Published on March 6, 2014
Best Practices in ROI Chris McLaren Director, Strategy | Wunderman February 2014
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The key to making a partnership work is setting a common vision and a common language. You need a common language to bring people together - and that language is the data. - Jeff Edmondson, Founder, Strive Together partnership
Social media is a marathon, not a sprint. Measure everything. See what works. See what doesn’t. Tweak and optimize the plan as you go. – Clay Hebert, CEO, Founder Tribes Win
72% • • • • of all adults are on a social network 89% of 18-29 year olds 78% of 30 to 49 year olds 60% of 50 to 64 year olds 43% of people over 65 One four in social network users follow brands, products or services on social networks Source: Pew Research 2013; Forbes 2012
78% of consumers say that the posts made by companies on social media influence their purchases Source: Forbes, May 2012
Online social networks are growing. Fast. Years to 50M Users Instagram Twitter Facebook Internet Television Radio Telephone 1.5 2.8 3.5 4 13 38 75 Source: United Nations Cyberbus Millennium Report, 2000; Facebook Newsroom; The Verge, May 2012;
YouTube is more popular than cable TV Over 1 billion unique monthly visitors Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;
Social media has overtaken porn as the #1 activity on the web Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;
Twitter handles more search queries per month than Bing and Yahoo combined Twitter: 24 billion Bing: 4.1 billion Yahoo: 9.4 billion Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;
“We don’t have a choice on whether we do social media, the question is how well we will do it.” – Erik Qualman Author, Socialnomics
Social ROI defined • “Return…” (social benefits) • Transactions • Every possible brand interaction prior to a transaction • Post transaction behaviors, including brand advocacy • Brand sentiment • SEM rankings • On-site social actions like ratings/reviews, liking and commenting • Customer service (efficiency/effectiveness) • Market research ...can generally be “rolled up” to strategic KPIs or value categories • “…On Investment” (social costs) • Easier to calculate (though many ‘R’s are not solely attributable to social media)
DEFINING SOCIAL “R”
Social “R” Characteristics: Pros + Traffic • 15-20% of Unique Visitors from “Earned” Links (source: Meteor Solutions) + Quality • 1.5 - 4x Conversion Lift • Loyal Fans (more likely to buy more than once) (source: Razorfish) Add: Community Value The larger the community, the greater the number of earned media impressions, clickthroughs, conversions, etc. for every $ spent. Earned media communities make all other marketing investments more valuable by enhancing and extending their effects Advocacy • 90% of consumers trust the opinions of people they know • 70% trust anonymous ratings and reviews posted online • Compare this with just 33% who trust online banner ads (source: Nielsen)
Social “R” Characteristics: Cons http://www.wired.com/business/2013/07/email-crushing-twitter-facebook/
Social “R” place in Customer Journey Time How people experience brands Ratio to a conversion (example) Seen from a measurement POV 0% Awareness Social Awareness 100,000:1 Advocacy Engagement Paid search, email, web 5,000:1 Conversions Conversion 1:1 Users take a desired action Buy online, live chat, contact form, whitepaper download, visit specified site content, email sign up, RSS, etc. Advocacy Feedback Loop Social Engagement Advocacy 50:1 100% Though earned media contributes value throughout, it is mainly effective at creating demand through awareness and engagement - before audiences have even thought about a brand / product / service. It is nearly impossible to build a brand or create demand using Paid media; this is where Earned Media tends to deliver higher ROI.
How an understanding of ROI can inform client strategy
3M Littmann Stethoscopes Why Social Media – and How to Leverage Littman has 92% market share. The average purchaser of a new stethoscope: Already owns a stethoscope* Already owns a Littmann (~92% likely) Paid search helps ensure Littmann is there to capture the lion’s share of current demand; however, paid search does little to expand the current market, e.g, create new demand for stethoscopes among clinicians Social media operates at the top of purchase funnel, creating awareness and demand for new stethoscopes New stethoscope offerings (new FABs, esp. customization, lifestyle/vanity offerings), coupled with social media, can create new demand for stethoscopes among current clinicians, leading to more lifetime stethoscope purchases per clinician *Students are an exception. However, Students are more present and active in social media than any other segment
How to Value Social “R”? Paid Media Return (Easy) – Traffic – Actions - searches, coupon (QR Codes) /whitepaper downloads, – Conversions – Sales, lead captures, phone calls, etc. – ROI – Cost per click, cost per lead, sales & revenue VS Earned Media Return (Difficult) – Reach: Friends, fans, subscribers, followers – Views: Social page views, video plays, SlideShare plays – Engagement: Likes, comments, sharing, retweets, replies, etc – Impressions: Influence and reach of people posting the chatter – Context & Sentiment: Subjects/themes and pos/neg buzz – ROI (???)
One way to measure Social “R” is by expressing the value of its native metrics in the form of paid metrics and/or transactions that already have a dollar value attributed to them for your business.
A fairly involved example Awareness, Engagement, Conversion, and Advocacy values for Earned Media using the following client-specific “known value” inputs: • Paid media: Cost per impression (CPI) • Paid media: Cost per click to website (CPC) • Website (conversion platform): Number of “where to buy” visits from Earned Media • Website (conversion platform): Conversion rate per click • Average Revenue per Conversion
Putting social metrics into value categories A E C L Awareness Engagement Conversion Advocacy • Impressions • Followers, Fans, Subscribers, Members • Lists • Page Views • Mentions per time period • Inbound links • Share of Conversation • Brand specific searches • Sentiment Trends • Comments • Visit Rate or Content Resonance • Return Visits • Click-throughs • Registrations/Opt-ins • Retweets • Replies • Referrals • Recommendations • Thread Size • Time with Content • Suggestions/Feedback • Content Downloads • Content Sharing • Spinoff Content B2B: Users take actions known to drive meaningful business outcomes: • Demo sign ups • Webinar sign ups • Contact forms • Whitepaper downloads • Email sign ups • Visits to desired site content • Advocacy Behaviors (various, including:) • Retweets • Testimonials • Recommendations • Referrals • Co-creation/User Generated Content • Content Sharing • Activity Sharing • Information Sharing Common B2C: • Go to store and buy • Find a partner/distributor • Lead form Some common, some specific Always specific to brand and/or campaign
Social media-driven value (one month) How people generally experience brands in social media Time $ Value for December Seen from a measurement POV 0% Awareness Awareness $169,200 + $318,301 Engagement Engagement Conversion + Conversions $26,103 Users take a desired action Buy online, live chat, contact form, whitepaper download, visit specified site content, email sign up, RSS, SMS, etc. Advocacy Feedback Loop + Advocacy $308,001 100% $821,605 (total value) Advocacy
Summing categories for total “R” If all metrics are assigned a dollar value, it becomes possible to sum total value contribution for any timeframe, channel, or campaign: $A $E $C $Adv Total Return ($) Common value “language” easier to align activities, make comparisons, optimize, forecast, plan
Deeper Benchmarking Examples
Deeper Benchmarking Examples
Brands have an (arguably) quantifiable value Source: http://www.interbrand.com/en/best-global-brands/2013/top-100-list-view.aspx
Brand sentiment drives brand value • If you track brand sentiment in social media, you have a measure of the effect that all marketing efforts (not just social media) are having on it • If you peg your brand’s sentiment to a brand valuation, you can theoretically know the dollar value of sentiment changes over time, assuming there is a causal relationship between the two • Most brands maintain NPS to measure sentiment; socialspecific version in the works
CSAT & Loyalty Measure: NPS See also: "Measuring Customer Satisfaction and Loyalty: Improving the ‘Net-Promoter' Score"
ROI Best Practices Checklist ROI measurement is not about “perfection”; it is about having some idea what you’re doing, why you’re doing it, and how you’re doing Measure value using reliable methods and calculations that are specific to your business as fully as possible Measure channels, tactics and campaigns using same value categories, so you can make informed comparisons about relative value (crucial to setting strategy) Measure new channels, tactics and campaigns, while still able to measure overall value as variables change Enable budgeting against outcomes rather than deliverables Tie reporting directly to annual and/or multiyear goals Assess on monthly/quarterly/annual basis
Discussion THANK YOU
WOM Facts 2/3rds of the economy is influenced by personal recommendations. Gartner McKinsey & Company 20% of consumers are key influencers of purchasing activities of 74% of the population. Consumers mention 56 brands in conversation per week. Keller Fay 62% of these discussions are positive. Each peer recommendation reaches 150 people on the social web. Forrester Less than 25% of people say they trust emails they sign up for. 1 in 3 people come to a brand through a recommendation. Bain & Co. Weber Shandwick The most recommended company in any given category grows 2.5x the category average. 40% of advocates answer, comment, or give opinions online several times each week. Yahoo! and Comscore 39
Social Media Amplifies WOM • Each recommendation reaches 150 people • 500M peer impressions annually in US • Now rivals advertising impressions Source: Forrester Peer Influence Analysis 40
How It Works 1. Identify Clicks, Conversions Impressions A/B Testing Review & comment moderation Z Score, NPS® Advocate Profile Data 3. Measure Advocate Responses Advocate Actions Paid Media Social Media 2. Mobilize Recommendations Ratings & Reviews Stories & Testimonials Offers Answers Word of Mouth marketing solution / fully integrated brand advocacy system 41
Use Advocacy Modeling 100 Mercenaries Advocates Influence Terrorists Non-Threats Fans 0 - Opinion + • Overlay customer and prospect databases with social profile data and segment into audience categories ranging from “advocates” to “terrorists” • Develop social and/or cross-media campaigns to move targets to become brand advocates • Track results over time Gage Confidential. All Rights Reserved.
Reporting and Dashboards 43
Marketing Practice Audit - Summary Designing Reporting • Web-based reporting dashboards are the best way to provide access on-demand • However, to be consistently useful, dashboards must be designed in accordance with how the information should be used at each organizational level 44
Source: “Framework: The Social Media ROI Pyramid”. Web Strategy, by Jeremiah Owyang. Posted December 13th, 2010 45
Business purpose of community measurement • Performance dashboards for use in managing community and reporting progress should be created for three audience levels: – Business Executives – Business Stakeholders – Community Managers and Agencies …as illustrated on next slide Gage Confidential. All Rights Reserved. 46
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