Published on March 7, 2014
How to get an ROI from social media By @chris_norton Blog: www.chrisnorton.biz Thursday 6th March 2014
Today’s agenda • 8am–8.40am: Getting an ROI on social media • 8.40am-9am: Breakfast and networking • 9am-9.30am: Google Analytics master class
Chris Norton - MD • More than fifteen years’ digital comms experience. Set-up the UK’s first Online PR agency in 2007 • Listed in Brand Republic’s top 30 marketing bloggers in the world and just published the official CIPR social media handbook • Winner of several “Best Use of Social Media” Awards • Associate lecturer at Leeds Metropolitan University on Digital Comms.
Prohibition services Traditional PR Social media/online PR • Media relations • Social media strategy development • News manufacturing campaigns • Social Media Audits/Measurement • Media training • Social community management • Insight and strategy • Creative social campaigns • Crisis communications • Blogger relations programmes • Internal communications (e.g. • Community creation and development newsletters) • Sponsorship management • Content marketing initiatives • Viral seeding
Let’s start with a definition In business, the purpose of the "return on investment" (ROI) metric is to measure, per period, rates of return on money invested in an economic entity in order to decide whether or not to undertake an investment.
An example ROI Calculation
Applying this to social media Easy, right? WRONG!
Applying this to social media Why? • The higher up the sales funnel, the harder it is to measure ROI • Also, social media is not just about sales, it’s about awareness • With so many metrics to measure, where do you start?
The good news is…you’re not alone • 88% of marketing professionals didn’t feel they could accurately measure the effectiveness of their social media campaigns. (Forbes) • 52% said social media ROI was their biggest frustration. (Forbes) • Currently, 96% measure number of fans and followers, 89% measure traffic, 84% measure mentions, 55% track share of voice, and 51% track sentiment
WHY are companies not measuring it? • Fearing what it will say about company effectiveness • Lacking the right tools, will or resource to collect data • Failing to understand which data is relevant • Having the data but not knowing where to begin Source: Social Media Today
Think of it like this…
Measuring nothing (with great accuracy) ‘The weight of a television set has nothing at all to do with the clarity of its picture. Even if you measure to a tenth of a gram, this precise data is useless.
Don’t be too quick to judge A person's Klout score or the number of Twitter followers she has probably doesn't have a lot to do with how much influence she actually has.
Sell, sell, sell So if you’re purely looking for an immediate increase in your sales.
The death of social ROI? Some analysts claim: • ROI in social media is no longer en vogue • ROI metrics are in decline • Social media ROI is dying a death However, to accept this 100%, is a cop out. Source BI Intelligence
The good news… ROI: Difficult, but not impossible.
No one-size-fits-all • First of all, don’t always think of social media in terms of sales. • Tie in social media with your business goals – which of these can social media support? • Build Brand Awareness? • Improve customer satisfaction? • Drive web traffic to your site? • Create an engaged community of advocates? • Grow your Customer Database? • Boost Sales?
Measure, measure and measure Once you have decided on your social media goals, you need to decide which metrics you will use to measure them. • • • • • • • • • • • Website / blog traffic — (referral source is a social media channel) Website registrations — email marketing campaign Increase subscribers, followers, fans, +1s Increased engagement score Increase positive sentiment Organic search rankings 7000 6000 5000 Increased sales 4000 Increased leads 3000 Increase cost savings 2000 Increase number of mentions 1000 Decrease customer service inquiries Facebook Twitter 0 November BUT – these numbers alone are not ROI! December January
…Now we can look at ROI Can you now assign a financial value to each of these goals? • Sometimes this is possible – but not always • Let’s look at where this IS possible
Social media and direct sales We know social media can drive direct sales • Consider a unique way people can buy from you that is exclusive to your social media channels. E.g. a promo code, specific landing page or coupon available only through Google+ • Then, track the sales that are generated through those initiatives. This is the one place you can calculate true ROI.
Social media and direct sales Dell Outlet • The company’s yearly return on Tweets is $3.25m
SM Case Study - direct sales Ultralase • Twitter ‘engagement marketing’ • Average treatment worth £5,000 • Average of 40-60 conversations per month. • 4-6 bookings as a result of SM.
Social media and customer service Social media increasingly used as a customer service channel, and there’s huge benefits. • 71% of consumers who experience a quick and effective brand response on social media are likely to recommend that brand to others. (NM Incite) • Customers will spend 21% more if they receive good customer service via social media (Sentiment) • The average number of people a social customer will tell about a good customer experience: 42 but a bad experience: 53. (American Express)
Social media and customer service Social Customer service also presents a good opportunity to calculate ROI • What are the costs saved on customer service via social media? • Cost of dealing with a traditional customer service enquiry via call centre • Satisfaction rating • How does dealing with that same issue on social media vary?
Social media and customer service Infusionsoft case study • A web-based provider of marketing automation software for SMEs. • Social Customer Service was driven by a frustration in how ineffective many of the contact centre technologies were • In 2011, the company had approximately 1 customer service agent for every 55 customers and a 77% customer satisfaction rating • Two years later, that ratio was 1 agent to 172 customers-- and with a 87% customer sat rating.
Web traffic Social media can be a huge driver of web traffic. Not only that, but it’s QUALITY traffic. • Consumers are 71% more likely to make a purchase if they arrive on a website from a social network (Frost & Sullivan 2013) • 70% of active social network users are already active online shoppers (Nielson)
Traffic is money Ask the right questions to estimate the value of each click • How many referrals are your social media efforts driving to your website? • How much do you already spend on PPC? • What is your average conversion rate? • What is your average basket size?
Student Wire - Our challenge
Summary of social media interaction 3,519 Likes on Facebook Strong community of students 252 Pinterest Followers 11.2k Twitter Followers 265 Pins and 17Boards on Pinterest
Student Wire – In Summary • All social media channels grew by more than 500% • Sales increased by more than 600% • Student Wire ranks 1st on Google for Online Student Magazine • Web referrals from all channels are increasing month on month • More than 300 articles have been written with 30 writers
What about consumer’s time?
Consumer’s time Much of social media is about brand awareness and advocacy. • If you genuinely value consumer engagement, then this is an obvious place to start to consider an ROI • Each time friends share a brand experience, they invest time and trust in their relationships. • Each brand touch-point between those consumers represents a commercial value that you’d have paid for through conventional media channels How could you apply this model to your business?
And finally…. • No single metric for social ROI • The devil is often in the detail • Think laterally about how you can attribute monetary value to social activity • Constantly adapt and evolve your measurement to suit • Clearly defined goals and outcomes are key • And of course produce a final insight report on the total impact of the initiatives. Success? Failure? Repeat? Or Rethink? • Also get your head around Facebook/YouTube,Google+ Insights, Google Analytics, Sysomos, Follower Wonk, Tweet Reach, Lead Forensics, Twitalyzer, Kred, Klout, Peer Index, Sprout Social and so many more.
How to Measure Social Media ROI. By ... implementing the new tools that hit the marketplace and proving to your clients that they’re getting the most ...
Though measuring social media ROI may not ... These three methods can help gauge what your small business is getting out of its social media ...
What if you could cut the time you spend on social media in half, yet double your effectiveness? It's possible. For real! You can increase your social ...
Discover how Facebook Lookalike Audiences can drive your conversions and reach, while cutting your acquisition costs and campaign workload.
Social media offers an economical opportunity for small businesses to market products & services. Learn how to get started measuring your social media roi.
Ultimate Guide to Measuring Social Media ROI. ... But at its core, social media ROI is what your company is getting back from the time, ...
Social media ROI is what you get back from all the time, ... The Secret Sauce to Getting Noticed, Becoming an Influencer, and Having Fun Online;
distilled home; how we help services ... (ROI) on social media activity is something which I'm ... I think good uses of social media include: Getting ...
Getting more results from social media can be difficult. ... ROI from social media / ... They encourage social sharing, ...
The rising popularity of social media marketing has directly increased the amount of efforts put into utilization of this marketing channel by small ...