Published on October 27, 2012
The Business Value of Social Media Prepared by Joey Barkercopyright © 2011, AutoZone, Inc., all rights reserved
Where Are We in Social?copyright © 2011, AutoZone, Inc., all rights reserved 2
FacebookLaunch:P1 in FY12Objectives:1.Drive traffic to stores & website2.Increase in-store & online retail sales3.Maximize customer lifetime valuethrough social engagement(Unique Content + Response Time)Likes = 384,446Reach1,507,730 impressions/wkEngagement Rate = 1 3.5%•Best Week - 51,916 People Talking•35,899 check-ins•134,815 Avg Link Clicks per Week
@AutoZone TwitterLaunch:•P7 W2 in FY12Objectives:1.Drive traffic to stores & website2.Increase in-store & online sales3.Maximize customer lifetime value;Engage with Info-tainmentFollowers = 10,936Reach = 342,707 impressions/wk.Engagement (per week)•191 Retweets•256 Mentions (@ or #)•4,538 Direct Link Clickscopyright © 2011, AutoZone, Inc., all rights reserved 4
YouTube Channel Launc h: •P9 in FY12 Objectives: 1.Drive traffic to website & other social networks 2.Educate auto DIYers with trustworthy advice 3.Maximize customer lifetime value; build deeper relationships than other methods allow Views = 1,200,632 Subscribers = 4,280 Engagement 1.1,499 video likes 2.1,637 favorites added 3.348 video comments 4.152 shares to social networkscopyright © 2011, AutoZone, Inc., all rights reserved 5
What is the Value to our Business?copyright © 2011, AutoZone, Inc., all rights reserved 6
Coupon Redemptions – FY12Annual Coupon Sales = $1.6MM+ FY12 Actual (projected)****Where… Fan Base 385,000 Average redemption rate is 0.16%, with Redemption Rate 0.16% $83 avg. basket Average Basket $ 83 # of Deals (weekly) 44 Most individual avg. baskets are +15- 30% higher than forecast Annual Sales $ 1,600,000 Percentage of incremental sales from Annual Profits*** $ 690,000 coupons NOT yet determined * Projected fan base growth to 500K FY ** Projected fan base growth to 1MM FY *** Profit is net of the discount given andcopyright © 2011, AutoZone, Inc., all rights reserved **** Started coupons P3 with 100k fan b 7
Coupon Redemptions – FY12 • Avg redemption rate for offers to date is 0.16%, with $83 avg. basket – Most individual avg. baskets are +15-30% higher than forecast • Threshold offers have highest redemption rates – Average of 0.42%, with $97 average basket – Threshold offers with 4-week offer period avg. 0.85% redemption rate – Avg. baskets are +73% more than purchase requirement ($87 basket for $10 off $50) • % OFF high usage product offers (e.g., batteries, wipers, lights, brakes) have 2nd highest redemption rates – Avg. 0.29%, ranging from 0.23% to 0.35% – Mostly featured 30% OFF deals • Redemption rate of other off-shelf & hard part deals less than .05-.1% – Discounts are likely not enough to drive traffic vs. other circular & in-store offers • Threshold offers with 4-week redemption periods have 2 to 3x Higher Redemption Rate than similar deals with 1 or 2-week periods – Rates for other offers did not increase significantly when expanded to 4 week periodscopyright © 2011, AutoZone, Inc., all rights reserved 8
Lead Generation – FB Sweeps Est. Value of Social Email Sign-Ups = $1,020,000 •Each Sweeps in FY12 generated a minimum of 30k unique emails – Most recent sweeps generated 50k+ in unique emails •AZ Rewards values an opt-in unique email at $5 average worth •Five (5) Sweepstakes total, estimated 150k opt-ins sales leadscopyright © 2011, AutoZone, Inc., all rights reserved 9
Additional Rewards Value 1. Web traffic to the Rewards site from the Facebook app – 2,169 monthly clicks to site 1. In-store Rewards card sign-ups from weekly Facebook posts – See post commentscopyright © 2011, AutoZone, Inc., all rights reserved 10
Earned Media Value of Social Impressions (Weekly Total Reach ÷ 1,000) * CPM * 52 weeks = Annual Media Value •Annual Media Value = $173,804 – Where CPM = $1.95 • Given by AutoZone Media Team, per MPG baseline recommendation •Annual Media Value = $202,771 – Where CPM = $2.10 • Recommended CPM given by Facebook ads team •Weekly Total Reach = 1,856,878 • Total number of unique people that see any social content related to AutoZonecopyright © 2011, AutoZone, Inc., all rights reserved 11
Media Value – Engagement (Facebook Only) • When calculating media value of social impressions, one thing to consider is Return on Facebook Engagement – 2012 Fast Company study estimates “Engaged user” as more than 2x the given CPM earned media value of “Like” (Source) – While impressions still mean value, a more recent alternative – and possibly more accurate addition for social traffic – interactions often >1 • ROE = Consumption * CPC = $984,985 – CPC = [ CPM / (CTR * 1000) ] – Where… • $0.23 CPC, $1.95 average CPM, 0.139% CTR • Consumption = Annual total # of likes, mentions, clickscopyright © 2011, AutoZone, Inc., all rights reserved 12
Search Rankings of Social Given the size of social networks, a high search ranking helps prevents competitors from ranking in any search for “AutoZone” or related keyword that we pursue, thus pushing them down in rankings and increasing our company’s web traffic.copyright © 2011, AutoZone, Inc., all rights reserved 13
Web Traf fic Referrals • YTD Traffic Referrals to AutoZone.com – 356,836 Clicks from Facebook – 55,691 Clicks from Twitter • Earned Traf fic Value = $61,879 – Where Cost-per-Click is $0.15, per display ad pricing from AutoZone media team & MPGcopyright © 2011, AutoZone, Inc., all rights reserved 14
Search Mentions across Digital Channelscopyright © 2011, AutoZone, Inc., all rights reserved 15
PR & Crisis Management Positive mentions in the social sphere now outweigh negative by more than 2.5 to 1 for AutoZone, promoting overall positive brand reputation. This is effectively maintained by rapid response to customer inquiries on Twitter and Facebook, as well as proactive management of which comments merit response.copyright © 2011, AutoZone, Inc., all rights reserved 16
Customer Ser vicecopyright © 2011, AutoZone, Inc., all rights reserved 17
Low-Cost Market Research• In addition to demographics, we can also see… 1. How we reached a user 2. Where they came from 3. Where they went on our Page 4. How often the page was visited by each user (on Average)copyright © 2011, AutoZone, Inc., all rights reserved 18
Social Media Value Estimated Business Value = $3,666,864 • Does NOT include… – Search engine rankings – Value of market research findings – Public Relations value in crisis controlcopyright © 2011, AutoZone, Inc., all rights reserved 19
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