Decoding Social Media ROI for Executives

1. presents a webinar with Dr. Natalie Petouhoff UCLA Director and Professor of the Social Enterprise Executive Education Courses and A Consultant/Analyst @drnatalie

2. ARE YOUR SOCIAL MEDIA EFFORTS WORTH THE MONEY? Justifying the business case for listening & engaging on social media is a BIG question. And executives want bottom-line business answers.

3. BUT IS CALCULATING SOCIAL MEDIA ROI EVEN POSSIBLE? Skeptics think social media is too “fluffy” to adequately measure return on investment (ROI) Would you calculate the ROI of a phone? Would you calculate the ROI of your mom? Would you calculate ROI of your pants?

4. Social Media Myth #1 “Social media ROI cannot be calculated because there are too many unknowns…”

5. TRUTH IS… • Social business is still business… …and the business of business is increasing shareholder value.

6. What is ROI? A Numerical view of strategy High ROI means executive approval for your initiative.

7. Does your strategy include business fundamentals like cost savings & revenue generation… • If your strategy includes… Reaching PR objectives faster, better, cheaper… Better Consumer Insights… Enhanced Brand protection… Increased awareness, reach, relevance, engagement… Reduction in call center costs/ increase in customer revenue Decrease in customer churn/ inc customer lifetime value Faster lead generation/ increased lead conversion rates • Social media ROI predicts if you’ll reach the goal…

8. Social Media Myth #2 “Would you calculate the ROI of putting phones on every desk in your company? smROI doesn’t have to calculated! ”

9. Hmmm…. • Except businesses do… Evaluate productivity benefits vs. costs. And also the systems needed to support the business activities.

10. Truth is… There was a day when… Secretaries answered the phones and typed EVERYTHING for workers. Along came phone switches and desktop computers… Someone did ROI calculations for: Getting a company-wide phone switch and phones on every desk top. (Ask Nortel and Avaya…) And a computer on every desk. And apps to get your work done -- like email, word processing programs.

11. Social Media Myth #3 Metrics = ROI

12. KNOW WHAT ROI IS AND ISN’T Many people mistake social media data, metrics and Key Performance Indicators (KPIs) for ROI Metrics are used to measure: Reach, Relevance, Shares, Likes, Engagement, Purchases But that’s NOT ROI

13. Collect Social Media Data, Metrics & KPIs Website analytics and marketing automation data help provide insight into what you’re doing right & how you can improve.

14. TRUTH IS… Metrics are the like ingredients in a good recipe. They go into the ROI calculation, but they aren’t the finished dish.

15. ROI VS. METRICS • Return on Investment • Earned Media Value vs. Marketing Spend • Lead Value vs. Marketing Spend • Brand Equity Growth vs. PR Spend • Focus group vs. Social Media Monitoring or Community Activity Metrics # of: News Releases Media Interviews Analyst Briefings Blogger Engagements Blog Posts Video Posts Podcasts Web Site Page Edits • Reach Metrics • # of: • Earned Media Placements • Earned Media Impressions • Paid Media Impressions • News Release Downloads • Analyst Report Mentions • Relevance Metrics • # of: • Key Message Penetration • Earned Media Share • Share of Conversation • Word of Mouth Volume • Click-Through Volume / Rate

16. ROI IS LIKE LOOKING AT AN ESCHER DRAWING • It’s a complexity issue • Traditional business goals & metrics • Social media business goals and metrics • How social media affects traditional business

17. THE STEPS FOR Social Media ROI? 1. An equation… ROI =Benefit - Costs x 100 Costs 2. Calculate Benefit & Costs. They are NOT metrics.

18. THERE’S AN ROI OF ANYTHING THAT PROVIDES VALUE And there is an ROI of your mom, a phone and wearing pants http://www.flowtown.com/blog/what-is-the-roi-of-your-mom

19. Where are we with respect to being able to calculate ROI of social media? Most marketers indicate social media measurement is a high priority & 48% feel pressure to report qualified outcomes of social media.

20. MARKETERS ARE UNSURE HOW TO CALCULATE SOCIAL MEDIA ROI Less than 20% of marketers can calculate the ROI of Social Media

21. WHAT’S SHIFTING THE NEED FOR SOCIAL MEDIA ROI? Justifying ROI is becoming more important now that we’re in the “third wave” of social media. The first two phases were driven by the Innovators and Early Adopters; they don’t need business cases to adopt something.

22. SOCIAL IS JUST IN SOME BRANDS’ BLOOD Some brands forge new ground by actively making social media part of their cultural DNA. OTHERS WANT PROOF BEFORE THEY TAKE THE LEAP

23. SOCIAL MEDIA ADOPTION HAPPENED QUICKLY Companies jumped into social media without extensive ROI calculations There wasn’t any real business analysis. It happened because the boss said so, or because a social media PR disaster could cost much more. Examples:

24. Isn’t it interesting that a whole industry grew without clear business cases for social media?

25. The Early Majority are Pragmatists They need assurances. They dislike unpredictability. They are hard to win over.

26. Pragmatists often become Evangelists Get the Early Majority to see what the innovators and Early Adopters saw. Loyal once they become “sold” on an idea. They influence others through WOM channels, especially the Late Majority

27. How do we get started down the road of social media ROI? ALIGN BUSINESS GOALS WITH SOCIAL MEDIA STRATEGY To be successful in social, you need to determine why you’re doing it and what strategic objectives you’re trying to reach

28. HOW DO THOSE GOALS COMPARE TO SOCIAL MEDIA GOALS? Apply SMART methodology to all business objectives: Specific Measurable Actionable Realistic Timed

29. THE SOCIAL MEDIA ROI EQUATION

30. A SOCIAL ROI EXAMPLE • Sea World San Antonio launched a social media campaign for their new “Journey to Atlantis” ride: • Identified top roller coaster enthusiast bloggers and • forum participants • Shared construction videos & photos from start to finish • Treated them like VIPs, inviting the American Coaster • Enthusiasts to be the first to ride the new coaster

31. THE RESULTING ROI? BENEFIT: Using a survey and formula that applies a value to each visitor to the park, Sea World was able to attribute more than $2.6 million in revenue from people who heard about the ride through the Internet. COST: The total costs for the campaign, for people, process and technology was $44,000. ROI =2,600,000 – 44,000 x 100 = 5809% ROI 44,000 For each dollar spent, $58.09 of value was added to the bottom line.

32. Calculating social media ROI IS possible! There isn’t one answer for how & what to measure in social media – the metrics to evaluate your success in social are as unique as your business. Prove social media efforts are providing value to your organization by taking the plunge and start crunching your own numbers today. Go forth & measure!

33. Additional ROI Resources Video: How To Build a Business Case for Social Media http://www.youtube.com/watch?v=_59iJrYanw0&feature=relmfuVideo: How To Calculate the ROI of Social Media http://www.youtube.com/watch?v=UhUO30VRN1M&feature=relmfuVideo: How Social Media Benefits the Whole Company http://www.youtube.com/watch?v=e1SfQaMSbH0&feature=relmfuEbook: ROI of Social Media: Myths, Truths & How To Measure http://www.radian6.com/resources/library/roi-of-social-media-myths-truths-and-how-to-measure/ Infographic: ROI: Are Your Social Media Efforts Worth the Money? http://www.radian6.com/resources/library/roi-of-social-media-infographic/White paper: Calculating the ROI of Social Media http://www.salesforce.com/social-crm/?lbt=/form/pdf/socialcustservice_roi.jsp&d=70130000000G5cI&lbh=600&lbw=510

34. presents a webinar with Dr. Natalie Petouhoff UCLA Director and Professor of the Social Enterprise Executive Education Courses and A Consultant/Analyst @drnatalie