how to measure roi in social media
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How To Measure ROI in Social
Media
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Brian A. Cliettewww.briancliette.com
@briancliette
www.superlinkjuice.com
Digital Marketing Strategist
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Not Just Some Fuzzy “ Awareness and Connections”
Can Social Media Produce ROI in Dollars?
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Not Just Some Fuzzy “ Awareness and Connections”
Yes! Social Media Can Produce ROI in Dollars
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You’re snapchatting
You’re Facebook liking
You’re tweeting
You’re Pinning
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These activities are great…
Are you tracking?
But the billion dollar question is
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If you aren’t, you are not alone
70%
Statistics show that more than 70% Businesses do not track their Social Media ROI.
Considering the Estimated $3.1 Billions spent on Social media in 2014, this statistic is crazy.
$2.2 Billion
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“3 out of 4 Marketing Executives are unable to calculate ROI on Social Media” - Domo Social Media
Without understanding ROI, It’s hard to justify spending money on Social Media marketing
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What does ROI really mean?
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In the Financial World, ROI is used to measure the financial efficiency of an investment.
ROI is based upon the following Financial Formula.
ROI = Return – Investment / Investment
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So what about ROI.... within the Context of Social media Marketing?
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SIMPLE
A Marketing campaign with high ROI is considered better and more efficient than a marketing campaign with low ROI
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Thus... the Social Media Platform and or Campaign that commands the highest ROI should garn the lions share of ad spend/effort.
So what about ROI.... within the Context of Social media Marketing?
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Social Media ROI
IR – E / ESocial media investment- the amount of money that we invested in our social media campaign (E)
So what about the ROI formula for Social Media
Social Media Return - the amount of value that we got from our social media campaign(IR)
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What’s Your Return On Social Media Investment?
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Calculate Your Social Media Expenditure
HARD COSTSDenote the work or costs associated with the project during the campaign
SOFT COSTSCalculate the soft costs which include unseen work that composes the initial part of developing a project during the campaign
COST/ TIME SPENTCalculate the money spent per time spent on the social media during the campaign
SUNK COSTScalculate the sunk cost involved during the campaign i.e. a one time purchase of Social Media Software
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HARD COSTS COST/ TIME SPENTSOFT COSTS SUNK COSTS
Calculate Your Social Media Expenditure
Social Media Expenditure (E)
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Keep track of your media conversions
It's impossible to measure your return on investment without knowing your visitor conversion rate.
Ensure you can determine the number of visitors traveling to your page from social media accounts and the amount of those visitors making actual purchases and or other actions that directly relate to your Social media goals.
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Top 5 Metrics for Social Media ROI
REACH
The more Followers, Fans, LinkedIn Group members. etc. that you have, the greater your ROI for any campaign or promotion
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Top 5 Metrics for Social Media ROI
TRAFFIC
Getting visitors to your website or another URL where conversions happen is a major goal of any social media plan
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Top 5 Metrics for Social Media ROI
LEADS
Maybe the most important social media measure, this is the ratio of leads coming from each social site.
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Top 5 Metrics for Social Media ROI
CUSTOMERS
Track the number and social media-generated leads that become actual customers.
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Top 5 Metrics for Social Media ROI
CONVERSION RATE
Tracking the % of visitors by social media platform or promotion piece tells you what's working and what's not.
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Defining and Adding a Value to Social Media Return
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Return On Investment Not Return On
Ignorance
“Everything starts with an end in the mind”Brian Solis
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Social Media Return is the Return on Your Goals
And you can define such goals as anything you want it to be.
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Social media return is basically the value that you derive from your social media campaign based on the goals of your campaign
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FansFollowers Comments
Likes
Are not Social Media campaign goals
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Some Popular Social Media Goals
To Drive Sales To Drive Consumer Insights
To Drive Brand Awareness
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Some Popular Social Media Goals
To Drive Sales
If your social media goal is to drive sales, then your social media return is the number of sales that you can attribute to your social Campaign.
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Some Popular Social Media Goals
If your social media goal is to drive consumer insights, then your social media return is the quantity and quality of the consumer insights you get from your followers(Cost savings versus Offline Customer Focus groups).
To Drive Consumer Insights
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Some Popular Social Media Goals
If your social media goal is to drive brand awareness, then your social media return is brand awareness.
To Drive Brand Awareness
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Deriving Real Dollar Value(s)
Real Dollar Value can be approached in two ways
1. Using Historical Data 2. Guesstimating
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Using Historical Data
If you know your Lifetime value (LTV) of each customer, its easy to back track to conversion value
EX. Is LTV = $200 and you know 1 in 20 people who view your video become customers, then the value of getting a visitor to view the video is $10 ( $200/20) x 1
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GuesstimatingHow much would it cost if you had to pay for the equivalent achieved by social media?
How much are you willing to pay per signup?
Cost Per Paying customer?
Amount labor hours saved in Tech support?
Cost per lead?Advertising Value and cost for equivalent leads?
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Deriving Real Dollar Value(s)
Once you apply real dollar values to these goals you should have an rough estimate of Investment Return (IR).
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("IR" - E)/E.After calculating your Social media expenditure(E)
Setting your Social media goals
Estimating your return and your investment(IR),
Use the ROI formula to calculate your social media ROI
("IR" - E)/E.
Assessing your Analytics
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("IR" - E)/E.
ROI is a measurement of efficiency, so use the ROI number to compare to other social media campaigns as well as your TV, print ,radio and other Marketing campaigns.
Facebook ROI
Instagram ROI
TV ROIVS VS
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ROI is a measurement of efficiency, so use the ROI number to compare to other social media campaigns as well as your TV, print ,radio and other Marketing campaigns.
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T H A N K Y O U