Image: Rachel Chapdelaine on Flickr

Marketing Measurement Has Come A Long Way

The Old WaySpray & pray

Fuzzy picture of what success looked like

Unsure which marketing tactics contributed to which outcomes

Started Getting Smarter

Coupon redemption codes

Customer reviews & ratings

Now We’re Talkin’Link Shorteners & UTM Codes

Goal Completion

Conversions

Assisted Attribution Models

-Bernard Baruch

“If all you have is a hammer in the toolbox, everything

looks like a nail.”

Return On Investment (ROI)

“A performance measure used to evaluate the efficiency of an investment or to compare the

efficiency of a number of different investments.”

-Investopedia Definition

Social Media ROI

The quantitative measurement of social media marketing in terms of tangible results (results) relative

to the cost (investment).

Two Basic Formulas

ROI - Return On Investment

(Benefit - Cost) x 100——————————

Cost

ROMI - Return on Marketing Investment

Incremental Revenue—————————

Marketing Cost

If the formula is so easy…

Why do we still struggle to measure social media ROI?

Vanity Metrics & Other General Fuzziness

• Likes

• RTs

• Awareness

• Conversations

• Multiple touchpoints

• Influencer, well, influence

Where’s my easy button?

There is no easy button.

The Basic Process1. Choose your goals

2. Track your goals

3. Assign monetary value

4. Measure results

5. Calculate costs

6. Analyze & improve

Understand Your Sales Funnel

To accurately measure social media ROI, we have to understand our sales funnel and our business goals.

McKinsey & Company

Buffer

Possible Conversion Goals

• Make a purchase

• Watch a video

• Register for a webinar

• Click on a link

• Sign up for a newsletter

• Download a white paper

Other Types of Goals

• Brand Awareness & Recognition

• Customer/User Loyalty

• Traffic

Assigning $$ Values: Three Methods

Method #1: Guesstimate

If you don’t have historical data to analyze, you’ve got to start somewhere.

Method #2: Correlation

Compare your baseline to your social media activities and look for correlation.

Establish Your Baseline

What would happen anyway even if you don’t invest in social?

Timeline Your Social Activities

• July 15th: Launched Facebook Page

• July 20th: Launched Twitter Account

• July 25th: First Facebook Ad Campaign

Overlay, Analyze, & Prove/Disprove

Note any apparent correlations

Investigate to prove or disprove if they are related

Don’t forget to check for non-social influences

Draw Data-Driven Conclusions

Example: During the month of July, we saw a 10% increase in new visitors to our landing page. Accounting for our 5% baseline estimate for increased organic traffic, we can attribute the remaining 5% lift to our Facebook advertising campaign.

Method #3: Use Past Values

Use existing data to calculate the value of your social media ROI.

LTV: Lifetime Value

If you know your LTV, you can work backwards to determine your conversion value.

Example: Puppy Dewormer

Other Measurements You Can Calculate

Conversion RateNumber of checkouts / Number of unique visitors

(within same time period) 100,000 visitors

2,000 checkouts

2% Conversion Rate

Average Order ValueTotal revenue/Number of Checkouts

$20,000 revenue

2,000 checkouts

$10 Average Order Value

Average Visitor ValueNew revenue generated / Number of website visitors

$20,000 new revenue in July

100,000 total visitors

$20,000 / 100,000 = $0.20 per visitor

Calculations By Activity/Channel

Using overall site values can only get us so far.

Segmenting social channels, campaigns, and audiences provides far more accurate data for ROI calculations.

Use Your Calculations to Assign Value to Results

Measure Results By Channel

Channel Clicks to Site Value (Return)*

Facebook 2000 400

Twitter 1500 300

Instagram 500 100

*Clicks x Average Visitor Value of $0.20

Image: Mykl Roventine on Flickr

Calculate All Costs• Time/Resources/Personnel

• Fixed Costs (Tools, Ongoing Maintenance)

• Variable Costs (Social Campaigns, Integrated Campaigns)

• Management/Oversite

Calculate ROIIf you spent $1000 on a Facebook campaign (total cost) and it

resulted in 1,000 new visits, what was the campaign ROI?

In our previous example, we know that each new visit is worth $0.20.

1,000 * $0.20 = $2,000

$2,000 / $1,000 = 100%

Calculate ROMI• Facebook ad campaign cost: $1000 (ad spend + labor)

• July revenue: $50,000

• Incremental Revenue: $2,500 ($50K x 5%)

• ROMI: 250% ($2,500/$1,000)

Creating a Measurable Social Media Strategy

Who > Why > What > How• Scope: Who’s involved?

• Business Objectives & Purpose: Why are we doing this?

• Goals & KPIs: What are we trying to accomplish?

• Tactics & Metrics: How are we getting sh*t done?

Who’s (Potentially) Involved

• Marketing

• Sales

• R&D

• Customer Service

• Human Resources

• Technical Support

Why Do These Folks Care?

Customer Service Sales Marketing

Reduce call volume Increase qualified leads Improve brand image

Because social media can help each department meet their business goals!

Turning Business Goals Into Social Media Goals

Customer Service Sales Marketing

Reduce call volume Increase qualified leads Improve brand image

Resolve social media support & customer service inquiries

Drive new visitors to targeted landing pages

Identify and recruit brand advocates to build our image

Every Objective Needs A KPI

Customer Service Sales Marketing

Reduce call volume Increase qualified leads Improve brand image

Resolve social media support & customer service inquiries

Drive new visitors to targeted landing pages

Identify and recruit brand advocates to build our image

# of posts/tweets resolved # of conversions from social media channels

Reach and frequency of influencer-generated content

Value-Driven Social Media Marketing

Now when your boss asks “How’s that Facebook stuff doing?” you have the tools to demonstrate

tangible benefits to the company.

Questions?@jenjamar

collaborate@jenjamar.com