Date post: | 23-Jan-2015 |
Category: |
Social Media |
Upload: | ignite-social-media |
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Six Social Media ROI Models
We’ll begin show shortly…
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Who’s presenting?
Jim TobinFounder, PresidentIgnite Social Media@jtobin
Tom WebsterVP, Marketing
Edison Research@webby2001
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Details
• Jim & Tom will lead Q&A at the end of the call.• Tag your tweets with #igniteroi• We’re recording the show.• We’ll send an email follow up to everyone.
Download the White Paper
http://bit.ly/ignite-roi
We’ve come a long way.
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The Models
1. Amplification2. Value of Social Traffic vs Display3. Quality of Visitors From Social4. Revenue From Facebook Fans5. Revenue From Social Media Marketing6. Social Promotions Sales ROI
None of the models are
perfect.
All of the models are better than
nothing.
Model 1: Amplification
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Amplification Step By Step
Calculate social impressions,
actions
Facebook impressions and clicks, Twitter impressions and clicks,
YouTube views, Online mentions, etc.
Sum value of impressions,
actions
Assign value to impressions and actions, weighting actions more
heavily that impressions.
Compare to total social
media spend
Map social impressions and actions to paid marketing value equivalency.
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Amplification Model Example
Social Impressions, Actions
Paid Advertising Equivalent Value
2,000 Facebook impressions $10 CPM $20
100 Facebook clicks $0.50 per click $50
100 YouTube Views $0.20 per view $20
Total Value: $90
Social Budget: $30
Social ROI: 300%
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Likely Questions & Considerations
• Most of the social data inputs are available for free.• The model is complex. It requires proxy values for
social actions based on non-social comps.• The model aggregates cross-channel social data and
maps it to familiar marketing metrics.• The output is a relative comparison, not an actual
sales return on investment.
Model 2: Value of Social Traffic versus
Display
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Example Traffic Comparison
Description Display Social Delta
Net New VisitorsAbove baseline
30,000 170,000 Social drove 5.67X more visitors
Cost $150,000 $130,000 Social cost only 86.7% of display
Cost per visitor $5.00 $0.76 Social generated a 6.5X better return
This data reflects actual performance from an Ignite Social Media client.
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Likely Questions & Considerations
• This approach is less complicated than others, it requires fairly simple inputs.
• The model works well if you have an active display advertising campaign as a basis for comparison.
• The model doesn’t incorporate impression value, only traffic value.
• The channels are the variable, so try to keep other variables constant.
Model 3: Quality of Visitors From Social
Media
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Example Traffic Quality Comparison
Description Display Social Delta
Pages per Visit 1.57 2.84 Social drove 1.8X more pages per visit.
Time on Site 0:40 2:18 Social visitors spend 3.45X time on site.
Bounce Rate 81.40% 45.46% Social visitors had a 44% lower bounce rate.
Goal Conversions 3,098 12,603 Social drove 4X conversions.
This data reflects actual performance from an Ignite Social Media client.
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Likely Questions & Considerations
• You can compare social traffic against other channels or “average” site traffic.
• Choose the most meaningful metrics, don’t worry about comparing all of them.
• Factor in all costs related to social and other channels for a final calcuation.
Model 4: Revenue From Facebook Fans
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The Facebook Factor
Brand Purchase in Last 12 Months
Likely Consider
Likely Recommend
Fan Non-Fan Fan Non-Fan
Fan Non-Fan
Bust Buy 79% 41% 78% 47% 74% 38%
Coca-Cola 95% 71% 85% 58% 83% 47%
Blackberry
55% 10% 69% 17% 62% 16%
Walmart 94% 74% 85% 56% 77% 39%
Source: Forrester Research, The Facebook Factor, April 2012
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Example Calculation
Net New Facebook Fans 283,786 For a year.
% Likely to Consider, Fan
69% Blackberry is closest comp brand in this example case.
% More Likely to Purchase Since Becoming a Fan
16% Conservative estimate from 2011 Chadwick Martin Bailey data.
Price of Product $250 Fictitious.
Purchases per Year 0.33 Fictitious.
# of New Fans Who Are New Customers
31,330 New Fans X % Likely to Purchase X % More Likely Since Becoming Fan
Total Estimated Revenue $2,584,723 New Fans Who Are New Customers X Product Price X Yearly Purchases
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Likely Questions & Considerations
• This is an admittedly rough estimate.• Additional data from comScore further
indicates that Facebook influences purchase behavior.
Model 5: Revenue From Social Media
Marketing
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Example Calculation
Visitors to Goal Pages 4,830,827 For a given time period
Products Sold 345,324 For the same time period
Goal Pages per Sale 13.989 For the same time period
Social Traffic to Goal Pages
27,716 Visitors from social who landed on a goal page during time period
Social “Sales” 1,981 Social traffic to goal pages / (goal pages / sale)
Avg Transaction Value $135 Revenue from period / transactions during period
Social Revenue $267,435 Social transactions X Avg transaction value
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Calculation Continued
Social Revenue $267,435 From previous slide
Social Marketing Cost $97,500 For the same time period
ROI $1.74 (Revenue – Cost) / (Cost)
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Likely Questions & Considerations
• This is (also) an admittedly rough estimate.• For considered, offline purchases, digital
marketers have limited visibility to impact.• This model becomes more valuable the more
you know about your buyers’ aggregate web behavior.
Model 6: Social Promotions Sales
ROI
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Example Calculation
Total Cost of Promotion $195,404 Including ads
# Goal Page Completions
34,812 Use actual if possible
Goal Pages per Sale 13.989 From model
Social “Sales” 2,489 Goal page completions / goal pages per sale
Social “Sales” Revenue $336,015 Social sales X average transaction value
ROI $0.72 (Revenue – Cost) / (Cost)
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Likely Questions & Considerations
• This model works well when you want to map a specific promotion to purchase intent.
• Remember that you’re comparing the effectiveness of marginal marketing spend – a “low” ROI might not be a bad thing.
BONUS MODEL 7: Show Me Yours
Thanks for attending!
Tweet your questions @ignitesocialmedia.
We’ll email you the slides, the whitepaper, and the presentation recording.