Social Media ROI

room214.com } [email protected] } 303.444.9214

Social Media Success Metrics

December 10, 2009

Presented by:James Clark, Co-Founder

Room 214


American Marketing Association@marketing_power

James Clark, Room 214@jamesoclark@room_214

#AMAReadyTalk


WOM and Social Media

WOM Marketing encourages, facilitates, and amplifies marketing-relevant communications amongst consumers

Social Media is a subset of WOM1.Online WOM activity2.Digital venues in WOM occurs3.Engine and set of tools to achieve marketing goals


Measurement FrameworkAction Who How What Where Result ROI

ObjectParticipants Action WOMUnit Venue Outcome

Qualities

PropensityDemographicPsychographicCredibilityReach

VelocityDistribution spreadSource diversity

TopicalityTimelinessPolarityClarityDepth

PopulationAudienceRules

ConsumptionsInquiriesConversionsRelaysRe-Creations

Tracking or Aggregate Metrics

Common segmentation for other metrics, e.g., by influence factor, demo, etc.

Conversation volumeConversation shareRating/Review scoreSentiment

Conversation volumeConversation shareRating/Review scoreSentiment

Reach/Awareness

Conversions (ct, trials, purchases)Advocacy(NPS, OP)Market shareShifts in awareness

Cost deflectionsCost per conversionCost per conversationValue of Conversation

Source: WOMMA Best Practices Guidebook


Program MeasurementProgram …defined as… Measure

Buzz MarketingUsing high-profile entertainment or news to get people to talk about your brand

Conversation volumes, SOV, MMM, Reach, ROI, Sentiment

Viral MarketingCreating entertaining/informative messages designed to be passed along in exponential fashion

Conversation volumes, SOV, MMM, Reach, ROI, Sentiment

Community Marketing

Forming or supporting niche communities that are likely to share interests about a brand; providing tools, content and information to support those communities

Advocacy, Cost Deflection, Cost per Conversion, Conversation Volume and Share, Influence, MMM, Reach, ROI, Sentiment Analysis, Value of Conversation

Grassroots Marketing

Organizing and motivating volunteers to engage in personal or local outreach

Advocacy, Cost per Conversion, Conversation Volume and Share, Influence, MMM, Reach, ROI, Sentiment Analysis, Value of Conversation

Evangelist Marketing

Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf




Program Measurement

Program …defined as… Measure

Product SeedingPlacing the right product into the right hands at the right time, providing information or samples to influential


Influencer Marketing

Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others

Advocacy, Cost per Conversion, Conversation Volume and Share, Influence, MMM, Reach, ROI, Sentiment Analysis, social Media Success Metrics Value of Conversation

Cause Marketing Supporting social causes to earn respect and support from people who feel strongly about the cause


Conversation Creation

Interesting or fun advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity

Conversation Volume and Share, MMM, Reach, ROI, Sentiment Analysis, Social Media Success Metrics


Program Measurement

Program …defined as… Measure

Brand Blogging

Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about

Conversation Volume and Share, Cost Deflection, MMM, Reach, ROI, Sentiment Analysis, Social Media Success Metrics

Referral ProgramsCreating tools that enable satisfied customers to refer their friends

Advocacy, Cost per Conversion, Conversation Volume and Share, Influence, MMM, Rating and Reviews, Reach, ROI, Sentiment Analysis, Value of a Conversation



Advocacy

Approaches to Advocacy Measurement

The key to measuring advocacy is to:

1. Identify all the different ways people verbalize their advocacy

2. Isolate advocacy from general positive sentiment

3. Explore who is doing the advocacy and analyze the level of advocacy from that individual for brand/topic vs other brands/topics

Styles of Measurement:

1. Asking people to recall if they would recommend (survey question)

2. Measuring people’s actual recommendations to each other (survey)

3. Measuring people’s actual recommendation to each other (online monitoring)

Is an act “The act or process of advocating or support a cause or proposal”

Source: David Rabjohns, MotiveQuest


Advocacy Methodologies

Scored by Aberdeen Group

1. The Net Promoter Score (NPS), - defined as the likelihood to recommend, http://www.statmetrix.com

2. The Brand Advocacy Quotient (BAQ), relates to satisfaction and importance, http://www.nielsen-online.com

3. MotiveQuest Online Promoter Score, (OPS), correlation between online advocacy and sales, http://www.motivequest.com/brandadvocacy

Resources:

1. Groundswell, Chapter 5, Advocacy Measurement, http://www.forrester.com/Groundswell/book.html

2. What Brand Advocacy Matters: http://www.clickz.com/3629611


Conversation Volume and Share of Voice

The total number of posts on a given brand, product, campaign or topic tracked over a set time period. Start when a campaign launches, or service starts or product is introduced.

Volume = Total Number of Post Share = Total Number of Post Compared to Competitor

Analyze by traffic source (blogs, mainstream media, forums, Twitter, social media, comments, YouTube) to look at the media distribution platforms where your message is being carried


Conversation Volume and Share of VoiceOnline Monitoring Tools

1. Radian6, - http://www.Radian6.com

2. Filtrbox – http://www.Filtrbox

3. Techrigy SM2, http://techrigy.com

4. Google Alerts, http://google.com/alerts

Resources:

1. Social Media Monitoring, http://www.socialmediamonitoring.ca/index.html

2. Monitoring Tool Directory: http://bit.ly/5LCyTf


Cost Deflections

Cost deflection occurs when an online or social marketing tool, such as support community, removes expenses from various processes that the business would otherwise incur.

Key metrics associated with cost deflection include:

1.Decreased product or service defects

2.Decreased customer service and support costs

3.Decreased R&D expense

4.Decreased time to market

Removal of hard or soft costs from the methods a business uses to support its customers

Source: Jennifer Voisard, ComBlu


Cost Deflections

Source: Jennifer Voisard, ComBlu

BrandEngagement

Advoca

cy

Feed

back

Su

pport

Advocacy: Engagement intended to influence transactional behavior

Feedback: Formal Channel between the end user or employee and the brand intended to have a direct influence on the product or service

Support: Content or conversations intended to solve problems and also provide answers to specific questions/needs


Cost Deflection

Case Studies

1. Microsoft Office Live Cast Study: http://comblu.com/forums/t/1.aspx

2. Cisco’s Human Effect Network: http://bit.ly/8O3AT2


Cost Per Conversion

Definition of cost conversion varies by business and situation, and commonly refers to a purchase or lead but can also refer to other types of actions such as visiting a page on a website, registering for a newsletter or downloading a white paper.

Cost per conversion: cost per conversion = cost/conversions

Campaign Cost: $250,000

Conversion Generated: 20,000

Cost Per Conversion: $12.50

Resources:

Google Analytics – free analytic package that will allow you to track conversions based on source, campaign, keyword, links, etc.

Cost to get one person to take a desired action and ultimately become a customer

Source: Steve McLaughlin, BzzAgent


InfluenceCurrent Definition – Online Influencers are those who drive opinions (and traffic) around the web are identified by three attributes:

1. Can impact a brand that produces content that guides perceptions and opinions

2. Have growing audiences opting to follow and often respond to current topics

3. Maintain relatively high levels of engagement through natural group affinities and other influencers both online and off

Monitor and Filter Influencers as a Subset

1. Track total number of times that influencer mentions your product, brand

2. Track sentiment of posts from the influencer as it relates to your product or brand

3. Track influencer group as a whole and look at the topical maps of discussion the influencers are engaging in – then define what your brand’s share of voice is in those discussions


Marketing Mix ModelingMMM – a mathematical technique of calculating the relative marketplace impact of all various levers a marketer can pull.

Looks at what’s in the marketer’s control:• Pricing• PR• Media Spend

…and what’s not:• what the competition is doing• seasonality• current events

This is the BIG BUCKS Methodology, for CPG, entertainment and auto category brand companies with large media buy and marketing budgets that can afford to conduct MMM analysis.

Resource: iMedia Connection Series on Marketing Mix Modelinghttp://www.imediaconnection.com/content/5412.imc

Source: Walter Carl, ChatThreads


Ratings and ReviewsA Nielsen Online Study, from Dec. 08 found that 81% of online holiday shoppers read customer reviews before making purchase

Key reasons brands should pay close attention to customer reviews:

1. Uncover what customers think about the brand2. Achieve impacts beyond sales3. Understand review evolution over time to see the overall impact


Ratings and ReviewsTips and Best Practices:

1. Look at as many products as possible2. Consider the same time periods over multiple years3. Use products present in all time periods4. Define conversation rates for products prior to launch, when they

had no reviews and compare to post-launch review metrics5. Look for positive trends associated with increased content [i.e. Do

20 reviews lead to higher conversion rates than to 10 reviews?]

Answer these questions specific to each review site:1. How many reviews per product does it take to affect a product’s

success metric?2. What percent of products have customer reviews?3. When do people submit reviews?4. When do people consume reviews?

Source: Melissa Douglas, Bazarrvoice

Google Sidewiki – anyone can now place comments and reviews on any web page


ReachReach represents the degree of “marketing penetration” within a given target audience

Why Measure Reach?1. Understand how far a given marketing message spread2. Extrapolate other outcome-based metrics [e.g. sales, awareness,

purchase intent] to a wider population, which in turn affords a more accurate valuing of marketing expenditures

Reach and Word of MouthThe number of individuals who have been exposed to a WOMunit through an action of peer-to-peer connectedness.

Word of Mouth GenerationsThe “ripples” of WOMGeneration 0 = the first senders of informatione.g. James (G0) tells Jennifer (G2) about the great trip he hadGenreation 1 = the recievers of Generation 0’s information, some of whom may resendGeneration 2 = the receivers of G1’s information, some of whom may resend


ReachMethods for Quantifying Online Word of Mouth Reach

1. URL analytics tracking of website visitors2. Email analytics of shares and forwards3. Refer-a-friend/Send-to-a-friend tracking4. Generational conversation validation and tracking platform

Tools

Meteor Solutions, word of mouth analytics and optimization, http://www.meteorsolutions.com

TwitterTweetreach, How far did your tweet travel?http://www.tweetreach.com

Source: Matthew Stradiotto, Matchstick


Sentiment & Opinion AnalysisAssessment of an author’s tone – whether or not they express a positive or negative opinion about something – within a specific text


Sentiment & Opinion Analysis

Sentiment Analysis Metrics and Indicators1.Sentiment Volume: The number of positive/negative/neutral consumer opinions expressed about a brand, company or product2.Sentiment Ratio: number of +/- opinions expressed divided by the total number of consumer opinions or similar formula3.Polarity/Intensity: beyond +/- exp: District 9 was f***ing amazin!, District 9 was a decent Sat night date flick4.Qualitative Factors: what do they cite as their reasons? E.g. Comcast is terrible my internet is crawling5.Specific Customer Feedback: I wish Netflix had subtitles, Blockbuster is better than Netflix, I wish Netflix would come to Canada

Natural Language ProcessingBEWARE – claim to have 80% accuracy – don’t believe the hype

Human ReviewedLimit the number of posts to review and assign each to a category

Source: Margaret Francis, Scout Labs


Sentiment & Opinion AnalysisKey Points• Conversation about ACME as an innovative

“green” company appears in the Exciting New Technology and Socially Responsible categories, which make up more than one third of content.

• Conversation portraying ACME as an Evil Corporate Giant focuses the xxxx indictment.

• AMCE’s attempt to impose a surcharge on customers with solar panels fuels Anti-Green conversation

• XXXXX conversation contains some discussion of ACME’s attempt to include executive perks in a rate hike, as well as more neutral discussion about routine rate increases

• The greatest proportional of user-generated content, much of it from Twitter, appears in Outages and Emergencies.

Key Topics of Conversation about ACME Company

Analysis Dates8/15 – 9/17

Exciting New Technology

25%

Socially Responsible

13%

Evil Corporate Giant10%

Complaints about Rate

Hikes20%

Outages & Emergencies

9%

Other11%

Anti-Green11%


Sentiment & Opinion AnalysisRoom 214’s Recommended Sentiment and Opinion Analysis Tools

Sysomos, http://www.sysomos.com

Crimson Hexagon, http://www.crimsonhexagon.com


ROI in Social Media

Methodologies for calculating ROI will vary depending:• Scope• Available Resources• Technologies Utilized• Industry

PROCESS CAN BE PAINSTAKING AT BEST – INCONCLUSIVE AT WORST

Project vs Utility

Project – most common way to organize expenditures and map results back to a project or initiative-Tech and hosting fees, Advertising, Program investment costs, Creative and build costs, hard product costs, fulfillment, Loyalty programs, Staff costs

Utility – effort and expense necessary to increase something by a single unit- Independent variable is the resources and expenses- Dependent variable is the incremental improvement of objective (increase conversation volume from 50 to 100 blogs)

Return – Investment = ROI


ROI TechniquesTechniques for INCREASING REVENUE EARNED include increasing a program’s:• Frequency – increasing the number of purchase transactions• Acquisition- increase the number of net new customers• Yield – increasing the value of individual purchases w/o sacrificing freq• Acceleration – shortening the time it takes to acquire a customer

Techniques for REDUCING COSTS include:•Customer Acquisition – shifting cost of sales to lower cost channels without sacrificing the customer experience• R&D – expediting R&D time and surfacing new product and feature needs•Institutional Learning and Insights – removing organizational friction and creating synergies between otherwise disparate groups•Customer Service and Support – shifting cost to serve to lower cost channels


ROI ResourcesReadWriteWebDell’s $3m on Twitter and Four Better Exampleshttp://bit.ly/6Lb8HX

Social Media Today6 Must Read Posts about the ROI of Social Mediahttp://bit.ly/4E0WqA

MashableHow To: Measure Social Media ROIhttp://mashable.com/2009/10/27/social-media-roi/

SocialSteveMeasuring the Value of Social Mediahttp://bit.ly/7jhOfK


Breaking the Golden Rule

Room 214’s Competitors – Doing Cool Stuff

Conversation ImpactOgilvy 360 Digital Influencehttp://bit.ly/5DWGQc

Social Influence MarketingRazorfishFluent Report: http://bit.ly/7MnurP


Thank You!

James Clark

Co-Founder, Room 214

[email protected]

Twitter: @jamesoclarkPhone: 303-444-9214 x100

Social Media ROI

Business

Transcript of Social Media ROI