How to get an ROI from social media
By @chris_norton
Blog: www.chrisnorton.biz
Thursday 6th March 2014

Today’s agenda
• 8am–8.40am: Getting an ROI on social
media
• 8.40am-9am: Breakfast and networking
• 9am-9.30am: Google Analytics master
class

Chris Norton - MD
• More than fifteen years’ digital comms
experience. Set-up the UK’s first Online PR
agency in 2007
• Listed in Brand Republic’s top 30 marketing
bloggers in the world and just published the
official CIPR social media handbook
• Winner of several “Best Use of Social Media”
Awards
• Associate lecturer at Leeds Metropolitan
University on Digital Comms.

Prohibition services
Traditional PR
Social media/online PR
• Media relations
• Social media strategy development
• News manufacturing campaigns
• Social Media Audits/Measurement
• Media training
• Social community management
• Insight and strategy
• Creative social campaigns
• Crisis communications
• Blogger relations programmes
• Internal communications (e.g.
• Community creation and development
newsletters)
• Sponsorship management
• Content marketing initiatives
• Viral seeding

Client experience

Let’s start with a definition
In business, the purpose of the "return on
investment" (ROI) metric is to measure,
per period, rates of return on money
invested in an economic entity in order to
decide whether or not to undertake an
investment.

An example ROI Calculation

Applying this to social media
Easy, right?
WRONG!

Applying this to social media
Why?
• The higher up the sales funnel, the harder it
is to measure ROI
• Also, social media is not just about sales, it’s
about awareness
• With so many metrics to measure, where do
you start?

The good news is…you’re not alone
•
88% of marketing professionals didn’t
feel
they
could
accurately
measure the effectiveness of their
social media campaigns. (Forbes)
•
52% said social media ROI was their
biggest frustration. (Forbes)
•
Currently, 96% measure number of fans
and followers, 89% measure traffic,
84% measure mentions, 55% track
share of voice, and 51% track sentiment

WHY are companies not measuring it?
• Fearing what it will say about
company effectiveness
• Lacking the right tools, will or
resource to collect data
• Failing to understand which data
is relevant
• Having the data but not knowing
where to begin
Source: Social Media Today

Think of it like this…

Measuring nothing (with great accuracy)
‘The weight of a television set has nothing at all to do
with the clarity of its picture. Even if you measure to
a tenth of a gram, this precise data is useless.

Don’t be too quick to judge
A person's Klout score
or the number of
Twitter followers she
has probably doesn't
have a lot to do with
how much influence
she actually has.

Sell, sell, sell
So if you’re purely
looking
for
an
immediate
increase in your
sales.

The death of social ROI?
Some analysts claim:
• ROI in social media is no longer en
vogue
• ROI metrics are in decline
• Social media ROI is dying a death
However, to accept this 100%, is a
cop out.
Source BI Intelligence

The good news…
ROI: Difficult, but not
impossible.

No one-size-fits-all
• First of all, don’t always think of social media in terms of
sales.
• Tie in social media with your business goals – which of
these can social media support?
• Build Brand Awareness?
• Improve customer satisfaction?
• Drive web traffic to your site?
• Create an engaged community of advocates?
• Grow your Customer Database?
• Boost Sales?

Measure, measure and measure
Once you have decided on your social media goals,
you need to decide which metrics you will use to
measure them.
•
•
•
•
•
•
•
•
•
•
•
Website / blog traffic — (referral source is a social media channel)
Website registrations — email marketing campaign
Increase subscribers, followers, fans, +1s
Increased engagement score
Increase positive sentiment
Organic search rankings
7000
6000
5000
Increased sales
4000
Increased leads
3000
Increase cost savings
2000
Increase number of mentions
1000
Decrease customer service inquiries
Facebook
Twitter
0
November
BUT – these numbers alone are not ROI!
December
January

…Now we can look at ROI
Can you now assign a financial value to each of these
goals?
• Sometimes this is possible – but not always
• Let’s look at where this IS possible

Direct Sales

Social media and direct sales
We know social media can drive direct sales
• Consider a unique way people can buy from you that is exclusive to your social
media channels. E.g. a promo code, specific landing page or coupon available
only through Google+
• Then, track the sales that are generated through those initiatives. This is the
one place you can calculate true ROI.

Social media and direct sales
Dell Outlet
• The company’s yearly return on Tweets is $3.25m

SM Case Study - direct sales
Ultralase
• Twitter
‘engagement
marketing’
• Average treatment
worth £5,000
• Average of 40-60
conversations
per
month.
• 4-6 bookings as a
result of SM.

Customer Service

Social media and customer service
Social media increasingly used
as a customer service channel,
and there’s huge benefits.
• 71% of consumers who experience a quick and
effective brand response on social media are likely
to recommend that brand to others. (NM Incite)
• Customers will spend 21% more if they receive
good
customer
service
via
social
media
(Sentiment)
• The average number of people a social customer
will tell about a good customer experience: 42 but
a bad experience: 53. (American Express)

Social media and customer service
Social Customer service also presents
a good opportunity to calculate ROI
• What are the costs saved on customer
service via social media?
• Cost
of
dealing
with
a
traditional
customer service enquiry via call centre
• Satisfaction rating
• How does dealing with that same issue on
social media vary?

Social media and customer service
Infusionsoft case study
• A web-based provider of marketing automation
software for SMEs.
• Social Customer Service was driven by
a frustration in how ineffective many of the
contact centre technologies were
• In 2011, the company had approximately 1
customer service agent for every 55
customers and a 77% customer satisfaction
rating
• Two years later, that ratio was 1 agent to 172
customers-- and with a 87% customer sat rating.

Traffic

Web traffic
Social media can be a huge
driver of web traffic. Not only
that, but it’s QUALITY traffic.
• Consumers are 71% more likely to
make a purchase if they arrive on
a website from a social network
(Frost & Sullivan 2013)
• 70% of active social network users
are already active online shoppers
(Nielson)

Traffic is money
Ask the right questions to estimate
the value of each click
• How many referrals are your social
media efforts driving to your website?
• How much do you already spend
on PPC?
• What is your average conversion
rate?
• What is your average basket size?

Student Wire - Our challenge

Summary of social media interaction
3,519 Likes
on
Facebook
Strong
community
of students
252
Pinterest
Followers
11.2k Twitter
Followers
265 Pins and
17Boards on
Pinterest

Student Wire – In Summary
• All social media channels grew by more than 500%
• Sales increased by more than 600%
• Student Wire ranks 1st on Google for Online
Student Magazine
• Web referrals from all channels are increasing
month on month
• More than 300 articles have been written with 30
writers

What about consumer’s
time?

Consumer’s time
Much of social media is about brand
awareness and advocacy.
• If you genuinely value consumer engagement,
then this is an obvious place to start to
consider an ROI
• Each time friends share a brand experience,
they invest time and trust in their
relationships.
• Each brand touch-point between those
consumers represents a commercial value
that you’d have paid for through conventional
media channels
How could you apply this model to your
business?

And finally….
• No single metric for social ROI
• The devil is often in the detail
• Think laterally about how you can attribute monetary value to social
activity
• Constantly adapt and evolve your measurement to suit
• Clearly defined goals and outcomes are key
• And of course produce a final insight report on the total impact of the
initiatives. Success? Failure? Repeat? Or Rethink?
• Also get your head around Facebook/YouTube,Google+ Insights,
Google Analytics, Sysomos, Follower Wonk, Tweet Reach, Lead
Forensics, Twitalyzer, Kred, Klout, Peer Index, Sprout Social and so
many more.