This is a slide deck that accompanied a Focus roundtable on how to calculate a marketing and PR ROI. Focus roundtable = http://www.focus.com/roundtables/simplifying-social-business-social-marketing-and-pr-roi/

1. Social Marketing and PR ROI
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2. Marketing & PR ROI Gains
• Revenues from enhanced Marketing Funnel
Dynamics
• Increased word of mouth and customer influence:
Shares, referrals, online reviews, key message pick-up,…
• Increased marketing lead conversion rates
• Savings from:
• Consumer Insights.
• Brand protection.
• Reduced marketing costs.
• Reaching PR objectives faster, better, cheaper:
• Increased awareness, reach, relevance,
engagement,…
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3. ROI Costs
Common costs for social customer service
programs:
• People,
• Process,
• Technology.
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4. ROI Formula
ROI = (Gains - Costs)/Costs x 100
ROI is shown as a percentage.
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5. Sample ROI:
Client Case Study #1
Sales revenues from
Marketing Program
(Medium-sized brand for baby care
products.)
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6. Challenge
1. To lead and own the conversation on baby care
WOM channels.
2. Increase awareness, reach, relevance, share of
voice, positive sentiment in online conversations
about diapers compared to competitors.
3. Educate moms on the new concept of Babies’
Stage of Development (BSOD) to generate
interest for diaper product.
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7. Solution
1. Create online presences and invite parents to
share and learn about their babies’
development.
2. Develop online PR program for baby care
websites targeted at parents to build up a WOM
channel to increase influence among parents
and establish/drive loyalty among consumers.
3. Determine ROI of program.
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8. Projected program stats (conservative)
• Average volume of social conversations
• Before: 1,380,000 in previous 6 mo.
• Goal: Add 168,000 convos over a 6-mo period (12% increase).
• Add 5,000/mo from registered users uploading photos and
essays to branded site.
• Add 10% to convo volumes = 23,000 other convos/mo in
3rd party blogs, their own tweets, etc.
• Social media sentiment
• Before: 42% positive, 36% neutral, 22% negative
• Goal: increase positive sentiment
• Sales and Revenue
• Before:
• Annual sales = $156M
• Sales/convo before program = $56.52/convo
• After: Increase annual sales and value of purchase
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9. Formula for Revenue Gain
Revenues =
Impact x Reach x Yield
Influenced convos
* We look at changes before program versus
estimates of expected after results.
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10. Impact
Impact
= Positive sentiment x Listening Rate
= 42% x 10%
= 4.2%
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11. Reach = Extent of online footprint
Reach
= 1,380,000 convos in previous 6 months
= Avg of 230,000 per month
= 5,000 posts/mo on website
+ 23,000 other convos/mo across web (blogs,
tweets, etc).
= 28,000 convos/mo
= 168,000 add’l convos total for 6 mo
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12. Influence factor
= Impact x Reach
= 4.2% x (168,000 convos)
= 7,056 influenced convos for 6-mo period.
* Influenced convos = # of impacted, add’l
convos.
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13. Yield
Add’l sales
= (Rev/convo) x (# Influenced Convos)
= $56.52 x 7,056 convos
= $398,805
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14. Costs
People costs
= $49,000 for employees for 6 mo
Process costs
= $163,000 for agency for campaign
Technology
= 60,000 community solution
Total costs = $272,000
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15. ROI Formula
ROI
= (Gains - Costs)/Costs x 100
= ($398,805 - $272,000)/($272,000)
x 100
= 47%
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16. Actual program stats
Registered users = 38,700 (29% higher)
Total conversations across social web = 196,560
(17% higher)
Social monitoring = 44% positive (+2% climb)
Revenues/convo = $61.61 (9% higher)
Actual Sales Impacted = $532,842
Actual ROI = 96% (2x higher than forecast)
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17. Sample ROI:
Client Case Study #2
Consumer Insight Savings
(Medium-sized software company.)
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18. Challenge and Solution
Challenge - Cut the cost of gaining
consumer insight.
Solution – Use social media in lieu of more
expensive focus groups.
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19. Program stats
Average cost per survey or focus group
= $15,000
Recommended # of surveys per year
= 1 before each major release
= 2x per year.
Total cost of recommended surveys
= $30,000
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20. Program stats
Cost of personnel
= 1 marketing person working 20% of time on
monitoring
= ($112,000 burden compensation) x 20%
= $22,400
Cost of social monitoring
= $6,000/yr
Total costs = $28,400/yr
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21. ROI Formula
ROI
= (Savings Gains - Costs)/Costs x 100
= ($30,000 - $28,400)/($28,400)
x 100
= 6%
Recommendation – Do either 2 surveys
per year or social.
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22. What if?
What if company wants ongoing real-time
customer insights?
What would ROI be then?
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23. What if costs…
Savings Gains
= Price of 4 surveys per year
= 4 x ($15,000/survey)
= $60,000
Costs
= Cost of personnel = $22,400/yr
= Cost of tech = $6,000/yr
= $28,400/yr
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24. What if ROI
ROI
= (Savings Gains - Costs)/Costs x 100
= ($60,000 - $28,400)/($28,400)
x 100
= 111%
Recommendation – Do social media for
consumer insights or do a mix of social media
and surveys.
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25. Contact information
Natalie Petouhoff Kathy Herrmann
DoctorNatalie@gmail.com info@kathyherrmann.com
DrNatalieNews www.kathyherrmann.com
@DrNatalie @KathyHerrmann
+DrNatalie +KathyHerrmann
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