Social Media ROI

Social Media Success
Metrics
December 10, 2009

Presented by:
James Clark, Co-Founder
Room 214

room214.com } info@room214.com } 303.444.9214

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 WOM
1. Online WOM activity
2. Digital venues in WOM occurs
3. Engine and set of tools to
achieve marketing goals


Measurement Framework
Action Who How What Where Result ROI

Participants Action WOMUnit Venue Outcome
Object

Propensity Velocity Topicality Consumptions
Demographic Distribution Timeliness Population Inquiries
Qualities Psychographic spread Polarity Audience Conversions
Credibility Source Clarity Rules Relays
Reach diversity Depth Re-Creations

Conversation Conversation Conversions Cost
Common volume
volume (ct, trials, deflections
segmentation Conversation
Conversation purchases) Cost per
Tracking or for other share
share Reach/ Advocacy conversion
Aggregate metrics, e.g., Rating/Revie
Rating/Revie Awareness (NPS, OP) Cost per
Metrics by influence w score
w score Market share conversation
factor, demo, Sentiment
Sentiment Shifts in Value of
etc.
awareness Conversation

Source: WOMMA Best Practices Guidebook


Program Measurement
Program …defined as… Measure
Using high-profile entertainment or news to get people Conversation volumes, SOV, MMM,
Buzz Marketing to talk about your brand Reach, ROI, Sentiment

Creating entertaining/informative messages designed Conversation volumes, SOV, MMM,
Viral Marketing to be passed along in exponential fashion Reach, ROI, Sentiment

Community Forming or supporting niche communities that are Advocacy, Cost Deflection, Cost per
Marketing likely to share interests about a brand; providing tools, Conversion, Conversation Volume
content and information to support those communities and Share, Influence, MMM, Reach,
ROI, Sentiment Analysis, Value of
Conversation
Grassroots Organizing and motivating volunteers to engage in Advocacy, Cost per Conversion,
Marketing personal or local outreach Conversation Volume and Share,
Influence, MMM, Reach, ROI,
Sentiment Analysis, Value of
Conversation

Evangelist Cultivating evangelists, advocates, or volunteers who Advocacy, Cost per Conversion,
Marketing are encouraged to take a leadership role in actively Conversation Volume and Share,
spreading the word on your behalf Influence, MMM, Reach, ROI,
Conversation



Program Measurement
Advocacy, Cost per Conversion,
Placing the right product into the right hands at the Conversation Volume and Share,
Product Seeding right time, providing information or samples to Influence, MMM, Reach, ROI,
influential Sentiment Analysis, Value of
Conversation
Conversation Volume and Share,
Identifying key communities and opinion leaders who
Influencer Influence, MMM, Reach, ROI,
are likely to talk about products and have the ability to
Marketing Sentiment Analysis, social Media
influence the opinions of others
Success Metrics Value of
Conversation
Cause Marketing Supporting social causes to earn respect and support Advocacy, Cost per Conversion,
from people who feel strongly about the cause Conversation Volume and Share,
Influence, MMM, Reach, ROI,
Conversation
Conversation Interesting or fun advertising, emails, catch phrases, Conversation Volume and Share,
Creation entertainment, or promotions designed to start word of MMM, Reach, ROI, Sentiment
mouth activity Analysis, Social Media Success
Metrics


Program Measurement
Creating blogs and participating in the blogosphere, in Conversation Volume and Share,
the spirit of open, transparent communications; Cost Deflection, MMM, Reach, ROI,
Brand Blogging
sharing information of value that the blog community Sentiment Analysis, Social Media
may talk about Success Metrics
Conversation Volume and Share,
Creating tools that enable satisfied customers to refer
Referral Programs Influence, MMM, Rating and
their friends
Reviews, Reach, ROI, Sentiment
Analysis, Value of a Conversation



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

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)

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

The total number of posts on a given Analyze by traffic source (blogs,
brand, product, campaign or topic mainstream media, forums, Twitter,
tracked over a set time period. Start social media, comments, YouTube) to
when a campaign launches, or look at the media distribution platforms
service starts or product is introduced. where your message is being carried


Conversation Volume and Share of Voice
Online 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
Removal of hard or soft costs from the methods a business uses to support its customers

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

Source: Jennifer Voisard, ComBlu


Cost Deflections
Brand
Engagement

Advocacy

Feedback

Support
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

Source: Jennifer Voisard, ComBlu


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

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.

Source: Steve McLaughlin, BzzAgent


Influence
Current 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 Modeling
MMM – 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 Modeling
http://www.imediaconnection.com/content/5412.imc
Source: Walter Carl, ChatThreads


Ratings and Reviews
A 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 brand
2. Achieve impacts beyond sales
3. Understand review evolution over time to see the overall impact


Ratings and Reviews
Tips and Best Practices:
1. Look at as many products as possible
2. Consider the same time periods over multiple years
3. Use products present in all time periods
4. Define conversation rates for products prior to launch, when they
had no reviews and compare to post-launch review metrics
5. 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?

Google Sidewiki – anyone can now place comments and
reviews on any web page
Source: Melissa Douglas,
Bazarrvoice


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

Why Measure Reach?
1. Understand how far a given marketing message spread
2. 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 Mouth
The number of individuals who have been exposed to a WOMunit through an
action of peer-to-peer connectedness.

Word of Mouth Generations
The “ripples” of WOM
Generation 0 = the first senders of information
e.g. James (G0) tells Jennifer (G2) about the great trip he had
Genreation 1 = the recievers of Generation 0’s information, some of whom
may resend
Generation 2 = the receivers of G1’s information, some of whom may resend


Reach
Methods for Quantifying Online Word of Mouth Reach
1. URL analytics tracking of website visitors
2. Email analytics of shares and forwards
3. Refer-a-friend/Send-to-a-friend tracking
4. Generational conversation validation and tracking platform

Tools

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

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

Source: Matthew Stradiotto, Matchstick


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


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

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

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

Source: Margaret Francis, Scout Labs


Key Points
• Conversation about ACME as an innovative
Key Topics of Conversation about ACME Company “green” company appears in the Exciting
New Technology and Socially Responsible
Other
categories, which make up more than one
11%
Exciting New third of content.
Technology
Outages &
25%
• Conversation portraying ACME as an Evil
Emergencies
Corporate Giant focuses the xxxx indictment.
9%
• AMCE’s attempt to impose a surcharge on
customers with solar panels fuels Anti-Green
conversation
• XXXXX conversation contains some
Complaints
about Rate Socially discussion of ACME’s attempt to include
Hikes Responsible executive perks in a rate hike, as well as
20% 13% more neutral discussion about routine rate
increases
Anti-Green Evil Corporate
Giant • The greatest proportional of user-generated
11%
10% content, much of it from Twitter, appears in
Analysis Dates
8/15 – 9/17
Outages and Emergencies.


Room 214’s Recommended Sentiment and Opinion Analysis Tools

Sysomos, http://www.sysomos.com

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


ROI in Social Media
Return – Investment = ROI

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)


ROI Techniques
Techniques 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 Resources
ReadWriteWeb
Dell’s $3m on Twitter and Four Better Examples
http://bit.ly/6Lb8HX

Social Media Today
6 Must Read Posts about the ROI of Social Media
http://bit.ly/4E0WqA

Mashable
How To: Measure Social Media ROI
http://mashable.com/2009/10/27/social-media-roi/

SocialSteve
Measuring the Value of Social Media
http://bit.ly/7jhOfK


Breaking the Golden Rule
Room 214’s Competitors – Doing Cool Stuff

Conversation Impact
Ogilvy 360 Digital Influence
http://bit.ly/5DWGQc

Social Influence Marketing
Razorfish
Fluent Report: http://bit.ly/7MnurP


Thank You!

James Clark
Co-Founder, Room 214
www.Room214.com
jclark@room214.com
Twitter: @jamesoclark
Phone: 303-444-9214 x100


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