How to Get a Grasp on
ROI for Social
Media
Eric Melin
@SceneStealrEric
@spiral16

Social Media Isn’t a Fad.
• An average of 900,000 blog
posts a day
• 4-6 million tweets an hour on
average
• Over 30 billion pieces of
content (videos, notes, status
updates, pages) shared on
Facebook in a month
It’s here to stay.

Social Media Is Not An “Add-On.”
It should be an integral
part of doing business.

Who Owns Social Media?
• Public relations?
• Marketing?
Which parts of your business
can benefit from social media?
Who should be responsible for
social media?

Who Owns Social Media?
• Public relations – crisis mgmt
• Marketing – brand reputation mgmt
• Sales/BizDev – lead generation
• Customer service – engagement/retention
• Product development – competitive intelligence
• IT – deployment/integrating new solutions
Everyone.

Social Media Isn’t Free.
It takes valuable time.
You need human resources for:
Planning
Creative insight
Content creation
Product management
Measurement
…and more.

What Does ROI Mean?
ROI = (Gain from Investment) - (Cost of Investment)
Cost of Investment
Return on investment is a
popular metric because of
its versatility and simplicity.
It is challenging to define
gains and costs when
measuring ROI for social
media efforts.

There is no way to calculate
social media ROI with a one-size-
fits-all equation.
Image from glynndevins.com -- and modified

•
ROI deals with money invested and
money gained—it’s a financial
metric.
That financial aspect is not inherent
to social media—it’s not built-in.
Why it is Difficult

To figure out ROI, you must bring the
two together.
Make sure your social media initiatives (nonfinancial)
are supporting your business goals (financial)
Have clearly defined business
objectives before you start.
THE MOST IMPORTANT
THING TO REMEMBER

Are We There Yet?
Subjective
metrics
tell you how the trip
is going.
Objective metrics
tell you when
you’re there.

Common Metrics
Frequency and volume of:
• Twitter followers
• Retweets
• Facebook likes
• Brand mentions
• Blog comments
• YouTube views
Are these things
important?
Ask yourself which
ones that matter to
your business.

Fostering Community
The US Navy’s Facebook page acts as a
bridge between
• Active Duty, Reservist, and Navy
Civilians
• Family and friends of Navy personnel
• Veterans and former Navy employees
• Potential recruits
• Navy enthusiasts
Which results in…
• 7-20K Facebook interactions
• 500-700 Twitter mentions
• 2,500-3,000 visits to the NavyLive blog
• 10-15K referrals to Navy.mil
“Managing Audience Engagement to Gain and Retain Public Involvement” - CDR Scott McIlnay (2010)
Per week.

Social Media Challenge:
2 Ways to Implement
• Figure out how social media can support
existing company initiatives.
• Create new social media initiatives that
help you reach your business goals and
impact your bottom line.

Objective Metrics
If your goal is …
Driving brand awareness - Look at metrics like share
of voice, reach, and volume of engagement.
To increase customer satisfaction or improve
customer retention - Look at things like sentiment,
satisfaction rates in surveys, speed of resolution and
percent of queries resolved.

Objective Metrics
If your goal is…
Creating better products - Focus on top market
trends and gauge satisfaction with various competitive
products.
Growing brand loyalists - Look at who your
advocates are, measure their influence, their reach,
and their engagement with your product.
Discovering new sales leads or new markets -
Discover and map the communities that are relevant to
your category.

Traditional Metrics
Social media shouldn’t be exempt from that.
Good news: That online data is already there.
Image from JoiningDots.net
• Every business is sitting on
a wealth of data.
• You expect those areas of
your business to present that
data in a measureable way.

Online Data That Matters
• Semantic Results
• Sentiment
• Volume/Frequency
• Where does it live?

What We Know So Far
Make sure your social media initiatives are
supporting your business goals.
Most of the common metrics are a means
to an end.
The metrics you need are out there—it’s up
to you to do define your ROI.
Let’s give it a shot.

1. Establish Benchmarks
What was the data like before
implementing social media?

2. Develop Strategy
How does social media support my
business goals?

3. Measure Results
How results are measured will be
different for everybody.
This process should be
customized for your business.
Measure effort and resources
against real-world results that
affect your bottom line.

4. Correlate Traditional Metrics
with Online Metrics
• Actual sales
• Retail traffic
• # of transactions
• New customers
• Amount per transaction
• Site visitors
• Time spent on webpage
• Conversion stats
• Positive/negative sentiment
• Message reach
• Volume of conversation
• Relevancy
• Frequency
• Linkages
• Comments
• Clickthrus
These are suggestions. Yours may be different.

Questions to Ask Yourself
• Did you see spikes in sales in correlation of your
social media efforts?
• What other patterns
can you find?

Data Without Context is Noise.

More Questions to Ask Yourself
Forrester’s Social Media Marketing Scorecard
considers metrics from four different perspectives:
Financial: Has revenue or profit increased or costs decreased?
Brand: Have consumer attitudes about the brand improved?
Risk Management: Is the organization better prepared to note
and respond to attacks or problems that affect reputation?
Digital: Has the company enhanced its owned and earned digital
assets?

It’s Not Always Difficult
Sometimes just being able to
illustrate that you have the ability
to create business gains through
social media is enough …
…to reach your goal.

Case Study
Background: 20-year hunting and fishing TV show
Needed to expand their brand association with
general outdoor adventure to attract large retailers
Company Goal: Win Retail Licensing Program

Tactics
• Developed an outdoor adventure site to promote outdoor
recreation activities
• Identified influencers in targeted communities like hiking,
mountain biking, snow shoeing, bird watching and sent
targeted messages about their brand
• Started a blog and included stories about outdoor
adventure activities
• Began tweeting about specific outdoor recreational
activities while shooting TV shows

AO measured word association with their brand and saw the new
words such as adventure, outdoor, activities, experts,
professional, training show up in their semantic cloud.
AO illustrated the overwhelmingly positive sentiment associated
with their brand and did competitive research on targeted retail
brands to compare their sentiment.
AO ultimately shared this data with the retailer and earned a
licensed goods program worth several million dollars over
three years – identified their overall costs of social media
efforts including listening, engaging and measuring as
$25,000.
Gains

Conclusions
• Goal: Understand that social media
represents a new set of measurements that
can be correlated with your traditional
financial metrics.
• Challenge: Figure out which social media
metrics can support your business objectives
and be correlated to increase your ROI.

Thank you from
Eric Melin
@Spiral16
@SceneStealrEric
www.spiral16.com
Special thanks to the organizers of
PodCamp Topeka
and The American Outdoorsman