Social Media ROI Report
The importance of goals and success metrics
Brought to you by Peashoot, from Egg Co. http://peashootapp.com
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For a marketing team within a larger organization or a clientfacing agency, being able to quantify growth or returns on a campaign is of vital importance when presenting results to upper management or clients - not to mention important to yourself or your team in order to determine whether your campaigns are actually working.
This report discusses these three areas:
• The difficulties of measuring Social Media ROI • Defining Better Success Metrics • Real-world Examples of Social Media Campaigns Written by Jon Anthony Yongfook Cockle, Chief Gardener at Egg Co.
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Problems with Measuring Social Media ROI
Avinash Kaushik recently tweeted the above, rather funny quote. He is of course touching on the fact that often, the results of social media are hard to measure and he is saying this from the viewpoint of an analyst. Why do the returns from social media have a reputation for being difficult to measure?
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Return on Investment
One of the first things we should clarify is this notion of “ROI”. Here’s what ROI means: Return on Investment is a measure of how much return you receive from each marketing dollar. This is a term we traditionally associate with advertising and ad campaigns. “Investment” implies some kind of capital outlay, such as hiring an ad agency to put together a campaign, or procuring 250,000 bouncy balls. This of course can cost anything from thousands to millions of dollars, so we quite rightly expect returns on the investment. The point about social media is that it doesn’t need to cost much. In fact it doesn’t need to cost anything. A successful social media campaign can be something started by you for $0 and expanded upon by your users/customers, or it can be something implemented and maintained by an existing member of staff taking up just minutes of their work day - we’ll look at a real-world example of that later in this report.
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Social Media for Marketing?
There is also some sentiment towards social media being more fundamental than a marketing tool. Some people believe that social media is not a channel to sell things but it is something that should be used purely to engage with your customers. An extension of ethics - something so core to your business that you should just be “doing it” and not thinking about what you get back from it. At Egg Co. we’re of the mindset that it’s a pretty diverse platform; social media can be used for selling just as well as it can be used for listening.
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Of course one of the big issues with measuring and understanding the returns from social media is that often, the benefits extolled by its advocates are qualitative in nature. We know that good social media campaigns can increase loyalty, influence and all these other exciting-sounding attributes but at the same time, they are a little vague. If we increase influence by 5%, what does that actually mean? Breaking down these qualitative attributes into bite-size chunks that we can measure, understand and translate easily into a business context is a vital step in measuring social media ROI.
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Deﬁning and Setting Success Metrics
It sounds like I’m stating the obvious, but the key to measuring returns is… knowing what to measure. This is the area where businesses - without proper guidance, or internal knowledge - start seeing fuzzy returns. Often the reason organizations or marketing teams don’t see recognizable returns or returns that are hard to quantify for social media campaigns is because they are using the wrong metrics - or not using any at all. Choosing the right success metrics (or KPIs if you’re an MBA-type) is the first challenge of implementing a social media campaign you can measure. There are infinite things that can be measured when you’re talking about digital communication / transactions. The smart companies are the ones who successfully figure out what success metrics translate easily into a business context for their organization.
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Filter Out the Noise
A successful campaign is about getting engagement. Or at the least, it’s about getting attention from the right kind of people. In both cases, being strict about what you measure is the key to seeing greater returns. For example - the number of followers on your twitter account is a pretty meaningless success metric to use, although it might be satisfying and flattering to try to increase. However, if for example you are a flower shop owner in the middle of downtown Tokyo and you implement a social media campaign to get 200 male followers on Twitter who live in Tokyo - that’s a metric that translates into a business context without any jiggling. That’s 200 qualified leads you can offer Valentine’s day discounts to in the week before February 14th. 200 leads to remind that it’s Mother’s day soon. Choosing more granular goals like this will make the relationship between the outcome of the campaign and your company’s bottom line easier to understand.
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Deﬁning Success Metrics
The next question is then, “ok, what should my success metrics be?” and there is no short answer to that. This is where your marketing team or social media consultant comes in to help you define what things you should be measuring. It depends on various factors such as what tools you have available to you, what are the goals of your campaign etc. One thing to remember is that by defining success metrics you can break down qualitative attributes into metrics that are easier to understand and measure. For example your campaign goal could be to increase “Influence” and you might measure this by the number of influential blogs linking to you and the number of influential twitters retweeting you, to give two simple ideas for metrics.
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Returns don’t always need to directly translate into revenue if the return is undeniably a positive force for the organization. A good example of this is a campaign that increases authority, which you might break down into metrics like page-rank of your blog and page-rank relative to your competitors. Setting a campaign goal of increasing your page-rank to beyond that of your competitors is undeniably a positive force for your organization, even if it doesn’t translate immediately into returns in the form of revenue. It will translate further down the line in the form of more organic search traffic to your website, and online competitive advantage over your competitor. We shouldn’t be afraid of recognizing a results like these as valid returns from a campaign.
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Measuring Qualitative Returns ~ Rackspace
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Here’s a really basic example of a campaign to increase customer loyalty, which we can measure simply by the amount of customers we interact with, and the number of subsequent, positive conversations this spawns. I signed up with Rackspace recently and was so impressed with their support that I tweeted something along the lines of “wow, I’m impressed with Rackspace’s support” - about 5 minutes after which I received the above reply quite unexpectedly from a Rackspace employee. This is an example of what I said at the very start - this isn’t an expensive campaign, someone at Rackspace is probably taking a little time out of their day to see who is talking about Rackspace on Twitter and shooting back a nice message to people saying nice things. It took that person seconds to type, but it will probably have an impact - however small - on my decision to re-contract with them next year.
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Measuring Qualitative Returns ~ Starbucks
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Starbucks implemented this campaign (similar to one by Dell) to ask customers, quite simply, what do you want. There are a number of interesting metrics that we can measure here, outlined in the slide above. You could also back up your measurements with pre-and-post campaign polls.
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Measuring Qualitative Returns ~ Copyblogger
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Copyblogger writes very authoritatively on marketing, providing reams and reams of free, useful content for their readers. Copyblogger earns revenue from various marketing-related side-projects which generate revenue directly (eBooks, pay-per-view content etc). Their authoritative, free content brings in loyal readers and organic traffic alike, and a percentage of these convert into paying customers for their premium content.
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Measuring Quantitative Returns ~ Burger King
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Burger King recently started a campaign on Facebook encouraging you to “remove” 10 of your friends in exchange for a free burger. It proved to be very popular until Facebook shut the campaign down, on the grounds that purposefully removing friends was kind of detrimental to the platform...
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Measuring Quantitative Returns ~ Dell
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Dell have done wonderful things with granularity. There are dozens of Dell twitter accounts serving specific markets and offering unique deals - refurbished offers, offers for home computing, offers for small businesses etc. Tracking returns in the form of online revenue generated from an online campaign like this is comparatively easy - technology has smoothed out some of the problems already. A good tool to get comfortable with is the Google URL Builder which will enable you to track campaign visitors through to your checkout pages, as long as you are using Google Analytics.
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The Importance of Testing
The last point I would like to make is that if you are going to use social media as a lead / sales generator (which companies above such as Copyblogger and Dell are doing effectively) then we shouldn’t forget that simply driving engaged traffic to a landing page doesn’t guarantee any return. That’s just half the challenge.
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The other half of the challenge is funneling the user into actioning, such as purchasing something, signing up for a newsletter etc. This is a delicate balancing act of making sure the user has enough information to action, making sure the process isn’t frustrating, making sure the things they need to click on are clearly labeled, or simply writing copy that isn’t lifeless and unconvincing. When I worked at Dentsu: Avenue A Razorfish (a Japanese-American joint venture with Japan’s largest advertising agency) the team I was part of would test this process very granularly. Do users respond better to green buttons or orange buttons? Do they respond better to a “Purchase Now” or a “Buy Now” call to action? Do they click on round things more than square things? - and so on… ...this was about the tip of the iceberg.
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We had some heavyweight “agency” tools to do this, but you can achieve similar results with free tools. With Google’s Website Optimizer, you can test attributes like this to an alarming degree of granularity, with the end result being a process that functions X% better than before. A few percent might not sound like much, but when your business is doing millions of dollars in revenue, those few percent can be well worth testing for…
If you want to know more about metrics and testing, Dave McClure has a good presentation entitled: Startup Metrics for Pirates
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How Peashoot Can Help
Peashoot is one of Egg Co.’s software products and it is a social media campaign manager for the type of campaigns you’ve been reading about in this report. For more information: http://peashootapp.com Peashoot creates short URL links for your products that you can easily share and promote across various social media channels. It then tells you information about who clicks, how many of those clickers purchased something on your site (or your client’s site) and also who tweets about your campaign. Three key benefits of Peashoot relevant for readers of this report are:
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1) Measure ROI in Peashoot
Peashoot automatically tracks how many conversions and how much revenue your social media campaigns are generating. Suddenly you’ll start thinking differently about PPC ad programs like Adwords, when you see that with just a few tweets a day you can increase sales or conversions on your website! Not only that but you’ll see trends that will help you maximize your returns on campaigns such as when is the best time to tweet, who are the most useful retweeters in your network, and more!
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2) Goal Setting in Peashoot
Peashoot allows you to create campaigns with granular goals to give your campaigns context and strategy. You can check your progress at any time and Peashoot will notify you by email when your campaign goals are complete.
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3) Active Listening
With Peashoot's Active Listening technology, Twitter activity about your campaign is plotted onto your campaign's activity graph. When your campaign gets a spike in clicks, conversions or revenue, you'll instantly know why, and who to engage with. With Active Listening you’ll discover like-minded tweeters who are promoting your campaigns and generating sales for you - encourage them to get on board with future campaigns to maximize your sales!
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Peashoot Free Trial!
You can sign up right now for a free trial of Peashoot at http://peashootapp.com. If you’re interested in measuring ROI for yourself or for your clients and increasing your sales on social media channels, sign up now! Free trials last for 21 days.
Thanks for Reading
Feel free to forward this document on to anyone you think will be interested. The slides are also available online if you would like to download or re-use them: http://www.slideshare.net/yongfook/social-media-roi Kind Regards, Jon Chief Gardener, Egg Co. http://egg-co.com
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