Measuring ROI for Social Media

Evo TerraASimplerWay.com

Measuring ROIfor Social MediaYes, you should. Yes, you can.


Measuring ROI for Social Media

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• ROI = Return on Investment– not “interest”– not “interaction”– not “engagement”



• ROI = Return on Investment– not “interest”– not “interaction”– not “engagement”

ROI =Benefit - Cost

Cost

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Evo TerraASimplerWay.comSocial Media ROI by Intersection Consulting


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Benefit - Cost

CostROI =


Your social media plan isn’t

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Evo TerraASimplerWay.comStolen from The Definitive Social Media ROI Presentation by Olivier Blanchard | http://smroi.net

Your Social Media Investment…

leads to an Action, that

creates a Reaction, which

delivers a Non-Financial Impact, that may ultimately

cause a Financial Impact.

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HOW TO measure ROI

• Showstoppers– Limited access to metrics– Execution roadblocks


HOW TO measure ROI

1. Know your client’s goals– Selling stuff– Increase sales of XYZ by 10% in Q2


HOW TO measure ROI

1. Know your client’s goals– Financial Impact

• Replacing expensive customer focus groups• Reduce inbound sales calls• Reduce inbound service requests• Reduce advertising expenses• Increased transactions• Higher GP sales• Increased sales efficiency


HOW TO measure ROI

1. Know your client’s goals– Non-Financial Impact

• Increased PageRank™• Reduced infrastructure cost• Increased store traffic• Increased site traffic• Improved sentiment• Relevant Fans & Followers


Measurement RULE

If you aren’t influencing it,

don’t measure it.


HOW TO measure ROI

2. Record every Action– Date & action

• Blog posts• Outbound comment• Guest post• Interviewed on podcast• eBook published• Event promoted• Campaign flight• Press release• Influential re-Tweet


HOW TO measure ROI

3. Overlay with business metrics

Revenues are up!

Site traffic is flat.Total Revenues

Site Traffic

Gross Profit %

Twitterers

FB Fans

Conversions percustomer


HOW TO measure ROI


Revenues are up!

Site traffic is flat.

No more conversions, either.

Total Revenues

Site Traffic

Gross Profit %

Twitterers

FB Fans



HOW TO measure ROI


Revenues are up!

Site traffic is flat.

No more conversions, either.

And sales were already going up. You’re fired.

Total Revenues

Site Traffic

Gross Profit %

Twitterers

FB Fans



HOW TO measure ROI


Mix of key financial and non-financial goals impacted

Total Revenues

Site Traffic

Gross Profit %

Twitterers

FB Fans



HOW TO measure ROI


SM Campaign launches

Total Revenues

Site Traffic

Gross Profit %

Twitterers

FB Fans


7/20 - New product push

9/1 - Influential tweet

10/30 - Mashable.comguest blogging


Measurement RULE

But you aren’t done!

Calculate the ROI.


Week GP Twitter Revenue Gross Profit $ Net Profit $ Baseine (net profit $) SM Fees Net net net

20 51.06% 2389 99,500.67$ 50,802.97$ 12,700.74$ $13,000.00 $1,000.00 ($1,299.26)

21 51.31% 2401 99,789.89$ 51,206.57$ 12,801.64$ ($1,198.36)

22 51.57% 2413 99,987.98$ 51,564.65$ 12,891.16$ ($1,108.84)

23 51.76% 2498 101,689.45$ 52,637.71$ 13,159.43$ ($840.57)

24 51.83% 2501 100,432.89$ 52,051.67$ 13,012.92$ ($987.08)

25 51.98% 2500 101,678.34$ 52,849.27$ 13,212.32$ ($787.68)

26 51.66% 2502 100,456.89$ 51,892.35$ 12,973.09$ ($1,026.91)

27 51.12% 2499 100,069.87$ 51,157.75$ 12,789.44$ ($1,210.56)

28 51.31% 2501 125,876.56$ 64,592.78$ 16,148.20$ $2,148.20

29 51.57% 2525 125,987.67$ 64,972.91$ 16,243.23$ $2,243.23

30 51.76% 2567 126,123.09$ 65,285.34$ 16,321.34$ $2,321.34

31 51.83% 2701 102,452.98$ 53,098.63$ 13,274.66$ ($725.34)

32 51.98% 2746 99,876.54$ 51,912.75$ 12,978.19$ ($1,021.81)

33 52.49% 2767 99,333.76$ 52,140.14$ 13,035.03$ ($964.97)

34 52.96% 2790 97,911.67$ 51,854.05$ 12,963.51$ ($1,036.49)

35 53.45% 2804 96,898.99$ 51,794.05$ 12,948.51$ ($1,051.49)

36 53.49% 2825 111,522.87$ 59,658.42$ 14,914.60$ $914.60

37 53.52% 2832 124,488.77$ 66,621.05$ 16,655.26$ $2,655.26

38 53.45% 2850 136,445.37$ 72,932.22$ 18,233.06$ $4,233.06

39 53.49% 2988 145,998.03$ 78,100.68$ 19,525.17$ $5,525.17

40 53.64% 3104 156,887.33$ 84,160.55$ 21,040.14$ $7,040.14

41 54.50% 3115 160,984.23$ 87,734.51$ 21,933.63$ $7,933.63

42 55.59% 3148 159,845.44$ 88,856.16$ 22,214.04$ $8,214.04

43 56.53% 3156 161,334.87$ 91,201.27$ 22,800.32$ $8,800.32

44 57.49% 3178 155,989.44$ 89,679.76$ 22,419.94$ $8,419.94

45 58.99% 3188 162,889.44$ 96,083.53$ 24,020.88$ $10,020.88

46 60.29% 3203 169,556.76$ 102,226.89$ 25,556.72$ $11,556.72

47 61.23% 3267 178,943.00$ 109,568.65$ 27,392.16$ $13,392.16

48 62.47% 3409 176,789.44$ 110,441.45$ 27,610.36$ $13,610.36

49 64.07% 3687 180,333.88$ 115,546.26$ 28,886.57$ $14,886.57

50 66.38% 3898 179,445.98$ 119,119.30$ 29,779.83$ $15,779.83

51 68.35% 4120 181,445.00$ 124,013.92$ 31,003.48$ $17,003.48

52 70.70% 4467 183,876.04$ 129,998.28$ 32,499.57$ $18,499.57

4,404,843.13$ 2,495,756.49$ 623,939.12$ $161,939.12

7/20 - New productpush

9/1 - Influentialtweet

10/30 -Mashable.comguest blogging


Benefit - Cost

CostROI =


Benefit - Cost

CostROI =

Benefit: $623,939.12 in net profit dollars, less $429,000 as baseline Cost : $1000 for 33 weeks = $33,000

$194,939.12 - $33,000

$33,0004.91 =ROI


What if…

You don’t win?

Then you don’t win.


Measuring ROI for Social MediaYes, you should. Yes, you can.

Measuring ROI for Social Media

Business

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