Measuring Social Media ROI - Econometrics

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Copyright Bottom Line Analytics, LLC - All Rights Reserved, 2013 1 SOCIAL MEDIA ROI: CAN WE MEASURE THE IMPACT OF SOCIAL BRAND CONVERSATIONS? HOW TO MONETIZE THE CUSTOMER EXPERIENCE Copyright Bottom Line Analytics, LLC - All Rights Reserved, 2013

Transcript of Measuring Social Media ROI - Econometrics

Page 1: Measuring Social Media ROI - Econometrics

Copyright Bottom Line Analytics, LLC - All Rights Reserved, 2013 1

SOCIAL MEDIA ROI: CAN WE MEASURE THE IMPACT OF SOCIAL BRAND CONVERSATIONS?

HOW TO MONETIZE THE CUSTOMER EXPERIENCE

Copyright Bottom Line Analytics, LLC - All Rights Reserved, 2013

Page 2: Measuring Social Media ROI - Econometrics

Copyright Bottom Line Analytics, LLC and Next Generation Marketing Research - All Rights Reserved, 2013

MONETIZING SOCIAL MEDIA CONVERSATIONS

SOCIAL MEDIA ENGAGEMENT INDEX

APPLYING THE SEI℠ METRIC

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

2. QUANTIFYING THE IMPACT OF SOCIAL MEDIA

3. DEVELOPING A CUSTOMER ACQUISITION STRATEGY BASED ON CONSUMER CONVERSATIONS THAT DRIVE BRAND ENGAGEMENT

4. VALUING AND MONETIZING FACEBOOK MARKETING CAMPAIGNS

5. ENHANCING PROMOTION EXECUTION BASED ON CONSUMER ENGAGEMENT

ABOUT BOTTOM LINE ANALYTICS

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Page 3: Measuring Social Media ROI - Econometrics

Copyright Bottom Line Analytics, LLC and Next Generation Marketing Research - All Rights Reserved, 2013

• Bottom-Line Analytics and a North Carolina partner have developed an innovative new

consumer engagement metric called the “Social Engagement Index” or SEI

• When developing the SEI℠, our big “ahha moment” occurred when we realized that

since social media is a form of word-of-mouth, words and semantics, not sentiment

are the foundation for understanding consumer engagement with a brand!

• This knowledge was used to create a quantitative social media metric based on

Stance-Shift linguistics theory. (Stance Shift theory has been published and peer

reviewed)

• Uses the Social Media conversations about your Brand as input.

• Results in a quantitative engagement score that is a translation of his/her

“personal” and “emotional” relationship with a brand

• SEI is highly correlated with Brand sales (75% - 85%)

• The SEI is more actionable than current sentiment metrics since it is strongly correlated

with Brand sales

SOCIAL MEDIA ENGAGEMENT INDEX

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Page 4: Measuring Social Media ROI - Econometrics

ENGAGEMENT SCORE

WHEN CALCULATING THE SEI℠ METRIC, BRAND CONVERSATIONS ARE SCORED

DIFFERENTLY BASED ON THEIR PERSONAL AND EMOTIONAL CONTENT

“I REALLY LOVE HOW MY BAGS FLY FREE WITH MY SOUTHWEST” “I LIKE THE EVERYDAY LOW RATES OF SOUTHWEST” “I BOOKED A FLIGHT ON JET BLUE TODAY”

“THE DELTA FLIGHT ATTENDANT WAS NOT THAT HELPFUL” “MY FLIGHT ON AMERICAN HAD THE RUDEST FLIGHT ATTENDANTS YOU CAN IMAGINE”

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Page 5: Measuring Social Media ROI - Econometrics

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THE SEI PROCESS CONVERTS SOCIAL MEDIA CONVERSIONS USING STANCE SHIFT

THEORY TO CREATE A QUANTITATIVE METRIC - SEI℠

POSITIVE

REVIEWS NEGATIVE REVIEWS

POSITIVE SCORES

NEGATIVE SCORES

SOCIAL MEDIA CHANNELS

LOW MED HIGH

High Med Low

EMOTIONAL SCORE

PER

SON

ALI

ZATI

ON

SC

OR

E

1. MINE ALL SOCIAL MEDIA CHANNELS FOR BRAND CONTEXT CONVERSATIONS, E.G. BRAND MENTIONS

2. PARSE INTO POSITIVE & NEGATIVE REVIEW

GROUPS. FURTHER DIVIDE INTO KEY TOPICS. 3. DERIVE ENGAGEMENT INDEX FROM 30

LINGUISTIC RULES TO “SCORE” MINED BRAND/TOPIC SOCIAL MEDIA CONVERSATIONS

4. TIME CODE BY WEEK & AGGREGATE METRICS

0

2

4

6

8

Per1

Per2

Per3

Per4

Per5

Per6

Per7

Per8

Per9

Per10

SEI SCORE

Page 6: Measuring Social Media ROI - Econometrics

WHERE OTHER SOCIAL SENTIMENT METRICS FALL SHORT, THE SEI℠

SHOWS SUPERLATIVE CORRELATIONS TO BRAND SALES!

-20% 0% 20% 40% 60% 80% 100%

METRIC 1 POS/NEG RATIO

METRIC 2 POS/NEG RATIO

METRIC 3 POS/NEG RATIO

METRIC 4 POS/NEG RATIO

METRIC 5 POS/NEG RATIO

METRIC 6 POS/NEG RATIO

SOCIAL ENGAGEMENT INDEX (SEI )POS/NEG RATIO

9.9%

2.8%

-3.2%

7.7%

14.8%

5.9%

82.9%

Comparison Of The Correlation To Sales For The SEI Metric Versus Sentiment Metrics For The Six Leading Social Data Vendors

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Page 7: Measuring Social Media ROI - Econometrics

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The Linkage & Correlation To Sales Over Time Shows That SEI Has Predictive Power

SEI℠ HAS PROVEN LINKAGE WITH BRAND SALES

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Page 8: Measuring Social Media ROI - Econometrics

Copyright Bottom Line Analytics, LLC and Next Generation Marketing Research - All Rights Reserved, 2013

MONETIZING SOCIAL MEDIA CONVERSATIONS

SOCIAL MEDIA ENGAGEMENT INDEX

APPLYING THE SEI METRIC

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

2. QUANTIFYING THE IMPACT OF SOCIAL MEDIA

3. DEVELOPING A CUSTOMER ACQUISITION STRATEGY BASED ON CONSUMER CONVERSATIONS THAT DRIVE BRAND ENGAGEMENT

4. VALUING AND MONETIZING FACEBOOK MARKETING CAMPAIGNS

5. ENHANCING PROMOTION EXECUTION BASED ON CONSUMER ENGAGEMENT

ABOUT BOTTOM LINE ANALYTICS

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Page 9: Measuring Social Media ROI - Econometrics

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• WHEN WE LOOK CONSUMER ENGAGEMENT (SEI℠) WITH NATIONAL RESTAURANT CHAINS, RESTAURANT A STANDS OUT AS A GIANT AMONG ITS COMPETITORS

1% 16%

12%

43%

10%

19%

Customer Engagement (SEI) by Restaurant Chain

Restaurant A

Restaurant B

Restaurant C

Restaurant D

Restaurant E

Restaurant F

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

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Page 10: Measuring Social Media ROI - Econometrics

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• ACROSS THE RESTAURANT, “HIGH QUALITY FOOD” AND “FRIENDLY SERVICE” CONVERSATIONS DRIVE CONSUMER ENGAGEMENT TO AN AIRLINE

0 10,000 20,000 30,000 40,000 50,000

A Good Place I Can Take My Children

Good Value for the Price

Has a Wide Variety on the Menu

Quick Customer Service

Fresh Tasting Food

Friendly Service

High Quality Food

Restaurant Industry Conversations Total Engagement (SEI) by Subject

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

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Page 11: Measuring Social Media ROI - Econometrics

• RESTAURANT “A” HAS THE HIGHEST OVERALL ENGAGEMENT WHEN CONSUMERS HAVE “HIGH QUALITY FOOD” RELATED CONVERSATIONS

- 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Restaurant F

Restaurant E

Restaurant D

Restaurant C

Restaurant B

Restaurant A

SEI Ratio – High Quality Food

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

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Page 12: Measuring Social Media ROI - Econometrics

• RESTAURANT “A’S” COMMITMENT TO HIGH QUALITY FOOD IS DRIVING MUCH OF ITS OVERALL ENGAGEMENT WITH CONSUMERS AND IS PROVIDING IT WITH A COMPETITIVE ADVANTAGE

0

1

2

3

4

5

6

0 1 2 3 4 5 6 7

SEI –

Hig

h Q

ual

ity

Foo

d

SEI - Total Restaurants

Relationship Between “High Quality Food” Conversations and Restaurant Conversations

Restaurant A

Restaurant B

Restaurant C

Restaurant D

Restaurant E

Restaurant F

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

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Page 13: Measuring Social Media ROI - Econometrics

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2. QUANTIFYING THE IMPACT OF SOCIAL MEDIA

• WE FIND THAT CONVENTIONAL ADVERTISING HAS BOTH A “DIRECT IMPACT” ON SALES AND AN “INDIRECT EFFECT” DUE TO ITS INFLUENCE ON SOCIAL MEDIA CONVERSATIONS AND THE SEI

• THE LARGE CONTRIBUTION FROM THE SEI℠ SUPPORTS THAT THIS IS A “WORD-OF-MOUTH” EFFECT

67%

8%

3%

2% 2%

10%

5%

11%

20%

Marketing Contributions

Base Sales Direct Alpha Brand Mass Media Direct Alpha Brand Digital Media

Direct Social Media Social Media on SNI Mass Media on SNI

Digital Media on SNI SNI Base

Net driven by media

SEI Engagement

Sub-model

Page 14: Measuring Social Media ROI - Econometrics

The tree starts with an average SEI score of 100; and each level indicates a higher or lower SEI based on an

SEI score for a topic. The percent represents the percent of the sample in each segment.

3. DEVELOPING A CUSTOMER ACQUISITION STRATEGY BASED ON CONSUMER CONVERSATIONS THAT DRIVE BRAND ENGAGEMENT

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Most Important Positive Drivers:

1. Place to Hang Out

2. For Meeting People

3. The Store Atmosphere

4. Beverage Products Positive SEI

3.93 = 100

Place2HangOut

>5.46= 211

9.1%

Place2HangOut

<5.46 = 83

91.9%

ToMeetPeople>

9.43 = 325

2.6%

ToMeetPeople<

9.63 = 188

6.5%

Atmosphere

>14.0 = 466

0.6%

Atmosphere

<14.0 = 288

1.9%

To Meet People

>5.4 = 229

3.8%

To Meet People

<5.4 = 85

85.5%

Beverage A

>6.4 = 271

7.7%

Beverage A

<6.4 = 74

77.8%

Place2HangOut

>3.6 = 126

5.9%

Place2HangOut

<3.6 = 76

71.9%

Beverage B

>5.2 = 211.1

1.6%

Beverage B

<5.2 = 67

70.3%

• INSIGHTS WERE USED TO DEVELOP A DIGITAL CONTENT STRATEGY AND IN-STORE PROMOTIONS THAT INCREASED SALES

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Page 15: Measuring Social Media ROI - Econometrics

Copyright Bottom Line Analytics, LLC and Next Generation Marketing Research - All Rights Reserved, 2013

4. VALUING AND MONETIZING FACEBOOK MARKETING CAMPAIGNS

• BY BUILDING A SALES RESPONSE MODEL USING THE SEI℠, WE CAN MONETIZE TARGETED MARKETING ACTIVITIES SUCH AS FACEBOOK CAMPAIGNS

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Page 16: Measuring Social Media ROI - Econometrics

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5. ENHANCING PROMOTION EXECUTION BASED ON CONSUMER ENGAGEMENT

Promotion Results

• During a six month time period, the Client featured its Breakfast item with a promotion price of $2 with the purchase of a beverage.

• We analyzed the promotion impact by comparing the baseline average Social Engagement Index (SEI) performance prior to and after the promotion to the promotion period.

• SEI metrics reflect a significant promo lift in social engagements during the promo week compared to the benchmark 16wk pre and post periods. The net POS/NEG metric was up 180%.

• The promo lift was occurred across all social media channels.

* Net = POS minus NEG Ratio = POS/NEG

Lift By Channel

Total Blogs Boards Facebook Twitter

173% 193% 164% 39% 165%

Artisan Sandwich [Jan 4th - Jan 10th]

SEI Pre Promo Promo Post PromoLift Over Avg

Benchmarks

# Weeks 16 1 16 Pre & Post

Average Wk

POS 84 259 108 169%

NEG 23 77 37 160%

Net* 61 182 72 173%

Ratio* 3.73 3.37 2.96

• THE BREAKFAST SANDWICH PROMOTION GENERATED A POSITIVE LIFE IN CONSUMER ENGAGEMENT

12 1 12

150% 160% 180%

65 135 100 150 20 60 29 160 60 170 65 180 3.2 3.1 2.8

180% 150% 170% 40% 180%

Page 17: Measuring Social Media ROI - Econometrics

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• THE BREAKFAST ITEM TRENDED HIGHER DURING THE PROMOTION

Weekly Trended SEI ℠

• The SEI metric identified a significant promo lift for the Breakfast item based on social engagements during the promo week. This is comparable to the lift experience by a previous Free Coupon promotion.

• However, the SEI was much higher during the previous promo possibly due to the excitement created by “Free” product.

Breakfast Item

Breakfast Item

5. ENHANCING PROMOTION EXECUTION BASED ON CONSUMER ENGAGEMENT

Page 18: Measuring Social Media ROI - Econometrics

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Consumer Responses to Promotions

• AFTER THE BREAKFAST ITEM PROMOTION, CONSUMERS EXPRESSED CONCERNS ABOUT HIGH FAT CONTENT AND MADE DIRECT COMPARISONS TO COMPETITIVE BREAKFAST ITEMS

Concerns about Fat and Comparisons to competitive products

Breakfast Item

5. ENHANCING PROMOTION EXECUTION BASED ON CONSUMER ENGAGEMENT

Promotion

Cluster Promotion Day

Product

Cluster Taste

Product

Experience Time

Concerns

&

Compare

Cluster

Diet Retail

Competition Occasion

Average

All

Clusters

Breakfast

Item 0.10 0.25 -0.05 -0.19 -0.70 -0.10 0.33 2.45 0.15 2.66 3.12 0.46

Page 19: Measuring Social Media ROI - Econometrics

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MONETIZING SOCIAL MEDIA CONVERSATIONS

SOCIAL MEDIA ENGAGEMENT INDEX

APPLYING THE SEI℠ METRIC

1. IDENTIFYING CATEGORY DRIVERS AND CONVERSATIONS IMPACTING BRAND ENGAGEMENT

2. QUANTIFYING THE IMPACT OF SOCIAL MEDIA

3. DEVELOPING A CUSTOMER ACQUISITION STRATEGY BASED ON CONSUMER CONVERSATIONS THAT DRIVE BRAND ENGAGEMENT

4. VALUING AND MONETIZING FACEBOOK MARKETING CAMPAIGNS

5. ENHANCING PROMOTION EXECUTION BASED ON CONSUMER ENGAGEMENT

ABOUT BOTTOM LINE ANALYTICS

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Page 20: Measuring Social Media ROI - Econometrics

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ABOUT US

Bottom-Line Analytics LLC is a consulting group focusing on

marketing and social media analytics

Our modeling experts have a total of over 100 years of direct

experience with marketing optimization modeling. This includes

direct experience in over 35 countries and dozens of product

categories.

We are dedicated to the principles of innovation, excellence

and uncompromising customer service.

Most important, however, we are dedicated to getting tangible

and positive business results for our clients.

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OUR TEAM’S EXPERIENCE

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Contact Information

• David Weinberger

• Chief Marketing Officer

• (o)770.649.0472

[email protected]

• Bottom-Line Analytics LLC

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