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A short(er) version of a talk I recently gave at SMAZ -- Social Media for Business in Arizona. The house was packed, even though others were talking about the ROI of social media. I made sure mine had teeth and didn't dance around the issue of ROI. ROI means what ROI means. And CFOs don't care about alternative descriptions for it. They care about money out and want to see money in. Is that easy? Nope. But it's doable. For some. I give props inside this preso to Olivier Blanchard for the concept that I expand upon. Hope you enjoy it.E.
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Evo TerraASimplerWay.com
Measuring ROIfor Social MediaYes, you should. Yes, you can.
Evo TerraASimplerWay.com
Measuring ROI for Social Media
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Evo TerraASimplerWay.com
Measuring ROI for Social Media
adding machine (d) by Aaron Kyle
Evo TerraASimplerWay.com
Measuring ROI for Social Media
• ROI = Return on Investment– not “interest”– not “interaction”– not “engagement”
Evo TerraASimplerWay.com
Measuring ROI for Social Media
• ROI = Return on Investment– not “interest”– not “interaction”– not “engagement”
ROI =Benefit - Cost
Cost
Evo TerraASimplerWay.combalance sheet ok by Philippe Put
Evo TerraASimplerWay.comSocial Media ROI by Intersection Consulting
Evo TerraASimplerWay.comSocial Media ROI by Intersection Consulting
Evo TerraASimplerWay.comSocial Media ROI by Intersection Consulting
Evo TerraASimplerWay.com
Head in the sand by jvh33
Evo TerraASimplerWay.com
Head in the sand by jvh33That gulping sound is coming from your yard by Daniel Greene
Evo TerraASimplerWay.com
Head in the sand by jvh33That gulping sound is coming from your yard by Daniel GreeneRob Cottinghams Notes from My Metrics Session by cambodia4kidsorg
Evo TerraASimplerWay.com
Benefit - Cost
CostROI =
Evo TerraASimplerWay.com
Your social media plan isn’t
Social Media Plan by javiberm
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.
Evo TerraASimplerWay.comNot the best hockey game ever by Evo Terra
Evo TerraASimplerWay.comStand out from the Crowd by Paul likes pics
Evo TerraASimplerWay.com
HOW TO measure ROI
• Showstoppers– Limited access to metrics– Execution roadblocks
Evo TerraASimplerWay.com
HOW TO measure ROI
1. Know your client’s goals– Selling stuff– Increase sales of XYZ by 10% in Q2
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
Measurement RULE
If you aren’t influencing it,
don’t measure it.
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
HOW TO measure ROI
3. Overlay with business metrics
Revenues are up!
Site traffic is flat.
No more conversions, either.
Total Revenues
Site Traffic
Gross Profit %
Twitterers
FB Fans
Conversions percustomer
Evo TerraASimplerWay.com
HOW TO measure ROI
3. Overlay with business metrics
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
Conversions percustomer
Evo TerraASimplerWay.com
HOW TO measure ROI
3. Overlay with business metrics
Mix of key financial and non-financial goals impacted
Total Revenues
Site Traffic
Gross Profit %
Twitterers
FB Fans
Conversions percustomer
Evo TerraASimplerWay.com
HOW TO measure ROI
3. Overlay with business metrics
SM Campaign launches
Total Revenues
Site Traffic
Gross Profit %
Twitterers
FB Fans
Conversions percustomer
7/20 - New product push
9/1 - Influential tweet
10/30 - Mashable.comguest blogging
Evo TerraASimplerWay.com
Measurement RULE
But you aren’t done!
Calculate the ROI.
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
Benefit - Cost
CostROI =
Evo TerraASimplerWay.com
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
Evo TerraASimplerWay.com
What if…
You don’t win?
Then you don’t win.
Evo TerraASimplerWay.com
Evo TerraASimplerWay.com
Measuring ROI for Social MediaYes, you should. Yes, you can.
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