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Sara Meaney, Hanson Dodge Creative (HDC) president of strategy and growth, delivered this talk at the 2012 Communications Conference of American Association of State Colleges and Universities (AASCU) in March of 2012. She discussed digital marketing in general and ROI and more specifically about social media and ROI. This is a great deck to better understand digital ROI and how to explain it to coworkers and clients.
Citation preview
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Digital Marketing & ROI1
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Defining ROI•Define objectives•Measure them•Case studies•Tools•Q&A
Overview
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
DEFINING ROI
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•# Fans•# ReTweets•Total Impressions•Ad equivalency calculations•# Post views, clicks, likes, comments or burps
•These are key METRICS. But they are not ROI.
What ROI is NOT
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
What did you invest?
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
What did you get in return?
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
What will your answer be?
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!"#$%&'#$&(#'%)#*+,#"-#'%.(#/("0.&1#2)3.&4#'%.56#"-#$%.0%#7"8#
(9)&:;#
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
We don’t work in a vacuum
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Purchase decisions are complex
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
DEFINING OBJECTIVES
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
What’s the point?
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What are you trying to do? How will you
measure it?
You can’t do everything. Focus. !
How will you know if you succeeded?!
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Definingyour objectives
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Augie RayForrester Research
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Financial objectives
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Revenue
Cost
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Increased enrollment/donations•Increased ancillary sales
Increase Revenue
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Reduction in acquisition cost•Reduction in customer service cost•Reduction in cost to innovate•Reduction in administrative costs
Decrease costs
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Awareness•Sentiment•Word of mouth•Loyalty•Recruitment / Talent retention
Brand objectives
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Reduction in exposure to risk•Improvement in response effectiveness•Speed of response
Risk management objectives
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Enhanced owned and earned assets•Search / findability
Digital objectives
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
MEASUREMENT
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
What’s everyone else measuring?
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
What’s most important?
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•PR / Advertising model•CLV (Customer Lifetime Value)•SEO model•Customer service / satisfaction
Measurement models
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Identify / agree on key success metrics for this objective•Establish baseline levels•Track change•Ensure comprehensive measurement from all available data points
Pick an objective.
Measure it.
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
“Can we literally enroll students or collect donations via social
media channels?”Objective: Sell more product /service
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YES! NO!
Integrate purchase functionality into your social channels: F-Commerce module, mobile storefront application, tracking codes, e-commerce, cookies, etc.
Maybe your budget or technology does not allow.
So what CAN you do to influence enrollment behavior?Measure collection volume and
calculate ROI based on cost to capture.
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Define success: sum of parts = whole•Let’s pick “Increase Awareness”•What data points would indicate success on this objective?
Identify success metrics
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✓Shares of product assets (images, video, etc.)✓Online reviews of institution✓Traffic to information page(s)✓Social comments, likes about you✓Mentions in third party media
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•What were the baselines before digital initiatives?
•Have there been other additions to the marketing mix?
•What other factors could contribute to potential increases or decreases?
Measure it
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
GC: Gross contribution per customerr: annual retention rate (as a percentage)d: Discount rate, or cost of capital for the future value of a customer. Often roughly estimated w/ current interest rate.
*This equation is a good estimate but doesn’t take into consideration costs to maintain a customer and assumes constant values for each variable. More complex CLV equations are required.
CLV: Customer Lifetime Value
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CLV = GC x (r________
1 + d - r)
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
GC = $50 per widgetr = 80%d = 2.75%Then CLV = $175.82
You spent $100,000 to acquire 2,500 new customers through traditional channels.Cost per acquisition = $40Customer acquisition ROI =
($175.82 - $40)/$40 = 339.5%
CLV: Customer Lifetime Value
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CLV = GC x (r________
1 + d - r)
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
GC = $50 per widgetr = 80%d = 2.75%Then CLV = $175.82
You spent $75,000 to acquire 2,500 new customers through social media channels.Cost per acquisition = $30Customer acquisition ROI =
(175.82 – 30)/30 = 486.1%
CLV: Customer Lifetime Value
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CLV = GC x (r________
1 + d - r)
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Simple calculation
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
(Sales – Investment) ÷ Investment = %ROI
Sales = $ sold via that channel or due to that channelInvestment = all $ costs related to acquiring the sale: development + design of platform, time to manage or staff it, maintenance costs, advertising to drive awareness of channel, etc.
Simple calculation
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Complex calculation
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
(Revenue – Investment) ÷ Investment = %ROI
Revenue = $ attributed to sales from leads through or assisted by digital initiativesInvestment = all $ costs related to acquiring the sale: assign relevant costs to each level of lead nurturing required to close sale. Must include additional marketing, CRM, proposal development, presentation time, customer service activities, etc.
Complex calculation
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
CASE STUDIES
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
•Comprehensive launch program for a new router
-Second Life-3D gaming-YouTube-Video conference-Mobile datasheet
Cisco social product launch
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-Facebook -Social news releases-Blog-Tech Community
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
• 9,000 people attended virtually = 90x more attendees than in the past• Saved 42,000 gallons of gas• 300% more media coverage than traditional outreach methods• More than 1,000 blog posts and 40 million online impressions• 1/6 the cost of a traditional launch• Saved $100,000
Launch costs
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Brand awareness
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Objective: Increase brand awareness for Wilson Basketball and its NCAA Tournament affiliation
Success Metrics:ImpressionsEngagementCommunity GrowthConversion to website
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Brand awareness
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Success Metrics:ImpressionsEngagementCommunity GrowthConversion to website
Outcomes: -50 million Facebook Impressions in 24 days.-Product page website traffic up 44% over previous month and 77% over March 2010.-Facebook became #2 source of all traffic to Wilson.com/Basketball, after Wilson.com-Community grew from 0 to 23,200 in 24 days.-Feedback avg of .45% outpaced Facebook average .29% by 150%
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
TOOLS
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Aggregated metrics
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• Most tools make gathering and processing easier• Some include distribution• Some include analysis• Some make pretty pictures• They (nearly) all cost money
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Want vs. need
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• Search / Aggregate mentions• Moderate conversation• Schedule / Publish content• Engagement management• Measure / Analyze• Language / Translation• Gamification / sweepstakes tools• Pricing model
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Want vs. need
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
No one-button solution
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HDC / Making the world more active.
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Constant change
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
10 Metrics to watch
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1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms6.Website visitors and sources of traffic7.Conversion: subscriptions, email lists, etc. 8.Time spent engaging: apps, time on site, etc.9.Engagement ratio: active network / total network10.Viral engagement: sharing, “people talking”
HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Sara MeaneyHanson Dodge CreativePresident, Strategy & GrowthMarch 6, [email protected]
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HDC / Making the world more active.
©Copyright Hanson Dodge Creative. All Rights Reserved.
Hanson Dodge Creative is relentless about pushing the boundaries of engagement to deliver integrated solutions that work.
MAKING THE WORLD MORE ACTIVE.™