Chris McLaren, Director, Strategy | Wunderman Minneapolis, February 2014. McLaren presented insights into best practices in ROI tracking. To ascertain the relative effectiveness of social media versus other marketing channels, he advised mapping social metrics to marketing KPIs and assigning comparative values using “known” media costs specific to clients.

1. Best Practices in ROI
Chris McLaren
Director, Strategy | Wunderman
February 2014

2. About Wunderman
CLIENTS
SERVICES

3. Wunderman transforms
AMBITION OF THE WORLD’S BEST DIRECT MARKETER
LOCAL CAMPAIGN INNOVATION
OPERATIONAL SCALE OF TECHNOLOGY AND CONTENT
GLOBAL ACCOUNTABILITY - MEASUREMENT

4. Wunderman transforms
1,400 AGENCY EMPLOYEES CONNECTED
CREATIVE ORIGINATION AND GLOBAL DEPLOYMENT
DATA, DIGITAL, DIRECT FOR B2B AND B2C
SHIFT FROM CHANNEL TO CUSTOMER CENTRIC

5. The key to making a
partnership work is setting
a common vision and a
common language.
You need a common
language to bring people
together - and that
language is the data.
- Jeff Edmondson, Founder, Strive Together partnership

6. Social media is a marathon,
not a sprint.
Measure everything.
See what works.
See what doesn’t. Tweak and
optimize the plan as you go.
– Clay Hebert, CEO, Founder Tribes Win

7. QUICK STATS

8. 72%
•
•
•
•
of all adults are on a social network
89% of 18-29 year olds
78% of 30 to 49 year olds
60% of 50 to 64 year olds
43% of people over 65
One four
in
social network users follow
brands, products or services on social networks
Source: Pew Research 2013; Forbes 2012

9. 78%
of consumers
say that the posts made by
companies on social media
influence their purchases
Source: Forbes, May 2012

10. Online social networks are growing. Fast.
Years to 50M Users
Instagram
Twitter
Facebook
Internet
Television
Radio
Telephone
1.5
2.8
3.5
4
13
38
75
Source: United Nations Cyberbus Millennium Report, 2000; Facebook Newsroom; The Verge, May 2012;

11. YouTube is more popular than cable TV
Over 1 billion unique monthly visitors
Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;

12. Social media has overtaken porn as the
#1 activity on the web
Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;

13. Twitter handles more search queries per
month than Bing and Yahoo combined
Twitter: 24 billion
Bing: 4.1 billion
Yahoo: 9.4 billion
Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;

14. “We don’t have a choice on whether we do
social media, the question is how well we
will do it.”
– Erik Qualman
Author, Socialnomics

15. Social ROI defined
• “Return…” (social benefits)
• Transactions
• Every possible brand interaction prior to a transaction
• Post transaction behaviors, including brand advocacy
• Brand sentiment
• SEM rankings
• On-site social actions like ratings/reviews, liking and commenting
• Customer service (efficiency/effectiveness)
• Market research
...can generally be “rolled up” to strategic KPIs or value categories
• “…On Investment” (social costs)
• Easier to calculate (though many ‘R’s are not solely attributable to
social media)

16. DEFINING
SOCIAL “R”

17. Social “R” Characteristics: Pros
+
Traffic
• 15-20% of Unique Visitors
from “Earned” Links
(source: Meteor Solutions)
+
Quality
• 1.5 - 4x Conversion Lift
• Loyal Fans (more likely to
buy more than once)
(source: Razorfish)
Add: Community Value
The larger the community, the greater the number of
earned media impressions, clickthroughs,
conversions, etc. for every $ spent.
Earned media communities make all other marketing
investments more valuable by enhancing and
extending their effects
Advocacy
• 90% of consumers trust
the opinions of people
they know
• 70% trust anonymous
ratings and reviews
posted online
• Compare this with just
33% who trust online
banner ads
(source: Nielsen)

18. Social “R” Characteristics: Cons
http://www.wired.com/business/2013/07/email-crushing-twitter-facebook/

19. Social “R” place in Customer Journey
Time
How people experience
brands
Ratio to a conversion
(example)
Seen from a
measurement POV
0%
Awareness
Social
Awareness
100,000:1
Advocacy
Engagement
Paid search,
email, web
5,000:1
Conversions
Conversion
1:1
Users take a desired action
Buy online, live chat, contact form,
whitepaper download, visit
specified site content, email sign
up, RSS, etc.
Advocacy Feedback Loop
Social
Engagement
Advocacy
50:1
100%
Though earned media contributes value throughout, it is
mainly effective at creating demand through awareness
and engagement - before audiences have even thought
about a brand / product / service. It is nearly impossible to
build a brand or create demand using Paid media; this is
where Earned Media tends to deliver higher ROI.

20. How an understanding of ROI can inform
client strategy

21. 3M Littmann Stethoscopes
Why Social Media – and How to Leverage
 Littman has 92% market share. The average purchaser of a new
stethoscope:

Already owns a stethoscope*

Already owns a Littmann (~92% likely)
 Paid search helps ensure Littmann is there to capture the lion’s share of
current demand; however, paid search does little to expand the current
market, e.g, create new demand for stethoscopes among clinicians
 Social media operates at the top of purchase funnel, creating
awareness and demand for new stethoscopes
 New stethoscope offerings (new FABs, esp. customization,
lifestyle/vanity offerings), coupled with social media, can create new
demand for stethoscopes among current clinicians, leading to more
lifetime stethoscope purchases per clinician
*Students are an exception. However, Students are more present
and active in social media than any other segment

22. How to Value Social “R”?
Paid Media Return (Easy)
– Traffic
– Actions - searches, coupon (QR Codes) /whitepaper downloads,
– Conversions – Sales, lead captures, phone calls, etc.
– ROI – Cost per click, cost per lead, sales & revenue
VS
Earned Media Return (Difficult)
– Reach: Friends, fans, subscribers, followers
– Views: Social page views, video plays, SlideShare plays
– Engagement: Likes, comments, sharing, retweets, replies, etc
– Impressions: Influence and reach of people posting the chatter
– Context & Sentiment: Subjects/themes and pos/neg buzz
– ROI (???)

23. One way to measure Social “R” is by expressing
the value of its native metrics in the form of paid
metrics and/or transactions that already have a
dollar value attributed to them for your business.

24. A fairly involved example
Awareness, Engagement, Conversion, and Advocacy
values for Earned Media using the following client-specific
“known value” inputs:
• Paid media: Cost per impression (CPI)
• Paid media: Cost per click to website (CPC)
• Website (conversion platform):
Number of “where to buy” visits from Earned Media
• Website (conversion platform):
Conversion rate per click
• Average Revenue per Conversion

25. Putting social metrics into value categories
A
E
C
L
Awareness
Engagement
Conversion
Advocacy
• Impressions
• Followers, Fans,
Subscribers, Members
• Lists
• Page Views
• Mentions per time period
• Inbound links
• Share of Conversation
• Brand specific searches
• Sentiment Trends
• Comments
• Visit Rate or Content
Resonance
• Return Visits
• Click-throughs
• Registrations/Opt-ins
• Retweets
• Replies
• Referrals
• Recommendations
• Thread Size
• Time with Content
• Suggestions/Feedback
• Content Downloads
• Content Sharing
• Spinoff Content
B2B:
Users take actions known to
drive meaningful business
outcomes:
• Demo sign ups
• Webinar sign ups
• Contact forms
• Whitepaper downloads
• Email sign ups
• Visits to desired site content
• Advocacy Behaviors
(various, including:)
• Retweets
• Testimonials
• Recommendations
• Referrals
• Co-creation/User
Generated Content
• Content Sharing
• Activity Sharing
• Information Sharing
Common
B2C:
• Go to store and buy
• Find a partner/distributor
• Lead form
Some common,
some specific
Always specific to brand and/or campaign

26. Social media-driven value
(one month)
How people generally experience
brands in social media
Time
$ Value
for December
Seen from a
measurement POV
0%
Awareness
Awareness
$169,200
+
$318,301
Engagement
Engagement
Conversion
+
Conversions
$26,103
Users take a desired action
Buy online, live chat, contact form,
whitepaper download, visit
specified site content, email sign
up, RSS, SMS, etc.
Advocacy Feedback Loop
+
Advocacy
$308,001
100%
$821,605
(total value)
Advocacy

27. Summing categories for total “R”
If all metrics are assigned a dollar value, it becomes possible
to sum total value contribution for any timeframe, channel, or
campaign:
$A
$E
$C
$Adv
Total
Return
($)
Common value “language” easier to align activities,
make comparisons, optimize, forecast, plan

28. BENCHMARKING

29. Deeper Benchmarking Examples

30. Deeper Benchmarking Examples

31. BRAND
SENTIMENT

32. Brands have an (arguably)
quantifiable value
Source: http://www.interbrand.com/en/best-global-brands/2013/top-100-list-view.aspx

33. Brand sentiment drives brand value
• If you track brand sentiment in social media, you have a
measure of the effect that all marketing efforts (not just
social media) are having on it
• If you peg your brand’s sentiment to a brand valuation,
you can theoretically know the dollar value of sentiment
changes over time, assuming there is a causal
relationship between the two
• Most brands maintain NPS to measure sentiment; socialspecific version in the works

34. CSAT & Loyalty Measure: NPS
See also: "Measuring Customer Satisfaction and Loyalty: Improving the ‘Net-Promoter' Score"

35. ROI Best Practices Checklist
 ROI measurement is not about “perfection”; it is about
having some idea what you’re doing, why you’re doing it,
and how you’re doing
 Measure value using reliable methods and calculations that
are specific to your business as fully as possible
 Measure channels, tactics and campaigns using same value
categories, so you can make informed comparisons about
relative value (crucial to setting strategy)
 Measure new channels, tactics and campaigns, while still
able to measure overall value as variables change
 Enable budgeting against outcomes rather than deliverables
 Tie reporting directly to annual and/or multiyear goals
 Assess on monthly/quarterly/annual basis

36. Discussion
THANK YOU

37. APPENDIX

38. Advocacy
38

39. WOM Facts
2/3rds of the economy is influenced by personal recommendations.
Gartner
McKinsey & Company
20% of consumers are key influencers of purchasing
activities of 74% of the population.
Consumers mention 56 brands in conversation per week.
Keller Fay
62% of these discussions are positive.
Each peer recommendation reaches 150 people on the social web.
Forrester
Less than 25% of people say they trust emails they sign up for.
1 in 3 people come to a brand through a recommendation.
Bain & Co.
Weber Shandwick
The most recommended company in any given
category grows 2.5x the category average.
40% of advocates answer, comment, or give opinions online
several times each week.
Yahoo! and
Comscore
39

40. Social Media Amplifies WOM
• Each recommendation reaches
150 people
• 500M peer impressions
annually in US
• Now rivals advertising
impressions
Source: Forrester Peer Influence Analysis
40

41. How It Works
1. Identify
Clicks, Conversions
Impressions
A/B Testing
Review & comment
moderation
Z Score, NPS®
Advocate Profile
Data
3. Measure
Advocate Responses
Advocate Actions
Paid Media
Social Media
2. Mobilize
Recommendations
Ratings & Reviews
Stories & Testimonials
Offers
Answers
Word of Mouth marketing solution /
fully integrated brand advocacy system
41

42. Use Advocacy Modeling
100
Mercenaries
Advocates
Influence
Terrorists
Non-Threats
Fans
0
-
Opinion
+
• Overlay customer and prospect databases with social profile
data and segment into audience categories ranging from
“advocates” to “terrorists”
• Develop social and/or cross-media campaigns to move targets
to become brand advocates
• Track results over time
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43. Reporting and Dashboards
43

44. Marketing Practice Audit - Summary
Designing Reporting
• Web-based reporting dashboards are the best
way to provide access on-demand
• However, to be consistently useful, dashboards
must be designed in accordance with how the
information should be used at each
organizational level
44

45. Source: “Framework: The Social Media ROI Pyramid”. Web Strategy, by
Jeremiah Owyang. Posted December 13th, 2010
45

46. Business purpose of community
measurement
• Performance dashboards for use in managing
community and reporting progress should be
created for three audience levels:
– Business Executives
– Business Stakeholders
– Community Managers and Agencies
…as illustrated on next slide
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46