1. MEASURING THE
ROI OF SOCIAL MEDIA

2. Agenda
• Why should we care about ROI?
• Social Media ROI today
• Better ways to measure ROI?
• Class Exercise

3. Why is ROI important?
• If you can’t measure it, you can’t manage it.
• “82% of marketers say their executive management
expects every campaign to be measured.”
(source: ifbyphone 2011 State of Marketing Measurement Report)
• Marketing budgets are correlated to ROI.

4. Social Media ROI Today:
What’s so hard about it?
“ROI intrinsically implies that you want to
take out more than you put in. Social Media is
about freely sharing with no strings attached.
It’s a paradoxical relationship...”!
" " " "- Rob Kozinets, Jan 11, 2012!
ROI = company gets more than company gives
≠
sharing freely = Social Media

5. Social Media ROI Today:
The Stats
• Measuring ROI was the
leading challenge for
Social Media Marketers
in 2010 & 2011.

6. Social Media ROI Today:
Quotable Notables

7. Social Media ROI Today:
Current Metrics
Source: The ROI of Social Media, MDG Advertising

8. Social Media ROI Today:
The big “But”
Bu!. . .
• Short term vs. long term
• Quantitative benefits vs. qualitative benefits

9. Turn your thinking upside down
Traditional
ROI= (new sales) or (cost savings) ROI= (new fans) x (leap of faith)
investment investment
Problem: short term & incomplete. Problem: blatant ignorance
Fodor, 2010
Hoffman &
Company Returns = Customer Investments (behaviors + $)
Customer Behaviors  Key Marketing Objectives
Key Marketing Objectives  1) Awareness, 2) Engagement, 3) WOM

10. Determine your Objectives
• Know what you
want out of a
campaign before
you try to
measure it.

11. Key Marketing Objectives

12. From Fuzzy to Quantifiable Metrics
• Measure early
• Measure often
• Measure everything
Source: Hoffman & Fodor, 2010

13. Measurement Tools Available

14. Estimating Metric Values
• Primary research (consumer panels, surveys)
• Traditional media benchmarks
• Historical performance

15. Case: Danone Facebook Campaign
• What was the marketing
objective?
• What metrics would you
use to measure it?
• How would you try to
measure ROI?
http://www.youtube.com/watch?v=R7F4zQWWaVs

16. Appendices

17. Relevant Metrics – Hoffman & Fodor