Marketing Tactegy

ROI of Social Media: Can’t live with it, can’t live without it – part 4

In my last three posts on the ‘ROI of Social Media:  Can’t live with it.  Can’t live without it’, I spoke about why many marketers try to hold social media to a higher standard of measurement when traditional media isn’t even measured, about the need to measure across the entire marketing mix in order to properly measure the impact of social media and in the previous post about Last Touch Attribution versus measuring the indirect effects of social media.  I hope you found them interesting.  With this post, I conclude with the entrepreneurial phase of social media and how that will quickly move past the early adopters.  I will also finally answer the teaser question of how I can claim the ability to be able to measure the effectiveness and ROI of all marketing activities.  I hope you find the answer useful as you work to implement and improve the ROI of all your marketing – both traditional and social – in your organization.

 

For more information on all these topics, please check out our book at http://www.ROIofSocialMedia.com, or follow the topic on twitter at #ROISM.

 

1)    The entrepreneurial phase of social media - Social media is in the entrepreneurial phase.  Social media entrepreneurs need to run social media marketing in order to test and try new things.  This is a very different mindset than what would be found with traditional media.  Certainly, traditional media specialists are also entrepreneurs, but in a different way.  They can’t afford failure.  Can you imagine the impact on a career with the failure of a multi-million dollar TV campaign?

2)     

Social media entrepreneurs must try things and be allowed to fail.  No one wants a failure, but social media marketers must put themselves into a position to be able to quickly learn from what didn’t work and turn that insight into what could work and then try again.  What’s required for this type of entrepreneurialism to work is a culture of measurement and of course ROI.  With the right metrics in place, the good and the bad can be quickly detected.  The good can be accelerated. The bad can be mitigated.

 

The point:  Don’t be afraid of failure.  Put the right metrics in place to be able to learn quickly.  Put the right people in place who are willing to test the envelope.

 

So let me answer the question from my first post.  ‘How can I make a statement that I can measure everything?’  It’s actually quite simple.  I didn’t mention what the cost would be.  Measurement and ROI in marketing isn’t about being able to measure something or not.  It’s about doing it at reasonable cost.  It’s about measuring the right things in order to make significantly better decisions for the future.

 

If you want to learn more or need help with marketing ROI – traditional or social, give us a call.  We’re just around the corner on a social site near you.

 

If you’d like to learn more about this topic, come join us at MeasureUp The conference on the art and science of integrating traditional and social media marketing ((Use this link for 25% off!  http://www.iirusa.com/measureup/welcome-page.xml?registration=SPKRM2308GP).). I hope you found them* interesting.  Please let me know if you have any questions or comments.

 

ROI of Social Media: Can’t live with it, can’t live without it – part 3

In the last two blog posts on ‘ROI of Social Media:  Can’t live with it.  Can’t live without it’, I spoke about why many marketers try to hold social media to a higher standard of measurement when traditional media isn’t even measured and in the previous post about the need to measure across the entire marketing mix in order to properly measure the impact of social media.

 

For more information on all these topics, please check out our book at http://www.ROIofSocialMedia.com, or follow the topic on twitter at #ROISM.

 

1)    Last Touch Attribution verses indirect.  Many times, I’m asked how does social media marketing work if there aren’t any click-throughs?  There are no conversions that can be directly attributed back to social marketing activities.  Firstly, many marketers need to realize that we are trying to measure the impact of our marketing activities, not the noise of all social media.  Our marketing drives incremental social media consumption, conversation and invitation (that is, inviting others to participate in the brand).  So we first want to attribute these results to our marketing activities, both social and traditional.  Second we want to determine how this incremental consumption, conversation and invitation leads to incremental revenue (and then, of course, profit.).

 

Next we’re interested in determining not only how this marketing effort drives direct response in terms of clicks and conversion, but also how it drives the brand (awareness, consideration, purchase intent, and brand imagery) in order to fully attribute all the direct and indirect effects to their proper drivers.

 

Once we have this in place. We can now start to really see how social media marketing drives value for the brand.

 

Lastly, we need to realize that marketing isn’t the only function for social media.  Social media also supports the operations of the company and in so doing, can reduce costs (e.g., call deflection, time to resolution, improved hiring), increase service levels and impact the long-term value of the brand.  This clearly applies to companies that have a direct support relationship with their customers.  It also applies to FMCG, but to a much lesser extent.  Even FMCG has service issues once in a while.

 

The Point:  ROMI for social media is not only about click-throughs and conversion.  It must also consider the long-term brand effects.  Click-thru and conversion are only partial metrics.  They’ll do if that’s all you’ve got, but smart marketers work to measure more - a lot more. Social media provides not just a marketing value, but also an operational value.  To truly determine its full worth, we need to measure both.

 

If you’d like to learn more about this topic, come join us at MeasureUp, the conference on the art & science of integrating traditional & social media marketing ((Use this link for 25% off!  http://www.iirusa.com/measureup/welcome-page.xml?registration=SPKRM2308GP).).  Otherwise, stay tuned for my next and final blog post.  I hope you’ll find it interesting.  Please let me know if you have any questions or comments.

 

ROI of Social Media: Can’t live with it, can’t live without it – Part 2

In my last blog post on ‘ROI of Social Media – can’t live with it, can’t live without it’ I spoke about how many marketers hold social media to higher ROI standard.  If you’re not measuring traditional media, why do we need to measure the ROI of social media before we’ll invest in it?

In this post I’ll talk about the fact that in order to measure the incremental impact of social media we need to measure across the entire marketing mix.  (If you would like more information on all these topics, please check out our book at http://www.ROIofSocialMedia.com, or follow the topic on twitter at #ROISM.)

1)    Measuring across the marketing media mix - As you probably noticed from my first post I speak about ‘marketing ROI’ when the article claims to be about social media ROI.

As a marketing measurement expert (and I think I can call myself that, even though I am always learning new tricks), I have been measuring the effectiveness of social media right from the start.  We have measured a number of social media activities around the globe going back a number of years and all of them have been exceptionally strong - much stronger than traditional media activities.

When embarking on marketing measurement and now social media marketing measurement, we have to go back to basics.  We can’t measure the effect of social media as a stand-alone media (of course, unless this is the only thing you and your competitors are using.)  Social media has a unique impact on consumer behavior but we need to realize that it also affects the impact of traditional media and traditional media impacts the effect of social media. 

In order to ‘get it right’ we need to have a measurement framework that is specific to social media, but also takes into account the entire marketing environment.  We need to look across all 4 Ps (Product, price, place and promotion).  To this end, my coauthors and I developed the Media Engagement Framework (page 84 in the book, which can be found at http://www.ROIofSocialMedia.com – a blatant plug).  It looks at how to gather the right information and data to properly measure the impact of all the actors in social media.  It talks about individuals, that may or may not become consumers, but nevertheless engage with your brand, influencers and how we would like to work towards winning and improving their endorsement of our brands, and of course consumers, that we want to move down the purchase funnel from brand awareness, to purchase, loyalty and advocacy.  If we follow this measurement framework, we can now be assured that we are measuring the right things so we can use those measurements to make better strategic and tactical marketing decisions in the future.

The Point:  Social media must be measured and it must be measured in context of all marketing activities and we must measure the right things in order to make better strategic and tactical marketing decisions.

If you’d like to learn more about this topic, come join us at MeasureUp The conference on the art and science of integrating traditional and social media marketing (http://www.IIRUSA.com/MeasureUp).  Otherwise, stay tuned for my next two blog posts.  I hope you’ll find them interesting.  Please let me know if you have any questions or comments.

Author’s Bio:  Over the last 20 years Guy R. Powell, based in Atlanta and Singapore has been helping thousands of marketers across the globe prove and improve their marketing performance through training, analytics and organizational transformation.  His experience cuts across just about every industry, every media channel – including social - and every region – from Asia to North America.  You can reach him on Linked in or at http://www.ROIofSocialMedia.com.  His other books include Marketing Calculator:  Measuring and managing your return on marketing investment (http://www.Marketing-Calculator.com) and Return on Marketing Investment:  Demand more from your sales and marketing investments. (http://www.ReturnonMarketingInvestment.net)

 

The Full Measure on MeasureUp (4 of 4)

MeasureUp is a great conference for all things marketing ROI and return on marketing investment ROMI put on by the IIR.  They put on some great events and I highly recommend you take a look at their site for some upcoming events.  To summarize this series of 4 posts the Measureup conference there were a few major points that I came away with:

1. Marketing Mix Modeling may have peaked. Marketing Mix models have provided great insight over the years, but lately many have been shown to only deliver short term insights. When used in a competitive, mature category, such as, for the Oreo brand, MMMs typically deliver short term insights in that temporary price reductions can increase sales. Unfortunately, they also lead to loss of brand value. MMMs don’t include the long term brand value that can be destroyed through continuous price actions. Consumers simply get trained to always buy on ‘deal’.
2. Social media although is growing and is important for many brands, it still has a long way to go to be a major contributor for some of the top consumer brands. For the rest of us, though social media can still drive a lot of brand engagement, it can be measured and will continue to grow in importance.
3. Analytics and measured insights are becoming more and more important in marketing decision making. Marketers are finally embracing analytics and using them to their advantage. There is still a long way to go, but it is progressing swiftly.

There were many more insights and I hope next year you’ll have a chance to participate as well.  Just let me know if you would like further information on any of these topics.

The Full Measure on MeasureUp (3 of 4)

Here are continuing remarks and key notes from the MeasureUp conference.  This is the third in a series  (You can also read my Twitter stream at #ROMI)

1. Melanie Davis, Director of Marketplace Insights at American Express had some great insight as to how American Express uses modeling to support their brand.  They analyzed their presences on Twitter and Facebook with the goal to track online buzz compared to their competitors (primarily bank credit card issuers) using share of conversation and sentiment.  It was modeled using Structured Equation Modeling to determine how online buzz drove their funnel (Awareness, Engagement and Consideration, Conversation, Loyalty and Usage).  This is a great example of using the community engagement funnel (described in our social media white paper.  Download now.  One of the other interesting findings was that even though there was a lot of buzz it was relatively small compared to the number of purchased impressions made using traditional media.
2. Building a business case for marketing, social media and ROI were discussed in my session. With Ted Molter, Director of Marketing at the San Diego Zoo and Wild Animal Park and Nick Popielski, Director of Marketing at Atlanta Gas Light Resources.  Both had compelling stories on how they were able to drive analytics and numbers into their marketing organizations with some astounding results.  Nick Popielski showed how ROI was the only way to get the attention of the C-Suite and provide a solid foundation for the marketing business case.  Understanding the causes of churn led to significant growth in their net customer base.  Ted Molter spoke primarily about online marketing ROI showing how online media including social media was able to drive high conversion rates and ROI.  The numbers reached into the 1,000% range for ROI.
3. Ed Keller of Keller-Faye provided some great insight on their TalkTracker tracking survey.  This service provides both on and offline measurements of word of mouth.  Social media must be looked at from an online and offline perspective when comparing online and offline word of mouth conversations.  77% of them still take place offline according to studies and research conducted by Keller-Faye.  They estimate that over 3.3bn brand conversations take place every day in the US alone.  The top talked about brands are:
   • Coca Cola
   • Verizon
   • Walmart
   • Pepsi
   • AT&T
4. Ellen Stone, SVP of Marketing at the Bravo Network gave probably the most complete discussion on calculating ROI for social media.  There is no question that social media marketing can be very effective at driving buzz and delivering value for Bravo network.  They were using a number of fascinating tactics to drive buzz and deliver incremental viewers to their programming.  This was especially true for the launch of new programming.
5. Unfortunately I wasn’t able to capture the name of the presenter from Publicis, the agency for Denny’s restaurants.  My apologies.  Nevertheless he had some great statistics from their superbowl campaigns.  Denny’s super bowl offer of a free breakfast after the 2008 Super Bowl was wildly successful driving value and sales for the brand.  Unfortunately the advertising campaign was not sustained after the first quarter and it lost its momentum that could have been easily and cost effectively sustained.  Here are a few interesting facts:
   • Add-ons and late arrivals paid for the cost of the ad and the food at the 1,500 Denny’s restaurants
   • 2 million guests enjoyed the meal
   • Restaurant locater on the web was a key metric to determine interim success.  The ad delivered over 14,000,000 hits to website in 12 hours.  It generated over 2,300 news hits, 500 newspaper articles.  It was even mentioned by Jay Leno and Jon Stewart.  “Denny’s” became the 2nd most googled word.
   • Many guests heard about the free meal through text, calling, Facebook and mass emails to friends
   • It took over a million chickens to lay the eggs required.
   • Through this ad, Denny’s was able to meet its financial goals for the quarter.

Still more to come. Stay tuned for the next installment. Let me know what you think of the insights gained.

The Full Measure on MeasureUp (2 of 4)

Here are continuing remarks and key notes from the MeasureUp conference.  This is the second in a series  (You can also read my Twitter stream at #ROMI)

The second day focused more on optimizing traditional media.  The keynote was from Avanish Kaushik, Analytics Evangelist at Google, Inc.  He is also the author of Web Analytics: An Hour a Day  and Web Analytics 2.0 

Avanish is a lively, engaging speaker.  Definitely worth the price of admission.  His primary message relating to web (and of course, Google analytics) is get started, make mistakes, learn and improve.  That is, learn to be wrong but do it quickly.  He provided an impressive array of tools that could be used to quickly analyze the impact of web-marketing on conversion and web design.  There were so many examples of using google analytics to increase conversion it was hard to keep up.  Here are a few:

• How to reduce bounce rates by pointing to design flaws
• How to use experimental design to continue to optimize page layout and design.

With the keys to the kingdom Avinash was able to show that sites could easily be significantly more effective.  One of his thought provocations was, “don’t have opinions, have hypotheses.” 
Avanish also introduced a new term, Hippo decision making.  The Highest Paid Person’s Opinion.  How often is this true when there are no analytics to back up the conversation and decision making. 
His last bit of advice was to continuously ask for feedback from your consumers about their experience with your website with the following three simple questions:

• Why are you here?
• Were you able to complete your task?
• If not, why not?

Here are a few more notes from the other speakers:

1. Scott Deaver, EVP Strategy for Avis Budget Group had a few good insights about his business. Unfortunately I wasn’t able to catch his entire talk but he mentioned a few interesting comments concerning metrics:
2. • Linear metrics
   • On/off metrics
   • Good enough metrics

   He left us with the statement “Don’t fall victim to the tyranny of the measurable.”

3. Dominique Hanssens has a fascinating message in that great marketing doesn’t just drive revenue and profit but it also drives the share price. If marketers can get it right, they can deliver long term incremental share prices. He also pointed out a few potential flaws in the valuation on the stock market. For example, he found that differentiation was not well understood (that is, not reflected in the stock price) but awareness and brand equity was. He also found that customer satisfaction clearly has a long term impact. It would be interesting to find out though whether positive customer satisfaction has a long term impact on share price, but does a negative have a short term impact. For example, how does the negative impact of the recalls for Toyota impact the share price? Is it a long term impact as well or has it hit the stock price in a short term way.
4. Lisa Wellington of Coca Cola and Greg Michaels of Kraft provided some great insights into their methodologies relating to marketing ROI and ROMI. Coca Cola puts the rest of us to shame when we look at how they have a comprehensive system applying globally. They are a big user of Baysian regression, pooled models, conjoint testing, copy testing and scenario planning with highly granular models, looking to understand the relative influence of brand, flavor, pack type, pack size and region. Even in the face of the imprecise nature of the data, they are still able to make great decisions to drive their business forward based on good consumer and modeling insights.
5. Kraft, not far behind showed how modeling has helped them to drive great decision making with their brands. Greg’s point of building a good model now as opposed to a perfect model later illustrates how they are able to use modeling to structure the decision making and conversations marketers have when they endeavor to build their businesses. One of the books he recommends is The Black Swan by Nasim Taleb.
   
   One of the interesting points highlighted by Lisa Wellington related to the great social media divide. Although social media wasn’t discounted for its value to help many brands, the problem is that it is still, for some of the major global brands, such as Coca Cola and American Express miniscule. For Coca Cola in particular, even though it has one of the largest followings on Facebook (5Million, I believe is the quoted number), that represents less than 0.1% of the world population (their target audience). Traditional media is still very valuable and will remain that way for a long time at reaching the masses when and where they want to be reached.

Still some great more insights from the conference. Stay tuned for my next post.

The full measure on MeasureUp (1 of 4)

The MeasureUp conference in Chicago was the latest version of the former ROMI Conferences and it had some great insight on measuring, proving and improving marketing and social media ROI (You can read my Twitter stream at #ROMI). MeasureUp is a great conference for all things marketing ROI and return on marketing investment put on by the IIR. They put on some great events and I highly recommend you take a look at their site for some upcoming events.

The first day was primarily on social media and some of the interesting marketing and customer service applications being employed.  There is certainly a lot to understand with social media but each of the presenters provided some valuable insight into social media strategy, tactics and measurement.  The second and third days emphasized traditional media marketing ROI with some social media ROI sprinkled in.  One of the things that I’ve found, now that I’ve trained a few thousand marketers around the world in just about every vertical, is that in order to measure marketing ROI and ROMI you must first have a good understanding of marketing strategy and tactics.  This is definitely the case when we start to measure the response to social media marketing.

Here are some of excerpts from the first day of social media:

1. Social media is very valuable for customer service and support. PitneyBowes’ Aneta Hall had a great presentation on how their company has been able to effectively utilize social media to minimize the number of calls to the call center. This is both true for ongoing support issues and for support events, for example a postal rate change requiring updating of the postal machines. Hall calculated that PitneyBowes was able to deflect about 50,000 calls to the call center and at $10 per call, represented a savings of about $500,000. Please visit a series of podcasts on a pre-conference workshop with Aneta Hall.
2. Measuring the ROI of innovation is a fascinating topic. Luisa Uriarte, Partner at Maddock Douglas and Ainslie Simmonds, VP, Innovation at Maddock Douglas gave some interesting insights in their three by five process. Just developing new brands and products without doing your homework can lead to disaster, both for the brand and your career. Their process systematizes the research and decision making in order to reduce risk and increase returns. Where their process leaves off our agent-based modeling can deliver some great insight to make certain the new product gets properly launched into the marketplace.
3. Esmee Williams, VP Marketing of AllRecipes, one of the top recipes communities boasts 2.5bn pageviews per month. They are #1 18 million pieces of user generated content and are now #1 in the number of iPhone recipes. It is a great site for the food category, because when users make comments they are more often than not going to make a brand mention. They use a unique method of measuring message association and purchase intent in order to deliver higher quality advertising to their advertisers. In addition to their consumer centric approach they also have branded subpages where brands can build sub communities. Advertisers have many options with which to reach the community. It can be done through relevance, effectiveness, videos, traditional banners, sponsorship (editorials and user generated content), branded profiles, widgets (users can give and get widgets) and newsletters.
   
   AllRecipes’ research illustrated which types of advertising delivered the highest purchase intent scores between banners & newsletters (mid level purchase intent), sponsorships (low purchase intent, profiles with (high purchase intent) and without a logo (low purchase intent) and give (high purchase intent) & get (mid level purchase intent) widgets. (If you would like a white paper on the ROI of Social Media which uses the concept of a community engagement funnel.  Download it here now.)
4. Matt Moog of Viewpoints Network which manages the ratings and reviews for Sears.com provided some fascinating insight on how to optimize the use of ratings and reviews in an e-commerce site. The question asked ‘is a reviewer more valuable than a customer because they drive sales because of their reviews?’ For Sears.com, for each review it drives 4 visits (=readers) per month or 48 readers per year. Matt’s contention was that it may actually be that the ratings and reviews are so valuable to drive conversion of other visitors that the reviews themselves are more valuable to the company than had that reviewer actually made a purchase.
   
   Matt made the comparison of reviews creators that will write content and have 150 Facebook friends, thereby delivering 150,000 impressions, versus the cost of paid search to deliver 150,000 impressions.
   
   Ratings and reviews can be used in many ways. They can be used to change the assortment and improve customer service. By coordinating with search to reviews can be written based on what visitors are searching on to help them more easily find what they’re looking for.
   
   In my opinion ratings and reviews are one of the hidden gems in social media strategy and tactics. By fully utilizing ratings and reviews marketers can easily increase conversions without having to develop new marketing initiatives. Combined with some of Matt’s tactics, ratings and reviews can then be improved even further.
5. Scott Chappell of Sessions College of Professional Design gave some great insight on targeting specific messages through specific social media channels. Sessions College is selling something very different from a consumer packaged good. It is a two year commitment. He also showed how you can increase the number of touches to a prospective student without having to risk an unsubscribe, nor having to risk a de-friending. Instead of being able to email a prospect only once a week or once per month, with Twitter and the combination of Twitter, Facebook and LinkedIn Sessions College of Art and Design may reach out to some individuals up to 48 times in one month.
   
   He also showed how you can use different social media channels to deliver different types of messages. He focused primarily on Facebook, Twitter and Linkedin, each focusing on messages of Culture, Industry and selling with little overlap between them.
   
   Of course social media comes with its challenges. Those outside of marketing wish to use their social media assets to do more than engage. They want sales. For example their blog has 33,000 subscribers. He has to constantly protect this engagement channel from those in the organization that wish to change it into a selling channel thereby violating the trust of the subscribers and devaluing what has been built up over the last few years.
   
   If you would like to hear a pre-conference interview with Scott please click on the link.

There are 3 more posts on this topic.  Please stay tuned.

Measuring the effectiveness of social media

One of the hotter topics right now in metrics is how to measure the success of social media.  Many social marketers are looking for the answer to this seemingly simple question.  The good news is that there is a lot going on here.  As I’ve become involved in metrics and have spoken around the world on this topic I’ve learned that there are no easy answers.  There is however a framework with which to develop an answer.  (If you’d like, please visit www.marketing-calculator.com for information on a generalized marketing effectiveness framework.)

At one level the number of visitors to a social site can be one measure of success.  At the next level we have to measure the level of engagement.  Time spent on site, the number of comments, videos or other content submitted can be an indicator of success in the social media space.  Unfortunately, these measures don’t determine how successful these social marketing activities are at delivering sales in the stores.  Just like there is an indirect link between TV and in-store sales, so too, is there an indirect link between a consumers’ social media activities and sales in the store.

So we need a measure of transforming this emotional engagement into brand awareness/consideration and preference/purchase intent.  Once we’ve done this, there are a number of tools that we can use to actually calculate the effectiveness of a social marketing activity.

But this is only backward looking.  As marketers, we want to look forward into the future.  How well will this next social marketing activity drive awareness, engagement and sales in the store?  For this we need to use a number of different tools (not complex) and then put the pieces together.  However I will address this in my next post.  In the meantime if you’d like more information or discussion on this topic, feel free to reach out to me on LinkedIn (www.linkedin.com/in/guyrpowell) or at www.DemandROMI.com.

 

It’s not share of voice it’s share of conversation

I was just working through a social media strategy session and realized that many companies still don’t quite realize the value of social media and that it’s not just about running a good (or bad) social media campaign.  It’s about understanding the strategy for your social media, including short and long term results.

Competitive social media strategy

Looking at social media isn’t about Twitter, blogs or Facebook.  It’s about how your actions compare to the competition and how you can deliver your share of conversation.  Just as it’s about market share in the physical world, it’s about share of conversation in the social media world.

Share of Conversation

Share of voice sounds like a great outcomes metric, but voice implies a one-way conversation, not to mention the fact that it is already used to measure the value of traditional media in a competitive market.  Social media is about engagement and a two-way conversation.  There is value being transferred from the brand and value being provided by the consumer.  There is a conversation taking place and it needs to be the goal of social media activities to determine an effective strategy to improve the share of conversation.  Once that has been done, the social media strategy can start to determine how to increase share, beat the competition and do it in a way to drive brand value and market share in the physical world.

I’d love to hear from you to see if this makes sense.  Just let me know.

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I think you’ll find them very interesting and I hope you will be able to attend.  For more information, please visit www.immergize.com – immerse and energize yourself to drive extraordinary returns for 2008.  There are four offerings:

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