Part 1: The definitive Social Media R.O.I. presentation
So there it is. The Social Media ROI (#smROI) presentation many of you were waiting for. Sure, I still have a few videos to shoot to complete the series, but a lot of the content and methodology is right here in this simple deck – from what ROI is and isn’t, to the basic methodology to link ROI (financial outcomes) to specific social media activities.
Think of this as a Social Media R.O.I. proof of concept methodology, that you can use as a foundation for social media measurement from a real business perspective.
What you will find in this presentation:
The business definition of R.O.I., the case for business justification of social media, the actual R.O.I. equation, a step-by-step method for creating a Social Media R.O.I. proof of concept, and real world no-nonsense advice.
What you will not find in this presentation:
The typical BS spewed by social media and media measurement “gurus” who obviously have no idea what they are talking about.
If your boss or client is still not getting the answers they want when it comes to the Social Media R.O.I. question, point them to this presentation and see if it strikes a chord.
If the presentation doesn’t launch for you properly, you can go check it out on slideshare here.
Part 2: Social Fresh recap
I can’t list all the great people I met Monday at Social Fresh, so I apologize if I’ve omitted your name in this post. Leave me a comment to slap me upside the head if I forgot to include you here, and I will rectify my omission pronto. Anyhoo, I am pretty stoked to have finally met @keithburtis @gialyons @gavinbaker @smashadv @wendywells @nathanrichie @ENDsessions @cammicam RichTucker @beccabernstein @theRab @ryamstephens @djwaldow @gilliatt @waynesutton @gregcangialosi @areich @waynesutton (@armano @abellmas @amywood @spikejones and @tinkhanson I already knew. You don’t count.)
I missed all of the morning sessions (I was being Mr. chatterbox in the lounge) but killer presos from @armano @gialyons and @spikejones in the afternoon. You couldn’t ask for a better afternoon lineup. Seriously, for a relatively small conference, the content was super solid.
I really have to commend Jason Keath and his army of volunteers for pulling of this pretty awesome conference.
Yeah, maybe the SxSW’s of the world get all the press, but sometimes these small conferences pack a hell of a punch too. (Good things do come in small packages sometimes.)
It’s pretty much a given that SoFresh will be back (and I’m hoping it will spread to other cities, for that matter). Looking forward to the 2010 edition!
Note: I will post links to other presentations, flickr galleries and videos as soon as I have the urls.
@Olivier – Couldn’t agree with you more. Jason and the SoFresh army did a tremendous job and it was a great conference, one Charlotte should be proud of.
I was glad I got to meet if you, if only briefly and I really enjoyed the no BS approach to ROI, and the awesome/ridiculous slides.
As I mentioned, I was acquainted with your work for awhile now, but became more of a fan after Valeria profiled you on Conversation Agent. Looking forward to much more!
All the best,
Thanks, Ryan. I enjoyed the handshake too. 🙂
Looking forward to more chats with you.
Oliver – you are becoming the “voice” on this subject. I think you need to simplify and write a book – in the vein of Purple Cow.
I know as a branding person myself, its the hardest to look at ourselves as the brand.
Thanks, Margot. I’m not sure I can come up with enough material for a book. This could be a chapter in a book about SM management or integration… but a whole book?
Not a rhetorical question. I am really asking. If I stretched it to 100 pages, would it be enough?
Absolutely, do it ala “The Brand Gap” and it would be awesome!
I want a signed copy, though.
I enjoy reading your post, keep posting like this informative article, I’ll be back to read your next posting :). Thanks
But especially loving the UFO pics – a fave show from back in the day!
I wish Sci-Fi… errr… SyFy would show it. That and all the good retro sci-fi shows – even those that were only mildly sci-fi like The Avengers and the Wild Wild West. Remember The Prisoner? Space 1999? San-Ku-Kai? Good stuff.
Who needs a big, long book? I’d buy a short, sharp book on ROI 😉
Crap. That means lots of pretty pictures. I knew it!!! 😀
(Working on it.)
Hey Olivier, I watched your presentation at Social Fresh [thank goodness for technology and for Jason being so savvy as to consider letting us not in attendance to get a peek!] and couldn’t really see your slides… Just zipped through them now, LOVED the graphics, too funny. [Are you trying to equate ROI is like rocket science?! That might scare folks… Heh. :)]
I think there are some things that also related to measurement and metrics and that lead to ROI that you didn’t cover [and yes, I know/understand 1) you only had an hour and 2) people pay you for that sort of thing…you wouldn’t want to give it all away, right?! ;-)].
For example, metrics are great and showing where there’s gain is nice, but I think we need to be realistic and let people know that they will need a system to track social media efforts that lead to leads that lead to sales that lead to ROI. It’s not as simple as watching where there’s an increase in traffic/metrics [although we all wish it would be!].
As well, if folks aren’t measuring the Return on Expenditures [meaning I paid X, I got 20 leads, cost per lead = Y], they are missing a major part of the ROI equation (cost of investment). And I find that’s where most marketers fall down on the job…they don’t properly track or measure each expense either for a campaign or program.
I look at social media measurement as containing the following: Benchmarks, Objectives (measurable), ROE and ROI (BORR-ing, but necessary). And yes, that is not strictly ROI, but nonetheless all measurement aspects are important to show the validity of social media.
As we continue this social media measurement/ROI conversation, I think we need to give marketers information that’s actionable… So many people just don’t know how to do measurement let alone basic ROI calculations. [I have a bunch of slides that discuss the actionable items if anyone’s interested: http://www.slideshare.net/bethharte%5D
Looks like we’re off to the races! (Or the moon…according to your slides!)
Community Manager, MarketingProfs
Well yeah, I only had an hour to cover the basic framework. I barely had time to touch on FRY, couldn’t really get into how to prove the relationship between SM and metrics appearing to have been affected by it, etc. The goal was to present the philosophy and get people to start thinking about financial performance measurement in real terms. 😉
Just watched your presentation and it makes some good points. I’ll be honest though: I get a bit nervous about ROE when dealing with Social Media. Nothing against it, but leads/lead generation is something I try to shy away from. From my perspective, it’s old thinking. I know many companies still pray to the altar of “lead gen”, but the sooner they move away from it, the better IMO. Either way, because leads are unrealized, they fall under potential – which is non-financial impact.
So… I don’t mind looking at leads and measuring conversion rates (lead-to-transaction ratios) if a client requests it, but only as long as it falls within the scope of non-financial impact-to-transactions/financial impact ratios.
If a client asks for that kind of data, I prefer to measure the average cost of a transaction to the cost of a lead. Here’s why: Response rates and lag aren’t the same for all customers. Some will change their transaction behaviors right away while others won’t. Some will respond to triggers faster than others. So it gets fuzzy fast. If I could somehow model customer behaviors with accurate lag data, I would be all for it… but until we can do that pretty well, I don’t want to make assumptions about the cost of leads and how that relates to monthly or quarterly transactions. Does that make sense?
This problem can be compounded in certain industries where the lag between a lead and a transaction can be 12+ months (typically B2B).
I would LOVE to sit down and discuss that with you when we get a chance though. I’m 100% open to the possibility that I might be missing something. If indeed you have a solid method for making that work, I’m all about checking it out and getting familiar with it. 🙂
Either way, thanks a bunch for the comment and for also working to elevate this conversation past the typical BS. You rock. 🙂
Yep, ROE makes people nervous because they haven’t done it or don’t know how to. I don’t think it’s old-school at all… If I give a vendor/marketing employee a pile o’cash to spend, I want to know what I got in return…right? You can’t figure out ROI with out the ROE. If we aren’t tracking the ROE how do we know “the average cost of a transaction to the cost of a lead?” (We are talking about the same thing here, actually).
The REAL problem here is that people are fuzzy and there are no systems to cleaning capture and track that fuzziness. But, it’s been like that for decades. Social media doesn’t change that. As marketers we’ve never really known the one thing that put a prospect over the edge to being a customer (was it the white paper? was it the trade show? was it their sales person? or was it WOM? etc…)
Yep, this conversation is far from over, but I think it’s not just a social media conversation. It’s a conversation for ALL marketing spending because social media will only be a small fraction of the overall integration for some.
Community Manager, MarketingProfs
I completely agree. When I first started playing with social monitoring tools, the light bulb that went off over my head had nothing to do with validating Social Media. It had to do with a whole new set of analytics that would allow us to understand customer behaviors better and fill some action-reaction gaps across all tactics and media. By using timelines, a few other basic little seeding tricks and just good old polling, you can zero in on what made people move – whether it’s going to a website or visiting a store or placing an order. It gets us A LOT closer than we were 5 years ago, when we really had no real-time feedback or direct line of communications with consumers. So yes, to me, the beauty of this is that SM allows us to understand the impact of all ‘marketing’ better than ever. This thing isn’t an incremental improvement, by the way; it’s a huge evolutionary leap.
I’ve focused so much on the ROI question recently because the BS and stupidity were completely out of control and something needed to be done, but you and I know that ROI is the tip of the iceberg. We’re only having these discussions because we’re in the beginning of this thing – or rather, most companies are in the beginning of this thing – and this is one of the very first rungs on the learning ladder. I was just telling Keith Burtis and a few other peeps Monday how ready I am for this ROI conversation to finally be put to rest so we can all go back to actually doing this stuff instead of dwelling on the basics.
So anyway, yes. We agree. 🙂
Very helpful. Very generous. Very fun.
Thank you Olivier!
Now, to work on understanding all that you have said here while applying it.
Keep creating…more WOW,
Thanks, Mike. You’re one of those people who does real work out there, so if you and I need to sit down and spend time going over this in more detail, let me know. 😉
It’s ironic that on this same day you posted this, that Social Media Today posted “How to Measure your Social Media ROI:Don’t”
The “don’t” attitude is head-in-the-sand but it will have an attraction to the old school who find business thinking just a bit too hard.
Between your work, and the comments, and other people thinking seriously about this issue there is good progress being made. It seems to be one of the recurring themes among the “CMO blogs” is that they aren’t respected, and an oft-given reason is that they can’t get their minds into ROI.
Let’s not perpetuate that fault into social media business planning.
Walter Adamson @g2m
Social Media Academy, Australia
Right on. 🙂
Absolutely great and engaging slideshow you really know what you are talking about and that sadly is a rare thing in Brand Building online. Keep it up you will see great results from what you are preaching here.
Olivier thanks very much for this. It’s a great and methodical way to think about ROI. Would love to see you organise these events in London, England. Let me know if you need a hand with that. Suparna (@suparnamalhotra)
Funny you should bring that up… 😉
Rockin presentation Olivier. You could say Savant like acumen. 🙂 lol Social Media Marketing Savants
nice work. thanks for sharing.
Thanks for the great info. I used some of your info in a presentation I gave on Tuesday. You said it much better than I could.
Many thanks regarding your awsome article. I’ll keep an eye about your own blog, i allready saved it to personal list 🙂
I love reading an article that will make people think. Also, many thanks for allowing me to comment!
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