The Business Value of Social Media

The Business Value of
Social Media

Prepared by Joey Barker

copyright © 2011, AutoZone, Inc., all rights reserved

Where Are We in Social?

copyright © 2011, AutoZone, Inc., all rights reserved 2

Facebook
Launch:
P1 in FY12

Objectives:
1.Drive traffic to stores & website
2.Increase in-store & online retail sales
3.Maximize customer lifetime value
through social engagement
(Unique Content + Response Time)

Likes = 384,446
Reach
1,507,730 impressions/wk

Engagement Rate = 1 3.5%
•Best Week - 51,916 People Talking
•35,899 check-ins
•134,815 Avg Link Clicks per Week

@AutoZone Twitter
Launch:
•P7 W2 in FY12

Objectives:
1.Drive traffic to stores & website
2.Increase in-store & online sales
3.Maximize customer lifetime value;
Engage with Info-tainment

Followers = 10,936
Reach = 342,707 impressions/wk.

Engagement (per week)
•191 Retweets
•256 Mentions (@ or #)
•4,538 Direct Link Clicks


YouTube Channel
Launc h:
•P9 in FY12
Objectives:
1.Drive traffic to website & other
social networks
2.Educate auto DIYers with
trustworthy advice
3.Maximize customer lifetime value;
build deeper relationships than other
methods allow
Views = 1,200,632
Subscribers = 4,280

Engagement
1.1,499 video likes
2.1,637 favorites added
3.348 video comments
4.152 shares to social networks


What is the Value to our Business?


Coupon Redemptions –
FY12

Annual Coupon Sales = $1.6MM+ FY12 Actual
(projected)****
Where… Fan Base 385,000
 Average redemption rate is 0.16%, with
Redemption Rate 0.16%
$83 avg. basket Average Basket $ 83
# of Deals (weekly) 44
 Most individual avg. baskets are +15-
30% higher than forecast
Annual Sales $ 1,600,000
 Percentage of incremental sales from Annual Profits*** $ 690,000
coupons NOT yet determined

* Projected fan base growth to 500K FY
** Projected fan base growth to 1MM FY
*** Profit is net of the discount given and
copyright © 2011, AutoZone, Inc., all rights reserved **** Started coupons P3 with 100k fan b
7

Coupon Redemptions –
FY12
• Avg redemption rate for offers to date is 0.16%, with $83 avg. basket
– Most individual avg. baskets are +15-30% higher than forecast

• Threshold offers have highest redemption rates
– Average of 0.42%, with $97 average basket
– Threshold offers with 4-week offer period avg. 0.85% redemption rate
– Avg. baskets are +73% more than purchase requirement ($87 basket for $10 off $50)

• % OFF high usage product offers (e.g., batteries, wipers, lights, brakes)
have 2nd highest redemption rates
– Avg. 0.29%, ranging from 0.23% to 0.35%
– Mostly featured 30% OFF deals

• Redemption rate of other off-shelf & hard part deals less than .05-.1%
– Discounts are likely not enough to drive traffic vs. other circular & in-store offers

• Threshold offers with 4-week redemption periods have 2 to 3x Higher
Redemption Rate than similar deals with 1 or 2-week periods
– Rates for other offers did not increase significantly when expanded to 4 week periods


Lead Generation – FB
Sweeps

Est. Value of Social Email Sign-Ups = $1,020,000

•Each Sweeps in FY12 generated a minimum of 30k unique emails
– Most recent sweeps generated 50k+ in unique emails

•AZ Rewards values an opt-in unique email at $5 average worth
•Five (5) Sweepstakes total, estimated 150k opt-ins sales leads


Additional Rewards
Value
1. Web traffic to the Rewards site
from the Facebook app
– 2,169 monthly clicks to site

1. In-store Rewards card sign-ups
from weekly Facebook posts
– See post comments


Earned Media Value of
Social Impressions
(Weekly Total Reach ÷ 1,000) * CPM * 52 weeks = Annual Media Value

•Annual Media Value = $173,804
– Where CPM = $1.95
• Given by AutoZone Media Team, per MPG baseline recommendation

•Annual Media Value = $202,771
– Where CPM = $2.10
• Recommended CPM given by Facebook ads team

•Weekly Total Reach = 1,856,878
• Total number of unique people that see any social content related to AutoZone


Media Value –
Engagement
(Facebook Only)
• When calculating media value of social impressions, one
thing to consider is Return on Facebook Engagement
– 2012 Fast Company study estimates “Engaged user” as more than 2x
the given CPM earned media value of “Like” (Source)
– While impressions still mean value, a more recent alternative – and
possibly more accurate addition for social traffic – interactions often >1

• ROE = Consumption * CPC = $984,985
– CPC = [ CPM / (CTR * 1000) ]
– Where…
• $0.23 CPC, $1.95 average CPM, 0.139% CTR
• Consumption = Annual total # of likes, mentions, clicks


Search Rankings of
Social
Given the size of social networks, a high search ranking helps prevents competitors from ranking
in any search for “AutoZone” or related keyword that we pursue, thus pushing them down in
rankings and increasing our company’s web traffic.


Web Traf fic Referrals

• YTD Traffic Referrals to AutoZone.com
– 356,836 Clicks from Facebook
– 55,691 Clicks from Twitter

• Earned Traf fic Value = $61,879
– Where Cost-per-Click is $0.15, per display ad pricing from AutoZone
media team & MPG


Search Mentions across Digital
Channels


PR & Crisis Management
Positive mentions in the social sphere now outweigh negative by more than 2.5 to 1
for AutoZone, promoting overall positive brand reputation.
This is effectively maintained by rapid response to customer inquiries on Twitter and
Facebook, as well as proactive management of which comments merit response.


Customer Ser vice


Low-Cost Market
Research

• In addition to demographics, we
can also see…
1. How we reached a user

2. Where they came from

3. Where they went on our Page

4. How often the page was visited by
each user (on Average)


Social Media Value

Estimated Business Value = $3,666,864

• Does NOT include…
– Search engine rankings
– Value of market research findings
– Public Relations value in crisis control


The Business Value of Social Media

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