A short(er) version of a talk I recently gave at SMAZ -- Social Media for Business in Arizona. The house was packed, even though others were talking about the ROI of social media. I made sure mine had teeth and didn't dance around the issue of ROI. ROI means what ROI means. And CFOs don't care about alternative descriptions for it. They care about money out and want to see money in. Is that easy? Nope. But it's doable. For some. I give props inside this preso to Olivier Blanchard for the concept that I expand upon. Hope you enjoy it. E.

1. Measuring ROI
for Social Media
Yes , yo u shou ld. Yes, yo u can .
Evo Terra
ASimplerWay.com

2. Measuring ROI for Social Media
Evo Terra
Shaking Hands with Fellow Graduates by boxercab ASimplerWay.com

3. Measuring ROI for Social Media
Evo Terra
adding machine (d) by Aaron Kyle ASimplerWay.com

4. Measuring ROI for Social Media
• ROI = Return on Investment
– not “interest”
– not “interaction”
– not “engagement”
Evo Terra
ASimplerWay.com

5. Measuring ROI for Social Media
• ROI = Return on Investment
– not “interest”
– not “interaction”
– not “engagement”
Benefit - Cost
ROI =
Cost
Evo Terra
ASimplerWay.com

6. Evo Terra
balance sheet ok by Philippe Put ASimplerWay.com

7. Evo Terra
Social Media ROI by Intersection Consulting ASimplerWay.com

8. Evo Terra
Social Media ROI by Intersection Consulting ASimplerWay.com

9. Evo Terra
Social Media ROI by Intersection Consulting ASimplerWay.com

10. Head in the sand by jvh33
Evo Terra
ASimplerWay.com

11. Head in the sand by jvh33
That gulping sound is coming from your yard by Daniel Greene
Evo Terra
ASimplerWay.com

12. Head in the sand by jvh33
That gulping sound is coming from your yard by Daniel Greene
Evo Terra
Rob Cottinghams Notes from My Metrics Session by cambodia4kidsorg ASimplerWay.com

13. Benefit - Cost
ROI =
Cost
Evo Terra
ASimplerWay.com

14. Your social media plan isn’t
Evo Terra
Social Media Plan by javiberm ASimplerWay.com

15. Your Social Media Investment…
leads to an Action, that
creates a Reaction, which
delivers a Non-Financial Impact, that may ultimately
cause a Financial Impact.
Evo Terra
Stolen from The Definitive Social Media ROI Presentation by Olivier Blanchard | http://smroi.net ASimplerWay.com

16. Evo Terra
Not the best hockey game ever by Evo Terra ASimplerWay.com

17. Evo Terra
Stand out from the Crowd by Paul likes pics ASimplerWay.com

18. HOW TO measure ROI
• Showstoppers
– Limited access to metrics
– Execution roadblocks
Evo Terra
ASimplerWay.com

19. HOW TO measure ROI
1. Know your client’s goals
– Selling stuff
– Increase sales of XYZ by 10% in Q2
Evo Terra
ASimplerWay.com

20. HOW TO measure ROI
1. Know your client’s goals
– Financial Impact
• Replacing expensive customer focus groups
• Reduce inbound sales calls
• Reduce inbound service requests
• Reduce advertising expenses
• Increased transactions
• Higher GP sales
• Increased sales efficiency
Evo Terra
ASimplerWay.com

21. HOW TO measure ROI
1. Know your client’s goals
– Non-Financial Impact
• Increased PageRank™
• Reduced infrastructure cost
• Increased store traffic
• Increased site traffic
• Improved sentiment
• Relevant Fans & Followers
Evo Terra
ASimplerWay.com

22. Measurement RULE
If you aren’t influencing it,
don’t measure it.
Evo Terra
ASimplerWay.com

23. HOW TO measure ROI
2. Record every Action
– Date & action
• Blog posts
• Outbound comment
• Guest post
• Interviewed on podcast
• eBook published
• Event promoted
• Campaign flight
• Press release
• Influential re-Tweet
Evo Terra
ASimplerWay.com

24. HOW TO measure ROI
3. Overlay with business metrics
Total Revenues
Site traffic is flat.
Site Traffic
Gross Profit %
Revenues are up!
Twitterers
FB Fans
Conversions per
customer
Evo Terra
ASimplerWay.com

25. HOW TO measure ROI
3. Overlay with business metrics
Total Revenues
Site traffic is flat.
Site Traffic
Gross Profit %
Revenues are up!
Twitterers
FB Fans
Conversions per
customer
No more conversions, either.
Evo Terra
ASimplerWay.com

26. HOW TO measure ROI
3. Overlay with business metrics
Total Revenues
Site traffic is flat.
Site Traffic
And sales were already
going up. You’re fired. Gross Profit %
Revenues are up!
Twitterers
FB Fans
Conversions per
customer
No more conversions, either.
Evo Terra
ASimplerWay.com

27. HOW TO measure ROI
3. Overlay with business metrics
Total Revenues
Site Traffic
Gross Profit %
Twitterers
Mix of key financial and non-
financial goals impacted FB Fans
Conversions per
customer
Evo Terra
ASimplerWay.com

28. HOW TO measure ROI
3. Overlay with business metrics
SM Campaign launches 10/30 - Mashable.com
guest blogging
9/1 - Influential tweet
Total Revenues
7/20 - New product push
Site Traffic
Gross Profit %
Twitterers
FB Fans
Conversions per
customer
Evo Terra
ASimplerWay.com

29. Measurement RULE
But you aren’t done!
Calculate the ROI.
Evo Terra
ASimplerWay.com

30. Week GP Twitter Revenue Gross Profit $ Net Profit $ Baseine (net profit $) SM Fees Net net net
20 51.06% 2389 $ 99,500.67 $ 50,802.97 $ 12,700.74 $13,000.00 $1,000.00 ($1,299.26)
21 51.31% 2401 $ 99,789.89 $ 51,206.57 $ 12,801.64 ($1,198.36)
22 51.57% 2413 $ 99,987.98 $ 51,564.65 $ 12,891.16 ($1,108.84)
23 51.76% 2498 $ 101,689.45 $ 52,637.71 $ 13,159.43 ($840.57)
24 51.83% 2501 $ 100,432.89 $ 52,051.67 $ 13,012.92 ($987.08)
25 51.98% 2500 $ 101,678.34 $ 52,849.27 $ 13,212.32 ($787.68)
26 51.66% 2502 $ 100,456.89 $ 51,892.35 $ 12,973.09 ($1,026.91)
27 51.12% 2499 $ 100,069.87 $ 51,157.75 $ 12,789.44 7/20 - New product ($1,210.56)
28 51.31% 2501 $ 125,876.56 $ 64,592.78 $ 16,148.20 $2,148.20
29 51.57% 2525 $ 125,987.67 $ 64,972.91 $ 16,243.23 push $2,243.23
30 51.76% 2567 $ 126,123.09 $ 65,285.34 $ 16,321.34 $2,321.34
31 51.83% 2701 $ 102,452.98 $ 53,098.63 $ 13,274.66 ($725.34)
32 51.98% 2746 $ 99,876.54 $ 51,912.75 $ 12,978.19 ($1,021.81)
33 52.49% 2767 $ 99,333.76 $ 52,140.14 $ 13,035.03 ($964.97)
34 52.96% 2790 $ 97,911.67 $ 51,854.05 $ 12,963.51 9/1 - Influential ($1,036.49)
35 53.45% 2804 $ 96,898.99 $ 51,794.05 $ 12,948.51 ($1,051.49)
36 53.49% 2825 $ 111,522.87 $ 59,658.42 $ 14,914.60
tweet $914.60
37 53.52% 2832 $ 124,488.77 $ 66,621.05 $ 16,655.26 $2,655.26
38 53.45% 2850 $ 136,445.37 $ 72,932.22 $ 18,233.06 $4,233.06
39 53.49% 2988 $ 145,998.03 $ 78,100.68 $ 19,525.17 $5,525.17
40 53.64% 3104 $ 156,887.33 $ 84,160.55 $ 21,040.14 $7,040.14
41 54.50% 3115 $ 160,984.23 $ 87,734.51 $ 21,933.63 $7,933.63
42 55.59% 3148 $ 159,845.44 $ 88,856.16 $ 22,214.04 10/30 - $8,214.04
43 56.53% 3156 $ 161,334.87 $ 91,201.27 $ 22,800.32 Mashable.com $8,800.32
44 57.49% 3178 $ 155,989.44 $ 89,679.76 $ 22,419.94 guest blogging $8,419.94
45 58.99% 3188 $ 162,889.44 $ 96,083.53 $ 24,020.88 $10,020.88
46 60.29% 3203 $ 169,556.76 $ 102,226.89 $ 25,556.72 $11,556.72
47 61.23% 3267 $ 178,943.00 $ 109,568.65 $ 27,392.16 $13,392.16
48 62.47% 3409 $ 176,789.44 $ 110,441.45 $ 27,610.36 $13,610.36
49 64.07% 3687 $ 180,333.88 $ 115,546.26 $ 28,886.57 $14,886.57
50 66.38% 3898 $ 179,445.98 $ 119,119.30 $ 29,779.83 $15,779.83
51 68.35% 4120 $ 181,445.00 $ 124,013.92 $ 31,003.48 $17,003.48
52 70.70% 4467 $ 183,876.04 $ 129,998.28 $ 32,499.57 $18,499.57
$ 4,404,843.13 $ 2,495,756.49 $ 623,939.12 $161,939.12
Evo Terra
ASimplerWay.com

31. Week GP Twitter Revenue Gross Profit $ Net Profit $ Baseine (net profit $) SM Fees Net net net
20 51.06% 2389 $ 99,500.67 $ 50,802.97 $ 12,700.74 $13,000.00 $1,000.00 ($1,299.26)
21 51.31% 2401 $ 99,789.89 $ 51,206.57 $ 12,801.64 ($1,198.36)
22 51.57% 2413 $ 99,987.98 $ 51,564.65 $ 12,891.16 ($1,108.84)
23 51.76% 2498 $ 101,689.45 $ 52,637.71 $ 13,159.43 ($840.57)
24 51.83% 2501 $ 100,432.89 $ 52,051.67 $ 13,012.92 ($987.08)
25 51.98% 2500 $ 101,678.34 $ 52,849.27 $ 13,212.32 ($787.68)
26 51.66% 2502 $ 100,456.89 $ 51,892.35 $ 12,973.09 ($1,026.91)
27 51.12% 2499 $ 100,069.87 $ 51,157.75 $ 12,789.44 7/20 - New product ($1,210.56)
28 51.31% 2501 $ 125,876.56 $ 64,592.78 $ 16,148.20 $2,148.20
29 51.57% 2525 $ 125,987.67 $ 64,972.91 $ 16,243.23 push $2,243.23
30 51.76% 2567 $ 126,123.09 $ 65,285.34 $ 16,321.34 $2,321.34
31 51.83% 2701 $ 102,452.98 $ 53,098.63 $ 13,274.66 ($725.34)
32 51.98% 2746 $ 99,876.54 $ 51,912.75 $ 12,978.19 ($1,021.81)
33 52.49% 2767 $ 99,333.76 $ 52,140.14 $ 13,035.03 ($964.97)
34 52.96% 2790 $ 97,911.67 $ 51,854.05 $ 12,963.51 9/1 - Influential ($1,036.49)
35 53.45% 2804 $ 96,898.99 $ 51,794.05 $ 12,948.51 ($1,051.49)
36 53.49% 2825 $ 111,522.87 $ 59,658.42 $ 14,914.60
tweet $914.60
37 53.52% 2832 $ 124,488.77 $ 66,621.05 $ 16,655.26 $2,655.26
38 53.45% 2850 $ 136,445.37 $ 72,932.22 $ 18,233.06 $4,233.06
39 53.49% 2988 $ 145,998.03 $ 78,100.68 $ 19,525.17 $5,525.17
40 53.64% 3104 $ 156,887.33 $ 84,160.55 $ 21,040.14 $7,040.14
41 54.50% 3115 $ 160,984.23 $ 87,734.51 $ 21,933.63 $7,933.63
42 55.59% 3148 $ 159,845.44 $ 88,856.16 $ 22,214.04 10/30 - $8,214.04
43 56.53% 3156 $ 161,334.87 $ 91,201.27 $ 22,800.32 Mashable.com $8,800.32
44 57.49% 3178 $ 155,989.44 $ 89,679.76 $ 22,419.94 guest blogging $8,419.94
45 58.99% 3188 $ 162,889.44 $ 96,083.53 $ 24,020.88 $10,020.88
46 60.29% 3203 $ 169,556.76 $ 102,226.89 $ 25,556.72 $11,556.72
47 61.23% 3267 $ 178,943.00 $ 109,568.65 $ 27,392.16 $13,392.16
48 62.47% 3409 $ 176,789.44 $ 110,441.45 $ 27,610.36 $13,610.36
49 64.07% 3687 $ 180,333.88 $ 115,546.26 $ 28,886.57 $14,886.57
50 66.38% 3898 $ 179,445.98 $ 119,119.30 $ 29,779.83 $15,779.83
51 68.35% 4120 $ 181,445.00 $ 124,013.92 $ 31,003.48 $17,003.48
52 70.70% 4467 $ 183,876.04 $ 129,998.28 $ 32,499.57 $18,499.57
$ 4,404,843.13 $ 2,495,756.49 $ 623,939.12 $161,939.12
Evo Terra
ASimplerWay.com

32. Benefit - Cost
ROI =
Cost
Evo Terra
ASimplerWay.com

33. Benefit - Cost
ROI =
Cost
Benefit: $623,939.12 in net profit dollars, less $429,000 as baseline
Cost : $1000 for 33 weeks = $33,000
$194,939.12 - $33,000
4.91 =
ROI $33,000
Evo Terra
ASimplerWay.com

34. What if…
You don’t win?
Then you don’t win.
Evo Terra
ASimplerWay.com

35. Evo Terra
ASimplerWay.com

36. Measuring ROI for Social Media
Yes, you should. Yes, you can. Evo Terra
ASimplerWay.com