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You’re a fool,   You couldn’t be
 Turner. Social   more misguided,
media can’t be    my friend. And
measured on an     I’ll prove it!
   ROI basis!
Social Media ROI
  Hey, kids! Want to
know how to calculate
 the ROI of a social
                        •   Many companies are still trying to
  media campaign?           figure out how to measure their social
                            media return-on-investment
                        •   Jamie Turner, the co-author of “How
                            to Make Money with Social Media,”
                            covers this topic in detail in his book
                        •   Which, oh by the way, is available at
                            fine bookstores (and a few crappy
                            ones) everywhere
                        •   Here’s a quick snapshot of the method
                            he outlines in “How to Make Money
                            with Social Media”
Introductions

                                             Hey, look! Our logos
 •   But first, a little background --       are on this page. What
                                                a coincidence!
     Jamie is the Chief Content Officer
     for the 60 Second Marketer, the
     online magazine for BKV Digital and
     Direct Response
 •   He also writes for Mashable and is
     invited to speak about social media,
     mobile media and branding on TV,
     radio and at industry events around
     the globe
Introductions




       • Who is BKV? Glad you asked
       • BKV creates direct response, social
         media, mobile media, email, paid
         search and other campaigns for clients
         like AT&T, Caterpillar, The Home Depot,
         Mercedes-Benz and Six Flags
       • Okay, enough about us. Let’ talk
                                      s
         about how you can calculate your
         social media ROI
Social Media ROI

• Our story begins in a company that’ eerily similar to
                                      s
  your company
• And when we say “eerily similar,” we mean the “Are
  these people watching me?” kind of eery
• But fear not. We’re not watching you. We just know that
  what takes place in our story is happening at
  corporations around the globe
• You see, many social media practitioners have a problem
  -- they launched their social media campaigns without
  tracking the three M’ : Metrics, Measurement and ... a
                       s
  third M-word that we’ll come up with later
Social Media ROI

                             Barbara is going
 • The challenge most        to love all these
   companies face with        YouTube views.
                               Can you say
   social media is that        “Promotion”?
   they can track
   quantitative metrics
   like page views, blog                        s
   comments, Facebook               YouTube View
   Likes and re-tweets...
 • But they can’t track
   the ROI of their social
   media campaigns
Social Media ROI
                                    OMG! We did all that
                                   work and all you can tell
                                   me is that we got 12,573
• In order to calculate the ROI         YouTube visits?
  of a social media campaign,
  you have to understand the                               No wonder I keep
  concept of Customer Lifetime                              you in a cubicle.
  Value (CLV)                                               You are still in a
                                                           cubicle, aren’t you?
• CLV is the amount of revenue
  a typical customer will
  generate for your company
  during his or her engagement
  with your brand
• Barbara, the CEO of Barb’ s
  Lawn Care, understands this
  concept
• Unfortunately, Bob, of YouTube
  chart fame, does not
Social Media ROI

•   Barbara, being the CLV whiz that she is, knows that the
    average customer spends $80 per month with her company
    and that they typically stay with them for 3 years
•   So her Customer Lifetime Value is $2,880. $80 per month x 12
    months x 3 years = $2,880
•   This raises another question -- how many marketing dollars
    should Barbara spend to acquire a customer that generates
    $2,880 for her company?
•   A good starting point is 10% of her CLV
•   In Barbara’ case, she’d spend $2,880 x 10% = $288 to
               s
    acquire a new customer
•   This $288 is called her Allowable Cost Per Sale (CPS)
Social Media ROI
•   Barbara’s lawn care
    company uses direct mail
    as its primary marketing        Damn. Barbara
    tool                          hated my YouTube
                                 chart. Is it time for
•   She spends $1.44 on each     brunch yet? I need
    direct mail piece they             a drink.
    send out
•   Barbara’s conversion rate
    on her direct mail
    campaign is 0.5%
•   So, for every 200 direct
    mail pieces she sends out,
    she gets 1 new customer
Social Media ROI

                              •   Barbara knows that if she
               Once again,        gets 1 new customer for
              Bob confused        every 200 pieces she
                 YouTube          sends out, and each piece
                visits with
               actual ROI.        costs $1.44 to print and
                                  mail, then her Cost Per
               No wonder
               he drinks.         Sale is $288
                              •   200 direct mail pieces x
                                  $1.44 each = $288 = 1 new
                                  customer
                              •   That matches her
                                  Allowable Cost Per Sale
                                  exactly!
Social Media ROI

                                   How can I       Fortunately, I
                                  calculate the   know just who
                                   ROI of my      to turn to for
                                   campaign?        the answer!
 •   However, in order to
     accurately calculate the
     ROI of her social media
     campaign, Barbara is going
     to have to find someone
     who can help her tie it in
     to her Customer Lifetime
     Value
Social Media ROI
 I’m off to re-
 connect with
 my old flame,                           Hmmm. I wonder
 Stone Steele.                           what this glowing
                                           green goop
                                            tastes like.




                  Stone Steele ... the
                  only guy man enough
                  for Barbara’s love
Social Media ROI
Once Barbara is in
Stone’s lab, she hits   Stone, we’re trying to
him up with the          calculate the ROI of
big question...            our social media
                               campaign.
                           Will it require a
                        super-human effort to
                           figure that out?
Social Media ROI
               Calculating the ROI of a
            social media campaign is easy.
             But more important, what do
             you think of my pecks? Can
            you tell I’ve been working out?



                            •   Barbara soon found out that
                                Stone was still the egomaniac
                                he’d always been
                            •   Even so, she listened intently
                                as he explained how to
                                calculate the ROI of a social
                                media campaign
Social Media ROI

• Barbara’ direct mail budget is
           s
  $2.8 million per year. She knows
  that if she uses that to send out
  2,000,000 direct mail pieces, she’ll     Even if the social
  get 10,000 new customers each             media campaign
  year                                   only generated 800
                                            new customers,
• If she slices off 10% of that $2.8     that’ okay because
                                              s
  million budget and uses it for a           results would
  social media campaign, the social       improve each year
  media campaign would have to
  generate 1,000 new customers for
  it to match the success of the
  direct mail campaign
Social Media ROI
• Stone explained that in order                   YouTube
  to track the leads generated
  from her social media                Facebook                   Twitter
  campaign, Barbara would have
  to use the hub-and-spoke
  system
• All of the social media spokes                    Barb’
                                                        s
  would drive leads to the                        Lawn Care
                                   Email                               Blog
  landing page on her website                      Landing
                                                    Page
• From there, she could track
  how many prospects converted
  to actual customers
• Bingo. Barbara now had a way      SlideShare                E-Newsletter
  to track and measure the ROI
  of her campaign                                 LinkedIn
She’ probably
                                                      s
                                                   wondering if
Social Media ROI                                  that’ a rabbit
                                                       s
                                                  in my pocket.




                               He may be an
                             egomaniac, but he’
                                              s
                               my egomaniac.
 Now that Barbara had a way
 to track the ROI of her
 social media campaign, she
 could get back to the task
 at hand - rekindling her love
 affair with Stone Steele.
Social Media ROI
                                  I think Bob’
                                             s
                                 YouTube charts
                                are just dreamy.
Meanwhile, back at the office   And Bob’ pretty
                                         s
                                  dreamy, too.




                                       The end, almost ...
Social Media ROI

• Jamie’ book, “How to Make Money
        s
  with Social Media” is available at
  Borders, 800CEORead.com, Amazon
  and Barnes & Noble
• You also can contact him for speaking
  engagements via his email address at
  Jamie.Turner@60SecondMarketer.com
• You can download this presentation at
  60SecondMarketer.com/SocialROI
• And, of course, you’ll also want to
  find out about BKV Digital and Direct
  Response, which generates a 10:1+
  ROI on most campaigns it develops
  for large brands around the globe
www.60SecondMarketer.com

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Social Media ROI: How to Tell if Your Social Media Campaign is Making Money

  • 1. You’re a fool, You couldn’t be Turner. Social more misguided, media can’t be my friend. And measured on an I’ll prove it! ROI basis!
  • 2. Social Media ROI Hey, kids! Want to know how to calculate the ROI of a social • Many companies are still trying to media campaign? figure out how to measure their social media return-on-investment • Jamie Turner, the co-author of “How to Make Money with Social Media,” covers this topic in detail in his book • Which, oh by the way, is available at fine bookstores (and a few crappy ones) everywhere • Here’s a quick snapshot of the method he outlines in “How to Make Money with Social Media”
  • 3. Introductions Hey, look! Our logos • But first, a little background -- are on this page. What a coincidence! Jamie is the Chief Content Officer for the 60 Second Marketer, the online magazine for BKV Digital and Direct Response • He also writes for Mashable and is invited to speak about social media, mobile media and branding on TV, radio and at industry events around the globe
  • 4. Introductions • Who is BKV? Glad you asked • BKV creates direct response, social media, mobile media, email, paid search and other campaigns for clients like AT&T, Caterpillar, The Home Depot, Mercedes-Benz and Six Flags • Okay, enough about us. Let’ talk s about how you can calculate your social media ROI
  • 5. Social Media ROI • Our story begins in a company that’ eerily similar to s your company • And when we say “eerily similar,” we mean the “Are these people watching me?” kind of eery • But fear not. We’re not watching you. We just know that what takes place in our story is happening at corporations around the globe • You see, many social media practitioners have a problem -- they launched their social media campaigns without tracking the three M’ : Metrics, Measurement and ... a s third M-word that we’ll come up with later
  • 6. Social Media ROI Barbara is going • The challenge most to love all these companies face with YouTube views. Can you say social media is that “Promotion”? they can track quantitative metrics like page views, blog s comments, Facebook YouTube View Likes and re-tweets... • But they can’t track the ROI of their social media campaigns
  • 7. Social Media ROI OMG! We did all that work and all you can tell me is that we got 12,573 • In order to calculate the ROI YouTube visits? of a social media campaign, you have to understand the No wonder I keep concept of Customer Lifetime you in a cubicle. Value (CLV) You are still in a cubicle, aren’t you? • CLV is the amount of revenue a typical customer will generate for your company during his or her engagement with your brand • Barbara, the CEO of Barb’ s Lawn Care, understands this concept • Unfortunately, Bob, of YouTube chart fame, does not
  • 8. Social Media ROI • Barbara, being the CLV whiz that she is, knows that the average customer spends $80 per month with her company and that they typically stay with them for 3 years • So her Customer Lifetime Value is $2,880. $80 per month x 12 months x 3 years = $2,880 • This raises another question -- how many marketing dollars should Barbara spend to acquire a customer that generates $2,880 for her company? • A good starting point is 10% of her CLV • In Barbara’ case, she’d spend $2,880 x 10% = $288 to s acquire a new customer • This $288 is called her Allowable Cost Per Sale (CPS)
  • 9. Social Media ROI • Barbara’s lawn care company uses direct mail as its primary marketing Damn. Barbara tool hated my YouTube chart. Is it time for • She spends $1.44 on each brunch yet? I need direct mail piece they a drink. send out • Barbara’s conversion rate on her direct mail campaign is 0.5% • So, for every 200 direct mail pieces she sends out, she gets 1 new customer
  • 10. Social Media ROI • Barbara knows that if she Once again, gets 1 new customer for Bob confused every 200 pieces she YouTube sends out, and each piece visits with actual ROI. costs $1.44 to print and mail, then her Cost Per No wonder he drinks. Sale is $288 • 200 direct mail pieces x $1.44 each = $288 = 1 new customer • That matches her Allowable Cost Per Sale exactly!
  • 11. Social Media ROI How can I Fortunately, I calculate the know just who ROI of my to turn to for campaign? the answer! • However, in order to accurately calculate the ROI of her social media campaign, Barbara is going to have to find someone who can help her tie it in to her Customer Lifetime Value
  • 12. Social Media ROI I’m off to re- connect with my old flame, Hmmm. I wonder Stone Steele. what this glowing green goop tastes like. Stone Steele ... the only guy man enough for Barbara’s love
  • 13. Social Media ROI Once Barbara is in Stone’s lab, she hits Stone, we’re trying to him up with the calculate the ROI of big question... our social media campaign. Will it require a super-human effort to figure that out?
  • 14. Social Media ROI Calculating the ROI of a social media campaign is easy. But more important, what do you think of my pecks? Can you tell I’ve been working out? • Barbara soon found out that Stone was still the egomaniac he’d always been • Even so, she listened intently as he explained how to calculate the ROI of a social media campaign
  • 15. Social Media ROI • Barbara’ direct mail budget is s $2.8 million per year. She knows that if she uses that to send out 2,000,000 direct mail pieces, she’ll Even if the social get 10,000 new customers each media campaign year only generated 800 new customers, • If she slices off 10% of that $2.8 that’ okay because s million budget and uses it for a results would social media campaign, the social improve each year media campaign would have to generate 1,000 new customers for it to match the success of the direct mail campaign
  • 16. Social Media ROI • Stone explained that in order YouTube to track the leads generated from her social media Facebook Twitter campaign, Barbara would have to use the hub-and-spoke system • All of the social media spokes Barb’ s would drive leads to the Lawn Care Email Blog landing page on her website Landing Page • From there, she could track how many prospects converted to actual customers • Bingo. Barbara now had a way SlideShare E-Newsletter to track and measure the ROI of her campaign LinkedIn
  • 17. She’ probably s wondering if Social Media ROI that’ a rabbit s in my pocket. He may be an egomaniac, but he’ s my egomaniac. Now that Barbara had a way to track the ROI of her social media campaign, she could get back to the task at hand - rekindling her love affair with Stone Steele.
  • 18. Social Media ROI I think Bob’ s YouTube charts are just dreamy. Meanwhile, back at the office And Bob’ pretty s dreamy, too. The end, almost ...
  • 19. Social Media ROI • Jamie’ book, “How to Make Money s with Social Media” is available at Borders, 800CEORead.com, Amazon and Barnes & Noble • You also can contact him for speaking engagements via his email address at Jamie.Turner@60SecondMarketer.com • You can download this presentation at 60SecondMarketer.com/SocialROI • And, of course, you’ll also want to find out about BKV Digital and Direct Response, which generates a 10:1+ ROI on most campaigns it develops for large brands around the globe