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Measuring Social Media ROI From a CFO’s Point of View

Measuring Social Media ROI From a CFO’s Point of View

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Published by: porternovelli on Jan 03, 2012
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06/06/2014

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digital pr guidebook • Vol.
4
129
prnewsonline.comChapter 4: Social Media Measurement
I
n today’s challenging economic andbusiness environment, every market-er understands the need to demon-strate return on investment (ROI) ormarketing investments as well as the clearneed to deliver short-term results as wellas long-term benet or the brand. At thesame time, nance chies charged to deliver-ing improved operating margins to the or-ganization’s nancial community continueto look or cost eciencies and cost-benetrelationships in their organizations. As a re-sult, more and more CEOs and CFOs aredemanding quantiable ROI beore allocat-ing and approving marketing budgets.
Measurement Challenges
Many marketers use both traditional me-dia and, increasingly, social media in theiroverall marketing mix calculations as a wayto understand ROI. However, accuratelymeasuring the results o individual socialmedia tactics or programs through market-ing mix modeling remains challenging orseveral reasons:Marketing mix calculations get less
•
accurate outside o broad strokes, andmany social media eorts are laser-o-cused or don’t have access to the levelo data that other channels do, mak-ing or a bad mathematical t.Social media value or ROI maniests
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itsel in a range o ways—brand build-ing, crisis mitigation, advocacy—thatare very dicult to capture inside amarketing mix calculation.Traditional ROI models that ocus on
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number o impressions to quantiymarketing investments simply don’twork with social media, as impres-sion counts on most social media cam-paigns are rough estimates at best.With the advent o social media, we needto view ROI in a dierent way where thequality o a social media program is mea-sured through valuation o various types o consumer engagement. Measurement mustbe based around such things as consumerattitudes, belies and behaviors; commentson Web sites and blogs; and participationon social networks. We then assign an esti-mated value or each o those actions andthe cascading value they can create to devel-op a measurement program that representsreal and eective consumer engagement.So why is measurement o ROI throughconsumer engagement more relevant thanmore traditional means? Simply put, con-sumers by way o their engagement controlsocial media as well as its ongoing word-o-mouth support, validation and amplica-tion. Earned social media is the most trans-
Measuring Social Media ROIFrom a CFO’s Point o View
Someone who is ollowedby only 10 highly infuentialpeople can oer ar more value than somebody who isollowed by an audience othousands who arenot ollowed.
By Anthony Viceroy 
 
130
digital pr guidebook • Vol.
4
© PR News
parent and credible, and it maximizes thepotential that a brand message has to be ul-ly leveraged, shared and engaged with by avirtually unlimited number o consumers— the very same individuals who will buy yourproduct or service and build brand value oryou. By better aligning social media goalsand objectives to valued consumer engage-ment, brands will be able to determine moreaccurate ROI. And, ultimately, the greaterthe consumer engagement, the greater thegrowth in brand equity and the greater theimprovement in top-line sales perormance.
Measuring Engagement
The key to measuring social media ROIeectively is to do the negotiation, researchand value estimates o each type o engage-ment and behavior change upront. Thenmovement in value created by engagementcan be tracked with real-time analytics atregular intervals, and the cost eectivenesso subsequent eorts may be compared.Periodic checks o macro trends in attitudeand behavior change also are smart movesas part o this process, as they allow you totrack the eect your engagement is havingon the larger audience.To calculate ROI or social media pro-grams, ollow these steps in order:Establish articulated goals and objec-1.tives or the program as you would orany serious marketing eort.Establish agreed-upon values or de-2.sired business outcomes and theirassociated social media engagementtypes. For instance, i the goal is toincrease sales, conduct a comparativestudy to establish the value o a Face-book “like” or your brand comparedto the general population.For key infuencers, estimate the value3.o uture communication about yourbrand based on relevance, ollowing,authority, tonality, key message pick-up and other related actors. This isnot an advertising value equivalent; itis a question o estimating the value o the infuencer to the brand’s goals. Re-member that someone who is ollowedby only 10 highly infuential peoplecan oer ar more value to an organi-zation than somebody who is ollowedby an audience o thousands who arenot ollowed.Track the value o changes in the at-4.titudes, belies and behaviors o thetarget audience through your engage-ment metrics. Measure the percentageo change and gauge how it impactssales based on your estimates.Establish success triggers i targets are5.met and designate the ability to cor-rect course in real time i targets arenot met. Consider surveys as macropulse checks o program success.Once appropriate estimates o value areagreed upon and all appropriate values havebeen assigned, you’ll then be able to ollowthe tactics undertaken through to the re-sults they generate, measuring costs againstthe metrics and values established at theoutset.
Measuring Crisis Impact
Over the last ew years we have seen how
The key to measuring social media ROI eectively is to do thenegotiation, research and value estimates o each type oengagement and behavior change up ront.

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