NADA MarketINSIGHT: Does the

ROI on Social Media Pencil?

New Ideas on Measuring
Performance of Social Media

“As an industry, we need to get past the point of listening

to closely to so-called social media gurus who respond to
dealer questions about ROI by dancing around the use of
objective measurements in applying performance analysis
to automotive social media marketing initiatives…”
-- Ralph Paglia
• What: Debunk many of the fallacies surrounding social media by
applying measurement and tracking systems to eliminate mysteries
surrounding social media marketing and reputation management ROI.
• Why: Despite an endless supply of new social media sites similar to,
but different from Facebook, YouTube, Twitter, Google, DealerRater
and hundreds of others, there has been little effort to supply dealers
with tools to measure and report results… Yet, dealers are being
inundated with various spins on social/digital media made during new
vendor pitches for dealer dollars.

• How: The current situation around social

media is like the 18th century question, "How
many angels can dance on the head of a pin?"
In my opinion, too many social media pundits
dance around each dealer inquiry concerning
tracking, results measurement and ROI
analysis… Put measurement systems in place
BEFORE starting a social media initiative!
 Forrester’s ROI Methodology
Benefits
• Quantified value
• Defined metrics
Benefits
(Impact on dealership) R Total
I Dealer
Cost Costs Economic
• People
• Process
(Impact on expenses)
S Impact
• Technology Flexibility K
(Proactive vs Reactive)

“Options” created
• Are there new opportunities Uncertainty
created for future revenue • Impact of “assumptions”
and profit realization?
There are many benefits of
Online Dealer Communities…

Source: “The ROI of Online Customer Communities” Forrester Research

Automotive Examples
Strategic ROI Proforma…
Planning…
The essential
ingredient to
driving with
your eyes open!

Objectives…
The essential
ingredient to
getting results.
Social Media Results Known = Dealer ROI (the What)
1. Marketing Communications: Create and Publish content that attracts consumers
within demographics targeted by social media marketing strategy. Use Social Apps to
engage/interact/convert.
2. Reputation Management:
A. Monitor social web for content posted containing dealership brand.
B. 911 Fast Response Strategy and Process for negative content posted. Notify dealer POC’s of
what was posted, when and by who. Send POC copy, including response published and
actions/due dates required
C. “Social Rewards” strategy for positive posts, comments and mentions
D. Promptly create and post appropriate responses to all dealership mentions so people see
your store cares, pays attention, responds, appreciates compliments and resolves customer
concern issues
3. Traffic Generation: Use anchor text and linked content to drive targeted traffic from
social media sites into dealer’s social assets and websites, incoming phone calls to
social media assigned numbers, use stories to drive showroom traffic
4. Improve SEO Strategy: Quickly increase the dealership SEO “footprint” with
multiple SERP listings from dealer’s Social Media accounts and profile subdomains.
Back links from hundreds of Social Media sites to dealer’s eCommerce sites boost
authority and rank with search engines.
Social Media Marketing Tactical Objectives (the How)

1. Create and Publish high quality content that attracts and engages
people in demographic categories your overall dealership
marketing programs seek and target
2. Monitor every post that mentions your dealership, report to key
dealership stakeholders on what it is, when, where and by who
3. Promptly post appropriate responses to all dealership mentions so
people see your store cares, pays attention, responds, appreciates
compliments and resolves customer concern issues
4. Drive qualified traffic from social media sites (earned media) to
dealership sites (owned media) defined by marketing strategy
5. Improve SEO “footprint” by creating multiple SERP listings using
dealership branded Social Media accounts and profile pages
History and Correlation
Good ROI analysis requires accurate historical performance data
(which few dealers have). Capturing and analyzing historical data requires
time and discipline. It’s easy to cast aside analytical tasks when everyone
is focused on making deals and generating profit. Historical data sets a
baseline for measuring the “Delta”. That change can then be measured
and compared to actions that may have caused it. If you can correlate
Social Media initiative actions to impact, then you can calculate ROI.
Automotive Avenues Internet Sales Lead volume
Year Before Investing resources into Social Media Marketing

2,383
Leads Submitted Annually
(Above the National Average
for metro car dealers of 968)
Automotive Avenues Internet Sales Lead volume
Year After Investing resources into Social Media Marketing

6,340
Leads Submitted Annually
166% Increase
During Worst Economic
Climate in 30 Years!
Does posting relevant Blog content that attracts Traffic

yield an increase in volume of Internet Sales Leads?

Sales Blog
Leads Visitors
Does posting YouTube videos designed to
drive Lead Form submissions generate ROI?
w/$500
Historic coupon w/Video

Sales Leads 100 100 100

Average Gross PVR $1,500 $1,000 $1,500
Lead/Sales Rate 5% 10% 15%
Profit from Units Sold $7,500 $10,000 $22,500
Incremental profit from
Action N/A $2,500 $15,000
Cost of incentive N/A $500 $2,500
ROI N/A 400% 500%
ROI Performance Metrics
PUTTING IT ALL TOGETHER
Apply all the measurement factors available for B2C social marketing scenarios. Then
compare the ROI of Events to buying RFQ leads. Start with historical data. What is
the conversion rate of leads from special events versus 3 rd Party Leads? What is the
lifetime value of an average car buyer to your dealership? Compare the outputs and
divide by costs to assess ROI:
Assumptions:
1. Average cost of a special event for 100 RSVP attendees = $3,000
2. People attending your events convert at a 2% sales rate (30 days)
3. Average cost of buying 500 3rd Party Leads is $10,000
4. 3rd Party Leads convert to sales at a 1% rate.

ROI Analysis: Special Event 3rd Party Leads

Audience size 100 500
Conversion rate 2% 1%
Lifetime profitability $10,000 $ 25,000
Cost of acquisition $  3,000 $ 10,000
ROI 233% 150%
Lead Generation from Article Marketing
Let’s look at one more example in which we use a blog for lead generation. We know that
performance will be slow during the first few quarters until search engine traffic kicks in.
Based upon the experience of others, we believe that lead growth will improve steadily as
traffic builds. We expect to be at 50 leads per month by the end of the first year and 160 per
month by the end of the second. Our historical data tells us that a lead is worth $100. We
further estimate our editorial costs at $2,000 per quarter during the first year, doubling to
$4,000 during the second. Here’s our analysis of quarterly and cumulative ROI.

Quarterly Cumulative
Leads Lead Value Cost
  ROI ROI

Y1-Q1 10 $          1,000 $     2,000 -50% -50%

Y1-Q2 25 $          2,500 $     2,000 25% -13%
Y1-Q3 35 $          3,500 $     2,000 75% 17%
Y1-Q4 50 $          5,000 $     2,000 150% 50%
Y2-Q1 75 $          7,500 $     4,000 88% 63%
Y2-Q2 100 $        10,000 $     4,000 150% 84%
Y2-Q3 130 $        13,000 $     4,000 225% 113%
Y2-Q4 160 $        16,000 $     4,000 300% 144%
Measuring Intangibles
The trickiest aspect of ROI analysis is accounting for intangibles. These include factors
like customer satisfaction, customer loyalty, brand reputation and market influence.
Many social marketing projects are justified for these reasons but the outputs are never
measured, either because it’s not worth the effort or because the measurements aren’t
in place. In fact, all of these outputs can be measured and have been for years using
some of the following tests:

Value Measurement
Customer Customer surveys; renewal rates; referrals; incremental business;
satisfaction testimonials; Net Promoter Score
Customer loyalty Renewal rates; incremental business, response rates, event
attendance; testimonials; Net Promoter Score
Customer Newsletter subscriptions; online community activity; response rates;
engagement event attendance; testimonials; feedback volume
Reputation Market share; awareness research; media citations; analyst research

Market influence Market share research; lift studies; media/social media citations;
speaking invitations; analyst research
Leadership Attitudinal research; growth rate; media citations; copycat competitors
Automotive Marketing ROI; By Social Media Channel
What happened when 11,159 People in San Antonio
Visited AnciraCommunity.com

•18,374  Visits
•11,159  Absolute Unique Visitors
•90,715  Pageviews
•4.94  Average Pageviews
•00:04:32  Time on Site
•48.12%  Bounce Rate
•60.36%  New Visits
Advertising Equivalent Value
What is the Display Advertising Media Equivalent Value
of AnciraCommunity.com Impressions?
•18,374  Visits
•11,159  Absolute Unique Visitors
•90,715  Pageviews
The aggregate average Cost Per Thousand Impressions (CPM)
for “Automotive Intender” geotargeted advertising in San
Antonio
market is $7.57 CPM…

90,715 Pageviews = 907.15 CPM Units

907.15 x $7.57 = $6,867.13
Advertising Equivalent Value
What is the Google Adwords Pay Per Click (PPC) Search
Advertising Media Equivalent Value?
•18,374  Visits
•11,159  Absolute Unique Visitors
•90,715  Pageviews
The aggregate average Cost Per Click (CPC) for Google Adwords
campaigns for automotive relevant keywords geotargeted within San
Antonio Metro is $2.64 CPC…
18,374 Community Visits = 18,374 Click Throughs

18,374 Clicks x $2.64 CPC = $48,507.36

Advertising Equivalent Value

What is the comparable Cost Per Unique Visitor

Equivalent Value?
•18,374  Visits
•11,159  Absolute Unique Visitors
•90,715  Pageviews

The aggregate average Cost Per Unique Visitor (CPUV) for all
other Ancira Auto Group online campaigns focused on driving
traffic to Ancira Web Sites $2.12 CPUV…
11,159 Unique Visitors
X $2.12 CPUV
------------------------------------
$23,657.08
What is the Social Media Aggregate Equivalent
Media Value Average for AnciraCommunity.com
within the time period measured?
$6,867.13 CPM
$48,507.36 PPC
$23,657.08 CPUV
------------------------
(79,031.57 / 3) = $26,343.85
Social Media Marketing:
Measurements to Financial Values for ROI
Social Media Marketing – ROI Categories
Ads
Ads were
were seen
seen 7,201,334
7,201,334 times
times in
in October
October by
by
Facebook
Facebook members
members who
who live
live near
near the
the two
two
dealerships
dealerships in
in this
this case
case study…
study…

1,730
1,730 of
of those
those Facebook
Facebook members
members clicked
clicked on
on
one
one the
the two
two dealer
dealer advertisements…
advertisements…

Since
Since we
we spent
spent $1,595.25
$1,595.25 for
for the
the Facebook
Facebook AdAd
Campaigns,
Campaigns, each
each click
click customer
customer visit
visit to
to our
our
community
community site,
site, or
or Fan
Fan page
page cost
cost 92
92 cents.
cents.

To
To show
show Facebook
Facebook members
members our
our dealership
dealership
ads
ads 1,000
1,000 times,
times, itit cost
cost 22
22 cents…
cents…
 Case Study: Ancira Auto Group
Birth of a Social Community
1 ADP builds AnciraCommunity.com integrated
w//Facebook, Twitter, Flickr, etc.

3 Dealer Information
Ancira Crafts Their Message
Employees engage discussions
4 Syndicated Content
Ancira personnel & suppliers set-up profiles - Interviews with Civic leaders
Get engaged – Create Content Relevant Info From Other Sources
5 Local Interest
Registration / Publication Highlight Ancira Civic Leadership
2 Site Registered in 120 Social Venues Become local social media leader
Web based console manages all accounts
6 User Content
Fun Stuff For Customers
Road tests, reviews & how to’s
“Canine Romance Blooms…”

Will you be my Facebook friend?

Subscribe to our YouTube channel
Follow Us on Twitter
 Case Study: Ancira Auto Group – San Antonio
Social Media Reputation Management Results

Positive “I am absolutely blown away

customer that you not only responded…
feedback but that you use social media”
“Heaters
Become “I will be happy to explain
Raving to everyone the fantastic
Fans” service I received…”
Branded Search
Search ancira dodge san antonio SERP Returns
ancira auto group
Engine ancira chevrolet 10 pages of
Results ancira kia san antonio Ancira Social
Media content
(SERP)

Consumer
Response to
Social Media
Advertising