ROI of Social Media E-Book

Guy Powell

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 465

Veröffentlichungsjahr: 2010

Beschreibung

How to Improve the Return on Your Social Marketing Investment This book more than adequately covers this increasingly important topic, as social media begins to take its rightful place on the center stage of not just marketing but a number of business disciplines. ROI of Social Media is an excellent analysis of the current landscape. I cannot recall any book that singularly tackles ROI at this level, most media books simply give a passing reference or chapter on ROI, this is the first comprehensive study. -Larry Weber, Founder and chairman of W2 Group, Formerly of Weber Shandwick We know that for 2011 and the foreseeable future, ROI is one of the top priorities for the social media strategist at many companies, ROI of Social Media is the right book at the right time as social media strategist are needing to work the various department within the enterprise and show that the investments in social tactics and tools are a good investment. The 15 case studies contained in this book will help the social media strategist understand how global brands are successfully using social marketing to connect to their audience. -Jeremiah Owyang, Partner, Altimeter Group The ROI of Social Media is a must-read for any business looking to get the most out of their investments in social marketing. It sets the stage for marketers to interact with influencers, individuals and consumers and explains the relationships between them. This book breaks down into simple terms both "dollars" and "sense" for social marketers to live by. Fundamentals, strategies and tactics ...this book has it all. The ROI of Social Media will be the dog-eared book that sits on the corner of your desk used to prove many a point. -John Lovett, Senior Partner & Principal Consultant, Web Analytics Demystified Analytics are the core to a consistently successful marketing program. This book offers the metrics to manage social marketing programs, to measure their success, to diagnose underperforming elements, and to deliver extraordinary results. Kudos to this team of marketers in putting this essential book together. -Professor JC Larreche, InSEAD, Author of The Momentum Effect

Leseprobe

Advance Praise for ROI of Social Media

How to Improve the Return on Your Social Marketing Investment

The biggest shift in today’s marketing world isn’t the much-discussed declining effectiveness of television advertising but the changes in how consumers research and buy products—and social media is at the heart of this structural dynamic. Simply measuring ROMI will not improve performance since marketing strategies are often flawed and their spending is inefficient. Indeed, we need to go beyond metrics and take a hard look at why the numbers are so bad! Groves, Powell and Dimos provide a timely and accessible text to allow a new and less controllable brand communications channel be managed within a holistic framework. Full of practical gems, it will stimulate your thinking and help you make better decisions.

Chris D. Beaumont

Professor, Tokyo University, Global Center of Excellence

Director, North Asia, Results International

If you’ve ever tried to integrate social media into your marketing planning, and especially if you’ve tried to measure its impact, The ROI of Social Media is a must-read. The authors bring decades of experience and a wealth of insight to anyone who is trying to plug into this elusive media channel and determine its value to your organization. The depth of discussion on ROI provided in this book addresses the glaring void in evaluating social marketing—its effect on my income statement. You need to read this book.

Dominic “Nick” Popielski

Director, Marketing Analysis Sales & Marketing

AGL Resources, Inc.

Before you spend another second on your latest social media marketing campaign you should read this book! Doing so will be the first step in improving your ROI for all your media investments. Congratulations to Steven, Guy and Jerry for showing the way in developing a strategy that actually works for businesses wanting to harness the power of social marketing.

Bill Jula

CEO & Co-Founder

Fast Pitch!

I would like to congratulate the writers for their great initiative and achievement in putting such a comprehensive and knowledgeable book together which would be a vital asset to the Chief Marketing Officers, Chief Executive Officers and Chief Financial Officers. The growth in popularity of Social Media and ROI has created a vacuum and necessity for a credible, leading material—ROI of Social Media fulfills it.

Nisar Butt

President and Chief Executive Officer

International Institute of Marketing Professionals

Contents

Foreword

Preface

Acknowledgments

Introduction

Section 1 : Getting Started with Social Media ROI

Chapter 1 : Getting Started with Social Media ROI

What is social media ROI?

Social marketing is measurable: The marketing process model applied to social marketing

Make better strategic and tactical marketing decisions

A (short) history of social marketing ROI

Obstacles in determining social marketing ROI

Traditional media versus social media

Social marketing strategy

Measuring social marketing

The future of social media and ROI

Let’s get started. . .

Chapter 2 : Social Media Motivations and Behaviors

Motivations for participating in social media

The three tiers of social media strategy

Motivators

Behaviors

Social media segmentation model

Conclusion

Section 2 : The Media Engagement Framework

Chapter 3 : Introduction to the Media Engagement Framework

Applying the Media Engagement Framework

The personas of the media engagement framework

Brand imagery

Competitive set

Measurement set

Conclusion

Chapter 4 : Influencer Persona in the Media Engagement Framework

The influencer and the Media Engagement Framework

Conclusion

Chapter 5 : Consumer Persona in the Media Engagement Framework

The consumer and the MEF

Social media and B2B marketing and selling

Conclusion

Chapter 6 : Individual Persona in the Media Engagement Framework

The individual and the MEF

Conclusion

Chapter 7 : The Competitive Set—Vying for Attention

Endorsement share as the competitive set for influencers

Brand as the competitive set for consumers

Time as the competitive set

Conclusion

Chapter 8 : The Brand Image

Brand image across the MEF

Conclusion

Chapter 9 : Search–Being Found in Social Media

Being visible in social media

Conclusion

Section 3 : Practical Applications of Social Media ROI

Chapter 10 : Putting Values to the “R” and “I” of ROI in Social Media

Why ROI?

Introduction to ROI

Conclusion: The ROI of ROI

Chapter 11 : Eight-Step Process to Measuring Social Marketing Strategy and ROI

Building a culture of metrics in social media

Social marketing metrics infrastructure

Eight-Step process to measure social marketing strategy and ROI

Conclusion

Chapter 12 : Social Media Metrics Tools Providers

Evaluating metrics tools and how to survey tool capabilities

Monitoring versus metrics versus influence

A framework for evaluating tools

Tool assessment characteristics

Examples using the ROI of social media tool analysis framework

Tool evaluation summary

Conclusion

Section 4 : Where Does Social Media Go from Here?

Chapter 13 : The Future of Social Media and ROI

Greatly expanded business adoption of social media

The death of social media and the emergence of a new social paradigm

Noise

Consumer expectations of understanding who they are

A global market that never closes

Consumer privacy, identity, location and portability

Trust and reputation-based economy

Semantics

Network access and mobile

The micro scale economics of social media

The social media bubble and global platform consolidation

China and social media

Unforeseen applications of social technology

Conclusion

Afterword

Appendix

Bibliography

Index

Copyright © 2011 John Wiley & Sons (Asia) Pte. Ltd.

Published in 2011 by John Wiley & Sons (Asia) Pte. Ltd.

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Library of Congress Cataloging-in-Publication Data

ISBN 978-0-470-82741-3 (Hardback)

ISBN 978-0-470-82743-7 (ePDF)

ISBN 978-0-470-82742-0 (Mobi)

ISBN 978-0-470-82744-4 (ePub)

Dedication

From Guy

To my wife, Karen, for putting up with all the time it took to write this book.

To Robert, Collin and Kristin.

To the children of the United Methodist Children’s Home. The mission of the United Methodist Children’s Home is to serve the needs of children and their families in crisis. Ten percent of the royalties derived by Guy from the sale of this book will be contributed to this worthy charity. If you would like to learn more about the United Methodist Children’s Home, please contact them directly at 500 S. Columbia Drive, Decatur, GA 30030, or www.umch.com.

From Steven

To my Sister Stephanie and partner Cynthia for believing in me, to Parker and Megan for inspiring me and to my co-authors Guy and Jerry for being supportive in the process and nurturing a deeper understanding of traditional marketing in me.

To my son Steven II and my parents Gerry and Betty who are always in my thoughts and prayers. There have been so many people that have meant a lot as this project has unfolded, they all deserve a thought and consideration.

Finally, to all the people in my life that make it rich and rewarding and just the most wonderful place to be—keep on being social!

From Jerry

To my wife, Megan, for her support even though she knew that this book would consume all my time and generally make me a less enjoyable person to be around.

Foreword

Placing the user at the center of our thinking—whether in the way in which we design our software or the sales, marketing and services strategies we use—has always been of paramount importance at Microsoft. Indeed, empowering users with access to “information at their fingertips” was at the heart of the company’s original philosophy when it was created 35 years ago.

Today, with over 90 percent of users choosing Windows for their computing needs, and the majority of these using their computer to connect to the Internet, social media is both a highly relevant and important marketing communication channel for us. What’s more, we are also a significant digital media owner in our own right, providing our advertising clients with access to over 650 million Internet users a month through properties such as Windows Live, Hotmail, MSN, Bing and others.

So, at Microsoft, we are not just consumers of digital marketing and social media, but also major suppliers of solutions in this area as well. With this in mind, the ROI of social media is of great interest to us and we are an active and vocal contributor to this growing debate.

Recently though, it seems more and more business books are drawing conclusions that aren’t completely fact-based. They analyze various successful companies and then find some nugget that seems to be the “one thing” that correlates with success and yet, after the book is published, those companies end up losing their ability to sustain success. More often than not, nothing’s changed in the organization and yet success eludes them. This is not the case with the ROI of Social Media. This book puts forth a solid ROI methodology supported by an analytical model that is brought to life by relevant case studies.

In doing so, the authors make a great team. Guy brings his experience as an ROI expert, Steve his strong social media strategy skills and Jerry his consulting and marketing strategy expertise. It is the only way that this topic could be fully covered. So many social media books tend to only a one-sided view to ROI, and without the practical recommendations to making better marketing decision. Because they actually work day to day in their respective areas, the authors’ capabilities are truly tried and tested.

The ROI of Social Media is a must read. It starts with a clear foundation of marketing strategy. It takes that strategy and applies social media and social media marketing—social marketing—to it. There is no question that this team of authors has real world experience and made it accessible to brand managers everywhere. There is good, actionable content in each and every chapter.

This book is also one of the first global books with numerous case studies spanning three continents—North America, Europe and Asia. With the rise of Asia, and specifically China, in social media, it will be critical for global marketers to understand how to put their social marketing strategies together for each of the top countries in each region.

Some marketers think social media will replace all other media. This may happen at some point far, far off in the future, but for all practical purposes social media will simply be another media channel standing alongside other traditional media channels. Nevertheless, for some businesses, social media will be the primary media to make their businesses grow. For others, social media will simply leverage traditional media and delivering incredible value for their efforts. Then there are yet others where their traditional media presence is so strong that social media may never catch up.

Regardless of your business type, where your brand is in its lifecycle, or where your marketing team is in its sophistication using social media, this book will help you strategize it, measure it, value it and make it better.

Andrew Pickup

General Manager, Marketing & Business Operations

Microsoft Asia Pacific

PREFACE

As recently as early 2010, many social marketers would have claimed that social media couldn’t be measured, it shouldn’t be measured or that businesses should be content with the new interpersonal engagement provided by social media, regardless of cost. It’s easy to draw comparisons to the 80s when computers would enable the paperless office and the 90s when the Internet would make bricks and mortar commerce obsolete. Predictably this has changed and many marketers are seeing the need to measure their success in social media because costs need to be accounted for, and incremental earnings are what really matters. Social media is not just about engaging potential customers, but it is about promoting the brand to drive increased revenue, profit, brand and market share with an acceptable level of cost and risk. Over the past few months, a few good books have been published that talk about social media and social media metrics, but they only tell a partial story. The complete story is that in order to determine whether social media is driving incremental sales volume and earnings, it must be considered a part of the entire marketing mix. Social media marketing can only be measured in the context of the entire marketing mix, including both traditional and social media. With that in mind, we need to understand what the drivers of value are for a brand and how a message in social media differs from, or is similar to, a message in traditional media. With that in mind, we have developed the concepts presented in this book and a practical model for business. If marketers can take these concepts to heart, they will not only be better social marketers but they will be better marketers overall.

It isn’t simply social media. It is media that is social!

Social media is also not just one big monolithic channel. It is made up of many different types of channels, each with its own nuances. Just as newspaper advertising is different from trade publication advertising, which is different from TV advertising, which is also different from out-of-home subway advertising, so too is Twitter different from Facebook and MySpace. Also, traditional media doesn’t need to be just a silo of messages being broadcast out to the nameless masses. It can be shaped by the give and take of social media. It can be used to support social media marketing campaigns and social media can be used to support traditional marketing campaigns. Traditional media is no longer just traditional. Social media is no longer just social. It is media overall that is social. In that light, we have chosen to use the term social marketing when referring to social media marketing.

Social marketing is another media channel sitting equally alongside all others

In this book, we aren’t just talking about social media marketing. We are talking about combining in an integrated fashion any and all media to deliver the best results for the least investment and least risk, but with the primary focus on social marketing. Just as integrated marketing communications became popular about a decade ago, we now see the same integration taking place with the addition of a new media channel to the marketing mix. All media must act in concert to deliver the best results for the company and with that we need to think about marketing in social media as simply social marketing—one component alongside mass media, direct media and one-to-one media. Social marketing won’t replace traditional media. It will just be another media channel that marketers can use to engage with their customers. With social marketing, marketers will be able to engage with certain groups of individuals to deliver certain types of messages to certain types of audiences that are more effectively delivered than through other traditional media channels.

ROI of social media has many target audiences

This book was written for a number of groups and individuals in the organization. Certainly, anyone in marketing is a primary target audience for this book. Marketers must not only understand how messages from any source impinge on their consumers, but how messages must now be targeted to individuals in general—and influencers pertinent to the brand—as well as to their consumers. Business managers, entrepreneurs, CEOs and CFOs are also targets for this book. Other groups in the organization also benefit from social media, including customer service, operations, market research, product development, investor relations and human resources. All of these functions have a stake in social media and they need to know how they, too, can take advantage of social media and measure its impact on their business functions. In addition, many of these business functions need to understand how they can support the marketing team in developing a metrics infrastructure to measure the results from marketing in general and social marketing specifically.

The top level takeaway

Overall, we see this book helping the CMO to answer that nagging question from the CEO and CFO about social media and its value to the firm:

“How can the company use this new media channel most effectively to drive more revenue, profit, brand and share with the highest ROI and least risk?”

Whether the company is a multinational fast moving consumer goods (FMCG) or consumer packaged goods (CPG) company, needing to justify its investments in social media, a small 10-man firm looking to find inexpensive ways to grow its niche business, or a mid-sized organization needing to determine the best allocation of its limited marketing resources, this book will provide clear guidelines on how this can be done. In order for these organizations to fully understand social marketing metrics and ROI, a discussion of how to develop successful social marketing strategies and tactics is also included. Only with a clear understanding of the fundamentals of social marketing strategy will the ROI and metrics concepts be able to be fully applied. For marketers looking to explain, improve and get approval for social marketing in their organizations, this book provides a strategic and tactical overview of social marketing and how it can deliver greater ROI. It differs from other social marketing books because it has ROI—the language of business—as the primary focus. With ROI as the primary focus, businesses will learn from their mistakes more quickly and understand precisely how to adjust their social go-to-market model. They will need to spend less time and effort experimenting with arbitrary tactics and more time executing tactics that provide results. Our guiding philosophy for return on marketing investment is based on the concepts of ROI developed in Marketing Calculator: Measuring and Managing Your Return on Marketing Investment:1,2

“The purpose of return on marketing investment (ROMI) is to optimize marketing spend for the short and long term in support of the brand strategy by building a market model using valid and objective marketing metrics and analytics.”

Many industries will differ in how social marketing will apply. Some industries are highly regulated—such as financial and pharmaceuticals—and they will need to apply some of the concepts in this book differently from marketers in those industries where there is less regulation. Businesses that are already spending heavily on traditional media—such as large consumer marketing companies—will find that social media will make up only a small component of the overall volume of messages inserted into the marketplace, but that proportion of messages can provide high leverage (i.e. bang for buck). Other industries where their customer base is primarily Internet and social media savvy—such as, high tech—will need a highly sophisticated implementation of social marketing metrics in order to stay ahead of the competition and reap the full measure of rewards from social marketing. Yet other industries where the purchase is highly considered—such as higher value consumer electronics where ratings and reviews play a key role in the consumer choice—will have other requirements in how they’ll need to implement social marketing strategy and optimize their marketing spend. We have also included many references to social marketing cases from around the world. These case studies illustrate some of the nuances of building a social marketing strategy in different countries and what it takes to measure their success.

Social media supports many business functions

Social media isn’t just for marketing. It also supports many other business functions. The king above all else must be that of customer discovery. The ability to gain customer insights is a competitive differentiator that generates momentum for the brand. The momentum effect,3 which is based on the 20 year study by Jean-Claude Larreche, enables firms to grow faster than the competition—outperforming the Dow Jones average by up to 80 percent. Social media marketing can generate a two-way exchange that reveals valuable customer insights beneficial to firms implementing business structures based on the concepts of the momentum effect.

Many industries augment their customer service functions through social media and don’t yet invest in social marketing. Others have fully operationalized the use of social media and have made it into a core component of their business processes. Even in these cases, social media has a strong impact on how marketing can take advantage of these functions to drive the most value for their brands. As we will see from the case studies, Dell Computer and Comcast have been able to fully internalize social media into their customer service operations to drive a competitive advantage in their categories. Social media can also be used: for product development and innovation by listening to the needs of their customers in their own voices; for market research in order to understand specific trends affecting their brands; and for lead generation for business-to-business marketers.

Social media requires CEO involvement

Social media shouldn’t be just a low-level function within the organization or delegated to the person with nothing to do. The CEO now needs to be concerned and involved to make certain that the individuals on the front lines participating in social media are portraying the brands as they should be and not exposing the company to undue risk. Social media provides bi-directional connections between the brand and the consumer, and consumer-to-consumer. It opens up new opportunities and new risks that the company must be ready for. Social media will become a highly important channel for the company to convey its brand messages and the CEO must understand how it works and how it can augment and drive the value of all media for the company’s brands. Social media is something that must be executed earlier rather than later. The brand that has the first, best social media presence will quickly achieve a critical mass that will be difficult for its competitor’s brands to beat. This competitive advantage can be long-lived if it is given the proper support at all levels in the organization.

Book outline

This book is broken down into four sections. The first section describes the development of the core concept: the media engagement framework. This concept has three pillars to it and describes each of the personas (influencers, individuals and consumers) that are important to the development and measurement of a successful social marketing strategy. This framework can be used by any organization at any stage in their use of social media. Whether they are just developing their first social marketing plan or have developed many in the past, this framework will help all marketers develop and measure their strategies to provide the most value for the organization.

The second section builds out in detail each of the elements of the media engagement framework, and looks at how a social marketing strategy can be measured at each level in the framework. The media engagement framework provides a comprehensive view into the requirements of developing, measuring and evaluating a successful social marketing strategy. It is made up of much more than just a few disparate metrics. Instead, the required metrics are described along each of the critical dimensions in the framework so that social marketers can deliver a fully comprehensive social marketing strategy. Because data is one of the key limitations in any measurement framework, methodologies are presented that can support the marketer in defining the right data sets that accurately and reliably go into the calculation of the ROI of social marketing. With accurate and reliable data, social marketing risks can be reduced because the right activities will be done at the right time, in the right way with the right messages. In an ideal world, perfect data would be available in a timely manner at no cost. In reality, there are compromises that need to be made and these will be discussed so that the ROI of ROI—that is the return on investment from measuring the ROI of social marketing—can deliver a high value for the investment in the associated manpower and costs in implementing a successful social marketing ROI function, which is made up of the right management, staff, technology and workflow.

The third section looks at how other organizations have begun to implement some of the concepts and what they have learned in the process. It includes a discussion on how the “R” and “I” of ROI can be measured and properly evaluated. It also includes an eight-step process for the implementation of these concepts in any organization.

Lastly, the fourth section provides a view of the future and how the media engagement framework can be applied as social media technologies evolve and grow.

This book provides a foundation for all marketers to be successful with social marketing. We believe we have brought together a mix of:

valuable case studies to see how other companies have tackled the implementation and execution of social marketing and social marketing metrics and ROIa comprehensive media engagement framework to make certain the concepts fit together in a logical and executable fashion representing the real worlda unique blend of social media strategy savvy, marketing ROI expertise and marketing strategy to make certain the presented concepts can truly drive value for the branda short- and long-term view of the critical drivers of marketing excellence and brand value.

The concepts contained in this book also don’t end with the reading of all the chapters in the printed book. We have put together a group of social media properties on Facebook (http://www.facebook.com/ROIofSocialMedia), LinkedIn (www.TheROIofSocialMedia.com will get you there), and Twitter (@ROISocialMedia) to provide a source of conversation and ongoing value as the technologies and markets evolve and change.

We hope you will join the conversation.

Endnotes

1. Yes, this is a blatant plug—more to follow. Nevertheless a worthwhile read, especially if you are serious about marketing ROI.

2. Guy R. Powell, Marketing Calculator: Measuring and Managing Your Return on Marketing Investment. (Singapore: John Wiley & Sons (Asia), 2008).

3. J.C. Larreche, The Momentum Effect: How to Ignite Exceptional Growth (New Jersey: Wharton School Publishing, 2009).

ACKNOWLEDGMENTS

Our greatest thanks and appreciation go out to the many marketers who have helped us to write this book. Some of them helped directly—many indirectly. Having worked with and trained many marketers in workshops around the world, each of their questions and concerns helped us to keep searching for new ways to explain the concepts of social media and marketing effectiveness. These comments and inputs have now been used to put together this book on social media ROI. Each of us would also like to thank each of our interview participants in providing us great material for the case studies used and referenced throughout the book. They provided us input that we would have never been able to acquire and helped us to hone our thinking in putting this book together. Special thanks go to Peter Storer, with whom we’ve worked before and he is great at what he does. Thanks also go to Joel Balbin and Nick Melchior for keeping us on track and delivering a great manuscript.

Introduction

Social media is exploding as a new media channel. It differs from other advertising media channels because messages are multi-directional and generated by many parties: the marketer, influencers, individuals and consumers. Social media isn’t a one-way broadcast of messages to the masses, but a conversation taking place between many individuals and which, unlike the real world, can have many others observing and consuming the content, not just during the conversation but practically forever into the future. Social media marketing has an easily accessible and long memory.

With multiple parties publishing brand-related messages for their own circle of friends and followers, the marketer is no longer in complete control of the message. Because everyone can play a role in what gets said about a brand, a competitor or the category, social media allows a high level of engagement with consumers compared with other “traditional” one-way media channels. Not only can the brand engage directly in a one-to-one conversation, but the conversation itself can provide value to those consumers passively observing it. By using search and the various conversation threads, individuals can read what others say and, in the process, gather both positive and negative brand impressions.