DreamGrow Social Media

New Free Social Media eBook

In the closing days of 2009 Pepsi decided against hiring Justin Timberlake, Cindy Crawford or even Britney Spears to speak for them during the 2010 Super Bowl. They would instead take the $20 million budgeted and use it to talk directly — and to listen back — with consumers through the web. It was the final and perhaps the most significant signpost marking 2009 as a year where emerging social media technologies mandated new strategies for anyone who deals with the public.

Download the new ebook released today (Feb 23): Who’s Blogging What About Social Media in 2010 eBook

What’s happening in social meida. The “Who’s Blogging What” ebook brings together the opinions from several bloggers including Ann Handley (MarketingProfs), Mitch Joel (Six Pixels of Separation), Paul Dunay (Buzz Marketing for Technology), and Mike Volpe (HubSpot). Read their thoughts about:

• What to expect in social media in 2010?
• What benchmarks can marketers use to measure social media ROI?
• How do you separate hype from reality in social media marketing?

What You Can Do With Social Media Now?

A collection of successful social media cases to show the audience on the Capgemini Cloud Computing Conference in Utrecht (February 17th) what social media can offer. And that investing in social media provides a return on investment.

How To Measure Social Media ROI

The number one thing about ROI is that it is measured in dollars (or in euros or any other currency you might prefer). Wikipedia tells us that:

In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.

This means that whatever non-monetary goals we might achieve, we have to translate them into dollars. The basic business metrics you should measure are:

• Number of transactions
• Number of customers
• Number of new customers
• Revenue
• Profit

Get these numbers tracked before you do anything else. You probably already have a specialist for this job, she’s called accountant. But the thing is, that for most of us, our social media activities influence these metrics only indirectly. Some of our social marketing goals may be:

• Website visitors
• Leads
• Brand awareness
• Newsletter sign-ups
• Facebook fans
• Blog comments
• Social mentions
• Visitor satisfaction index

Now, the trick is to find the connections between social results and dollars earned. Start with the simplest of correlations. Here are just a few examples:

How is the number of your monthly website visitors related to revenue. Segment that and tie website visits to revenue from online and offline segments. Secment yet again and find the most effective online revenue drivers. What you want to know is if site traffic increases X% then revenue goes up how much?

Find out if the customers who are your Facebook fans make purchases more often. Check if the Facebook fans are making larger transactions than average. What you want to know is if your Facebook’s fan-base grows X% then what’s the corresponding increase in frequency of transactions.

Start to monitor the social chatter and tie the number of mention on the internet to changes in sales volume. Segment that and find out what channels have the most impact on the bottom line.

If your sales are mostly online then it is easier to measure all those metrics. When you are operating offline then you have to conduct customer surveys and ask specific questions to figure out why they are doing business with you. You can also implement various incentives to track people from online to offline. For example we have done this for our client by giving Facebook fans special deals that can be used offline and then measuring the results of those activities.

After you have collected these data for some time, you will be able to make pretty good predictions how different social media activities influence you cash flow. A word of caution, don’t stop experimenting. Use 5-10% of your marketing budget for experiments and you will be ahead of the pack.

And, of course, make note of your spending on customer acquisition and establish a base-line. Include all marketing spending. Make note of how much is spent on different channels online and off. Separate the parts that are hard to measure (new logo, upgrading content management system, etc.).

ROI is about the R. Return. No return, no ROI or more precisely negative ROI (ROI = (return – investment) / investment.). One million Facebook fans won’t make any difference if you don’t know how to turn them into paying customers. From our post Social Media ROI Will Become Important:

Consistency, predictability and repeatability are important when dealing with ROI. Experiment with small budgets. Weed out money losers and channel the funds to profitable activities.

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Image credit foxumon

Social Media ROI Will Become Important

As we predicted 2010 is the year when a lot of money will be invested in social media. When serious money starts to pour in then the guys upstairs want to see some results. Until now people have experimented with low budgets and without very specific goals. The bigger budgets will bring an need to show return.

Return on investment is very simple. You put something in – the investment, you get something out – the return, and later should be higher that the former.

ROI = (return – investment) / investment.

Now the question is what is social media ROI. The trick in the investment side is not to leave anything out. If you spend half of your time managing communities on social networking sites then half of your salary should be considered as an investment in your social media efforts. We estimate that close to two thirds of social media budgets may be used in-house. Social media expenditures can be any of the following:

• advertising
• content creation
• IT
• public relations
• discounts
• call center
• payroll
• R&D
• etc

If we do stuff in the right way we are going to see some results. These results are not yet ROI. You should call something a return if you can attach a dollar sign to it. Some of the results you might see are:

• web site visitors
• followers
• newsletter sign-ups
• RSS readers
• retweets
• blog comments
• WOM
• mentions in press
• RFPs
• share of voice

Some of these result are relevant to your business. Select the results that apply and set concrete goals what you want to achieve. Make sure that you note the existing levels of that metric so you can attribute the change to your activities. For instance if you have 10,000 monthly visitors to the company web site, then mark it down as a starting point.

Now you have to find out how to tie these results to actual monetary business value. How much money comes in because of your activities. For example you may have 1,000 Facebook fans and get 100 visitors per month from your Facebook fan page. 25 of those visitors make a purchase that gives you 500 dollars of profit. Now you know that if the quality of fans is constant each additional fan will generate 50 cents of profit per month. You could use up to 49 cents per month acquiring more fans through advertising or other activities and still have a positive ROI. Consistency, predictability and repeatability are important when dealing with ROI. Experiment with small budgets. Weed out money losers and channel the funds to profitable activities.

As soon as you can show positive ROI bosses will get really happy, invite you to dinner, pat on your back and give you a rise (don’t forget to include some of that rise in the investment part of the ROI formula). Budgets will grow even further.

Social Media Will Get Real Budgets

In our 2010 trends post we mentioned that social media marketing will start to get real budgets. Every marketer who hasn’t been hiding under the rock for the last several years has noticed that something important is happening.

In a recent MarketingSherpa study almost half (49%) of the respondents say that they believe that social media will eventually produce ROI. Seven percent of respondents already see ROI and intend to increase budgets as needed to get better results.

Emarketers Debra Aho Williamson estimates that paid Facebook advertising will grow 39 percent in 2010 and reach 605 million dollars worldwide. The total spend on social network advertising would grow to 2.2 billion dollars worldwide and 1.3 billion in US.

But that is only paid advertising. In social media adaption paid ads are only one step and not very social at that. So we expect to see a lot more budgets to be earmarked for social media marketing. Building communities, setting up Twitter accounts and Facebook fan pages, creating content, capturing leads, measuring results. There are a lot of way to spend on social that will be hard to measure or classify.

We believe that bigger chunks of media and marketing spend will be channeled to payroll to hire community managers, bloggers and other specialists who are a key ingredient to make social media marketing really social. This in-house part of the social media spend may take up to two thirds of the budgets. This means that the total social media spend may be more than 7 billon dollars in 2010.

In the same category the payroll will finance social media when engineers talk directly to consumers and support personnel answers customer questions on Twitter or Facebook. As the organizations start to open up, more and more of social media interaction will be an integral part of employees daily routine and this way “social media budgets” may look smaller than they actually are even if we include in-house.

Higher budgets mean higher level decision-making. This will probably mean that some budgets will increase simply by added frictional costs of meetings and consultants. But higher level decision-making will also put pressure to produce real and measurable social media ROI.

7% Of Marketers See Social Media ROI

7% of marketers see immediate return on investment in social media channels. This allows them to increase budgets and spend liberally to improve results. This is a really high number considering that social media has been around for only a short time.

However, about quarter (27%) of the respondents didn’t see tangible value in social media and were skeptic about investing more.

MarketingSherpa asked:

Which statement best describes how social media marketing is perceived within your organization at budget time?

And the answers were as follows:

22 Social Media Marketing Trends for 2010

I have collected some of the ideas that seem to be growing fast and make real business sense. Here we go in no particular order:

Some people have problems with opening the original Open Office presentation format when downloading from Slideshare. Here is the PowerPoint version of the presentation.

Great! Got featured on Slideshare:

Your presentation 22 Social Media Trends is currently being featured on the SlideShare homepage by our editorial team.

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Slideshare went down shortly after. Coincidence? Hmmm… )

And here’s the list:

1. The fact that audience has the control starts to sink in. (Control is an illusion)
2. Social media will get real budgets. (Most of these budgets will be inhouse)
3. Social media will be integrated to overall marketing activities.
4. Social media ROI will become important. Measure how much do we get out of social media.
5. Brands start to use listening platforms to monitor the conversations.
6. Social media will reach behind corporate firewalls. (Read more)
7. Customer service and interaction with businesses becomes social. (Personaly touch pays)
8. Measuring online activities and their effect on offline sales will become increasingly important.
9. Media will fragment even more and smaller communities can be hyper-targeted.
10. Social networks chatter will be incorporated into CRM systems.
11. More sales will originate from social media contacts (B2B and B2C).
12. Marketing will hit mobiles big time.
13. All search will be real-time. Web, blogs, social networks.
14. Real-time will be the right time. Delays will cost customers.
15. People will use more social networks’ messaging instead of regular email and IM. (Webmail providers should be worried.)
16. First large scale successful augmented reality applications.
17. Campaigns will get more dynamic, spanning from offline to actionable social channels.
18. Social networks will become more commercial.
19. Ads will be more interactive and connected to social networks.
20. The home page for internet users will be social network’s profile page.
21. Facebook will grow to 700 million? (Let’s look at some numbers).
22. Shopping will be integrated into social networking sites.

Social Media ROI

Concentrate on real world value. Traffic is not a good metric, however targeted it is. Sales, conversions, signups, etc. Try to aim for these.

Weekend reading: social media trends and studies

The trends that have cought my eye the most are:

• Real-time communication
• Local services and augmented reality
• Cloud computing
• Social gaming
• One sign in through large social sites

People will use social site anywhere, anytime, any device, tweeting after sex, trying to share experiences and entertain themselves. They will use on social networking site as a base and rarely go to other places. Smaller external sites will connect to larger ones by using login services and moving content.

10 Web trends to watch in 2010 2010
While Web innovation is unpredictable, some clear trends are becoming apparent. Expect the following 10 themes to define the Web next year. Pete Cashmore of Mashable giving his views on trends.

Social Media Trends: 2009 and Beyond
Social media trends presentation from Andy Carvin. Audio of the PRPD presentation on 2009 social media trends is here(http://acarvin.posterous.com/audio-of-my-prpd-presentation-on-2009-social ).

Top Digital Trends For 2010
In 2009, digital marketing experienced some major shifts in marketing opportunities, budgets and attitude. 2010 will see the hype calming around Facebook apps and Twitter campaigns and the development of ROI models around social media marketing. The following trends are based on thoughts we have shared with our clients and now share with DMB’s readers.

Looking ahead to 2010 with Shiv Singh
Shiv Singh, vice president and global social media lead for Razorfish, a member of the SmartBrief on Social Media Advisory Board and author of “Social Media Marketing for Dummies.” Social brands. Real-time brands. Identifying, nurturing and managing relationships.

Survey analyzes top goals for brands engaging in social media (PDF)
Their primary goalsfor using social media aside from increasing sales overwhelmingly include: greater customer engagement, mobilizing advocates to drive “word of mouth”, increasing brand loyalty. Customer reviews are seen first and foremost as contributing to customer engagement (61%).
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Image credit Erkin Sahin

Socialnomics: Social Media ROI video

From Socialnomics – Social Media Blog