TAG | roe
This week, we continue our interview series by speaking to Mike Volpe, Chief Marketing Officer at HubSpot, a marketing software company. Volpe leads the company’s lead generation and branding strategy through inbound marketing and under his leadership, HubSpot’s marketing has won more than 30 awards and been featured in over 20 marketing and business books. Volpe also co-hosts the weekly marketing podcast HubSpot TV, blogs frequently and is very active in social media and as a marketing speaker.
What are your thoughts about the ROI of social media? Two things: First, the ROI is huge. There has been a big transformation in what marketing is effective today. You used to be able to just tell people what to think of you in advertisements and sell to them with cold calls. Now consumers have all sorts of ways of blocking that outbound marketing. You need to attract people using inbound marketing, making it easy for them to find you in blogs, search engines and social media. So, as part of an inbound marketing strategy, social media can be a great and valuable tool.
Second, I am not sure why everyone is holding social media to such a precise and exactly measured ROI when marketers have done all sorts of things for decades that did not have a great measurable ROI. Sure, you can measure the ROI of social media pretty well, but why hold it to a higher standard than print ads or events?
Are marketers that promise ROI setting expectations that cannot be delivered solely by social measures? Maybe, but it is not because of ROI they promise. The reason that is a mistake is that social media is actually not all that helpful or effective on its own. Social media is just a technology like the phone or email. Using it alone is not useful or effective. You need to have something useful, valuable and interesting to talk about in social media and a way to convert those social media connections into leads and sales. So anyone that says they can use social media alone to deliver ROI might not have a great strategy and might be misguided.
Is there a difference between ROI or “impact”? If so, is one more important? No difference in my mind. The R in ROI is the impact that your activity had. Technically ROI also compares the impact to the cost or investment, so maybe there is a little difference, but the concept is the same.
Does a consultant or agency need an ROI mindset when they work with a client? If so, how do you find out? Yes. Marketing today is measurable, and all good marketers measure what they do. I think clients should demand ROI and reports from all of their vendors. It often makes sense for the client to use their own analytics to measure what their consultants or agencies are doing, so they have an unbiased view. Smart marketers and companies take an active role in their marketing, and if you do outsource some of it, you are the ones who manage it, set the goals, and measure it.
Read more about Mike Volpe at his website.
This week, we begin our series of interviews with social media superstars. First up is author, certified Sommelier and brand strategist Rick Bakas, of Bakas Media in San Francisco. As the first Director of Social Media in the wine industry, Bakas has influenced new ideas and new concepts that connect wineries to new consumers through tweet-up tours and global online wine tastings. He specializes in translating personal and corporate brands to new media. This year, Bakas will be traveling the world educating businesses on how to build their brands online, stopping in cities including NY, London, Mexico, Sydney, Los Angeles, Vancouver, Munich and Napa, and speaking at the Inbound Marketing Summit in San Francisco.
We asked him about social media ROI, impact and more:
What are your thoughts about the ROI of social media? In my opinion, “Return on Investment” is an outdated term based on the old way of doing things. New Media is just that—it’s new, which means we need to redefine what “return” looks like. The return we get in this new world takes on a new form we haven’t seen before.
I like to refer to it as ROA, or Return on Attention because the real magic happens when we’re able to get someone’s attention online and convert that attention into action. We’re increasingly overwhelmed with more technology and are bombarded daily with emails, text messages, tweets, blog posts, YouTube videos, Facebook posts and all the other stuff in addition to the overstimulation from traditional media. We’re spending more time online than watching television so that’s where people’s attention is.
Going forward, savvy marketers will be able to nurture a healthy relationship online, so that at any given moment they can get someone’s attention no matter what channel they’re sending the message through. The true value is getting that mind share, even if for a moment and affecting a behavior such as a purchase. Where traditional media and new media share a commonality is Reach. In traditional media you pay for someone else’s reach for impressions. With new media you can create your own reach.
Are marketers that promise ROI setting expectations that cannot be delivered solely by social measures? Yes. In the previous answer I mentioned “return” taking on a new form we haven’t seen before. There’s a new factor in determining “return” called Time. Time is a multiplier now because digital content lives for a longer time. One single YouTube video could influence someone’s behavior in 2011 or 2016.
Marketers who promise anything related to social media are probably desperately trying to position themselves as experts out of a survival instinct, and are telling clients what they need to hear. No one can control digital content over time, nor can they guarantee how much attention they’ll be able to capture online.
Is there a difference between ROI or “impact”? If so, is one more important? Return on Investment, or as I call it Return on Attention, shares something in common with Impact. It comes down to Reach.
The number of impressions has a direct correlation to affecting someone’s behavior. In traditional media you rely on someone else’s reach like magazine readership or television viewers. In new media you can create your own reach. Either way you’re going for impact from impressions. The real magic happens when you leverage both at the same time.
Does a consultant or agency need an ROI mindset when they work with a client? If so, how do you find out? A consultant needs to have their client’s interest in mind. And because their client is most likely a business, then yes, working towards ROA should be the driving force.
When we work with client partners, we turn their sales funnel into an hourglass. We all know the sales funnel is about getting people to an action like a purchase, but the real beauty of new media adds a second half of the equation to the mix.
Ultimately, each client partner is going to have different objectives, so it’s good to start with their endgame and work backwards to build in the systems needed to accomplish the result.
For more information on Rick Bakas, head to his website.
The most successful social media campaigns have had certain characteristics in common. Whether the campaign has been centered on the launch of a big brand’s newest product, or simply consists of the revival of a decades-old favorite, success cannot be attained if all the brand has to offer is… its product. Durability comes from other factors, including personalization, discussion, novelty and buzz.
Personalization: Facebook capitalizes on the fact that its users are impulsive and restless. It’s just as easy to click on a link, a page, or a group as it is to close out of that tab and move on the next one. Therefore, in order for a brand to capture the attention of these most fickle of internet users, it must offer a personalized experience. The main difference between a traditional campaign and a social media campaign is the level of interaction the latter can offer users. Take, for example, IKEA’s wildly successful Facebook campaign in 2009. The campaign used one of Facebook’s most popular features, tagging, to encourage people to tag themselves in photos of IKEA showrooms. The company offered users the chance to win tagged items for free, and as word of the campaign spread, photos were tagged within seconds of being uploaded. Without the store rolling out a costly campaign, their products were personally promoted by their audience. People also felt a personal connection to the brand, picking and choosing pieces of furniture they would want in their own homes.
Discussion: Encouraging discussion on Facebook, or any other social network, is tricky, especially when the discussion is initially based on a single product. For the Wrigley’s Extra Facebook campaign, the Wrigley’s team took a different approach. Instead of focusing solely on the product at hand (gum), the page capitalized on the current “foodie” trend and prompted discussions about good food and eating. The page was created with the premise that strongly flavored food and drink, while one of life’s pleasures, are not necessarily things we wish to carry with us for the rest of the day on our breath. The message, then, doesn’t directly rely on the product itself, and is designed to continue conversation for as long as people eat and drink. Discussions on the Facebook page, which has more than 150,000 “Likes,” range from favorite Valentine’s Day food to the best pie flavor. Asking questions like, “Do real men eat quiche?” and “What do you reckon’s your CPM (chews per minute) rate?” provoke interesting, lively and continuous conversation that shouldn’t die down when buzz about the new gum does.
Novelty: Creating a social media campaign that draws a broad audience is tough when your product is a standard household item, like the toothbrush. It becomes even tougher when you’re trying to generate buzz for a new mini disposable toothbrush called The Wisp. In designing their social media campaign for this product, Colgate knew they’d have to think out of the box to generate any kind of attention. Hence, the brand took a fresh approach and came up with the “Be More Kissable” creative platform, which rerouted the issue at hand from dental hygiene to a topic that was more fun, social and sexy. At the heart of the campaign strategy were online videos, and a series of online videos were released that cinched into the comedy and how-to market. The brand also ran a photo contest, looking for “The Most Kissable Person in America,” and created a Facebook app called Spin the Wisp. Once the app was installed, it had the names of the consumer’s Facebook friends and provided them with an experience similar to Spin the Bottle. Ultimately, there were more than 100,000 engagements and 40,000 + installations of the widget and more than 1 million unique impressions of the widget. Overall, as of May, 2010, Big Fuel reported 6 million+ total engagements with the Wisp campaign (widget installs, video views, game plays, pass-alongs). The campaign succeeded not because it was led by a big brand, but because it took a fresh and new approach to something as stale as toothbrushes.
Buzz: Even with all of the components above, a social media campaign cannot be successful without buzz. Word-of-mouth gears social media; as an example, let’s discuss the buzz that the Red Cross accidentally generated a few weeks ago with an unintentional tweet. An employee with access to the @RedCross Twitter account had accidentally posted about their night of drinking Dogfish Head Midas Touch and tagged the message #gettngslizzerd. Within moments of the tweet going out, it was like a social media avalanche. While The Red Cross has about 270,000 followers subscribing to that account, hundreds of re-tweets and tweets about the post put that number well into the millions. Although the Red Cross later deleted the tweet and replaced it with one that read,“We’ve deleted the rogue tweet but rest assured the Red Cross is sober and we’ve confiscated the keys,” it didn’t stop this non-campaign from generating buzz. In fact, the Red Cross reports that the incident actually resulted in slight raise in donations and interest in giving blood. Everyone, including Beer brand Dogfish, has now blogged about the incident and it just goes to show- if an accidental tweet can generate this much buzz, how much attention can an intentional, well-played tweet get?
Ultimately, social media case studies allow us to look back and move forward more successfully. We can see the numbers and the views and decide for ourselves which brands were triumphant in what they did.
This new era of marketing renders Mad Men-style agencies obsolete and pushes social media to the forefront. As social media continues to evolve, however, most strategists wonder one thing: How is social media ROI measured? According to Social Media Examiner, this is the number one question asked by experts in the field.
Over the years, those involved in social media have continued to attempt to redefine ROI, wondering if it was even necessary in this field. The lack of tools for analyzing made quantifying results near impossible, and this lack of standards for ROI also made it difficult to “sell” social media campaigns and tactics to executives and companies.
This year, however, social media has grown immensely in terms of ROI. While case studies are nothing new, they prove invaluable for social media ROI, extending to B2C and B2B, small and large businesses, for-profit and non-companies. Case studies can prove ROI as determined by sales, shorter sales cycles, new leads, improved company operations, and better business innovations.
Take the example of Burberry, a high-end fashion chain that initially seems impervious to social media’s “of the people” approach to building fan bases and ultimately, business. The company’s “Art of the Trench” campaign, however, capitalized on the recent trend in blogs that feature street-style photography.
While many designers and retailers had already taken their businesses to Twitter, Burberry was the first major fashion company to create a social media empire of its own. Burberry’s facebook page received 7.5 million views and with over 1 million fans, the company’s same store sales increased by ten percent after the campaign.
For a company that has been selling the same thing and marketing the same “look” for years, this was surely a coup. They had no new product to sell and were advertising the same trench coat that made them famous decades ago. Through the use of a social networking fashion blog via facebook, Burberry drew in a new demographic and a new generations of shoppers, simply by making use of what made facebook cool: They allowed their fans to “like” items, leave comments, and “share” photos, ultimately making their consumers feel powerful and drawing them in.
ROI in this case is undeniable, as shown by the company’s growth over the last year.
Social media has become part of our life. Today, pretty much everyone is using some form of it. Every local store, cafe, club and event has a Facebook page. Every brand has a Twitter account and every white paper ever written has been turned into a SlideShare presentation, for some self-proclaimed thought leader in a Linkedin group to share.
In this completely connected, totally viral, absolutely transparent, geo-targeted, digital world we live and work in… you have to be social. But how do you justify the time and expense it takes to maintain that presence?
Now that social media has passed the point of “why do I need it” to “what do I do with it” the quest to determine the ROI of social media has become more complex.
Since you are asking people to put numeric quantities around human interactions and conversations, which are difficult to quantify, trying to determine the exact return on your investment is not easy and in the long run, may not a good idea. To really understand the impact of social media and social technology on an event, promotion, brand awareness or even product sales, people need to measure the “ROE” … return on engagement.
At Medial Needle, we have been finding valuable “returns” manifesting themselves in ways not always anticipated at the onset as a result of our marketing efforts. More and more, we’ve come to see these unexpected fruits and proverbial rewards only appear because social media was strategically integrated into a marketing agenda.
For example, Media Needle recently executed a food campaign outreach program. While servicing a very small, archaic and insular cooking listserv, we uncovered a hive of influential webmasters; each with robust email lists and social media profiles. So what at first appeared initially to be a seemingly insignificant target community mushroomed into one of the campaigns top case studies. Clearly social media bears the markings of what we once more readily called “viral marketing”. Another campaign had us establish a quality dialog with a key target community. Despite a lull in activity on the client’s end, we maintained the relationship. Six months later, the two partnered successfully for a robust promotion. Anticipating these in conventional ROI terms, especially at the onset of the campaigns would have been impossible.
Thinking about social media in terms of a simple bottom line number puts the whole thing on an old school path of problems and risks, missing great opportunities. Essentially, you have to stop relying solely on the numbers. With social media the trick is to focus on what your numbers end up leading to. ROI is an effect of quality ROE.
If your goal is to participate in the conversation, to enhance your relationship with your audience and become a trusted member of the community that surrounds your brand; then your ROE has been set into motion. Once you’ve paved this foundation, the more conventional ROI models of sales, registrations, new followers and fans etc. will begin to kick-in, proving the benefits of a well-engaged social media agenda versus a dry and uninspired one.
Finally, ROE like everything else social media related, has a variety of definitions. Here are two good ones: We wish to cite Jason Falls’ here http://www.socialmediaexplorer.com/2008/10/28/what-is-the-roi-for-social-media/
Sarah Evans’ different but complimentary tome here: http://prsarahevans.com/2009/05/15-ways-to-measure-return-on-engagement-roe-of-social-media/ as a valuable point of reference.