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Measuring RoI & effectiveness
  in social media marketing




@maheshmurthy
Return On Investment
  can be said to come from
  Relevance, Originality, Impact
        But that’s not precisely measurable.
        Need better metrics.




@maheshmurthy
12 minutes.
  12 metrics to live by.




@maheshmurthy
1
  HOW LOW IS YOUR AD-SPEND-TO-REVENUE
  RATIO? TO BECOME BIG, SPEND LESS.



@maheshmurthy
Interbrand’s ‘Top 100 brands 2012’




@maheshmurthy
@maheshmurthy
@maheshmurthy
Interbrand’s ‚Top 100 brands 2012‛

        1/3rd seem to have been built without
        too much spend on media buying.




@maheshmurthy
This list doesn’t even include Red Bull,
  Twitter, Ferrari, Facebook. The zero-ad-
  budget champions.
        It’s back to the age of extreme word-of
        mouth




@maheshmurthy
Increasingly, in more sectors, the winner
  has the best word of mouth.

  And correspondingly, the lowest ad spend.




@maheshmurthy
2
  HOW FAST CAN YOU DIE?
  WINNER BRANDS HAVE TO THINK ANTI-FRAGILE.



@maheshmurthy
$300m brand, built over 15 years.




@maheshmurthy
$300m brand, built over 15 years.
              Destroyed in 15 hours.




@maheshmurthy
$50b brand, built over 150 years.
                Gone in a weekend.




@maheshmurthy
Let’s say a can of Axe deodorant was found
  with a cockroach in it.

  And a can of Gillette deodorant too was
  found with a cockroach in it.
        I believe Gillette would be harder affected because
        it’s the one making higher claims of greatness.

        ‚The holier-than-thou, the harder-thy-fall.‛

@maheshmurthy
Let’s say there was a similar service issue
  (stewardess makes out with passenger on
  flight) on Singapore Airlines and on Virgin.

        I believe Singapore Airlines would be much harder
        hit.

        ‚The holier-than-thou, the harder-thy-fall.‛

@maheshmurthy
Your longevity is increased if you don’t
  claim perfection.

  The more risk you embrace in your brand
  personality, the more resilience to black
  swans you’ll gain.




@maheshmurthy
3
  WHAT IS YOUR CONTENT-COST-TO-COVERAGE
  RATIO?
  WINNER BRANDS WILL CUT OUT THE MIDDLEMEN
  BETWEEN THEM AND CONSUMERS.

@maheshmurthy
Old way:
  Brand  Research firm  Strategy firm 
  Creative agency  Media agency  Media house
   Media property  Editorial / Entertainment 
  Inserted advertising  Consumer

  Loss of fidelity, efficiency at each level



  New way:
  Brand  Editorial / Entertainment  Consumer

  Minimal loss of fidelity. Max efficiency.
@maheshmurthy
@maheshmurthy
Red Bull had 5x the global search volume of Coca Cola
 during the stunt. And settled down at a level higher than
 Pepsi.




@maheshmurthy
The brand is the entertainment.
  Media may even pay to cover the brand.
  No ad film was produced.
  No media buy was executed.
  $500m+ worth of publicity
  on ~$15m worth of investment.

  30x



@maheshmurthy
4
  HOW SOON WILL YOUR SOCIAL NETWORK DIE?
  WINNER BRANDS WILL BUILD NETWORK-NEUTRAL
  PRESENCE.


@maheshmurthy
Social networks typically have a lifecycle




@maheshmurthy
@maheshmurthy
When & how brands should participate




       Watch    Try   Wait   Exploit &   Maintain & Consolidate   Prepare to
                             grow                                 exit &
                                                                  migrate


@maheshmurthy
Facebook seems to have begun its decline
  in the US already.

  It will also die one day.

  What happens to your investment and fans
  there?

  They’re not portable.


@maheshmurthy
Instead of building content on a social
  network, build it on your site –

  Use ‚f-connect‛ and other such buttons –
  and embed it on networks from your site

  You should own your fans. Not Facebook.

  Be network-neutral.


@maheshmurthy
5
  WHAT IS YOUR SHARE OF TRAFFIC FROM SOCIAL?
  OVER 50%?



@maheshmurthy
@maheshmurthy
India’s #3 sports site

  5m pageviews a month generated socially
  from 3.5m Facebook fans.

  At zero media cost




@maheshmurthy
6
  WHAT IS YOUR SHARE OF SALES FROM SOCIAL?
  OVER 50%?



@maheshmurthy
@maheshmurthy
$1m annual sales.
  Generated almost exclusively from
  Facebook.
  At zero media cost.




@maheshmurthy
7
  HOW SOON BEFORE FACEBOOK BECOMES YAHOO
  WITH SMALLER ADS?
  AND TAKES ITS VIRAL VISIBILITY TO ZERO?


@maheshmurthy
Edge rank: updates reach virtually no one, really.




 @maheshmurthy
Typical / max organic visibility of your Facebook
          update across your fan base
     80%




                             16%

                                             12%




   2012                                      2013

@maheshmurthy
Typically, less than 1% of your fan base
  actually is shown your update (unless you
  pay to promote). 99% won’t get it.

  At best, about 12% of your fan base will
  get to see it.




@maheshmurthy
Facebook squelched organic ‛free‛ visibility
  to boost short-term revenues to kick-up
  stock price.

  Every time Facebook needs revenues, it’ll
  damp virality further.

  When will virality go to zero – and you start
  comparing Facebook with Yahoo, where
  visibility is 100% fee-dependent?


@maheshmurthy
8
  WHAT ARE THE ONLY FACEBOOK STATS THAT
  MATTER?
  VIRALITY AND ENGAGEMENT


@maheshmurthy
Out of a boatload of Facebook analytics…




@maheshmurthy
Two really matter – and Facebook doesn’t
  compute those. But you can:

  Relative virality:
          How many non-fans get to organically see updates
          divided by total number of fans

          i.e. how viral did it go?
  Viral attraction:
          How many non-fans become fans as a result of
          seeing updates organically, divided by total
          number of non-fans who saw the updates.

          i.e. how compelling was the virality?

@maheshmurthy
Relative virality – the higher, the better. Aim for 2%+ daily




  @maheshmurthy
Viral attraction – the lower, the better. Aim for <50




@maheshmurthy
Then measure engagement

        Not as PTAT (people talking about this)
        which is a useless number.




@maheshmurthy
Engagement Type   Metric                Norm

E1: Unprompted    Posts / fan base      0.05% | 50
E2: Prompted      Comments / fan base   0.5% | 500
E3: Passive       Likes / fan base      2.5% | 2500
E4: Referral      Shares / fan base     0.5% | 500




@maheshmurthy
And compare against sectoral peers –
  also TG peer brands.

        Which you can measure externally, with
        no account access




@maheshmurthy
@maheshmurthy
9
  HOW DO YOU IDENTIFY AND TRACK INFLUENCERS?
  WITH KLOUT, PEER INDEX AND KRED.



@maheshmurthy
Pinstorm tracks over 6,000 influencers in
  India alone everyday, sorted by TGs & topics

        http://pinstorm.com/ii




@maheshmurthy
@maheshmurthy
@maheshmurthy
10
  HOW QUICKLY CAN YOU PICK UP BUZZ ABOUT YOUR
  BRAND AND DEAL WITH IT?
  WITHIN 4 HOURS? 7 DAYS A WEEK?


@maheshmurthy
Per brand: 1,000 to 15,000+ social
  mentions per day

  80% outside office hours.

  Need to work in shifts, 7 days a week.




@maheshmurthy
Quick sorting and data visualisation




@maheshmurthy
@maheshmurthy
@maheshmurthy
@maheshmurthy
Instant client notifications on mobile.

  SLA of ~4 hours for responses at scale.




@maheshmurthy
@maheshmurthy
11
  WHAT IS THE VALUE OF YOUR SOCIAL BUZZ?
  RELATIVE TO YOURSELF?
  RELATIVE TO COMPETITION?


@maheshmurthy
Tracking competitive sentiment




@maheshmurthy
100

                                                               93
90

                                                                    84
80
                                                                         78   78
                                                                                   74
                                                72                                                     71   71
70                                                                                      69
        65             65   66                       65                                      65   65
                                      63   63
60           61   61             60                       60
                                                                                                                 Positive
50
                                                                                                                 Negative


40           39   39             40                       40
                                      37   37
        35             35   34                       35                                      35   35
30                                                                                      31
                                                28                                                     29   29
                                                                                   26
                                                                         22   22
20
                                                                    16

10
                                                               7

 0




      @maheshmurthy
Valuing sentiment




@maheshmurthy
Pinstorm has an SLA for $15m in value of
  non-negative publicity to be generated
  through online reputation management for
  one client.
        Value apportioned with equivalent CPM
        rate for ad spot in medium, with 1:1
        editorial to ad valuation


@maheshmurthy
12
  WHAT ARE YOUR VIDEO VIRALITY AND COST
  METRICS?
  THIS IS THE NEXT BIG FRONTIER.


@maheshmurthy
@maheshmurthy
Over 2.5m views generated on one film
  alone.

  TV-competitive cost per view

  67:33 mix of paid and organic.




@maheshmurthy
The 100x revolution in production.




@maheshmurthy
@maheshmurthy
@maheshmurthy
Cost of broadcast quality commercials
  down from US$250,000 to US$2,500.

  100x improvement already.

  True break-even will come at US$25, when
  the film can make its own cost back thru
  ads on 10,000 views.

  So, further 100x improvement needed


@maheshmurthy
12 minutes.
  12 metrics to live by.




@maheshmurthy
Thank you!

  mahesh@pinstorm.com

  @maheshmurthy




@maheshmurthy

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RoI in social marketing: some metrics. By Mahesh Murthy of Pinstorm

  • 1. Measuring RoI & effectiveness in social media marketing @maheshmurthy
  • 2. Return On Investment can be said to come from Relevance, Originality, Impact But that’s not precisely measurable. Need better metrics. @maheshmurthy
  • 3. 12 minutes. 12 metrics to live by. @maheshmurthy
  • 4. 1 HOW LOW IS YOUR AD-SPEND-TO-REVENUE RATIO? TO BECOME BIG, SPEND LESS. @maheshmurthy
  • 5. Interbrand’s ‘Top 100 brands 2012’ @maheshmurthy
  • 8. Interbrand’s ‚Top 100 brands 2012‛ 1/3rd seem to have been built without too much spend on media buying. @maheshmurthy
  • 9. This list doesn’t even include Red Bull, Twitter, Ferrari, Facebook. The zero-ad- budget champions. It’s back to the age of extreme word-of mouth @maheshmurthy
  • 10. Increasingly, in more sectors, the winner has the best word of mouth. And correspondingly, the lowest ad spend. @maheshmurthy
  • 11. 2 HOW FAST CAN YOU DIE? WINNER BRANDS HAVE TO THINK ANTI-FRAGILE. @maheshmurthy
  • 12. $300m brand, built over 15 years. @maheshmurthy
  • 13. $300m brand, built over 15 years. Destroyed in 15 hours. @maheshmurthy
  • 14. $50b brand, built over 150 years. Gone in a weekend. @maheshmurthy
  • 15. Let’s say a can of Axe deodorant was found with a cockroach in it. And a can of Gillette deodorant too was found with a cockroach in it. I believe Gillette would be harder affected because it’s the one making higher claims of greatness. ‚The holier-than-thou, the harder-thy-fall.‛ @maheshmurthy
  • 16. Let’s say there was a similar service issue (stewardess makes out with passenger on flight) on Singapore Airlines and on Virgin. I believe Singapore Airlines would be much harder hit. ‚The holier-than-thou, the harder-thy-fall.‛ @maheshmurthy
  • 17. Your longevity is increased if you don’t claim perfection. The more risk you embrace in your brand personality, the more resilience to black swans you’ll gain. @maheshmurthy
  • 18. 3 WHAT IS YOUR CONTENT-COST-TO-COVERAGE RATIO? WINNER BRANDS WILL CUT OUT THE MIDDLEMEN BETWEEN THEM AND CONSUMERS. @maheshmurthy
  • 19. Old way: Brand  Research firm  Strategy firm  Creative agency  Media agency  Media house  Media property  Editorial / Entertainment  Inserted advertising  Consumer Loss of fidelity, efficiency at each level New way: Brand  Editorial / Entertainment  Consumer Minimal loss of fidelity. Max efficiency. @maheshmurthy
  • 21. Red Bull had 5x the global search volume of Coca Cola during the stunt. And settled down at a level higher than Pepsi. @maheshmurthy
  • 22. The brand is the entertainment. Media may even pay to cover the brand. No ad film was produced. No media buy was executed. $500m+ worth of publicity on ~$15m worth of investment. 30x @maheshmurthy
  • 23. 4 HOW SOON WILL YOUR SOCIAL NETWORK DIE? WINNER BRANDS WILL BUILD NETWORK-NEUTRAL PRESENCE. @maheshmurthy
  • 24. Social networks typically have a lifecycle @maheshmurthy
  • 26. When & how brands should participate Watch Try Wait Exploit & Maintain & Consolidate Prepare to grow exit & migrate @maheshmurthy
  • 27. Facebook seems to have begun its decline in the US already. It will also die one day. What happens to your investment and fans there? They’re not portable. @maheshmurthy
  • 28. Instead of building content on a social network, build it on your site – Use ‚f-connect‛ and other such buttons – and embed it on networks from your site You should own your fans. Not Facebook. Be network-neutral. @maheshmurthy
  • 29. 5 WHAT IS YOUR SHARE OF TRAFFIC FROM SOCIAL? OVER 50%? @maheshmurthy
  • 31. India’s #3 sports site 5m pageviews a month generated socially from 3.5m Facebook fans. At zero media cost @maheshmurthy
  • 32. 6 WHAT IS YOUR SHARE OF SALES FROM SOCIAL? OVER 50%? @maheshmurthy
  • 34. $1m annual sales. Generated almost exclusively from Facebook. At zero media cost. @maheshmurthy
  • 35. 7 HOW SOON BEFORE FACEBOOK BECOMES YAHOO WITH SMALLER ADS? AND TAKES ITS VIRAL VISIBILITY TO ZERO? @maheshmurthy
  • 36. Edge rank: updates reach virtually no one, really. @maheshmurthy
  • 37. Typical / max organic visibility of your Facebook update across your fan base 80% 16% 12% 2012 2013 @maheshmurthy
  • 38. Typically, less than 1% of your fan base actually is shown your update (unless you pay to promote). 99% won’t get it. At best, about 12% of your fan base will get to see it. @maheshmurthy
  • 39. Facebook squelched organic ‛free‛ visibility to boost short-term revenues to kick-up stock price. Every time Facebook needs revenues, it’ll damp virality further. When will virality go to zero – and you start comparing Facebook with Yahoo, where visibility is 100% fee-dependent? @maheshmurthy
  • 40. 8 WHAT ARE THE ONLY FACEBOOK STATS THAT MATTER? VIRALITY AND ENGAGEMENT @maheshmurthy
  • 41. Out of a boatload of Facebook analytics… @maheshmurthy
  • 42. Two really matter – and Facebook doesn’t compute those. But you can: Relative virality: How many non-fans get to organically see updates divided by total number of fans i.e. how viral did it go? Viral attraction: How many non-fans become fans as a result of seeing updates organically, divided by total number of non-fans who saw the updates. i.e. how compelling was the virality? @maheshmurthy
  • 43. Relative virality – the higher, the better. Aim for 2%+ daily @maheshmurthy
  • 44. Viral attraction – the lower, the better. Aim for <50 @maheshmurthy
  • 45. Then measure engagement Not as PTAT (people talking about this) which is a useless number. @maheshmurthy
  • 46. Engagement Type Metric Norm E1: Unprompted Posts / fan base 0.05% | 50 E2: Prompted Comments / fan base 0.5% | 500 E3: Passive Likes / fan base 2.5% | 2500 E4: Referral Shares / fan base 0.5% | 500 @maheshmurthy
  • 47. And compare against sectoral peers – also TG peer brands. Which you can measure externally, with no account access @maheshmurthy
  • 49. 9 HOW DO YOU IDENTIFY AND TRACK INFLUENCERS? WITH KLOUT, PEER INDEX AND KRED. @maheshmurthy
  • 50. Pinstorm tracks over 6,000 influencers in India alone everyday, sorted by TGs & topics http://pinstorm.com/ii @maheshmurthy
  • 53. 10 HOW QUICKLY CAN YOU PICK UP BUZZ ABOUT YOUR BRAND AND DEAL WITH IT? WITHIN 4 HOURS? 7 DAYS A WEEK? @maheshmurthy
  • 54. Per brand: 1,000 to 15,000+ social mentions per day 80% outside office hours. Need to work in shifts, 7 days a week. @maheshmurthy
  • 55. Quick sorting and data visualisation @maheshmurthy
  • 59. Instant client notifications on mobile. SLA of ~4 hours for responses at scale. @maheshmurthy
  • 61. 11 WHAT IS THE VALUE OF YOUR SOCIAL BUZZ? RELATIVE TO YOURSELF? RELATIVE TO COMPETITION? @maheshmurthy
  • 63. 100 93 90 84 80 78 78 74 72 71 71 70 69 65 65 66 65 65 65 63 63 60 61 61 60 60 Positive 50 Negative 40 39 39 40 40 37 37 35 35 34 35 35 35 30 31 28 29 29 26 22 22 20 16 10 7 0 @maheshmurthy
  • 65. Pinstorm has an SLA for $15m in value of non-negative publicity to be generated through online reputation management for one client. Value apportioned with equivalent CPM rate for ad spot in medium, with 1:1 editorial to ad valuation @maheshmurthy
  • 66. 12 WHAT ARE YOUR VIDEO VIRALITY AND COST METRICS? THIS IS THE NEXT BIG FRONTIER. @maheshmurthy
  • 68. Over 2.5m views generated on one film alone. TV-competitive cost per view 67:33 mix of paid and organic. @maheshmurthy
  • 69. The 100x revolution in production. @maheshmurthy
  • 72. Cost of broadcast quality commercials down from US$250,000 to US$2,500. 100x improvement already. True break-even will come at US$25, when the film can make its own cost back thru ads on 10,000 views. So, further 100x improvement needed @maheshmurthy
  • 73. 12 minutes. 12 metrics to live by. @maheshmurthy
  • 74. Thank you! mahesh@pinstorm.com @maheshmurthy @maheshmurthy