Calculating Social Media ROI for SeaWorld

Companies today are investing more and more in social technologies to increase their profit margin.  Since Web 2.0 are user driven and the internet users consequently became content creator and distributor which allow them to become more interactive and “social” in such community. The Social economy report, McKinsey Global Institute, 2012 estimated that in 2011, 72% of organizations are adopting social technologies to run their businesses and 90% see business benefits from this adoption. It also has been indicated that customers will benefit from social media providing better products, lower prices, transparency between competitors and faster responses to changing needs. Overall, these benefits will all ultimately increase customer satisfaction.

Unlike any other technologies, calculating social media Return on Investment (ROI) is an overwhelming task because it is challenging to define gains and costs when measuring ROI for social media activities. Most social media benefits are indirect or intangible which makes it difficult to populate the benefits in a balance sheet. However, to be able to calculate ROI, a company should set a clear business strategy to ensure social media initiatives are supporting business goals.

Today, I would like to discuss how the ROI was calculated for a selected case example, SeaWorld San Antonio, one of the three largest parks in the SeaWorld chain in the United States. Before launching their new journey to Atlantis roller coaster, they decided to adopt social media tools by creating a YouTube channel and Flicker account to reach and engage as a wide range of people as they can.

Costs

The following three categories enable a better estimation of costs:

ü  Number of people who worked on the campaign, amount of time and their hourly rate.

ü  Setting up different media tools and marketing materials.

ü  Costs for the technology, meaning the implementation for the campaign.

(I made a reasonable assumptions to calculate costs and benefits based on discussions here and here on how to calculate ROI for social media marketing).

Social media program setup	$10,000
Setup of social media accounts, including employee time	$2,500
Social media monitoring	$7,500
Content production, including employee time	$12,900
Quantity of materials	30
Employee time	21.5 hours
Hourly rate	$20
Setting up social media marketing campaigns	$21,000

Total costs for the campaign was around $44,000.

Benefits

SeaWorld San Antonio conducted a survey to differentiate social media visitors from others. By using a formula to apply a value for each visitor to the park, they determined both tangible and intangible benefits.

Increase sales (i.e. new customers)	$900,000
Increased communications with customers*	$600,000
Research value: customer insights	$350,000
Increased retention rate	$450,000
Customer satisfaction*	$300,000

*intangible benefits

 The social media marketing resulted in $2.6 million revenue.

Applying the ROI formula, which is:

 Resulted in

This ROI result indicates that SeaWorld San Antonio successfully benefited from implementing social media solutions in their business while putting their goals and objectives beside their implementation strategy.

What other metrics should SeaWorld San Antonio take into account?

 

"A brand is no longer what we tell the consumer it is - it is what consumers tell each other it is."

Scott Cook, Co- Founder of Intuit