What is the value of your social media efforts? How do you socialize that value with executives? This point of view and methodology offers a simple yet elegant approach to social media valuation.

1. Valuation of Consumer
Social Media Efforts

2. Objectives
Approach
Express the value of Social
Correlate available social media metrics to
§ Create Brand Awareness
§ Actual paid media metrics
§ Service Customers
§ Standard “best practice” econometrics
§ Foster Positive Brand Image
§ Trigger Advocacy
§ Generate Demand
Regularly socialize the value and
impact of Social
Exclude the social media metrics which do not have a
logical correlative:
§ Grow Community
§ Engage Fans & Followers
§ Risk
Offer two levels of information
§ Simplified, such as a scorecard
§ Detailed
Address two dimensions
§ Social Media Performance = economic
§ Social Media Equity = index based on cohorts
Start simple and enhance over time based on
§ Availability of information
§ Stakeholder feedback
§ Enhanced digital maturity
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3. Methodology: Social Media Performance
Contextualize social media metrics in terms of business outcomes correlated to econometrics:
Business Outcome
Create Brand Awareness
Measurement
Impressions
Correlative
Cost per
Impression, Paid
Media
Savings per call
Value
$0.0017
Details
Source
Recent paid media results
Service Customers
Contacts
$1
$4 per call traditional.
$3 per call digital
Client benchmarks
Foster Positive Brand
Image
Sentiment
Quotient
Consider
Sentiment
Quotient as worth
one-half that of
the Customer
Satisfaction Index
$4,500,000
Multiply by %
difference from 2012
average;
Disregard negative
values
According to KU Study, on
average, a one-point
increase in customer
satisfaction index led to a
$9 million increase in a
firm’s value.
Trigger Advocacy
Retweets, shares
Avg # friends,
followers, etc.
400
# shares x avg #
friends x Cost per
Impression
Generate Demand
Clicks
CPC, Paid Media
$0.56
DMR, a clearinghouse for
digital marketing stats an
curated content
Recent paid media results
Exclusions:
Community Size
Community Size is indirectly represented vis-à-vis involvement in the number of impressions.
Engage Fans & Followers
No standard or best practice is available. One option is to apply a multiplier to the Cost per Impression.
Crisis Management
No standard or best practice is available. Social media enables brands to get in front of issues that have the
potential to be costly, but the value of this is a function of the type of crisis.
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4. Methodology: Social Media Equity
Obtain data from no-cost, publicly available sources to identify strengths and weaknesses relative to cohorts.
Descriptor
Community Size
Chatter Volume
Social Channel Sampling
Clickstream Quotient
Reputation
Size of Community
27,477
126,126
25,600
66,046
99,139
Facebook (likes)
20,135
122,630
20,076
61,669
94,637
Twitter (followers)
6,002
3,472
3,811
4,064
2,748
Google+ (circles)
1,208
-
1,521
277
1,522
132
24
192
36
232
YouTube (subscribers)
Chatter Volume
Client
Cohort 1
Cohort 2
Cohort 3
Scorecard
Criteria
Cohort 4
4,165
8,283
6,332
2,719
5,563
Mentions
11,913
38,823
23,798
7,008
38,700
135,000
131,000
34,800
181,000
Twitter
18,100
37,100
5,090
3,190
11,300
Google+
11,900
26,400
11,300
1,080
2,080
41,300
12,700
3,970
7,930
16,500
4,400
2,310
17,900
Yelp
4,480
14,600
1,840
3,560
35,000
199
864
253
145
13.30%
12.71%
6.89%
13.12%
Sentiment Favorability
45%
41%
32%
34%
32%
Sentiment: Positive
Sentiment: Negative
Total Sentiment
Advocacy Impact
% Advocacy
347
423
770
33%
560
805
1,365
30%
189
401
590
30%
227
441
668
100%
319
682
1,001
70%
% Shares
23%
49%
23%
100%
80%
Facebook shares
(seomoz)
25
53
25
108
% tweetreach
46%
21%
20%
100%
33%
20,590
9,231
9,036
44,381
14,819
29%
21%
48%
100%
96%
375,596
515,126
229,519
109,808
114,375
Sentiment:
Favorability
86
Cohort 3
2,990
15.59%
Cohort 2
34,600
Foursquare
Cohort 1
49,200
YouTube
Cohort 4
47,427
Facebook
Client
StumbleUpon
Clickstream (Alexa)
Twitter (tweetreach)
% retweetrank
Twitter (retweetrank)
Community
Size
Advocacy
Impact
Social Channel
Sampling
Chatter
Volume
Clickstream
Quotient
0%
50%
100%
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5. For More Information, Contact:
Laura Walker
lwalker@sapient.com