Tuesday, April 26, 2011

What Is The Value Of A Facebook Like Or Twitter Follower?

I recently found a research report that set out to determine the monetary value of your social media fans in online commerce. Chompon.com released this research report to show their findings. Below is what they have determined to be the value in gross revenue per action. This is taking into consideration immediate next sales:

Facebook Share… $14
Facebook Like… $8*
Twitter Tweet… $5
Twitter Follow…$2*

Chompon says “*Admittedly, we believe the true value for likes and follows to be much higher due to creation of long-term loyalty. Additionally, it is not possible to directly attribute traffic from these actions so it was necessary to estimate”

So here’s how Chompon.com came up with these values:

• For shares and tweets, we were able to directly attribute sales to the original action, so we simply took the total revenue attributed to each action and divided it by the total number of shares/tweets.

• For likes and follows, we had to estimate attribution by looking at our traffic references and subtracting out purchases made
through shares/tweets as well as purchases made through direct traffic.

• None of our analysis captures long-term value of customers acquired through these social channels –which means the true value per action should be even greater.

• Gross revenue depends on the products/services being sold, but due to the diverse set of ChompOnpublishers, we still feel the comparison between actions is reasonable.

The entire point of this blog is to demonstrate that it’s possible to create a monetary return on your social media strategy. You just have to be able to figure out how to monitor and measure your efforts. Granted it will differ by industry but it’s important to remember social media marketing is about maximizing results. The only way to know if you are maximizing your results is to have some sort of tracking system.

Many companies leave social media marketing on the back burner without giving it real effort. What you put into social media marketing is exactly what you’ll get in return. If you’re not committed to creating a solid social media strategy that includes measuring, tracking and analyzing… you can’t expect to see impressive results.