A recent study by Syncapse and Hotspex analyzed 20 top brands on Facebook and the activities of their Facebook fans in an effort to calculate the value of each one of those fans. The average value of each fan is valued at $136.38 according to the study.
But you should approach that number with caution.
One of the biggest challenges for big corporations trying to implement social media marketing strategies is calculating the elusive return on investment (ROI) of those efforts. My position on social media marketing ROI is a bit different than the traditional ROI metrics that we’ve all learned over the years as we calculate response rates, lift, and all those other easily quantifiable success metrics that have been developed over the years.
However, social media marketing is still in its infancy, and the traditional hard metrics that marketers use to justify budgets to corporate executives don’t really apply to social media marketing. Instead, social media marketing is more closely aligned with brand building. Both offer incredible value to an organization, but that value is difficult to measure in hard numbers.
That’s where what I call the shift from calculating Return on Investment as the form or ROI to Return on Impression as the form of ROI is necessary to evaluate social media marketing success. You can read my complete post about the new social media marketing ROI on the Yahoo! Advertising blog, but I’ll recap the highlights here:
- Calculating the success of social media marketing depends more on soft metrics than hard metrics.
- Those soft metrics can be valued in two forms of impressions: eyeballs and perceptions.
- Eyeball impressions are the quantifiable half of the impressions soft metric and refer to the number of times branded content or messages are actually viewed by the online audience.
- Perception impressions are the immeasurable half of the impressions soft metric and refer to the added value that your branded content and messages deliver to the online audience and how that content and those messages affect their perceptions of your business, brand, and products.
- If your social media marketing success or failure is measured solely by click-throughs or actual direct sales, then you’re heading down a path that will never allow you to fully leverage the power of the social web in generating word-of-mouth marketing, brand advocates, brand guardians, and brand loyalty.
What do you think about calculating hard metrics related to social media marketing initiatives? Does relying on hard metrics give an accurate reflection of what’s happening or is it doing a disservice to the intrinsic value of social media conversations to rely on hard metrics alone as it does with brand valuation? Leave a comment and share your thoughts.
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