How can brands find a social media evaluation model that forecasts the monetary value of their campaign, plans e-commerce mechanics and evaluates return on investment?
To help achieve this objective, brands should first ask themselves these million-dollar questions: Can we evaluate social media? What was the ROI of this social media campaign? What is the ROI of a brand’s entire social media community – across all social channels? Did it sell any products? Did it answer the brief? Is it worth reinvesting in social media again?
Avoiding the answer
I am compelled to write about the subject because it is on everyone’s mind and yet is largely ignored – not just by digital experts, but by the whole industry since the emergence of social media.
The only people who have not ignored social ROI are the brand owners.
But brands are too often told that it is impossible to evaluate the value of a like, share, click or some other social call to action. This is because, according to most industry experts, the role of a social platform is to build engagement and advocacy, not sales.
There is a flaw in that logic and most brands with large communities are now realising it.
Yes, it is possible to accurately evaluate the monetary value of your social media.
Social media are increasingly used as a catalyst for amplifying e-commerce. From global brands to start-ups, the industry now uses social media not just to nurture conversations, but to drive audiences to buy a product, book a hotel, subscribe to a service etc.
We can measure those sales and attribute appropriate value to each social media call to action.
At Clarion, we have done extensive work on building a standard model based on learnings from the IAB UK and Barcelona Declaration of Measurement Principles. We have also garnered recommendations from our sister WPP companies Mindshare, MEC, Kantar and G2 Joshua.
The model to use
We begin with measuring five meaningful quantifiable variables. Each variable can then be attributed to monetary value based on its contribution to the increase in sales/revenue. This is all measurable because we can see which clicks come from which source, unlike traditional advertising where the source is less clear.
If there is no visible increase in revenue, then we can attribute an advertising equivalent monetary value to each of the five variables, which are:
- Awareness: an indication of how many people are reached with the brand message (measured in audience impressions and reach).
- Appreciation: a measure of how many people show an initial interest in brand content (measured in posts, shares, re-shares etc).
- Actions: speak louder as they indicate an active interest in the brand/product (measured in clicks, downloads, enquiries, purchases etc).
- Advocacy: signifies intent to keep in touch (measured in likes, followers, circles, subscriptions etc).
- Domino effect: reaching audiences through their network (measured in friends of friends, followers of followers, viral reach etc).
Measurable impact on revenue
The most exciting variable is arriving at the post-campaign profit (subtract the pre-campaign sales from the post-campaign sales and add the campaign cost). Adding this value to the total industry value of the above five variables gives us the monetary value for the campaign. If we have a traditional ad campaign running simultaneously to the social media campaign, then it is crucial to also measure the above variables and attribute monetary values respective to the measurable variables of each campaign.
The mathematical element of this type of measurement provides agencies and brands with clearer ROI for any social media campaign. It allows us to forecast campaign revenue and plan the integration of creative e-commerce mechanics that we know can boost revenue. More importantly, I feel it is this type of reasonable rationale that reflects the visible increases in revenue that give our clients the confidence to continue reinvesting in social media.
Views in brief
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Habib Amir, head of digital; member of WPP Digital European Advisory Board