My first look at ROI for social media focuses on revenue conversion, not surprisingly having recently worked in the online price comparison marketplace within eBay Inc this is an obvious starting point for me:
Simple equation to calc soc med ROI? Life time value of customer – cost of acquistion, divided by COA = %ROI hbsp.harvard.edu/multimedia/fla… for LTV
— Stuart G. Hall (@stuartgh) February 20, 2012
To explain that tweet (inspired by the holy grail of social media which is figuring out the return on investment (ROI) – it started with a good simple equation suggestion in the Hubspot webinar – slide 45:
- Exposed Persons (EP) = The number of persons exposed to the social media campaign.
- Acquisition Rate (AR) = The percentage of EP that become new customers.
- ARPU_monthly (ARPUm) = The average revenue per user/customer per month.
- Churn_monthly (Cm) = The percentage chance of losing a customer at the end of each month.
- We can then calculate revenue from the social media campaign as = (EP*AR*ARPUm) / Cm
|0 –10k||0,96 %|
|10k – 20k||0,29 %|
|20k – 50k||0,21 %|
|50k – 100k||0,19 %|
|100k – 200k||0,16 %|
|200k – 500k||0,13 %|
|500k – 1 000 k||0,11 %|
|1 000 – ~||0,09
It only measures comments and likes, and no other actions (such as video plays and link clicks). The feedback percentage is computed as (comments + likes)/Impressions. Facebook analytics specialists Socialbakers have even given an estimate from their clients depending on the Facebook Page size which is useful too (see table above).
When you are ready you can also try checking out FB Insight stats on fans vs active users to find out who to better target to improve engagement. Ultimately, to reiterate, it’s a question of taking is step by step, aligning with business objectives.