Over my decade working in web marketing, I’ve spent a ton of time at various marketing conferences, and I’ve read countless books and blogs about new media. I’ve noticed a disturbing trend over the past few years in the social media end of the communications world. Much of the advice and strategy I hear boils down to little more than “unicorns and rainbows” superstitions like “engage in the conversation” and “be awesome.” Not only has much of the industry ignored hard metrics and dollars-and-cents ROI math, but there also has actually been a vocal opposition to measurement and accountability.
Effective marketers expect to see clear-cut, positive ROI for every other channel of online marketing, including email, search, and display advertising. But for some reason, many seem to forget about return when it comes to channels like Facebook and Twitter.
At HubSpot, the inbound marketing software company where I work, we’re obsessed with hard data and metrics for every inch of our business. So it seemed like a no-brainer to me that we should understand exactly what the value of each social networking connection is to our bottom line. It was out of that love of numbers that I began work on the value of a like (VOAL) formula.
The VOAL formula ends up looking like this:
L / UpM • (LpD • 30) • (C / L) • CR • ACV = Value of a Like
L (Total Likes): The total number of audience members connected to your social media account. On Facebook these are “likes” of your page, and on Twitter these are followers.
UpM (Unlikes per Month): The average number of fans who “unlike” your social network account each month. On Facebook this is an “unlike,” and on Twitter this is an “unfollow.”
LpD (Links per Day): The average number of times you’re posting links and potentially converting links driven from your social media account. On Facebook this is the number of posts you’re making per day that lead to a page on your website. On Twitter this is the number of times per day you’re tweeting these kinds of links.
C (Average Clicks): The average number of clicks on the links to your site you’re posting on your social media accounts.
CR (Conversion Rate): The average conversion rate of your website, from visit to sale or visit to lead. This can be an overall average, but for increased accuracy, use the conversion rate measured from traffic coming from the social network you’re calculating.
ACV (Average Conversion Value): The average value of each “conversion.” In this context, a conversion is the action you’ve used to measure CR for. It could be average sale price or average lead value. For increased accuracy, use the average conversion value of traffic coming from the specific social network.
It is relatively easy for any marketer with decent analytics software (like Google Analytics or HubSpot’s Marketing Analytics) to track the traffic from social networks and assign lead or customer acquisition values. It becomes more difficult when we want to understand how much time or money we should feel comfortable spending to build our reach.
The first part of the formula uses UpM and L to calculate a churn rate for your social media following. This will allow you to derive the average length of time an individual user is subscribed to your social network profile.
The rest of the formula calculates the VOAL metric for each follower using the number of links they’re exposed to over the length of time they follow your brand and the values from your conversion funnel.
To make this calculation easy for any marketer to do, I’ve built a calculator tool. Simply enter these six values for your business into ValueofALike.com, and the math will be done for you. The tool itself offers explanations about how to find the numbers needed. You can also adjust each value up or down to see the impact each metric has on the value of your followers and likes.
For more articles like this one, download the Harvard Business Review report: Putting Social Media to Work.
*Reprinted with permission from Harvard Business Review.