Tuesday, January 29, 2013

What is the Value of Facebook likes And Twitter Followers

Web 2.0 is all about user generated content (UGC). In web 2.0 the demarcation between the content provider and the content user is close to non-existent. The revolution created by blogs and social media like Facebook and Twitter has changed the way the information is shared between the content provider and the user. Until the late nineties in Web 1.0, the dialog between the content creator and the user did not exist. The author published through internet which was assimilated by the user, however the author was unaware of what the user did with the information.



                        (video ref: http://www.youtube.com/watch?v=6gmP4nk0EOE)

With the advent of social media, the author now has the opportunity to receive feedback in the form of comments, likes, tweets and followers. In a business perspective the response of the user (read customer) to a post by the author (read business) can be invaluable, provided the reception is tracked.



Avinash Kaushik in Web Analytics 2.0 talks about metrics that can be used effectively to track the customer response for a post either in a blog or a micro blog like Twitter. Out of which likes and retweets can be most prominent and easily tracked. However, the real value to a business or an individual can be realized when the metrics such as Facebook likes and Twitter followers be quantified into dollar amount. Dan Zarella in his HBR blog How to Calculate the Value of Like prescribes a mathematical formula to convert likes/followers into dollar amount. The formula is given below,

Value of a Like = (Total likes)/(Links per Day*30*(Average number of clicks/Total Likes)*Conversion rate*Average Conversion Rate

An automatic calculator at Valueofalike.com provides the dollar amount by entering these parameters. Just for fun I used the data from the first blog I posted using likes and number of visitors. I set everything else to the lowest score. The value for each like turned out to be $0.27.

The formula appears to be empirical, however the estimated monetary value of the like/followers metric provides great insights to the author or a business tracking social media metrics.

References:
  1. http://www.youtube.com/watch?v=6gmP4nk0EOE
  2.  Avinash Kaushik, Web Analytics 2.0: The Art of Online Accountability and Science of Customer Centricity
  3. http://blogs.hbr.org/cs/2012/11/how_to_calculate_the_value_of.html
  4. http://valueofalike.com/
  5. http://dauofu.blogspot.com/2013/01/social-analytics.html