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:
(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:
- http://www.youtube.com/watch?v=6gmP4nk0EOE
- Avinash Kaushik, Web Analytics 2.0: The Art of Online Accountability and Science of Customer Centricity
- http://blogs.hbr.org/cs/2012/11/how_to_calculate_the_value_of.html
- http://valueofalike.com/
- http://dauofu.blogspot.com/2013/01/social-analytics.html
While I do see how so many people say the web 2.0 is now all about UGC, like how some people will say they are "reading the news" when they are reading their Facebook feed, I see a bigger problem of many people trying to fight through all the clutter. With so many self proclaimed experts on so many topics and opinions in social media I think it can be harder to know who is sincere and who is a paid social media advertiser.
ReplyDeleteI agree, I have seen friends wall's and they have "liked" so many companies its hard to tell what is actually from friends or companies. Their wall is so cluttered it looks like a newsletter ad.
DeleteI agree with both your comments. I am relatively new to this social media and researching some topics for this class found Web 1.0, 2.0 to be buzz words. I personally feel web is evolving and each stage of evolution creates its own buzz.
DeleteTurning social networking activity into ROI is a great topic and something that interests me greatly. I like that you have a calculation listed that can help in figuring some of this out - also that there's a link to a site to help do this automagically!!
ReplyDeleteGlad that you found the blog useful. If you are tracking the likes and metrics similar to it on regular basis, would you be able to feedback if the formula makes sense. My thought is that it is an empirical formula and needs several iterations to verify the model is accurately predicting the value. Thanks for going through the blog and the comments.
DeleteThank you! finally, a concrete, easy to understand computation of the value of a Facebook Like. "Value of a Like = (Total likes)/(Links per Day*30*(Average number of clicks/Total Likes)*Conversion rate*Average Conversion Rate"
ReplyDeleteGlad you found it useful. It predicted the value of my first blog to be $0.27.
DeleteI appreciate the social media formula you gave. I will put this to the test for our company. Thank you.
ReplyDelete