Measuring the Value of Social Media

Measuring social media is parallel to measuring marketing – something that has been debated for as long as I can remember.  The CEO asks, “If I allocate headcount and budget for social media, am I going to see more sales?”  Digital native in company replies, “Absolutely.”  CEO snaps back, “Okay, quantify the ROI.”

Be careful what you promise … marketing is not sales.  It does not result in sales, but rather 1) increases the number of potential clients (qualified leads) and 2) increases the probability of sales closure, while reducing sales cycle time.  Quantifying the value of marketing efforts must be specified in these functional areas, not in sales numbers.  Yes, one can say that sales increased after a marketing campaign, but you can not attribute it 100% to the marketing campaign.  There are other attributes that have likely changed prior to the start of the campaign such as new product release, new features, new channels, new sales team members, just to name a few, that worked in an integrated manner to increase sales.  In my experience, claiming “sales” numbers as a result of “marketing” just leads to endless debate. 

In a traditional sense, marketing influences sales and generates leads.  Prior to social media we would measure results such as the number of hits on a website; number of call-ins; and response to specific calls to action.  In a social media context, we want to move potential customers along the “A path”:

1)      We want to get their ATTENTION

2)      We want to ATTRACT them

3)      We want them to gain AFFINITY for us

4)      We want them to be our AUDIENCE, regularly engaging with us

5)      We want them to be our ADVOCATES – the greatest level to reach where our customers provide positive referrals for us to their friends, colleagues, and family

So in a social media context here are just some parameters that will indicate how well you are moving customers along the A-path:

  • Amount of friends or followers a social media account has
  • Using trackable URL’s when posting information/links to these social media accounts
  • Amount of discussions generated within social media account pages
  • Amount of video comments
  • Amount of photo comments
  • Amount of comments on profile page
  • Amount of retweets a tweet gets
  • Amount of downloads or installs an application or attachment has
  • Amount of questions asked or answered on a site
  • Size of your network
  • Amount of fans your page has


These are a realistic set of attributes to quantify results of social media marketing.  Others have defined social media measurement from other perspectives.  I give two examples:

1)      Dave Evans writes an article “Making Quantitative Sense of the Social Web” ( where he talks about quantifying the social media conversations that occur.  He names a number of tools available to assist in this exercise.  I see this as too subjective, but you and your organization may like this approach.

2)      Dragon Search has recently released what they term a “Social Networking Media ROI Calculator” (  I like the intent and approach here, but there are a couple of parameters that, again, are too subjective.  Part of the model includes users specifying a monetary value for “posts” and “stories”.  The model is on the right track, but I question the use of these two parameters.  Nonetheless, it is worth checking this out.

If you are a marketing professional you know the power of positive socialization of your product/service, and the catastrophic nature of negative socialization.  This speaks directly to the value of social media marketing, but this may not be enough to see your company grow social media initiatives.  You will likely need quantifiable ROI objectives and results.  Test what will and will not work in your company.  Work to evolve the perception and growth of social media at your company … set objective, realistic measurable goals … track and record the results … it will be rewarding for your company and they will show greater commitment to winning social media initiatives.

 Social Steve


Filed under marketing, measuring social media, social media, Social Steve, socialmedia, SocialSteve

30 responses to “Measuring the Value of Social Media

  1. Some excellent insights. Most of the time, we find it hard to break away from our traditional mental models of marketing and business in general. We embrace social media just because it’s the hottest buzzword in town, but never think of “what to expect?” at the end of the day. We implement some of these “non-traditional” social media strategies/tactics to our marketing mix, and expect “traditional results”. It’s like seeding wheat and trying to harvest rice!

    I believe, any company trying to embrace social media into their marketing mix, should first clearly define themselves “what do we want?” out of this. Another important question to ask is, “are we going to use social media just as a promotional tool, or are we going to adopt it as our core business strategy?”. Most of the time, we tend to mix these two things; promotional tool, and business strategy. If you know clearly what you want from Social Media; then you know exactly what is to be measured!

    Thanks for writing this! I’ve stumbled you, twittered you, and book marked you 🙂

    • SocialSteve

      Amisampath – Thanks for the comments. I especially like your comment, “We embrace social media just because it’s the hottest buzzword in town, but never think of “what to expect?” at the end of the day. We implement some of these ‘non-traditional’ social media strategies/tactics to our marketing mix, and expect ‘traditional results’. ” I do address setting expectations in another blog “Before Social Media.” It becomes part of my 3 phase approach to integrating social media into a marketing plan … 1) define who you are, 2) set communication goals (expectations), 3) social media plan. – Social Steve

  2. Good article, certainly got me thinking. In my opinion, prior to starting a social media campaign, it is essential to listen to the conversations taking place about your brand or compay, your competitors, or our product area, to get a baseline of what is being said. You can then measure the results of your social media activity in terms of increase in share of conversation, increase in volume of on topic, positive comments about your brand, or increase in engagement with your social media posts.

    • SocialSteve

      Nigel – Thanks for your comments. I address what needs to be done prior to starting a social media campaign in another blog, “Before Social Media.” I do not explicitly mention the importance (and power) of the listening aspect of social media and the general need for any marketing endeavor as you have here. You are absolutely correct … so thanks. – Social Steve

  3. Hi Steve. Interesting article. I notice, however, that there is no mention of leveraging social media for a consumer’s ‘research’ phase in purchase decision-making. Personally, I find that many (most?) companies fail to make this often horrendously time-consuming activity as easy as it could be – and I have in fact made purchasing decisions that seriously favored this aspect of ‘making it easy to do business with you’.

    I think that companies could benefit significantly from allowing consumers to explicitly specify their ‘requirements’ for pending product purchases and automatically (with, of course, a bunch of back-end IT work!) filter / personalize their messaging based on that. That includes identifying not only the products that have decent potential fit for those requirements, but also tailored access to in-depth information about those products that can help the consumer generate an appropriate competitive evaluation of potential products – especially for understanding limitations, reliability / quality issues, and total-cost-of-ownership issues, which I find are generally the hardest to get a handle on.

    One big potential benefit for companies that adopt this kind of model is that they can get real information on what users actually want – and perhaps even get feedback on why a consumer chose their eventual purchase (whether it was their product or a competitor’s). In any case, a great source of fact-driven info for product development and packaging.

    I also think that social media could add considerable value to this process by facilitating user communities around not only individual products, but also product categories. This happens today in a very piecemeal way, but a social network provides a built-in infrastructure that could make these kinds of approaches considerably more user-friendly and uniform in the future.


    • SocialSteve

      Hi Ian – Excellent comments. I believe your comments point more to what will be with social media as opposed to how to use it today, but the comments are very accurate. In fact, I reference probably the best study I have seen on “The Future of the Social Web” by Jeremiah Owyang of Forrester (see Here Jeremiah lays out the five eras of the social web. Your comments relate to what he calls the “Era of Social Commerce” where communities define future products and services. This is directly related to your comment that “consumers to explicitly specify their ‘requirements’ for pending product purchases.” Jeremiah estimates that this era will satrt in 2011. (I always knew you were a great predicter of technology futures.) Thanks!

      Social Steve

      • Hi Steve. That was a great link – very interesting article and concepts, although obviously from a very ‘analyst-centric’ perspective 😉

        Although I think he’s right about the general idea of an ‘Era of Social Commerce’ – and probably about right (or even a bit early! – a common analyst failing ) with his timing for it, I think his focus on ‘communities defining products’ is a bit off the mark (although I think most of the rest of his analysis is very well thought out).

        My personal opinion is that this area is probably the ‘killer app’ for The Semantic Web – but that it will take ‘a while’ before SW infrastructure is ready enough for prime time to make this broadly practical, except for a company that has the resources and vision to build its tooling and deployment infrastructure practically from scratch (and there are only a few of those around!).

        Anyway, before this goes completely off-topic, I would like to mention a theme that was implicit in my original comment (and explicit in the Era of Social Commerce meme), which is that as these technologies start to arrive and mature, we will see a potentially dramatic leveling of the playing field between consumers and businesses. I think the lesson for companies today is that they need to prepare for this – culturally as well as technologically – because when the technologies do converge, companies that have done this preparation are likely to have a significant competitive advantage over the rest.

        Companies that attempt to cling to non-transparent models in the new era will become increasingly challenged by those willing to embrace transparency and community.

        Cheers, Ian

  4. ecairn

    Also replied to your linkedin Q&As.
    Don’t you think that those metrics are very quantitative in nature and that social media adds a qualitative dimension to the equation. I strongly believe it. So I think any measure, when possible, should have a qualitative side to it.

    For example if I take your 1st example, it would be “#of friends/followers a social media account has” overall and split by ‘relevance’ – i.e: if I’m a fashion company, how many are influencers in the fashion industry, how many are passionistas, how many are the average joe…etc.

    • SocialSteve

      ecairn – Good additional comments. I would continue to emphasize the need of quantitative metrics AND get the quantitative target market more precise. I believe this is what you mean by adding a qualitative dimension … good stuff!

      Social Steve

      • ecairn

        Yes it is, and if I push the concept to its end, and social media enables us to dream about such a thing, the market is many many markets of a few, so called communities (i.e: I can communicate directly or through proxies the right -relevant and personal- message, in the right way at the right time into the online life of each individual’s I want to reach). Thus my metrics become more qualitative than quantitative because its then more important to understand if my message is received by those communities, how it is received and transformed, what part is received, and so on…vs pure quantitative metrics that don’t provide those kind of deep insights. We’re not quite there yet 😉

  5. Thanks for the post Steve, it’s certainly a topic that’s been discussed a lot around our agency. We see the value, but it is difficult to show direct ROI to our clients.
    I really liked the links you shared. Dragon Search’s formula approach is interesting, but it would certainly need tweeking, as I don’t think it’s fair to assume that every PR story or focus group has a $10,000 value.

    • SocialSteve

      Alissa – Glad you found it interesting. I agree with your comment about the Dragon Search model. I am critical of some of the parameters, but I give them credit (and let others make up their own mind) for getting a big jump in this area. I remember when I used to run a mainframe product line that we used a Glomark tool called EVC (Economic Value Creation) to quantify clients’ ROI staying on their mainframe. What we found was that customers would always debate the numbers we initially put in as estimates, but once they started playing with the model and put in their own numbers, the methodology a) should positive ROI anyway, and b) got everyone in their organization synched such that we could more easily close the sale.

      Social Steve

  6. Hi Steve,
    Thanks for taking notice of our calculator.

    Its so true that the parameters we’ve included are pretty subjective – and one might conclude that some are utterly worthless. I think the idea is to try to think about as many intangibles as possible, and try to align them things that c-levels ARE willing to spend money on. The whole concept of Social Capital is relatively new, but there is no arguing that a home in a low-crime neighborhood would have more value than the identical house in a nearby high-crime neighborhood.

    The social media community has been terrific with coming forth with lots of ideas to enhance the calculator, so hopefully soon we’ll have a 2nd version. Many thanks again for your input.

    • SocialSteve

      Ric –

      Thanks for joining the conversation since I referenced your practice and your tool. I think you are on to something and I am sure it will evolve to be extremely useful as social media matures.

      Social Steve

  7. Pingback: Social Media ROI Calculator | DragonSearch Marketing

  8. Nice post, and solid POV. The value I see in the measurement and listening platforms is that they are one step down a path toward measures that ultimately link sales, marketing, and operations. We are just at the start of the tools that actually do this, and the impact that they will have on … sales, marketing and operations will be profound.

    • SocialSteve

      Thanks Dave … I agree with your comments here. Keep the torch burning. I’ll be looking for your valuable perspective going forward.

      Social Steve

  9. Pingback: Measuring Social Media ROI – One size does NOT fit all | DragonSearch Marketing

  10. Very good post. Dragonsearch’s ‘RoI calculator’ is an interesting tool to look forward. Thanks for sharing this here for all of us.

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  13. Interesting post! Got here because you commented on another post that was highlighted in a LinkedIn PR/Communications Professionals group–another example of the way various channels and networks intersect and feed each other.

    I really like your A-path–it does a great job of capturing the engagement and involvement value of having a social media presence.

    I work in higher ed communications, and certainly can’t control product, price, or the many personal variables that go into that buying decision. Even understanding all the caveats about not attributing sales outcomes to marketing activities, I’m curious as to why you don’t include Action as one of your A words. If someone clicks on a link from BestBuy’s Twitter account and ends up buying, social media did help drive or close that sale.

    I don’t want to go back to measuring JUST those traditional ROI values. I also wouldn’t want to miss the chance to track those types of outcomes if I were in a context where I could.

    On the other hand, Einstein said it: “Not everything that counts can be counted and not everything that can be counted counts.”

    For some thoughts about this from the nonprofit sector, see @kanter’s blog post “ROI (Results on Insights): Nonprofit Examples of How Listening Returns Value” and “ROI: What are the best “I” words for nonprofits to think about Social Media and ROI?”


  14. SocialSteve

    Hi Barb,

    Thanks for your comments.

    With regards to not picking “Action” as one of my “A words” for A-path”, “advocacy” is the action that I look for in a social media endeavor. It is the specific action that has the most impact. If someone is your advocate, likely they are buying your product/service – not necessarily through the “online click-through” that you have set up. I am happy that they are buying in any manner. If they take this one step further and become an advocate, this is the ultimate relationship a brand can have with its audience.

    Two other points … 1) in most my articles I stress the importance that a social media endeavor should NOT be selling in any way. This is a turn off to building relationships. Indirect selling by presenting value to your audience is okay, but I would not go much further than this. 2) In an article I wrote called “Before You Start with Social Media” ( I lay out a process to help define the social media effort that is implemented. In the second phase of this process (where a campaign is planned), I do describe how one of the steps is a “call to action”. Check out that article if you wish.

    Anyway – thanks for your input and the conversation.

    Social Steve

  15. Steve,

    I appreciate the way you add to the value of the blog post with your replies to comments!

    I agree that overt/blatant selling is a huge turnoff. I was thinking more of things like when one of my favorite coffee shops, @CoffeeSocial in Spokane, puts out a tweet saying that they just took brownies out of the oven and the next 3 people to RT this get a free brownie (or something like that). I like that real-time sense of what’s happening there (and they make KILLER brownies). This kind of thing rewards me for being an advocate and brownie lover without being a huge turnoff for me personally. “Click My Junk” auto-DMs, on the other hand, and the equivalent in other networks are a huge no-no.


  16. A fairly obvious thought on what you measure–it’s not only how much, it’s the nature of the interaction. If you have a lot of comments on your site or content but they’re all negative, that’s something you need to respond to. Both quantitative and qualitative measures are critical to understanding your success in social media.


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  18. Steve,

    From my experience there are a few direct, qualitative ways to track specific actions that a user may take while on your website that thus result in legitimate, undebatable ROI.

    Multiple web analytics programs allow for funnel conversion analysis, a method by which marketers track specific outcomes of a site visit, whether that be e-commerce, content discovery, lead-generation or self-service.

    Using funnel conversion analysis with a program like Coremetrics, marketers are able to set up specific paths for which they can measure drop-off. In the end, a marketer can reliably measure multiple scenarios if they have tracked them correctly. Some ideas for tracking:

    – How many referrals from Facebook yielded sales?
    – How many referrals from Twitter yielded an email sign-up?
    – How many referrals from YouTube resulted in a visit to landing page XYZ?
    – How many referrals from Flickr resulted in a subscription to the daily newsletter?

    Setting up these paths can be tedious and costly, but if ROI is of great interest to the company, they seem to be worth the turmoil.

    While working in social media marketing for a retail company, I was able to measure the successes you mention (fans, followers, comments, likes, etc) as well as sales generated.

    Thank you for sending this post my way!


  19. Pingback: Measuring Social Media ROI: One Size Does Not Fit All | DragonSearch Digital Marketing

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