ROI and Social Media (Value of a ‘Like’)

‘Like’, ‘Share’ and ‘Follow’ are modern world’s three most powerful buttons. One cannot imagine to build a brand without these three buttons in this Social Media driven world. Yes, there are other buttons as ‘pin’ or ‘+1’, but when it comes to high-end digital marketing, ‘Like’, ‘Share’ and ‘Follow’ are still dominating the Social Media Universe.

Now with the rise of immense power gained by businesses on Social Media, Return on Investment becomes as important as Brand Management. And here is when value of all the “likes’ and ‘shares’ comes into the picture.

The idea here is to figure out whether your Social Media strategies are generating revenues for you or not! How do you do that? There are white papers and books available to explain ROI with Social Media, but I found something beyond the scope of regular articles.

It’s a formula called Value of a Like (voal),


developed by Dan Zarrella, a Social Media Scientist at HubSpot.

Below is what each term in the formula means:

L – Total number of people you are connected to. That means the number of people who ‘like’ your Facebook page or who follows on Twitter.

UpM – The term means Unlike-per-month. If you go to your page insights and export the data as an excel file (for past 1-3 months), you will be able to figure out the average number of ‘Unlike’ per day. (For twiiter, ‘Unfollow’)

Lpd – The term means Links-per-day. It is the number of posts you publish on Facebook/Twitter.

C – It is the average number of clicks on the Links that you post on Social Media. With the data exported from the Page Insight, you can get this number.

CR – Conversion Rate is the traffic you are gaining through Social Media. It is the ratio of people who follow/like you to the people who clicked on the links you posted and came to your website.

ACV – Average Conversion Value is your lead value, your average sale price from people coming through Social Media.

Here, (L/UpM) is sort of a churn rate for your Social Media, (LpD * 30) is the number of posts that you publish on your Social Media, (C/L) gives you the ratio of people who actually clicks your links out of people you have as your fans/followers.

On the other hand, CR and ACV helps you calculate the actual Return on Investment based on the above mentioned terms.

Now, just when I thought it’s AWESOME, a link was waiting to amaze me!! And it was the link that motivated me to actually write this blog!

The calculator on the link follows this formula and gives you the ROI. And not only it follows the formula, but also explains it and helps you get your numbers correct!

Do share what you think about it, I would be glad to learn and explore what you have got to say and share!

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About Parth Acharya
Data Analyst | Social Media Evangelist | Film Maker

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