Brands ask this question all the time — how do you measure the value of earned media on Facebook?
Some just multiply by $5 per thousand impressions (or whoever can provide the highest earned media value multiplier) to report the highest figure. Not the most sophisticated approach, but it might be good enough for companies that sell sugar water. Certainly better than pure fan count, since EMV correlates more with engagement than the size of the fan base.
But unless you can tie EMV (Earned Media Value) to actual sales, you’ve got some level of hocus pocus here.
The short answer…
- EMV is what you would have had to pay to buy a certain number of impressions, usually driven from PR and social efforts.
- Companies calculate it by taking non-paid impressions and multiplying it by a default CPM.
- You use a CPM that best represents what you’re paying for your other media, which could be $500 CPMs in B2B marketing in the US and only a penny for international celebrity traffic.
- You use EMV to justify your organic efforts, just like ranking reports justify SEO efforts. Since labor isn’t free, though the traffic is, you can still calculate the ROI.
- Game CPM by buying lots of crappy international links from 3rd party sources, run contests that are based on sharing, choose an insanely high CPM multiplier, and organize your site to artificially drive more clicks/impressions (slideshows on the homepage).
The in-depth answer…
1) Fan base size doesn’t correlate with engagement or impressions (EMV).
See Obama’s 41 million fans versus Romney’s 11 million fans.
Did Facebook help Obama win or was Facebook engagement a byproduct of a successful campaign? We know there is power in an active audience, versus just a large audience.
But how do we quantify this?
PR companies invented the earned media concept to quantify the value of their efforts. You would have had to spend “this much” in advertising to get this much reach or this many interactions. And it’s usually impression-based, because of TV measurement companies like Nielsen.
But impressions are a passive metric, not as good as engagement.
If you’re a CPG brand, you’re looking at impressions, reach, and engagement for EMV (Earned Media Value). There’s no direct purchase, response, or lead capture to tie back to the impressions, so you must use reach and engagement as proxies.
We recommend using a default CPM (cost per thousand impressions) of $5, but you should use whatever price you pay for your advertising, as not all audiences are the same.
A large audience usually correlates with a lower engagement rate. So having a lot of inactive fans won’t help your EMV.
There are a few ways to game this system:
Technique #1: Post more frequently—twice as many posts will yield close to twice as many impressions, but with some decay. With entertainment brands, we see nearly no decay or cannibalization, provided there is low negative feedback (less than 0.01% on interactions).
There are many tools that will help you not only automatically post (we don’t recommend it), but optimize for News Feed coverage by curating content in your topic.
In fact, you can run right column ads to bump up the impression count — the impressions cost a third as much.
Technique #3: Drive 3rd party traffic using apps. Now that you’re attracting people to click LIKE, you’re generating a ton more impressions. We know that interactions of all types drive more traffic. But not all traffic is worth the same, especially if driven from other parts of the world.
Technique #4: Add twitter into the mix. With Twitter’s new Organic impressions, we now have a clearer picture of EMV from Rwitter.
Bump up your EMV calculation by throwing other social networks into the mix — YouTube, instagram, Pinterest, LinkedIn, and even your website — anything you can track growth, reach and conversions on.
The real way to calculate Earned Media Value– connect the top and bottom of the funnel.
Ignore Twitter (sorry, folks in Twitter sales). Take your Facebook organic and viral impressions over the last 30 days and multiply by the average CPM you are paying for Facebook ads into the newsfeed placements. Multiply that by your average customer lifetime to get an on-going value.
Don’t use industry CPM averages, unless you want to game the system. Don’t use rate cards for display, since they’ll be a lot higher. Don’t use your average CPM via Google AdWords, since keyword based searches have higher intent, especially on brand.
On Facebook, your Earned Media Value is driven by how often you post, the size of your fan base, and default CPM. So if you want to do apples-to-apples, then divide your current EMV by the percentage increase in your post frequency and then again by the percentage increase in your fan base.
If you have seasonality, then you’d want to select a time period that covers a full cycle, not just when you’re hot.
For the bottom of the funnel, look at:
- What percentage of customers you have at least one touch on social. Google Analytics and Omniture have this.
- The average number of digital touches a customer has. There is much social value in nurturing existing customers and creating word of mouth, but this is hard to factor here.
- Your average customer LTV(Lifetime Value). This may vary, especially if you’re in B2B.
Multiply these together.
Direct revenue EMV= (Percentage of customers with at least one touch on social) / (average number of touches) x average customer LTV
This formula tracks impressions down to the bottom line, assuming all touches are worth the same (even attribution). And it works only for direct marketers or where we can track retail POS transactions by store location.
Now compare the top of funnel EMV with your direct revenue EMV.
If these numbers are significantly off, then you need to consider if your social efforts are not driving bottom-line impact. Or it could be that you’re gaming the system by how you’re measuring EMV. Or perhaps you’re in a space where conversions are hard to track.
But even the biggest of CPG and retail companies can do this with Datalogix and Epsilon data. They can tie these transactions back to Facebook users (in a privacy-safe way) and determine whether there’s a correlation.
Bottom Line: Don’t accidentally cheat yourself
You’d not want to take EMV out of context anyway, since all metrics have counterbalances.
If you choose just one metric, you’re setting yourself up to be gamed: to have another metric suffer because of suboptimal decisions to try to increase a particular metric.
There are lies, damn lies, and statistics. So on Facebook, you’ll want to model the entire funnel to track traffic from audience to engagement to conversion. EMV is a passive metric only at the top of the funnel. So don’t sacrifice engagement over slamming a bunch of impressions down users’ throats.
It’s easy enough to game the system by running a bunch of ads, which cause viral and organic Facebook impressions to increase, too. So look at all these metrics in balance.
Readers: which metrics, such as EMV, do you like to look at?
Top image courtesy of Shutterstock.