# Social Media ROI Calculator Methodology

## Our calculator is based on the Social Equivalent Advertising Value (SEAV) theory. It compares social impressions & clicks to equivalent traffic generated from paid marketing.

This was originally proposed by the team at Tourism Ireland:

“In the absence of an industry standard to measure the value of the interactions that our fans have with us, Tourism Ireland created a metric called Social Equivalent Advertising Value (SEAV). This simple and practical metric has applications across all social media platforms and for all businesses that wish to define their return on investment.” (read report)

To calculate your ROI for posting to social media, you'll quantify the effect of the organic engagements on your pages by determining what you would've had to pay to get the same effect with paid marketing.

## Step 1: How Much Do You Spend on Social Media?

Entering the number of people that you have hired and the details of their compensation will be the basis for calculating your investment.

(# of people who work on social media} * (Average # hours per week) * (Average Hourly Wage) = Weekly Social Media Investment

## Step 2: How Valuable is Getting Traffic for Your Company

In order to value how important engagement is to your company, we're going to derive what your effective CPC would be aimed at if you were doing a media buy.

### First, we'll define each concept:

-CPC = Cost per click -LTV = lifetime value of user (how much is each avg. user worth to you over their lifespan of using your product) -Conversion Rate = (Out of 1000 visitors, how many will convert to) -CPM = cost per thousand impressions -CPV = cost per thousand views

(LTV of 1 user) * (Conversion Rate of Site Visitors) = Effective CPC

### How did we calculate Effective CPM & CPV from the Effective EPC?

This CPC measure will be expanded to estimated CPMs & CPVs based on a basic proportional relationship (based on Google click & impression data.

Ex. \$0.50 CPC : \$10 CPM : \$0.20 CPV

## Step 3: Your Social Media Data

Here's is where you can put all of your tracking on number of likes, retweets, follows, comments, etc. into action.

Facebook Value = ( organic impressions / ( 1000 * cpm) ) + ( organic clicks * cpc )

Impressions from Twitter are based on the analysis provided by Twitter & eMarketer. Twitter doesn't provide organic impressions. However, they do suggest a 25% view rate to clients running paid promotions. We are leveraging this estimate for organic impressions. Similarly, impressions from retweets and other Twitter engagements are being scaled according to a reported 310 Avg. Twitter followers per user based on data from eMarketer.This is then combined with the estimated 25% view rate.

Total Twitter value = ( ( twitter_followers * tweets * .25 ) + ( ( ( retweets) * 310 * .25 ) / 1000 * cpm ) + ( clicks * cpc ) )