This week I’ve been working away at another client media analysis, and it has brought up some interesting questions about how we apply value to media. Generally with traditional print and broadcast media, we assign a price value equivalent to what it would cost to purchase the space or time in the media. An accepted industry standard estimate is to then apply a multiplier of approximately x 4 to give it an elevated value as “earned media” rather then purchased media. For example if the print space was 3 x 7” and cost $500 as an ad space, we would assign editorial that took up that 3 x 7” space equivalent as having an earned value of $2,000. This method is relatively straightforward. You can calculate the distribution, readers per copy and overall reach of a publication, as well as being able to calculate the broadcast audience for a radio or TV piece based on industry third party monitoring that assigns audited values.
Where it all gets interesting is in valuing social media. There are a variety of methods, but ones I have used in the past are to apply a similar methodology as above. We would look at what the cost would be to boost the post or promote it to a targeted audience. Google ad word prices are often around $5/thousand. Facebook and Instagram pricing are usually in the $40-50 range to reach approximately 10,000 – which translates into $4-5/thousand. LinkedIn goes on a bidding process similar to Google ad words, and has a generally more expensive per person reached then Facebook depending on the audience. In the Facebook example it then becomes reasonably easy to calculate value based on total impressions using a cost/thousand value. However, where it gets tricky is in the next level of sharing and subsequent waves you may not be able to track. Depending on the audience, and how engaged they are with the content; the multiplier for total impressions could be huge. I’ve heard multipliers of x 5 or up to x 10 being used. In this example, suppose there were a total of 15,500 impressions on Facebook tracked. Using a $5/thousand, and a multiplier of x 10 for additional next waves of sharing, we would get a value of $775. I’ve seen companies value interactions at different levels too, such as reactions = $0.25 each, comments = $1 each, shared = $2 each, link clicks = $1 each, video views = $0.50 each. An example using this method would be a post with 215 reactions, 4 comments, 48 shares and 259 link clicks. That post would have a value of $158 in earned media value.
The whole process of valuing media is a little art, a little science, and a whole lot of assumptions, best guesses and justifying a methodology. In the end, it’s really just an attempt to quantify so results and approaches can be evaluated and compared for future planning. What makes the process of applying a value to social media a real challenge however, is the fact that it is by nature social. There is that added element of word of mouth, and the fact that friends share content within their circles of influence and that adds clout because it comes with an implied personal endorsement. Depending on the individual, that clout could have huge value.
So what does it all really mean to you?
Traditional earned media comes with a highly valued third party endorsement and usually includes significant reach. Social media also has highly valued third party endorsement once it enters the interactions phase with shares and comments, and depending on how it was shared and by whom, it could also hit significant reach. What these both have in common is the endorsement factor, which can’t be undervalued.