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What Is The Value of A Social Action in Online Commerce? February 2011

This document analyzes the value of social actions like shares, likes, tweets, and follows for online commerce. It finds that a Facebook share provides the highest value at $14 per action, while a Facebook like provides $8 value and a Twitter tweet $5 value. These values only account for direct attribution to the next sale and don't capture long-term customer loyalty effects. The methodology estimates values by directly attributing sales from shares/tweets and estimating attribution from likes/follows based on traffic sources. Future analysis could optimize incentives for social actions and bundle products based on social/demographic data.

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James Poulter
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755 views6 pages

What Is The Value of A Social Action in Online Commerce? February 2011

This document analyzes the value of social actions like shares, likes, tweets, and follows for online commerce. It finds that a Facebook share provides the highest value at $14 per action, while a Facebook like provides $8 value and a Twitter tweet $5 value. These values only account for direct attribution to the next sale and don't capture long-term customer loyalty effects. The methodology estimates values by directly attributing sales from shares/tweets and estimating attribution from likes/follows based on traffic sources. Future analysis could optimize incentives for social actions and bundle products based on social/demographic data.

Uploaded by

James Poulter
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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What is the value of a social action in online

commerce?

February 2011
THE QUESTION

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y Short term analysis


-­ Only attributing for immediate next sale
-­ 0HDQVZH·UHXQGHUHVWLPDWLQJYDOXH
CHOMPON TRAFFIC
| Topping off at 2k hits per minute during peak commerce
hours (9 am to 1 pm)
VALUE (IN GROSS REVENUE PER ACTION)
Again, please note we are only attributing for the
immediate next sale

Facebook Share

$14
Facebook Like

$8*

Twitter Tweet

$5

Twitter Follow

$2*
*Admittedly, we believe the true value for likes and follows to be much higher due to creation of long-­term loyalty.
Additionally, it is not possible to directly attribute traffic from these actions so it was necessary to estimate (see methodology).
METHODOLOGY
| For shares and tweets, we were able to directly attribute sales to
the original action, so we simply took the total revenue attributed to
each action and divided it by the total number of shares/tweets.

| For likes and follows, we had to estimate attribution by looking at


our traffic references and subtracting out purchases made through
shares/tweets as well as purchases made through direct traffic.

| None of our analysis captures long-­term value of customers


acquired through these social channels ² which means the true
value per action should be even greater.

| Gross revenue depends on the products/services being sold, but due


to the diverse set of ChompOn publishers, we still feel the
comparison between actions is reasonable.
JUST THE TIP OF THE ANALYTICS ICEBERG!
| ChompOn is tying social with e-­commerce by optimizing the
incentives that drive sales and resonate with users.

| Future analysis:

| Pricing perception when bundling products/services


according to social/demographic data

| Incentivizing social actions with discounts

| Showing friend purchases and analyzing effects on


conversion rates

| Product/service FRQYHUVDWLRQV· effects on sales


(experimenting with )DFHERRN·V new commenting widget)

| Scarcity manipulation through limited/blackout dates

| Credits·FRQYHUVLRQUDWHVDQG52,

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