Paid Social vs. Your Employees

Metrics and KPIs can be overwhelming. There are too many things you can measure, making it difficult to determine how your employee advocacy program has impacted your company’s bottom line.

Today, we’ll look at how you can calculate the ROI for your brand ambassadorship program. Specifically, we’ll look at ad spend on social vs. employee advocacy on social.

As you know, paying to run ads on social media isn’t cheap. Thankfully, your employees can offset those costs.

But how much money are your employees saving you? Let’s take a look at the math.

What You’ll Need:

To do this calculation, you’ll need:

  1. Your average cost-per-click (CPC) for each social network (monthly)
  2. The total number of clicks that your employees generate on each social network (monthly)
  3. Additional costs for your employee advocacy program (monthly)

Using those numbers, we’ll answer this question: How much would your marketing team have to spend on paid social in order to get the same number of clicks that your employees generate?

Here’s the basic formula that we’ll use:

If you don’t know your monthly CPC on each social network, here are a few sites that give you average numbers for Twitter and LinkedIn ads. As you look at those pages, bear in mind that your CPC could be much higher, depending on your target audience.

Step 1: Calculate your Twitter Savings for One Month

Let’s say that you typically spend $1.53 per click on Twitter.

Now, imagine that your group of 300 employees generates a total of 19,689 clicks on Twitter in one month.

Let’s plug those numbers into our formula to find out how much you saved on Twitter…

19,689 clicks x $1.53 CPC = $30,124.17

To generate 19,689 clicks on Twitter, you would have to spend $30,124.17. In other words, by empowering 300 employees, you saved your marketing team over $30k on Twitter in one month.

Not too shabby.

Step 2: Calculate Your LinkedIn Savings for One Month

LinkedIn sponsored updates are typically more expensive than Twitter ads. So, let’s say that you typically spend $7.50 per click.

And let’s say that your group of 300 employees generates 2,433 clicks on LinkedIn in one month.

How much did you save on LinkedIn?

2,433 clicks x $7.50 CPC = $18,247.50

You saved your marketing team roughly $18,250 on LinkedIn in one month.

Step 3: Add up Your Savings for One Month

The next step is to add up how much you saved across your social networks. In this post’s example, we’d add up our LinkedIn savings and our Twitter savings, but you might also throw Facebook into the mix, as well.

$30,124.17 + $18,247.50 = $48,371.67

In one month, your employees saved your marketing department $48,371.67 in paid advertising costs. Woohoo!

But wait… employee advocacy programs aren’t completely free, which brings us to step 4.

Step 4: Subtract Any Additional Costs Associated with Your Employee Advocacy Program

With employee advocacy programs, you might have some monthly expenses. Perhaps you’re paying a monthly fee for your advocacy platform, or perhaps you’ve outsourced your advocacy program to an agency.

Don’t forget to subtract those costs from your subtotal in step 3. In so doing, you’ll discover whether your advocacy program is cost effective.

If you find yourself with a negative number at the end of this step, you’re spending more than you’re saving. In other words, your advocacy program is costing your company money.

But if you find yourself with a positive number at the end of this step, you’re doing things right. Your advocacy program, even with expenses taken into account, is saving your company money.

The ROI of Employee Advocacy

Employee advocacy programs have been proven to be a valuable asset to any marketing program. With a little strategic thinking, you can prove the ROI of your program to your executive team.

In this post, we looked at one way to show your company’s leadership the economic value of your advocacy program. In future posts, we’ll look at other calculations that you can use.

Stay tuned!


Image via Flickr

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Posted byMark Bajus

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