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The network ROI

The network ROI Leveraging social action theory, social network theory and the notion of network externality, the purpose of this paper is to model two different return on investment (ROI) measures: the networked ROI which captures the network effect originating from a social media investment, and the discrete ROI which focuses social media discrete returns from individual users.Design/methodology/approachA field experiment was set up over a period of three months to test the effects of two variants of an advertisement campaign (a social vs a discrete ad) on the modeled networked and discrete ROIs.FindingsThe authors find that emphasizing discrete user actions leads to lower network gains, but higher monetary returns while the social action emphasis produces higher network gains, but lower monetary returns. The study further suggests that social action focus is preferable for brand promotion and engagement, whereas the discrete action focus is suitable for boosting sales and website traffic.Practical implicationsSeveral potential implications for social media researchers and marketers are also discussed.Originality/valueThe authors for the first time showed that that the social media returns are derived not only from individual actions taken by the user (e.g. likes and shares) but also from users’ social interdependencies and the additional exposure that results from network effects. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Internet Research Emerald Publishing

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References (100)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1066-2243
DOI
10.1108/intr-07-2018-0346
Publisher site
See Article on Publisher Site

Abstract

Leveraging social action theory, social network theory and the notion of network externality, the purpose of this paper is to model two different return on investment (ROI) measures: the networked ROI which captures the network effect originating from a social media investment, and the discrete ROI which focuses social media discrete returns from individual users.Design/methodology/approachA field experiment was set up over a period of three months to test the effects of two variants of an advertisement campaign (a social vs a discrete ad) on the modeled networked and discrete ROIs.FindingsThe authors find that emphasizing discrete user actions leads to lower network gains, but higher monetary returns while the social action emphasis produces higher network gains, but lower monetary returns. The study further suggests that social action focus is preferable for brand promotion and engagement, whereas the discrete action focus is suitable for boosting sales and website traffic.Practical implicationsSeveral potential implications for social media researchers and marketers are also discussed.Originality/valueThe authors for the first time showed that that the social media returns are derived not only from individual actions taken by the user (e.g. likes and shares) but also from users’ social interdependencies and the additional exposure that results from network effects.

Journal

Internet ResearchEmerald Publishing

Published: Apr 6, 2020

Keywords: Return on investment (ROI); Social media ROI; Networked ROI; Discrete ROI; Social action theory; A field experiment

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