Using Brand Equity to Model ROI for Social Media Marketing

ABSTRACT This study proposes a model that measures the value of audience responses to company-initiated social media posts by assessing their direct and indirect effects on brand equity. The model was tested using a content analysis of every post made by 25 different brands on Instagram, Facebook, and YouTube during September 2017. Findings demonstrate that online reach has a positive relationship with brand equity; active user responses (i.e., comments and sharing) has a positive relationship with online reach; and frequency of company-initiated posts has a negative relationship with online reach. Implications include empirical evidence of social media marketing’s return on investment; the determination that social media metrics that measure active audience responses (e.g., comments and sharing) are more valuable to a company’s brand equity than those that measure passive audience responses (e.g., likes, hearts, and video views); and that over-posting content on social media can have an adverse effect on brand equity by reducing a company’s cumulative online reach.