E-Commerce and Social Media Indicators

Abstract

It seems that the Internet boom, which started at the end of the 1990s and finished with the spectacular collapse of the so-called dotcoms, is probably over. We are currently enjoying a period of fast and stable growth. This is manifested by the growing number of both Internet users and companies which – to an ever-increasing extent – use the Internet as a form of communication (both internal and external), promotion, sales etc. Expenditures on Internet advertising are growing continuously and now constitute more than 25% of all advertising expenditure. A natural consequence of this development is the need for the standardisation and organisation of the world of the Internet. These activities will result in a greater awareness of the benefits which this medium provides, increasing the possibilities of its use, and – most importantly – the opportunity to evaluate the return on investments made on the Internet. Nowadays, it is clear that many companies are striving to increase the quality of their activities on the Internet or to improve the effectiveness of such activities. As a consequence, the number of companies that look for indices which would enable the making of more precise and effective decisions in the scope of online operations is growing.

This chapter is dedicated to the phenomenon of the increasing role of the Internet in business, including the scale of its use by Polish and international companies. We present the most commonly used measures of marketing activities on the Internet and in social media. This group includes the indices which make it possible to determine whether a company actually needs a website. Other measures allow for the improvement in the effectiveness of the activity on the Internet, whereas others specify the costs of activities on the Internet and often serve as the basis for settlements between a company and advertising agencies or companies specialising in website design. It is worth emphasising that the Paid, Earned, Shared, Owned (PESO) model, worked out by Don Bartholomew,¹ is the basis for creation and description of indices concerning social media. This model has gained certain popularity in the social media industry. It does not, however, specify how individual indices should be named and calculated. It maps already existing indices and adapts them to specific levels of marketing communication measurement. All the measures indicated by the author of the model have been grouped into five major areas: exposure, engagement, brand awareness, action and recommendations. This model– similarly to all models of performance measurement – inspired by the sales funnel concept, adjusts certain standard indices and proposals of measurements for specific levels. Additionally, the measures are divided into four types, depending on who the owner of the content is: Paid (P) – refers to all forms of paid content; Owned (O) – all websites and web properties controlled by a company or brand; Earned (E) – the contents about a given brand created spontaneously by Internet users; and Shared (S) – the contents shared by Internet users.

Citation

Kozielski, R., Mazurek, G., Miotk, A. and Maciorowski, A. (2017), "E-Commerce and Social Media Indicators", Kozielski, R. (Ed.) Mastering Market Analytics, Emerald Publishing Limited, Leeds, pp. 313-406. https://doi.org/10.1108/978-1-78714-835-220171009