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Facebook Fans Worth 20 Yearly Site Visits, $136 A Piece?

Theories about the value of individual Facebook fans

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[ Social Media]

What is a Facebook fan worth? It’s a question that many have attempted to answer. These answers are often greatly debated. Can you place a set value on a Facebook fan?

The latest attempt comes from Experian Hitwise. “We are constantly asked: ‘What’s the ROI with advertising on Facebook?’ and until now that has always been a difficult question to qualify precisely,” says the firm’s Research Director in the UK, Robin Goad. “Leveraging our unique data sets we now have an answer: for retailers, each new fan acquired on Facebook is worth 20 additional visits to your website over the course of a year.”

How much is a Facebook fan worth? Tell us what you think.

“Our data shows that for the top retailers, even if they have no Facebook fans they can still expect to receive on average 62,000 visits from Facebook each month,” says Goad, plugging a new service the firm is offering, called Facebook Fan Acquisition and Analysis. “Within retail each new fan acquired will drive an additional 20 visits to a retailer’s websites, which in turn will generate extra sales both online and offline.”

“The figure of 1 fan = 20 extra visits to a website uses a unique methodology that combines Hitwise data with data from Techlightenment,” he says. “We took the top 100 retailers ranked in the Hitwise Shopping and Classifieds category and benchmarked visits to those websites against the number of fans those brands had on their Facebook page. We then also looked at the propensity for people to search for those retail brands after a visit to Facebook using our Search Sequence tool.”

A study (about a year ago) from Syncapse found that people who are Facebook fans, on average, spend $71.84 more per year on brands they are fans of than those who are not fans. In addition to that, they’re 28% more likely than non-fans to continue using that brand. Michael Scissons, the CEO of Syncapse, talked about the study on the Fox Business Network:


He says a Facebook fan is worth $136.38, taking into account factors like spend, loyalty, recommendations, earned media value, and cost offset for fan acquisition.

The Value of a Facebook Fan

Back in February, a report released by ChompOn (which just partnered with Loopt its interesting new u-Deals offering), proclaimed that a Facebook Share was worth $14, while a Facebook “Like” was worth $8. That’s compared to a tweet being worth $5 and a Twitter follow being worth $2.

“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,” the firm said. “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.”

ChompOn Puts Value on Tweets, Likes, Shares, Follows

Last year, a study from Virtue found that Facebook fans are valued at $3.60 each in earned media for brands. The study was debated, but interesting nonetheless. “Despite the formula flaws, I do think it’s a good start to something many marketers are looking for – i.e. what’s the return on investing budget and human capital on a Facebook fan page?” wrote Yahoo Sr. Manager of Community Marketing Michael Brito in an article we ran about the study. “In fact, working on the brand side for many years, this question arises daily.  And, the reality is that we may never know the true value of a fan because human behavior changes all the time and technology isn’t quite there yet; not to mention the possible privacy implications.  I do feel that calculating fan value needs to involve more than just impressions.”

Brito took the formula used to come up with that valuation, and ran it for some major brands at the time. Based on this, Coca-Cola fans were wroth $0.96 a piece. YouTube fans were worth $1.92, Adidas fans were worth $2.40. NBA fans were worth a whopping $8.22. The formula used went like this:

1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000
$300,000 x 12 months = $3.6M
$3.6M / 1M fans = $3.60

Feel free to poke all the holes you want in any of these studies. Augie Ray at Forrester Research once wrote on “why the question of Facebook fan valuation is problematic”:

  • Assumptions:  The methodologies for estimating the value of a Facebook fan rely on a host of assumptions, but every audience, brand and program is unique. For example, the value of a fan for big-ticket items cannot be the same as a fan for lower-consideration items.
  • All fans are not equal:  Every individual has a unique social graph and a unique voice.  I might be considered influential on topics of social media and marketing, but my opinion on floor mops might hold little influence within my set of friends and followers. One’s value as an influencer varies from category to category.
  • Acquisition matters:  How a fan is acquired makes a difference.  A fan that organically “likes” a brand has more potential value than one that is encouraged to click the “like” button in exchange for a coupon or some Farmville bucks.
  • Cause and effect:  Which came first, the chicken or the egg?   Do Facebook fans spend more, or do people who spend more become fans?  If the former, then Facebook fans are generating new value, but if the latter is true then Facebook fandom merely reflects existing value rather than creating new value for brands.

Of course Facebook has continued to grow tremendously since most of these even came out, and user behavior has also changed (strictly in the sense that you can’t assume that everybody is using Facebook exactly the same way they were using it a year ago) so even if it was dead on, it’s possible that things have changed.

The “Filter Bubble” is worth considering. This is a concept we discussed in an article earlier this week, based on a TED talk given by Eli Pariser. Basically, this is about the content we consume becoming more filtered because it’s being tailored to us on a personalized level by the sites we use – including (and especially) by Facebook. Pariser quoted Facebook CEO Mark Zuckerberg as saying, “A squirrel dying in front of your house may be more relevant to your interests right now than people dying in Africa.”

Zuckerberg’s point is that Facebook wants to give you the information most relevant to you. It does this by not showing you everything from all of your friends and Pages in the news feed. In terms of Facebook fans for a page, it’s worth considering that all of your messages might not find their way to all of your fans, simply because Facebook may filter some of them out of their news feeds. You can’t expect all of your fans to go to your page on their own on a regular basis.

There are ways to improve your chances of getting in the news feed. In another recent article, we discussed “EdgeRnak,” which is the basis for Facebook’s News Feed algorithm. A report from Buddy Media, which has built a business out of creating Facebook tools for businesses, and counts many major brands among its clients, provided these tips to keep audiences engaged. Posts with higher engagement are more likely to appear in the News Feed:

1. Ask questions
2. Post games and trivia
3. Interact with fan engagement
4. Incorporate wall sapplets (polls, coupons, etc.)
5. Incorporate relevant photos
6. Relate to current events
7. Incorporate videos
8. Post content for time-sensitive campaigns
9. Include links within posts
10. Be explicit in your posts

In social media in general, you might say you get back what you put in. Earlier this month, we ran an article from Brian Solis, who said, “Social media is as effective as its design. The ability to deliver against brand lift, ROI, or an established set of business and operational metrics and KPIs is all in the design. I believe you can not measure what it is you do not, or do not know, to value.”

He pointed to a study from Vocus and MarketingSherpa, which looked at the effectiveness of various social media marketing tactics, finding that effectiveness very much reflects the degree of difficulty for different strategies. In other words, it’s probably not going to be as effective if it’s really easy, but if it takes more effort, it’s likely to work better. Here’s a graph from the study that illustrates this:

Solis offered the following tips:

1. Start by understanding who you’re trying to reach and what it is they value

2. Design programs that meet the needs of each segment

3. Dissect the keywords and clickpaths of your desirable segments and develop a thoughtful SMO program

4. SMO is only as effective as the content and destinations its meant to enhance. Develop content and click paths that matter and deliver value on both sides of the transaction.

5. Identify the individuals and organizations that influence your markets. Learn what it is they value and develop engagement programs that offer tangible value (what’s in it for them and their audiences).

6. #Engage

In reality, it’s hard to say with any confidence that every Facebook fan you have is worth a set amount of money to your business. People may even forget that they even “like” your brand over time, if it’s not appearing in their News Feed frequently. That said, it does seem pretty clear that there is value to be had in Facebook fans if you’re willing to engage them and give them reasons to value you. Value isn’t a one-way street.

Maybe you should look at the brands you “like”. Why do you like them? What’s in it for you? If you have a good reason for “liking” a Page, they’re probably doing something right. Are you doing the same things right as a reflection of your own brand? Do enough things right, and the value of “liking” your page will go up for the consumer, which in turn is bound to make that consumer more valuable to your business.

What’s a Facebook fan worth to you? Let us know in the comments.

Facebook Fans Worth 20 Yearly Site Visits, $136 A Piece?
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  • Chris54

    I have a hard time of taking any of this seriously.

    I know people who “like” brands, just beacuse it’s easy to do, everyone else does, it adds material to your boring facebook or it might get them a discount or something for free. At what point does one person’s likes have no value – 20,50,100? How many people “like” just about everything they see online? If I don’t like any brand on facebook or don’t follow any tweets, does that make me less of a consumer. Even with this article, you have a chance to “like” it. I read 30 or 40 articles today (on this and on news sites)…..if I “liked” all of them (which I may have), wouldn’t the value of the “like” diminish with each additional “like”?

    Well that’s my 2 cents.

    • http://www.webpronews.com/ Chris Crum

      While I certainly agree that any of the studies should be taken with their respective grains of salt, especially when it comes down to specific numbers (I think Augie ray’s comments in the article take care of this well), i have to disagree with the comparison of “liking” a particular article to that of “liking” a brand’s actual Facebook Page, which gives the brand an opportunity to push more messaging out to the user.

      Not “liking” a brand on Facebook doesn’t make you any less of a consumer, but it does make you less connected to that particular brand.

      • Chris54

        I might like a article, but I doubt that any (of my) friends or family would care.

        The thin line between brand engagment and brand advertising/marketing, is being assulted daily, and from what I see, many do not see the difference.

        Just as the difference between having and liking.

        I might use facebook, but I do not like it.

  • http://www.reameasures.com John Burnham

    This is very interesting research, but it is also a classic wishful thinking argument.

    Of course people who like a brand are more likely to “like” it on Facebook or become a fan of its Facebook page. Of course, people who like a brand are going to spend more on a brand and visit that brand’s website more. It took an extensive study to figure that out? But why would a person “liking” a brand of being a “fan” of a brand on Facebook cause them to spend more on that brand? The “value” from a marketing perspective of a particular advertising or marketing effort is how much it moves the needle. How many people who visit a “friend’s” Facebook page will visit the brand’s website and will they buy the brand because of this?

    As others have said, “not all fans are equal”. Some people have much more sway when they make a recommendation than others. Some people actually may have a negative effect on visits, if some of their “friends” on FB know the person has very different tastes.

    We need causality to justify spending money on FB marketing. That’s a high standard to meet. I don’t think this research, as interesting as it is, gets us there.

    • http://www,theanaloguerevolution.com Pete

      I think you hit the nail on the head there, it is cause and effect. Many of the stores or brands I have liked on FB I liked and was highly likely to spend money with anyway, I suppose it just strengthens the relationship (lets them market more to you!)

      Also I think the value depends entirely on what it is that is being liked and what the brand does with it. A brand may have 1million likes but never posts anything whist another may have a few thousand but a very active and engaging FB page, these Likers would have far more individual value.

  • http://www.oldshopmanuals.com Paul

    If the visitor to my Facebook page is a targeted prospect,the value of that visit is tremendous.Not only will there be a possibility of a sale of merchandise derived from that visit,it might also be multiplied by a recommendation to a friend of that visitor.And isn’t that what drives the Facebook frenzy?

    Thanks,
    Paul
    www.oldshopmanuals.com

  • http://www.walkupright.com Eric

    Good article and analysis, Chris.

    My beef with social media metrics analysis has always been that it assumes a “trickle down effect” from the top retailers to all other businesses.

    There’s no real way to “scale down” analysis of the Top 100 retailers in a way that meaningfully displays the Facebook potential for SMBs.

    I understand that the top social media strategists work with the world’s top brands. But making claims in webinars to anyone who’s not in the Fortune 500 makes millions of people feel like they’re missing their own piece of an incredibly large pie.

    Understanding/valuing traffic from Facebook into a website is tangible. But beyond that, it doesn’t do the industry any good to make lofty claims based on brands like Coca Cola people already use daily/weekly. It’s freakin Coca Cola– some people have been drinking 4 a day since 1950. Big brands in social media start on 3rd base and act like they hit a triple! :)

    • http://www.webpronews.com/ Chris Crum

      Certainly a valid point. I think the MarketingSherpa info might be the most useful of the bunch though – the one that shows effectiveness based on how much you put into it.

      • http://www.walkupright.com Eric

        Yes, agreed!! Thanks for your reply.

  • http://www.optimalconversions.com David Brooks

    A “like” on Facebook is not so innocuous. Think about the significance of a “like” for Sarah Palin vs. Barack Obama? On FB, a like is a very public statement of allegiance that has instant implications and consequences within your circle (clique) of friends.

    When someone publicly declares their fidelity to a brand, they can’t help but act on that (and buy more). To do otherwise would raise painful cognitive dissonance.

    • http://www.webpronews.com/ Chris Crum

      The spreading of “likes” to friends is definitely a point worth considering.

  • http://www.jewelleryonlinestore.com.au shags38

    That sort of advertising appears to be very expensive by comparison to more target market specific alternative forms of online advertising. Is the Facebook phenomenon overrated such that advertisers are forking out their money without really quantifying the results?

  • http://get-business-online.com/ Gal

    This is all well and good for big brands and chain retailers, but of course, they are the only ones who can afford to pay for hot-shot analysts to fiddle with their data. For your everyday small business, branding is a pretty useless exercise and these stats likely don’t apply.

    For small business, Facebook influence is not an average of some sort, it’s make or break stuff. If fans flock to their page, they get overwhelmed with sales, but if they don’t, well…

    • http://www.webpronews.com/ Chris Crum

      Not sure that I agree with branding being a useless exercise.

  • Wayne Tempel

    As for me, I clearly think our value should be substantially of more worth considering Mr. Zuckerberg has made his fortune by selling our personal information. I think we all deserve a small piece of that big pie he’s got!

    • http://www.webpronews.com/ Chris Crum

      Well, the IPO is expected.

  • http://www.lightbulbinteractive.com Dave culbertson

    This is just too vague. I’ll take double opt-in email subscribers over Facebook fans and twitter followers any day.

    • http://www.webpronews.com/ Chris Crum

      That’s a whole different conversation. Email is still very powerful.

  • http://awesomize.me/eliasshams Elias Shams

    HA! Interesting view on the Fans. Never looked at it that way. For sure, Social media is here to stay for good. Given vast variety of the existing channels to choose and stick with, it’s time for such a hot space to enter into a new category.

    Here is my 2sents on this whole internet -> search Engine -> Social media things and my rational on why there is a need for a portal to provide a quick and intelligent decision for both the consumer and the companies about their online connections. A Platform to Help us to Distinguish Our Quality vs. Quantity Friends, Fans, Followers, and Companies:

    - Early 90s: WWW was born…
    - Mid – late 90s: Yahoo & Google were born to help us to find the right pages on the WWW…
    - Early 2000: Social media was born…
    - Late 2000: There are now millions of pages created by people, companies, and organizations on all these social media channels.
    - 2011: We are back to early 90’s

    That is why I built awesomize.me to accomplish such a mission – the portal to all your existing social media channels.

    Elias
    CEO & Founder
    awesomize.me

  • http://dorkville.wetpaint.com/ ed the law

    A fan on Facebook is worth exactly what they paid to be a fan – NOTHING
    Facebook ‘likes’ are meaningless, the same statistical worth as spambots.
    PR people and advertising hot air salesmen may claim this shows brand loyalty, but it’s only a way to convince the gullible that they are “digital” or “interactive”

    • http://www.webpronews.com/ Chris Crum

      I’d have to disagree. As simply a Facebook user, I read updates from numerous brands I follow every single day. That’s got to be worth something. I must have more value as a consumer to these brands than a spambot.

  • http://www.gestograma.net/ Nikolas, gestograma de embarazo

    He says a Facebook fan is worth $136.38, taking into account factors like spend, loyalty, recommendations, earned media value, and cost offset for fan acquisition.
    Excesive Price…

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