Working Out The Value of a Facebook fan

Facebook August 12, 2010 4 Comments




Evaluating the cost of a Facebook fan/Like is something that every brand or advertiser has an interest in. It’s something that’s frequently mooted about when exploring the ROI of social media, or exploring metrics such as AVE. It’s an incredibly tricky metric that must be approached carefully, if at all. It’s also important to remember that there are 2 areas to explore when it comes to establishing a value of a fan : their perceived media value/equivalent and their actual monetary value to a brand, that is how much they’re purchasing or intend to. So how do you calculate the value of a fan or is it fruitless to try?

A study was done by a media monitoring agency – Syncapse – earlier in the year, to establish how much a Facebook fan is really worth to a brand, in terms of how much they would spend. In the study, 4,000 panelists were surveyed and asked their attitudes to the top twenty brands in Facebook including Gilette, Dove, Adidas and Nike. Key findings in the report are that users spend an additional $71.84 on brands that they are fans of on Facebook and that fans are 28% more likely to continue to purchase from brands than non-fans. The full report can be accessed here (links to pdf) which details the methodology and study. So just how much is a Facebook fan worth? $136.68 , according to them.

This obviously varies depending on how active the fan is and there’s key factors that need addressing. What’s important is the content that’s on your page and just how engaged your fans are. Then you start to get other factors such as impressions in newsfeeds, propensity to recommend, sentiment as perceived by your friends. This is where it starts to get tricky. What  needs addressing is the role that Facebook plays in the purchasing cycle. In reality the user is completely removed from an intent to purchase, unless this is being actively promoted through the page itself, through a discount code or similar mechanic. There’s also a big elephant in the room. If you’re going to become a fan of a brand, would you not already be comitted enough to them to purchase anyway? Or be a long-term customer? When you’re start putting all these variables together and the fact that it is highly dependent on the individual page, you realise that it’s a fairly complicated figure.

Media Value of a Fan

An area that’s certainly closer to the function of Facebook itself, is the media value of a fan. Just what are they generating for you that replaces or outperforms traditional media coverage? Here, lots of effort has also been made to examine the earned media value as a way to measure the performance of your page. Another social media company has focused on this, developing an online tool that allows you to calculate this for any Facebook page. The Social Page Evaluator works to a calculation to evaluate the annual media value of a brand’s Facebook presence. I tried it out for Simply Zesty, results below :


This a nice figure to have, but in my opinion the site needs to offer more context around this and in particular how you can reach the potential value. I’m left feeling a bit confused with this figure, because I don’t think it really tells the full story. Again it points to the difficulty of attributing a traditional model to a new medium. And when you consider facts such as recommendations from a trusted contact being the biggest impetus to purchase, there needs to be more thought behind this. I’m just not quite sure that it’s something a tool can really calculate, though I’m sure this will be used by agencies to compare their clients to their competitors!

Cost Per Like

The next thing to consider is how Facebook tailor their advertising to fit with these methods. If you know the value of a fan to you, then how much would you pay for them? This isn’t something currently offered by Facebook, who typically operate on a CPC or CPM model for their targeted ads. But it is something that many media buying companies are adapting for their clients. And you can understand why. It brings it back to black and white – I can pay this much and get this in return. It’s an advanced practice of measuring social media that unfortunately ultimately devalues the purpose of Facebook in the first place. It turns it simply into a place for monetary exchange and takes away from the real value of it, for creating engaging content and building a community around your brand. It sort of cheapens the whole thing.

Working out the value of a fan is certainly a tricky business, with so many variables and intricate factors that are impervious to measurement themself. And since Facebook have changed from ‘fan’ to ‘Like’ I’d argue that if anything, the value of a Facebook fan has become less. Even though it’s something as simple as a Language change, people are now Liking all over the place and it signifies, to many, less of a commitment than becoming a fan. The true value of a Facebook fan is yet to be proven, if it ever can be.

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