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If you're looking for the ROI of a Facebook fan, you may be doing it wrong

Written by Simply Zesty on

Hitwise UK have put together a study that aims to lift a lid on the question that all marketers ask themselves at least once a day - 'What is the actual value of a Facebook fan?' . There have been many, conflicting numerical figures given to this, that aim to look at ROI through traditional methods such as advertising value equivalent (AVE), but these methods don't necessarily fit the way that social technologies work. I don't think you can ever look at Facebook fans in terms of AVE, because you can't compare column inches with recommendations or endorsements to friends. So Hitwise have looked at the value that Facebook fans drive, by looking at the referral site visits. They found that each Facebook fan adds an additional 20 site visits to your site per year. The findings were based on taking the top retail brands on Facebook and looking at referral traffic from the Facebook Page, as well as looking at the increased likelihood for someone to search for that particular retail brand, after engaging with them on Facebook.

Why is the value in the click?

If you look at this figure compared to what you could drive with PPC ads for example, it pales into comparison. Think of all the time and money that brands invest in building an engaging Facebook Page. You can bet that you can drive a significantly larger amount of traffic to your site through directly paying for clicks, instead of looking at a Facebook Page as a way to drive traffic to your site. While the data from Hitwise provides a new perspective on the real value of a Facebook fan, it could also prove dangerous to brands, who move from thinking about their community as Likes to thinking about them as clicks. Approaching it in this way means that you miss the actual benefits of a Facebook Page and just how hard it can work for you, without the need to take people to an external site.

If you're constantly looking for the ROI of a Facebook fan and having to use metrics such as clickthroughs to determine it, then you're missing out on all the value it can actually drive. The propensity for someone to actually leave a Facebook Page is very low, and I'd be interested to see how many of those site visits are actually accidental clicks, as someone thought they were perhaps being taken to a competition or app within the Facebook platform, as opposed to an external site. Instead, brands should be looking at how they can drive value within the Page itself. The conversion doesn't necessarily need to happen within your site, and brands would be better spending their time at offering commerce solutions within their Facebook Page, or optimising it to drive the overall conversion, whether this is a signup, registration or purchase. By operating your Page in this way, you don't need to look so hard for the ROI of a Facebook fan, because it's all there for you to see. No sophisticated measurement tool needed, but hard data on the conversions you've driven within the Page.

The difference between visits and fans

What the data from Hitwise does show, is the amount of referral traffic sites will receive from Facebook regardless of whether they actuall have a Facebook Page. Indeed, many sites now count Facebook as the second largest referrer of traffic, after Google. This is growing at a particularly fast rate for video also, with Facebook now the second largest referrer for online videos on sites. The fact that much of this referral traffic is happening irrespective of a site having a Facebook Page, shows the vast difference between clicks and fans. Facebook is clearly splitting into two different platforms, at least for brands. You can benefit from the natural, referral traffic that will come from people sharing links on the site : this can be encouraged by having good content and making it shareable. The benefit here is what happens on your site and what you can do to keep people there. But then there is your Facebook Page, which functions in a completely separate way. You've done the hard work in getting them leave their own profile to go to your Page. If you try and then get them to click out of Facebook completely and go to your site, you're going to be fighting an uphill battle.

It's time for brands to look at Facebook differently and realise that the 'end goal' isn't just represented by a conversion on your site. There is a difference between clicks and fans and both require an ultimately different strategy to make them work for you. Facebook's internal search engine will become more and more important and this actually presents two opportunities for brands. While you can hope to get people commenting and Liking on your Page and increasing the results that turn up in Facebook search, you can also influence this from outside Facebook. If you're combining a good Facebook strategy with an equally good content strategy on your site, then you're doubling the chances that people are going to be sharing and talking about your brand within Facebook. You can hope to be a part of the conversation within Facebook, without having to start it, as you would within your Facebook Page. Your Facebook Page is the place where you keep people up to date maybe one time per day when you post an update. But the content on your site is going to be naturally discoverable all the time, and if you've integrated tools such as the Like button, then you can hope to be part of the conversation on Facebook again.

Forget ROI altogether

Of course there is the other school of thought which argues that social media will never lend itself to ROI, and that perhaps you should stop looking to drive this. The existing methods of measurement around ROI are by no means perfect : unique page views, AVE.. all have their limitations and their fair amount of criticism. The brands that are doing well on Facebook aren't necessarily employing sales tactics, to allow them to measure the benefit of their Page. While you have some companies such as Zappos that are (successfully) driving conversions and click throughs from their Facebook Page, compare this to a Page like Red Bull :

There are no sales tactics on their Facebook Page, no fancy app that invite you to mix different flavours, get a free sample etc.. Instead they focus on great content and engender a positive brand experience through the association of this content. They make Red Bull an experience on Facebook. This might all just seem like a bit of fun, but look at how fans engage with this :

In response to their latest update on the Page, a photo from one of their sports events, there were thousands of Likes and comments, and in just one screenshot above, there are two positive comments relating to the Red Bull brand. What brand wouldn't pay to have a fan say that 'live and love' your product, right there in the newsfeed for all their friends to see? This type of ROI isn't something that can ever be tracked or measured, or really even sought after. But by focusing on giving your fans a good experience of your brand, you can encourage positive word of mouth (of course taking some good with the bad). If you have a solid product and offering at the centre of it, this will in turn generate sales, even if there's not a magic button to measure it from Facebook.

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