At the moment, there is much discussion going on about the actual ROI of a social media presence. Many businesses going social are not sure how to measure their social media efforts and this makes them question how much to invest online.
However, making some research on the subject, we found that the Danish company named Digital Works has recently published a great article about the actual value of a Facebook fan in their newsletter. They have gathered some interesting cases where several companies have decided to examine and analyse the value of a Facebook fan.
I’m sure that this is great knowledge for many businesses engaged in an online presence, and that it’s something which might make the end of doubting that social media has a great impact on today’s brands.
Further, I think we can all agree on the fact that it’s a lot easier to relate to exact numbers and results, so here I will go through the studies presented by Digital Works together with including some more information from the research.
The monetary value of $3.60
According to social media specialist Vitrue, a Facebook fan base of 1 million translates into at least $3.60 million in equivalent media over a year. This result is made on the basis of impressions generated in the Facebook news feed, where your see the recent updates from your friends and pages you fan.
Vitrue analysed Facebook data from its clients with a combined 41 million fans, and they found that the majority of fans yielded an extra impression. This means that a marketer posting twice a day can expect about 60 million impressions per month through the feed on Facebook.
Further, Vitrue reached the conclusion of the exact amount of $3.6 by working off a $5 CPM, meaning a brand’s 1 million fans generate about $300,000 in media value each month. As they use as an example, this equals that Starbuck’s 6.5 million fan base is worth $23.4 million in media annually.
The monetary value of $136.38
Another suggestion to determining the value of a Facebook fan is made by Syncapse, a Social Media Management & Technology Partner. This company has created a paper about the subject, where they primarily have studied the variables below to reach a solution. And I think these are some very essential points to take into account in order to understand a pattern of behaviour of Facebook brand fans:
- Product spending
- Propensity to recommend
- Brand affinity
- Media value
- Acquisition cost
Naturally, this also means that they have made use of fans of some of the big brands on the social network in order to create the most accurate picture of what a fan is actually worth. From examining how much money fans and non-fans respectively spend on a given brand, Syncapse has found that the monetary value of a Facebook fan is placed at $136.38.
What is also interesting to emphasize from the paper, is the following key findings:
- On average, fans spend an additional $71.84 on products they are fans of compared to non-fans.
- Fans are 28% more likely than non-fans to continue using the brand.
- Fans are 41% more likely than non-fans to recommend a fanned product to their friends.
1 fan = 20 visits on website
… This is the conclusion made by Hitwise, an online competitive intelligence service. For retailers, each new fan acquired on Facebook should be worth 20 additional visits to your website over a year.
How Hitwise reached the conclusion of the fact that 1 fan = 20 extra visits was based on their data combined with data from social media experts Techlightenment. They 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. However, you can read more about this right below.
What to keep in mind
What is important to remember from the above mentioned research, is the fact that we are all different. Not least is fan value one factor to your brand and another factor to others, but a fan base is also unique. Individuals have different online patterns of behaviour.
With this in mind, it’s therefore crucial to consider what you are striving for. Define a plan for your social media presence, and know what you want to obtain. You have to know what system of measurement you should count on to maintain a continuous overview of your presence. In this way, you’ll also be able to create an overview of what is working for your brand and what makes your fans engage with you.
Keep in mind as well, though, a social media channel is only going to be a success if you interact with people. Don’t expect people to “like” you and recommend your brand to others without making an actual effort. And what can also have an impact, is which time and day you post during a week. Figure out what has the greatest effect in exactly your business, since this plays a great role when reaching out to a fan base.
… And please, let us know what you think about these results 🙂