As social media continues to win respect and legitimacy in the hearts and minds of executives across the world and more companies than ever are looking to open up a Facebook page to take their brand “social” -a question that is repeatedly asked by brands is: What is the value of a fan? (or a “liker” in today’s terms).
This question is often asked by two very opposing camps. For those against social media, there is an inherent derogatory tone and a cynical smirk they like to use when they ask this question, however when discussing old media outlets, they never raise this question.
Allow me to explain: When a prospective client wants an indication of the value of a commercial time slot on a given network, the network will generally provide him with viewership stats, meaning, on average, how many viewers of a prized demographic can the client expect to reach during their 30 seconds of air time. These statistics are gathered and measured against market demand, and translated into a monetary figure. Major Television events, like the U.S. Super Bowl, can reap more than 1 million dollars for a few seconds of airtime.
When you take that criteria and transfer it to Facebook, it’s quickly recognized that demographics and numbers are already a feature which the client gets automatically as soon as he begins his social media path . The demographics are super targeted as members have to opt-in to become “likers” and the numbers are plainly visible for all to see. Yet for some reason, because these “viewers” (to borrow a term from television) are not viewing the commercial (post) during an actual television program, their value is presumed by social media naysayers to be less significant. If anything, the interactive nature of Facebook fans should make them more valuable, not less so. For old advertising to assume that stats and demographics are not enough information to warrant a value estimate for social media, is a clear double standard and downright hypocrisy.
“That’s right!” champions of social media will chime in, “Facebook fans far outweigh the value of any television viewer”, and thus you see such value estimates floating around the blogosphere ranging from $3.60 to $136 for the average Facebook “fan”.
The first value is based on a calculation put forth by Vitrue which takes the number of fans and multiplies them by a presumed average of 2 Facebook posts per day. You then take the resulting number of impressions and divide it by an estimated CPM model, meaning Cost per Measure – or 1000 impressions. Vitrue performed their calculation based on a fan page of 1 Million members with a very conservative $5 CPM value to come up with $3.60/ fan. I decided to see how Blonde 2.0′s (my personal company) fans’ value would measure up. Taking our own fan base of 4,270 members X (2X30) = 256,200 impressions per month /1000 X $11 (the average CPM value according to ClickZ) = $23.24 X 12 months = $279 /4,270 = $0.065 representing Blonde 2.0’s average fan value per year based on this formula.
I can tell you, being intimately familiar with Blonde’s fan value, that this figure is not anywhere near the vicinity of being accurate. Our fans are our greatest ambassadors and much of our business is generated though their word of mouth. Now how do you measure WOM? Vitrue’s model falls short in accurately predicting fan value for many companies and this makes sense given that CPM models are generally used to price traditional media ads which represent only a monologue selling a specific product and are not customized to measuring the overall value of social media. Facebook “impressions” are a completely different kind of media where more often than not, the post should be as divorced as possible from trying to make a sale and are more about creating dialogue, brand awareness and positive social conversation which indirectly leads to higher sales.
Then there is the second value model based on a report compiled by Syncapse. They are the ones who came up with the $136.36 figure stated earlier. To get this figure, Syncapse canvassed 4,000 fans from 20 major brand pages on Facebook to find out why they were fans in the first place and how they would describe their purchasing behavior. They used the accumulated data to estimate the fore stated value. The problem with this study is that individuals are notorious for inaccurate self depictions. Compound that little snag with the fact that much of advertising and branding is subliminal in nature, leaving the brunt of its effects to go unnoticed by the viewer, and what you have in the end is a very tenuous figure at best.
So, if these figures do not represent the true value of a fan, what does? The problem with answering this question is that it assumes there is some sort of generic value that every “fan” has. The truth is, there are different types and qualities of fans. There are diehard fans who are dedicated to the brand and would do all they can to promote it and there are passive fans who basically just like to be updated on what your brand is up to – and everything else in between, making a generic figure next to impossible to conjure up at this point. Nontheless, it should be noted that all Facebook “likers” of your brand are more valuable than TV viewers or any other old media audience because they themselves opted to be your fans and part of your community whereas in other media channels they were “forced” to view your brand’s messaging because they fit the criteria of your target audience.
Another important point to emphasize is that the kind and quality of likers that your page attracts is, in large part, within your sphere of influence and control. Through expert social profile management, careful cultivation of budding fans, well timed campaigns and well placed media – likers can be converted from passive viewers to your most active cheerleaders in a few short months. The operative word here is “expert”. Many companies are hearing all this buzz about social media, and fall under the impression that the mere act of opening up a Facebook page will bring in adoring fans like Kevin Costner’s Field of Dreams. The truth is, it is far more complicated than that, and takes acquired finesse that only develops with time, experience and expertise.
The value of a Facebook fan is more than just a number. It is equal to the same value you would place on someone who has agreed to become a part of your brand’s daily on-going activity for the long term and even promote it to his friends and family on occasion. The value of a Facebook fan is the same value you would place on someone who actually cared enough to show you he likes you or your actions. The value of a Facebook fan cannot be measured using the same measurement system as old traditional media. It calls for a new form of measurement which takes into account a whole new set parameters including the “liker’s” level of engagement with the brand, duration of being a “liker” and more. The value of a fan in my mind, well, is priceless.
Nice post Ayelet. You are absolutely correct that no two fans are alike. Some fans are passive and have little value, while others are great brand advocates and their value is priceless. The value also varies greatly on how the fan was acquired. The expansion of Facebook’s Open Graph and the switch to a ‘like’ button makes it much easier to acquire fans/likers, but these fans are probably not as valuable as fans that go the the brand’s Facebook page and click the ‘like” button.
Hi Eric:
Agreed. Different values should be given to different fans based on their level of engagement with the brand.
Ayelet, great post.
I’d like to make the matter a little more complex though.
While no two Facebook fans are alike, no two TV viewers are either. In fact, our Facebook fan can watch our ads on TV and someone watching our ads on TV might be(come) a fan on Facebook.
Now, with social media, it is easier to measure more than simple reach. This is much harder though with traditional media. Still, this does not mean that one has more value than the other. It might be that it is easier to activate people in the social media sphere but we cannot tkae this as a given only because it is easier to measure there.
Moreover I’m inclined to somewhat disagree with the notion that a Facebook fan is mroe valuable (besides being active). The act of becoming a fan is more of a hassle than watching an ad, that’s right. But do we know whether the TV viewer is unhappy to view our ad? Perhaps it’s an awesome commercial and viewers were waiting the whole evening for it to finally see it. And even if not, pherpas it is still delightful to them and reminds them of our brand – which they might really like regardless of whether they are Facebook fans or not. Perhaps a TV viewer doesn’t want a Facebook account but would immediately become a fan if he had one!
What does that mean?
I think it means we need to be very careful whenever we want to compare the effectiveness of any given medium with another. This can only happen when we compare the same metrics. If this is impossible we face a problem.
The issue is not that we have a whole new set of parameters. The issue is that it is much easier to measure certain parameters in the social media sphere than it is to measure them outside. “Likes” might be a metric but does the meaning of a “like” not exist outside Facebook/social media? I think it does. It is just infinitely harder to measure and comes in a thousand varieties.
TV can generate its “likes” just as Facebook can. The fact that one can like a brand on Facebook doesn’t make Facebook fans better than offlien fans. Facebook is a great tool because it has things such as the like button. Unfortunately it would be unwise for us to select our toolbox with only ease of measurement in mind.
Hi Julian:
Thanks for your nice words!
I understand your point, however, the fact that a facebook fan is more valuable than someone who is watching a 30 second commercial on TV is not related to his level of enjoyment but rather to the fact that with the TV commercial, the “fan” (as happy as he might be to see it) watches it and that’s it. After 30 seconds, it’s done. When someone becomes a fan on your Facebook page, he continues to constantly receive updates and messages from the brand, on a daily basis or even a few times a day. This is why he is considered more “valuable” – he is in your community for the long run and is therefore more “committed”.
Hi Ayelet,
Fair enough and a good point!
What we need to keep in mind though is that a viewer can see one or even different commercials several times a day as well.
We cannot compare the reception of a single ad versus an undefined time as a Facebook fan.
An ad is a message just like a single update on Facebook would be, right?
Whether a Facebook fan is in my community for longer depends on what I have to offer. This is the same with TV. Content seems to be king in both. :)
Moreover, TV viewers and Facebook fans can opt to ignore my messages. I might get lucky on Facebook when my fans start quitting – which I am able to measure. For TV it gets a little more complicated already.
So I’d still argue that we know much less about the value of a TV viewer than we know about the value of a Facebook fan (if we want to, that is).
In conclusion, I think it is truly difficult to say whether a Facebook fan is truly more vlauable. The good thing is that social media has rocked the traditional measurement world and thus we start thinking about the established metrics and what they actually tell us and what they don’t (engagement for example).
If social media makes us rethink old habits that’s great.