Putting a value on Facebook
It's been the ultimate question facing an entire industry since social networking exploded a few short years ago: how, exactly, can we put a dollar figure on this?
Nearly every major American company with a meaningful consumer base and a coherent online strategy is somehow active on Facebook, Twitter, and the like. Some do a much better job than others, but there's certainly a sentiment out there that goes something like, "Gee, we ought to be doing this... so we'll do it."
There are a lot of brands out there driving real consumer engagement, and coming up with creative ways to take advantage of the social network ecosystem. But what's it worth? The biggest problem we encounter when attempting to answer this question is a simple one: how to frame the question itself. A pair of recent studies determined to discover the value of a Facebook fan prove how difficult it still is to quantify social network behavior. From the FairWinds Blog:
Virtue, a social media management company, put out a study recently that revealed that Facebook fans have a value of $3.60 apiece for big brands. The company based their valuation on how many impressions a wall post receives given the number of fans a page has.
Meanwhile, at GigaOm:
An average fan is apparently worth about $136.38, although for some very successful social marketers the value can be dramatically higher, while for some less successful companies it can be virtually zero.
Now those are a couple of very different valuations. The first number is, as the excerpt mentions, based on impressions; in other words, the value of reaching eyeballs. That second number is essentially derived from conversions; the dollar values were drawn a survey of purchasing behavior by fans of the top 20 brands on Facebook. There's interesting symmetry here that resembles a Google AdWords campaign - are we after impressions, or conversions?
Clearly, the answer will depend on context, and the specific goals of a company or brand. The specific numbers here - $3.60 vs $136.38 - are far less informative than the divergent framework of these two studies. They're both perfectly legitimate ways of looking at the problem, but probably don't stand up as well on their own as they would if we could merge the results in a customized way that makes sense for an individual company.
So what is a Facebook fan worth? Something, that's for sure.