What’s the value of a Facebook Fan? - a question we are asked every day. Savvy marketers continue to invest substantial sums in building a presence on social networks like Facebook and Twitter. They clearly see the Return on Investment (ROI), and we want to help you understand some of the reasons why. So we developed the first-ever published Facebook fan valuation (also covered in this Adweek article)
According to our research a Facebook Page with 1 million fans is worth a minimum of $3.6 million in earned media annually. Honestly that’s just the tip of the iceberg as I’ll explain.
Let’s explore how we developed the Fan valuation.
Vitrue manages over 45 million fans and sampled data across varying pages from digital entertainment to retail to B2B to CPG to publishers to quick serve restaurants—in order to determine a wall post impression to Fan ratio. In other words, how many impressions can a single wall post receive? To our surprise we learned the average was approximately 1:1 (0.96:1 to be exact).
This means our 1 million Fan Facebook Page can average 1 million impressions with a single post to the wall. Factor frequency; a two post per day strategy would garner approximately 60 million impressions per month. Now here’s a metric all marketers are familiar with - we’ve been buying impressions since the dawn of the Internet.
These impressions are practically free, similar to earned media - that we are all familiar with. So our last step is to place a CPM value to our earned media. We factored a very conservative $5 CPM - how much would you pay for highly targeted impressions?
This final assumption gives our 1 million fan page $300,000 in earned media per month or $3.6 million annually.
1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000
So there you have it: a simple valuation using metrics every marketer is familiar with. But that’s not all. Facebook wall posts have social engagement such as clicks, comments, likes, plays and shares. Wall Apps such as a coupon or a poll offer even greater levels of engagement. Brands engaging their Fans stand to earn much more value, potentially doubling or tripling these estimates.
Are you feeling short on fans? I hope this simple valuation helps you see the importance of a Facebook Fan acquisition strategy. One of the fastest ways to grow your Fan base is with Facebook Ads. You can also leverage Fan exclusive content/offers and deploy engaging apps.
Are you lacking a daily wall post strategy? Are your posts garnering maximum engagement? Vitrue works with marketers large and small to maximize ROI from the Facebook wall. The Vitrue SRM (Facebook publishing system) enables your marketing team to create and schedule a daily wall post strategy. Marketers can create eye-popping posts with video, images, audio and even apps that will maximize your Fan engagement. Comprehensive reporting gives you realtime metrics on clicks, comments, likes, plays, shares and app engagements.
Are you maximizing your ROI on Facebook? What strategies are you using to grow your Fan base? What’s your posting frequency? Leave a comment and join the conversation.
I’d like to see some numbers about the cost to create a new fan on Facebook. With brands spending a lot of money on Social Networking efforts, doing prizes, Facebook ads and etc it would be interesting to know what the acquisition cost is per fan?
Thanks
Casey
[...] According to a new study released by social media management company Vitrue, Facebook Fans are valued at $3.60 a piece in earned media for big brands. When scaled to Fan Pages with 1 million Fans, that equates [...]
I manage a Facebook page with 3,500 fans. Facebook insights tell me each one of my posts gets around 20-25k impressions. Facebook defines an impression as every time the post was served. Even if they are not unique viewers, it would still count as an impression towards a CPM calculation. Does that makes each fan worth $25?
@Casey, each fan costs me between $0.50 to $3 in Facebook advertising - the better you know your audience the more targeted your advertising, and the more likely they are to convert.
Casey,
The average value of acquiring a fan tends to fall around $0.50.
- Gina
is there a source where I cam find out what the national average CPM rate is in the US?
I’m not sure how scientific this calculation is… I’d like to hear someone at Virtue respond to this http://www.communicationammo.com/2010/04/why-vitrues-facebook-fan-value-is-poppycock/
Would love to hear your thoughts on it as well.
[...] fan count, post frequency, and various fan interactions with the page and crunch the data using our original fan valuation, adding the equally vital aspect of [...]
1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000
I think this formula is a good starting point, but needs to be tailored to each organization…
Depending on the company two posts may be an ok number to use, but I don’t know if I’d say 30 days, more like 20 days (4 weeks in a month x 5 business days) in my opinion unless the company is actually employing multiple full time employees to manage their social media outlets.
For the non-profit organization I work with we typically post between 1 to 3 posts a day, so 2 posts average is fine, though we don’t have a full time social media person. It’s a part time Mon-Fri function.
So the formula for us would be changed for us to
1M impressions x 2 posts x 20 days = 40M impressions
40M impressions / 1000 x $5 CPM = $200,000
Valuing our Fans at around $2.40
@Brandon - I responded about the post you reference elsewhere but have included my response here for you.
Sean seems to be under the impression that the tool isn’t measuring real data. That is false. The SPE measures very real data, namely number of fans, posts and engagement (Likes & Comments) amongst other things. Your main contention seems to be that attempting to assign any dollar value to Facebook marketing efforts is impossible. I think your assumption is false and I’d like to explain why.
Brands and marketers still pay very real money for impression based advertising. Some impression based advertising is more easily measured than others (i.e. measuring a Google CPM ad buy might be more accurate than another medium). Let’s put aside the effectiveness of impression based advertising for a second as I think this is where your assumptions become incorrect. If a brand spends $1,000 on a banner ad on Google to get 10,000 impressions then their CPM is $10.
That $1,000 is real money spent and represents a real cost. If a brand can get those same 10,000 impressions elsewhere then that represents $1,000 in value. Facebook offers an opportunity for brands to earn their media rather than purchase it directly (that does not necessarily mean that it is free though). Different brands will pay different amounts for CPM based media buys which is why the Social Page Evaluator provides brands with the ability to adjust that value to more accurately reflect the value they place there.
Impressions are only part of the story though. I think everyone agrees that engagement is more valuable whether you are talking about clicks on Google ads or Likes and Comments on Facebook. This is where science meets art. Vitrue manages nearly 50 million Facebook fans and is uniquely positioned to understand the value generated by engagement. This insight helped inform the algorithm used in the calculation. If anything, the algorithm errs on the side of being conservative in assigning value while giving brands flexibility to adjust as needed.
The SPE provides brands a tool to better understand the monetary value that their Facebook efforts are currently generating along with the ability to see how growing fans or increasing engagement can lead to a more valuable Facebook presence.
@Casey, we managed to get 220,000+ fans for around £600.
We also had an incentive work $10,000 offered by a trustee. All in all though it’s still an amazing CPA.
Nobody in the comments has mentioned the fact that a $5CPM was pulled out of nowhere. For what is essentially a text link, it’s a high CPM and definitely out of line with what one might pay on Google’s Content Network which actually puts ads in more contextually relevant environments. Just because someone is a fan does not make that advertising highly targeted. After all, you can’t target different posts on the same profile to different sets of fans.
I wdon’t buy text links on a CPM. I’d evalutate a CPC basis.
What is the point of valuing an impression? Do you really want to make a career out of spamming people? Isn’t advertising just a form of manipulation? Is this was social networks are for — aggressive panhandling?
100 fans = $20-30. Its a lot cheaper than fb ads in my opinion!