Tuesday, April 13, 2010
What is a Facebook Fan Worth?
Amid all the talk about earned media—the additional exposure a brand gets from having its message passed along virally online—it has been challenging to assess the value of those added mentions when someone discusses a brand message online. Vitrue, a social media company, this week released results of a study that found that the average value of a Facebook fan is about $3.60.
According to Adweek, Vitrue determined that:
On average, a fan base of 1 million translates into at least $3.6 million in equivalent media over a year. The company’s findings are based on impressions generated in the Facebook news feed, the stream of recent updates from users’ networks.
One interesting finding highlighted in the Adweek article was that some brands’ fans are far less valuable, especially if the fans do not pass on messages very often. Vitrue attributed that to the brands not being as sexy or compelling as other brands, with less access to their fans’ news feed. However, I think there’s another factor, which is simply that brand messaging that appears in the news feed needs to have a strong call to action, whether that means commenting, passing along, downloading a coupon or some other activity. The more a brand can get its fans to interact with the brand via the news feed, the more chances those actions will spread virally to friends of fans.
Take Skittles, one of the top brands on Facebook, with over 4 million fans (including myself). A recent item in my news feed simply asked “So what’s it like to Fizz the Rainbow?”—a reference to a fizzy variation on the Skittles candy. Within two hours there were more than 250 comments and 530 “likes” from brand fans. Notably, many of the comments were negative.
Other brands appearing in my news feed garnered far less commenting activity. A post from Dove, inviting people to register for a sweepstakes themed to the TV show “Glee,” had just 6 comments and 23 likes from its 131,000+ fans within an hour.
As eMarketer senior editor Nicole Perrin says in her recent piece called “What You Need to Know About Earned Media” (part of a series of social media briefs available to eMarketer Total Access clients):
“Building brand buzz does not require a magic formula, but it does take hard work and deep involvement. The best way? Market a great product or service.”
[...] This post was mentioned on Twitter by Samson Adepoju, Pritesh Patel, topsy_top20k_en, topsy_top20k, Shawn Vallejos and others. Shawn Vallejos said: #news @emarketer What is a Facebook fan worth?: Amid all the talk about earned media—the additi… http://bit.ly/aJnAxt #marketing #digital [...]
Interesting. I imagine that based on your target market, expectations for comments and sharing would shift as well. Skittles targets kids who are likely to comment, while Dove targets adults who are less likely to comment. I’m generalizing of course, but demographics definitely plays a role.
Interesting valuation reasoning and discussion about Skittles Vs. Dove brands, which I agree resonate and go after very different demographics with very different engagement styles. The thing to remember is that Facebook is first and foremost social media.
I am aware that Facebook is an ad supported model which keeps its use free for its 400M+ users and that to Direct Response advertisers, Facebook is the second coming of MySpace.
Successful brands engage Facebook users and create fans in a way that meshes with their social habits. Unlike Search where many people are seeking product and services information and in some cases, looking to buy, social media users are looking to be social. Message and delivery must be fun and fit with the audience engagement style for success.
Though you may get additional EARNED media as a result, let’s be clear that Facebook is really an OWNED media. Important distinction I think….
When are people going to learn that it’s not a good way to grab headlines by issuing a press release with flawed study ? I’m talking about a study that was done by Virtue a social media company that found that the average value of a Facebook fan is about $3.60. This study is flawed in so many ways that it actually should send prospects running away from Virtue because they obviously don’t understand Internet marketing or social media.
http://www.richsblog.com/files/070b0728c5d996a404badc750de70ac4-477.html
Rich,
It might also be worth mentioning that you have replied to a “flawed” study using the incorrect name of the social media company you are knocking. The company’s name is Vitrue, not Virtue. Speak freely, but feel free to check your sources before you throw a sucker punch…
Additionally, you should run a grammar check when you publish a blog. In the world of free speech, there is still VIRTUE to be found in proper grammar.
In closing, the 75% you reference in your blog is vague and unsupported: “data suggests that over 75% of brands that use social media are going to fail.” Where is your data coming from? Cite a link so that the discerning reader may come to that conclusion.
P.S. Thanks for the shameless plug to your own blog, which I will NOT do to bolster my readership.
Sincerely,
Virtuous Reader
Thanks for the comments on my post. I wanted to add that Vitrue has published its own blog post, with more details on how it came up with the $3.60 number. You can find it here: http://vitrue.com/blog/2010/04/14/360-facebook-fan-valuation-is-just-the-tip-of-the-iceberg/
Stacey — good point about the distinctions between earned and owned media. My POV is that a marketer’s fan page on Facebook is their “owned” media since they control that page and what goes on it. However, when Joe Smith comments or likes an item that a marketer posts, that action appears in the news feeds of Joe Smith’s friends. That’s the earned media part of it; the marketer didn’t pay anything at all for the additional impression to appear in Joe’s friends’ news feed.
Debra
In this often cliched ‘Global market’ – we all still exist and operate in our local ecosystems. As much as we might want to believe that Facebook is a ‘global’ tool – it has very many local flavours to it, depending upon the market where Facebook is being ‘consumed’. A question therefore to the experts – will the value of a fan be still $ 3.60, even if he is in say an Indian market or a Chinese market? Also from what i understood of the study is that it isnt really a ‘valuation’ but a media apportioning of the impressions – which therefore means that we arent really ‘valuing’ the ‘fan’ on the facebook page. For I am sure for a fan who is joining an active brand page on Facebook is a lot more than $3.6 (given his entrenchment with the brand, his ability to promote the brand and his assured re-purchase probability of the brand). Any thoughts?
Do the math. Dove actually did better than Skittles.
If you want to call facebook comments a response, then:
Skittles had a ‘response rate’ of 1 in 16,000.
Dove had a ‘response rate’ of 1 in 6,000