Interesting article by Brian Morrissey of AdWeek as based on impressions generated in Facebook's news feed. However, unless you are a rather large brand, I'm not sure how much this applies to most organizations. Blanked statements like "each Facebook fan = $3.60 " is a catchy headline but does it really make any sense?
I would argue the the most important factor for smaller businesses, politicians and nonprofits is the simple fact that Facebook can go a long way in improving customer relationships and promoting new products and service.
Articles this like are simply the old guard attempting to normalization things. The power of web analytics and your customer data isn’t about coming up with normalized numbers to apply blandly across all consumers, but about segmentation, detailed analysis and accountability. It’s about understanding and activating your true client base, and not necessarily treating them all the same.
Share your thoughts on the following article...
Brands have rushed to Facebook to build fan bases, with some amassing millions of connections. The nagging question has been: What is the monetary value of these fans?
Social media specialist Vitrue, which aids brands in building their customer bases on social networks, tried to put a media value on such communities.
The firm has 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.
Vitrue analyzed Facebook data from its clients -- with a combined 41 million fans -- and found that most fans yielded an extra impression. That means a marketer posting twice a day can expect about 60 million impressions per month through the news feed.
"It's important to understand that once you build that fan base, you want to make sure you're leveraging it," said Michael Strutton, chief product officer at Vitrue.
Not all brands are created equal. Vitrue found wildly divergent impression-to-fan ratios. Some marketers generated just .44 impressions per fan, while another saw 3.6 impressions. Strutton chalked that up to sexier brands having more engaged connections, giving them access to the news feed more often. The impressions are not unique.
Vitrue arrived at its $3.6 million figure by working off a $5 CPM, meaning a brand's 1 million fans generate about $300,000 in media value each month. Using Vitrue's calculation, Starbucks' 6.5 million fan base -- acquired in part with several big ad buys -- is worth $23.4 million in media annually.
"It helps [marketers] justify the spend they're making, especially in acquiring a fan base and engaging that fan base," Strutton said.
"When you start to [add] engagement value, it goes higher," said Strutton. "We were trying to get an easy-to-understand valuation terminology."
Posted on
Wed, April 21, 2010
by Thomas Frank