Value of a Facebook Fan – Still Worth Considering?

Over the last year, chatter between brands and agencies continues to circle around the top of the defining and understanding the value of a Facebook fan.  There is no direct answer given the multiple of impacts that go into a Facebook brand strategy.  Many fans are gained through a combination of organic growth and paid acquisition - in light of GM’s announcement that it will no longer use Facebook ads, will other brands follow suit and change the conversation again on the value of a Facebook fan?

No Standards

The “value of a Facebook fan” specifically or more broadly the “value of anyone linked to a brand on a social platform” has not been defined by the industry.  Within industry debate - none of the methods are able to assign a holistic value to a fan or a “like” given the many potential positive effects of advocacy and sharing behavior by fans. Instead many fan ROI models aim to attribute only some part of the total value. There methods are quick to assign a value number to a fan or like, but these are rigid formulas that do not take into account the dynamic ecosystem of Facebook and social media in general. Overall exposure to social media, in combination with other online platforms, earned media and ad formats, increases average sales impact as well as brand awareness, purchase consideration, and brand favorability.

It All Goes Back to Business Objectives

To try and frame “value” for fans, first reexamine what business goal social media supports? It is only by dissecting that goal that we can understand what value would be meaningful to derive from – and attribute to - Facebook fans or “likes.” There is a difference in “value” based on how engaged a fan is, yet different types of fans deliver different types of values and collectively make for a whole, composite community. So what is value in the context of the Facebook fan or like? There are three different types of value: Amplification; Equity; and Spend. Amplification

• The value of a Facebook fan can be viewed in the number of people one fan can inspire to learn more about the brand or how many non-fans they endorse the product to.  The influence of a trusted recommendation will have a higher long-term value versus one transaction inspired by traditional advertising. Of course, one recommendation for the Lexus brand might have a high ROI than one recommendation for Bic given the products’ price points.

Equity

• The value of a Facebook fan can also be in their level of brand awareness. Different levels of engagement will exist across a large Facebook community but each fan came onto the page recognizing the brand at the entry point, driving engagement will likely increase brand equity.

Spend

• Value can be tied to a monetary spend. If a brand has e-commerce directly tied to their Facebook page this tracking is much easier than company that is brick-n-mortar based only. Without e-commerce, identifying what sales data and tracking is possible to tie back to social media efforts over a timeline is the first place to start. Future tracking could include exclusive promotions on Facebook that track ROI separately.  While there may be a gap between online marketing and offline sales, don’t despair – it might be more closely to not be on Facebook at all.

Don’t Forget

The value of a fan debate is all about online impressions, interactions, and influence – don’t forget the power of IRL impact.  IRL or In Real Life – are the very tangible conversations and actions taking place in the real world, often impacted by actions and interactions on social media.  If you are able to apply a framework to measure the value of a fan for your company, don’t forget the value of a fan fluctuates month to month, is always unique to that fan, and is changes based on your tactical CTAs. According to online analytics done by Comscore and Facebook, a fan is worth the sum of his or her friends. This is because when fans like or comment on a brand’s post, their friends see the brand being endorsed by a connection. Here is a list of a few other related articles:

1. Your Brand Has Thousands of Facebook Fans, How Much Is That Worth http://www.fastcompany.com/1743875/your-brand-has-thousands-of-facebook-fans-how-much-is-that-worth
2. Social Media Key Influencer in Multi-Exposure Purchase Path http://www.emarketer.com/Article.aspx?R=1008845
3. What’s a Facebook Fan Worth? Does it Depend on How Many Friends they have? http://adage.com/article/digital/a-facebook-fan-worth-depends-number-friends/228923/
4. Proof that Facebook Fans are Worth More to Brands http://forrester.typepad.com/groundswell/2012/04/proof-that-facebook-fans-are-worth-more-to-brands.html
5. What Your Klout Score Really Means http://www.wired.com/epicenter/2012/04/ff_klout/all/1