Social media marketing platform company Vitrue has determined that the average value of a Facebook ‘fan’ is about $3.60 in equivalent media each year. This calculation is based on having one million Fan Page fans, and is not weighted for brand recognition.
In some figures published in AdWeek, Vitrue revealed how they determined this per-fan value. They made their findings based on the aggregated fans of their client base for their Wall Apps Facebook applications, which is part of their SRM (Social Relationship Manager) software suite. Collectively, Vitrue’s clients have 41M Facebook Fan Page fans. Their study results show that companies with a fan base of 1M find an average return of $3.60 per fan in the form of “equivalent media,” spread out over a year.
The numbers work like this. If a brand posts to their Facebook Fan Page twice a day and have a million fans, that’s 60M impressions per month in the collective “news feed”. Vitrue used a figure of $5 CPM (Cost per Mille, aka Cost per thousand impressions), so 60M impressions would result in $300K/month of media value. I.e., what the brand might have to spend elsewhere to get the same eyeballs. That $300K /month is $3.6M/ year, meaning that with 1M fans, the average value is $3.6 per fan.
These numbers are just averages, but the general statistic is important to those who need to measure social media metrics. Brand notoriety seems to play a part in whether all companies realize the $3.60/ Facebook fan value, or go above or beyond. E.g., a popular brand might get additional impressions from the Facebook news feed, partly because of fans sharing information with friends.
If you want to learn more about Facebook Page-related promotion opportunities, have a listen to our sister site MediaBistro’s podcast interview with Vitrue CEO Reggie Bradford, from early Mar 2010.
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There numbers are nice but if you check them a little bit more you will see. There are number of facts that can take these analyses up and down:
1. Most of the commercial companies doesn't post twice a day. If they will – the fans won't interact with them and they will disappear in the "most recent"
2. No one can assure the companies that the post will appear in the news feed
3. Most of the post have more impressions then fans (according to number of our fan page)
4. The value of content impressions is much higher then premium display ads.
Comment by Etgar Shpivak — April 14, 2010 @ 4:54 am
simple algebra just cannot be that simply used in coming up with these figures!!
Comment by Y.Can Akbulut — April 14, 2010 @ 2:52 pm
Etgar: Absolutely, you're right. Remember, these aren't my numbers but Vitrue's. I was merely trying to explain the math behind them. They averages, and Vitrue did point out that some brands managed to squeeze out extra impressions — probably as a result of sharing by friends of fans. Some brands received less, maybe due to fans blocking select feed items.
Y.Can: Really? Why not? Vitrue came up with that $5 CPM figure. The rest of the math is pretty simple.
Comment by Raj Kumar Dash — April 14, 2010 @ 3:32 pm
Hi Raj
The main issue is that this model fit more to media providers than commercial companies.
Comment by Etgar Shpivak — April 15, 2010 @ 7:08 am
I think the bigger issue is how much are we worth to Facebook, because at the end of the day the bigger layer of monetization is that Facebook is offering us as a commodity.
http://www.socialmediatoday.com/SMC/173961
Comment by Cody Merritt — April 15, 2010 @ 9:05 am
@Etgar: Possibly. I'm not convinced there isn't value for commercial companies, and in fact, I believe that Facebook users are worth far more than $3.60/year, each. Unfortunately, no one has come up with the best way to monetize us.
@Cody: Thanks for sharing your link. Indeed, though I guess that's possibly the "price" of getting their services for free. If Facebook monetized even 10% of users in some way, shape or form, at $100/year each, that's 40M x $100/yr = $4B/yr in revenues (compared to $500M last year?).
I'm sure at least 10% of users won't have a problem being monetized, and there are less intrusive ways to monetize some of the rest of the 90%.
Comment by Raj Kumar Dash — April 15, 2010 @ 2:22 pm
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