What is the Value of a Facebook Fan?

Have you ever wondered what the value of a Facebook Fan is? You’re not alone.  An article which appeared on AdWeek last week has provided a calculation of its own.

The featured study showed that, on average, a fan base of 1 million translates into at least $3.6 million in equivalent media over a year. By this calculation then, each fan is worth approximately $3.60 of equivalent media, or what you would be spending on traditional advertising to expect to generate the same marketing outcome. At Wildfire we’ve seen many customers use our campaigns to build their fan bases for under $1 per fan and in some cases for just a few cents per fan. So for these clients the return on investment can be huge!

To obtain these numbers, Facebook data from a collection of large and small brand Fan Pages was analyzed, with a combined 41 million fans, and showed that on average marketers who post twice a day are able to achieve monthly impressions of around 1.5 times their number of fans (i.e. 60 million monthly impressions yielded from a fan base of 41 million fans). An “impression” is the equivalent of one ad view and accordingly to the study an impression using paid advertising generally costs around $5 per 1000 impressions. So according to the calculations in the study, a fan page owner that has 10,000 fans and posts content to their page twice a day can expect that they’ll receive around $36,000 in ‘advertising’ value from these fans. In other words, if this fan page owner were to try to achieve the same level of exposure for her brand during the year, she’d have to spend around $36,000. Of course, not all fan pages are made equal – some achieve much higher engagement levels than others (the study found that some fan pages achieved 3.6 impressions per fan per month and others just 0.44 impressions per fan) but nevertheless the potential exists for fan bases to be highly valuable.

Of course, this study only measures impressions. Wildfire clients achieve far more than just impressions from the campaigns they run with us – they grow their fan bases, newsletter lists, Twitter followers, website impressions and even drive store visits and sales via coupons and giveaways. So for our customers, the value they get from a Wildfire campaign could well exceed the potential $3.60 value of a fan cited in the the AdWeek article.

So what does this mean for you? Well, for starters it means that all the time and effort you’re putting into building your fan base can have a quantifiable return (and a pretty significant one to boot!). It also means that the more regularly you update your fans, the more impressions you’ll likely be achieving and thus the greater the value of your fans. Of course, this can be a double-edged sword because if you ‘spam’ your fans with content that is not relevant or compelling they’ll likely opt-out of your activity streams, thus reducing your overall impressions over time. Finally, it means that the more you can do to engage your fans beyond just impressions – for example, have them sign up for your mailing list, refer your brand to friends, claim coupons etc, the greater their value will grow. Fortunately, Wildfire’s campaigns are designed to help you achieve all these goals – sweepstakes, contests, giveaways and coupons have been shown to be one of the most effective ways to not only grow a fan base but to keep them engaged and to keep them ‘looking out’ for your brands content.