How Much Is a Facebook Fan Really Worth?
Lots of companies — more every day, it seems — want to have Facebook “fan” pages, where customers or would-be customers can connect with them and become part of their online community. But what are those fans actually worth to a company? Everyone has their own views on that question, but now a social media measurement firm called Syncapse has come up with an actual dollar value in a report released today (PDF link). The answer? An average fan is apparently worth about $136.38, although for some very successful social marketers the value can be dramatically higher, while for some less successful companies it can be virtually zero.
Syncapse came up with the figure by asking 4,000 fans of 20 of the top brands on Facebook — including Nokia, BlackBerry, Victoria’s Secret, Adidas, Nike, Coca-Cola, Starbucks and McDonald’s — why they were fans of those companies or brands, and about their past and future purchasing behavior. Syncapse then tried to estimate what the value of each fan’s spending would be to a company, as well as the value of continuing to have that fan as a customer over time.
The key findings of the report are likely to come as music to the ears of advertisers that have been pursuing a Facebook-based social media strategy. According to the survey:
- On average, fans spend an extra $71.84 they would not otherwise spend on products they describe themselves as fans of, compared to those who are not fans.
- Fans are 28 percent more likely than non-fans to continue using a specific brand.
- Fans are 41 percent more likely than non-fans to recommend a product they are a fan of to their friends.
That probably helps to explain why, according to recent statement by the company, the number of advertisers working with Facebook has doubled in the past year. But Syncapse also said that its results showed how the value of a fan can vary widely:
An average fan may participate with a brand ten times a year and will make one recommendation. But an active fan may participate thirty times and make ten recommendations. The impact this has on fan value is quite dramatic. In the case of Coca- Cola, the best case for fan value reaches $316.78 but is $137.84 for an average fan. In the worse case scenario, a fan is worth $0.
As the chart below shows, fans of McDonald’s spent, on average, more than $300 on the company’s products, while non-fans spent just half that amount. Fans of Starbucks also spent more than twice as much as non-fans.
Some might argue that these conclusions aren’t exactly rocket science — after all, one would assume that if someone goes to the trouble of becoming a fan of a product on Facebook, that person would be enough of a supporter of the brand that they would buy it more often, recommend it to their friends and so on. And Syncapse’s results may also not be 100 percent reliable if extended to the entire universe of 500 million Facebook users, since a few thousand users is a relatively small sample. But it’s still interesting to see someone try to put an actual dollar figure on the value of a Facebook friend.
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I don’t know what they are worth to big brands, but for my wife’s blog, they don’t seem to be worth much, at least not the ones obtained via targeted facebook advertising.
Increacing the number of fans 8x has, maybe, doubled the number of people who visit when she posts a link to a new blog post to facebook. I’d guess it is about 1/10th the rate of people responding to opt-in email updates. And honestly, the facebook updates are a lot more inviting than the plain text emails that get sent out.
Either this is the most effective form of advertising ever produced, or there’s a heavy correlation-causation problem (e.g. people only fan a product if they already spend huge amounts of money on it).
Yes, I tried to deal with that in the post, Avery. Thanks for the comment.
@Avery Very good point. I think it is more of the latter. unless they show a longitudinal study that shows spend goes up after they became fan (even then we need to be wary of lurking variables that drive both)
-rags
Even better, Avery… they just fan it for the hell of it. Why not. It’s just a click. Maybe they’ll get a coupon or somethin’.
I try to add facebook fan bcoz most of visitor come to my blog. but gr8, many Big companies have realized people sparing time
I am HIGHLY suspicious of these findings/calculations, and I agree with the earlier comments that there are some significant correlation/causation logic problems in both the collection and interpretation of the survey results.
All due respect, let’s consider the source of this survey. The mission of the firm is “to help companies build, manage and measure customer relationships through the use of cutting-edge social media technology”.
I mean, what benefit could they possibly get from calculating inflated fan valuations and then having tech blogs rebroadcast the manufactured news across the internet? :)
You are right that the study comes from a company that is interested in helping customers take advantage of social media, Jeff — but it is based on interviews with users. I did mention the correlation/causation issue as well. Thanks for the comment.
This study attributes 100% of the fan’s value to facebook. I GUARANTEE that facebook did not generate these customers. Additionally the facebook page for these brands probably has little to no impact on purchase behavior. So your simply surving a group of people WHO ALREADY BUY to find out that THEY WILL BUY MORE. Does anyone actually think about this?
I think this is flawed premise. If I fan Diet Coke, am I suddenly going to start using it? No, rather I used it before, liked it, and fanned it. If I fan a website, game, or service, is it because I’m considering using it, or because I am already using it. More likely that I am the latter, or that I simply like the concept.
Meanwhile, having 10’000 FB fans can increase your company/product’s perceived market penetration. Which definitely has value. I think if you are promoting how many FB fans you have on your sales site, it can work for or against you. But I would nowhere near put the value for each fan at $100.
For most websites, the value is less than a dollar. For huge, well-monetized sites the value is between $0.50 and $20 per fan. Most fans don’t turn into regular visitors and most regular visitors don’t turn into revenue.
I think you and other commenters are right that there is a lot of overlap between fans who were already consumers of a product and new purchases related to that after they become a fan on Facebook. That is mentioned in the piece, and in the study. I don’t think Syncapse would argue that users go from not being fans to buying large quantities of a product simply by joining a Facebook page — obviously the two are related. Thanks for the comment.
So, we agree there’s a causation issue. Unfortunately this # will get some additional airplay, but the faulty premise won’t be examined.
What would have been nice is if the initial story/press release differentiated between ‘gross’ spend and ‘net’ additional spend that might be attributed to FB. Then listed what else might account for it. I, for one, put no credence in this whatsoever. I am an etailer, active on FB with over 1000 fans, and I am convinced that there’s some good that can come from this type of interaction, but there’s no easy money to be made, and LOTS of time and effort to be wasted looking for it.
My experience is similar to those who commented earlier. I am very involved with my site’s SEO, blog and social media development and although my social mead conversions are the highest, facebook is not a force within those numbers.
I get more productivity from Twitter and linkedin.
facebook fans have a personal reason why they became a fan in the first place. That could be anything. There could be a real value, once more information about the fan is available. That’s exactly where privacy becomes an issue.
I reckon that the value of a customer is directly related to the strategy of the company. Plus, if you build a brand like Victoria’s Secret or Nike, which a lot of enthusiasts are always wanting for new nice products to come, and that the fans only worth between 200 and 230$ each for them, they probably have a value close to 0 for a company that have no strategy or any plus-value…
Social Medias sure suck for marketer who have nothing to offer… and are only spamming on them. The ability to make great products worth more than being good in social media, at least people care about that for real.
What is the adress of the Apple’s Fan Page or Twitter account?
I’d say they are worth a lot, and even more than the $136. I’m trying to build up my fan page currently and have about 32 fans. Quite poor.