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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 (s nok), BlackBerry (s rimm), Victoria’s Secret, Adidas, Nike (s nke), Coca-Cola (s ko), Starbucks (s sbux) and McDonald’s (s mcd) — 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.

Related content from GigaOM Pro (sub req’d): Social Advertising Models Go Back to the Future

Post and thumbnail photos courtesy of Flickr user Ali Brohi

48 Responses to “How Much Is a Facebook Fan Really Worth?”

  1. Specious arguments in this report, in my opinion. This reports on the value of those “fan” customers that would hold true regardless of whether they became fans. It confuses correlation (best customers are more likely to want to be fans) with causation. Marketing is all about cost-effectively growing new revenues — either by getting current customers to spend more or attracting new customers.

  2. Agree entirely. This study sounds ridiculous. The “key findings” are true of any fans of a brand–whether they’re Facebook fans is irrelevant. The real strength of Facebook fandom is the ability for brands to speak directly to their audience.

  3. Your Facebook followers spend more because:

    1. Your brand is front of mind, leading to increased frequency of purchasing and therefore a higher annual spend

    2. You have more regular, yet informal contact with the brand, which as a consequence, penetrates your subconscious mind.

    3. As customers, we feel like brands on Facebook are really listening to us. Since they care more about us than their competitors do, we return favor in kind.

  4. Rebecca

    Would have been nice if the bar chart had a legend or actually included McDonald’s or Starbucks as the previous paragraph suggests. Fail.

  5. The title is a bit misleading. They didn’t assess the value of a “Facebook fan”, they simply compared fans vs non-fans. The name “Facebook” is only used for buzz value here.

    The true value of a Facebook fan depends on how you monetize them. If the sole purpose of a fan page is to get high numbers of fans and not do anything with them, then its value is zero. If you use that fan page like a newsletter, distributing very focused and pertinent advertising and promotional deals to your loyal customers, then its efficiency can dwarf conventional media channels.

    Just look at the runaway success Dell enjoys with their weekly draws and all the positive brand exposure it brings, for the cost of one person’s salary as social media rep, and a few free netbooks. To achieve anything near that level of buzz from a conventional ad campaign would have cost tens of millions of dollars in TV spots and product placements.

  6. Will be interesting to watch how this trickles down to local. We’re also beginning to see some local advertisers (real estate agents, property managers) starting to focus on building their fan base. Measuring the ROI can’t be far behind…