Social Media

Putting a Price Tag on Fans

Virtue, a social media management company, put out a study recently that revealed that Facebook fans have a value of $3.60 apiece for big brands.  The company based their valuation on how many impressions a wall post receives given the number of fans a page has.  For large brands, the average ratio of fans to wall posts is 1:1, meaning that if a brand’s page has one million fans, it gets an average of one million impressions per post.  Virtue took an average of two wall posts per day and applied a CPM value of $5 and used the following formulas to calculate the value of the impressions generated by a year’s worth of wall posts:
(1M impressions) x (2 wall posts) x (30 days) = 60M impressions per month
(60M impressions/1000) x ($5 CPM) = $300,000
($300,000) x (12) = $3.6 million

Divided by one million fans, this figure averages out to each fan having a value of $3.60.  Obviously, this valuation is an average – not all brands have a 1:1 fan to wall impression ratio.  (Brands can improve their ratio by posting relevant content, engaging with fans and customers and using rich media.)  But the most important thing to take away from this calculation is how important it is for companies to establish a strong presence on Facebook and other social media sites.  Consumers are there, and they’re clearly worth something.  And the first step in taking advantage of the value social media has to offer is to make sure a consumer can find and access the branded content they are looking for.