Facebook fans may have more business value than suspected
While companies have been falling all over themselves to launch on Facebook and build fan bases, few have been able to really determine what is the true value of these fans -- until now.
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According to social media management company Vitrue, fans have a monetary value that can be represented in terms of media impressions. In a recent blog post to its site (www.vitrue.com/blog), Vitrue has determined that a company with a fan base of 1 million represents at least $3.6 million in equivalent media over the course of a year (assuming a $5 CPM — cost per thousand impressions).
It bases this assumption on impressions generated in the Facebook news feed. By analyzing Facebook data from 41 million fans, it found that most fans yielded one impression for every wall post. That means a company posting to its fan page twice a day can reasonably expect to achieve approximately 60 million impressions per month, according to Vitrue. Only posting once a day? That still translates into 30 million impressions per month for someone with 1 million fans.
Of course, not all companies or fans are the same as Vitrue discovered. In fact, when getting detailed on its impression-to-fan ratios, Vitrue found that some companies managed just 0.44 impressions per fan, while others realized 3.6 impressions. Why? Those with more impressions were offering more relevant and engaging news feeds.
Beyond the calculation of impression valuation, the power of a Facebook fan page found more endorsement via a March 2010 Harvard Business Magazine story. The authors of the article wanted to determine how much businesses really influence consumers when they launch company pages.
To test the theories, they set up a Facebook page for Dessert Gallery (DG), a popular Houston-based bakery and café chain, and measured the effect on customer behavior. In summary, this is what the study revealed:
>> People who had become fans ended up being DG’s best customers, although they spent about the same amount of money per visit.
>> DG fans increased their store visits per month after becoming Facebook fans and generated more positive word-of-mouth than non-fans.
>> DG fans went to DG 20 percent more often than non-fans and gave the store the highest share of their overall dining-out dollars.
>> DG fans were the most likely to recommend DG to friends and had the highest average “Net Promoter Score” — a score of 75, compared with 53 for Facebook users who were not fans and 66 for customers not on Facebook.
>> DG fans also reported significantly greater emotional attachment to DG — 3.4 on a 4-point scale, compared with 3.0 for other customers.
>> DG fans were the most likely to say they chose DG over other establishments whenever possible.
–Michael Hodgson
