Everyone wants to be liked…particularly marketers on Facebook. But just what does it mean when a user “likes” or “follows” your brand? What is the value of a “like”? Can it be quantified? When the first banner ad appeared in 1994, a new era of advertising accountability and measurement was ushered in. For the first time marketers could track purchase behavior directly after exposure to an ad and determine the return on investment for the cost of advertising.
Engagement Metrics
More recently, as social media enveloped the digital marketing environment a new set of engagement metrics emerged. Marketers started tracking the number of “likes,” followers,” “tweets,” “subscribers,” and so on. Calculating a ROI related to these metrics turns out to be a lot more difficult than it is for clicks and conversions. But that’s not stopping some from trying.
Provocative Data
ChompOn, a social commerce platform operator, released some provocative data earlier this year. By evaluating the conversion rate and related clicks for sites using its platform, it calculated that the value of a Facebook “Like” is $8 and a Twitter “Follow” is $2. Eventbrite, an online event platform and ticketing provider pegged the value of a Facebook Share at $2.52 and a Twitter Share at $0.43 These platforms estimated attribution by examining traffic referrals and eliminating purchases linked to other sources. Most experts characterized these calculations as tenuous at best.
Wide Variance
Last year a social media measurement firm named Syncapse proclaimed that an average Facebook fan is worth $136.38. They conducted a survey among fans of the top 20 Facebook fans and queried them on past purchase behavior and future intent. Syncapse cautioned that there is a wide variance in fan value and the $136.38 amount shouldn’t be given too much emphasis.
Velocity
Toyota placed a value of $500 for a tweet. Last December they ran a promotion that gave new customers a $500 debit card if they tweeted about their new car purchase. “Tweets and other Social Media efforts help us create velocity behind an immediate call to action for consumers to take advantage of a program like this with limited duration,” said Kimberley Gardiner, Toyota’s national digital marketing and social media manager. An obvious observation is that one must take into account the price and profit margin on the item when evaluating what a fan or tweet is worth. And until there is more analysis, the wide range will continue to exist.
No Intrinsic Value
It’s evident that marketers are coming at the social media valuation question from a variety of directions: from the creative to the fanciful to the arbitrary. Perhaps that is why one expert from Forrester (Augie Ray) says the value of a Facebook fan should be considered “zero.” He argues that because every brand is unique and because the value of a fan depends on their level of influence there is no one-size-fits-all value. He also notes there is no intrinsic value to a fan base. Fan value is created when a company cultivates a deeper relationship that transcends simply being “liked.” One thing that I think that everyone can agree on however is that it is better to be “liked”, “followed,” “tweet about,” “subscribed to,” and so on, than not!