6 steps to understanding the REAL value of a Facebook fan

By on February 3, 2012 in Research Reports & White Papers

My very talented friend Minter Dial (The Myndset) have together with Yael Rozencwajg (Yopps) have spent a lot of time explaining how to look at the real value of  a facebook fan and our social networks. Just to make it more sticky they’ve branded it as the value of a Facebook fan.

Actually the title should have been “6 steps to understanding the real value of a [insert and social media channel here] fan”, but that doesn’t quite have the same ranking potential in search engines.

So how do we go about to solve this multimillion dollar question?

Haven’t every digital marketing agency in the world (that sells Facebook ads) already answered this question? Reading the publications available on the topic the value of a Facebook fan is anything from a couple of $ cents to a few dollars.

The problem with all of these studies are that they don’t measure the value of a Facebook fan. They measure the Cost of Acquiring a fan, or in best case the Cost of Acquiring a customer (CPA). That’s a very bad metric for measuring the potential value (or non value) of a Facebook fan.

Instead you have to attribute the actions, activities and information taking place on your Facebook page  and attribute this to your bottom line objectives. Easier said than done in today’s digital multichannel environment. Probably the best existing solution today to track and prove any economic value from Social channels is to use Google Analytics Multichannel Funnel and look at the Assisted Conversions (requires that you have properly setup your goal paths).

Minter and Yael have made a great 6 step guide on how you should think about the real value of  a facebook fan.

Real value of a facebook fan

Real value of a facebook fan

Source: http://themyndset.com/2012/02/what-is-the-value-of-a-facebook-fan/

About Joakim Nilsson

Joakim Nilsson is a Social CRM strategist focusing on strategies, processes, tools and technologies within social media monitoring, analytics & measurement, customer service and community management. Joakim has over 7 years experience from ecommerce and notably worked as Head of Social Media for Betclic Everest Group, one of Europe's largest online gaming groups.
View all posts by Joakim Nilsson →
  • http://www.themyndset.com Minter Dial

    Joakim, love the “right” title!  ;)  Thank you for your post.  You are so right to say that it is not about the acquisition cost… Just as people get confused with the run for numbers, for the sake of numbers.  The trick is finding the balance between the short and long term goals, because we all know we have the bills to pay!

    • http://joakimnilsson.com/ Joakim Nilsson

      We shouldn’t look at owned social media channels much different than a traditional e-mail newsletter. They are both permission marketing based and both very easily shared amongst connections.

      Getting the economic value from tracked links is easy, but if your facebook update (or email, tweet, video) is informative and educational rather than hard sales, how do you attribute economic value? Google multichannel funnel is a good step forward answering that question, the question which is: how to attribute sales in a multi channel world….

  • http://profiles.google.com/darealya Yael Rozencwajg

    Thank you so much Joakim.
    I don’t know if we’ve reached the exact target, but what is sure, is that more and more brands are seeking for a valuable and long term strategy on social media.
    Of course, I’m not talking about brands like Starbucks or Coca-Cola, that have already show the way to others, spent a lot of money and could afford themselves a safe mode on every step they’ve made towards the crowds. 
    We are here focusing on 60% of the brand world: that means small businesses, startups and companies that are on their way to invest and build a strategy but have that deep sense that the answers they are seeking are far away.