According to a new study released by social media management company Vitrue, Facebook Fans are valued at $3.60 a piece in earned media for big brands. When scaled to Fan Pages with one million Fans, that equates to $3.6 million annually — and Vitrue says that this is just the tip of the iceberg.
As more brands and companies start to make real investments in social media, having a handle on what kind of value various platforms can offer becomes extremely important. After all, why invest in something if you aren't going to get anything back?
Vitrue manages more than 45 million Fans for a variety of different companies, including entertainment, media, retail and restaurant companies. Its team sampled data from their clients' Pages to come up with their valuation.
Valuation Breakdown
To start, Vitrue looked at its data to determine the wall post to Fan ratio, i.e. how many impressions a single wall post receives based on the number of Fans a Page has. The average ratio for Fans:wall posts was nearly 1:1. In other words, if a brand has one million Fans, it gets an average of one million impressions per wall post.
Factoring in a frequency of two wall posts a day (for ~60 million impressions a month), Vitrue then applied a $5 CPM against that data.
That certainly puts the value of advertising on Facebook in perspective, doesn't it?
What This Really Means
It's also important to note that this valuation is an average. Not all brands have a 1:1 Fan to wall impression ratio; some were higher and some were lower. The brands that did tend to have higher ratios tended to do a better job of posting relevant content, actively engaging Fans and customers, and also used rich media.
I talked to Reggie Bradford, the CEO of Vitrue, and he told me that while this data can certainly scale downward for smaller brands (and might even be more valuable in that sense), what this study really emphasized to him and the rest of the Vitrue crew was just how important it is for brands to have a strong Facebook presence. "It's no longer an option," Bradford said. "It's a necessity."
The potential value that brands and companies can get from Facebook Fans is huge, especially if you consider the potential of matching location data with some of these tools.
http://mashable.com/2010/04/14/facebook-fan-valuation/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Mashable+%28Mashable%29
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