Comments on: What Is the Value of a Facebook Fan?

By: Benjamin Weiss

Benjamin Weiss — Thu, 25 Feb 2010 23:14:39 +0000

It’s a good start at measuring the acquisition of one new fan…but what about the lifetime value of that fan? Every time that the fan “likes” one of your posts or engages your group, the message is likely to be re-broadcast to ~160 users. It’s these subsequent engagements with your brand that make the bulk of the value of 1 friend.

By: spanky

spanky — Wed, 27 Jan 2010 21:25:34 +0000

$5 CPM lol – what are you smoking? Maybe if ALL of your friends are active, high-wealth investors. But your analysis is interesting…

By: Akash Pai

Akash Pai — Thu, 08 Oct 2009 22:35:06 +0000

Interesting analysis, Adam. The numbers that you use for number of fans per user – 164 is from 2007. Do you have the latest nums? I guess they must be upwards of 200 now.

By: Rob Duncan

Rob Duncan — Wed, 30 Sep 2009 19:47:03 +0000

Like the approach, but value is never the same as cost… so, it would be a good argument that by getting the exposure to those fans, Lamborghini “saved” itself some amount of money ($366k in your example) that it would have COST to gain the same exposure… of course, many would argue that such a campaign ($366k in CPM spending) would likely not have that VALUE to the company.

The bottom line is the “investment” building a fan base could stay around for a while, instead of the expense in PPC/CPM advertising which has no residual value. It should be used, when possible, as part of an overall strategy.

By: Mike Nierengarten

Mike Nierengarten — Mon, 28 Sep 2009 20:22:10 +0000

I would consider the value of a fan not by CPM but closer to the value of adding someone to your opt-in email list (possibly a little higher). You get the benefit of connecting directly with the fan via fan updates. You also get the initial endorsement of when the user becomes a fan, which is much more valuable than an regular impression on paid search or with a FB ad.

In terms of cost/fan, I would add targeting. If you are running very targeted ads on Facebook, your cost/fan should shrink significantly. Also, if you are running a contest or giveaway, you can also reduce costs. With my campaigns, I typically shoot for $0.50 per fan.

By: Christian Del Monte

Christian Del Monte — Thu, 24 Sep 2009 21:45:23 +0000

Great post Adam. Couple of items I thought would be worth mentioning….because I had to read your analysis several times before I got it:)

That’s $0.82 per 164 impressions WHEN they become a fan. I’m curious as to what others say, but I’ve been averaging fans for about $2.50/fan while using FB’s advertising program. I believe that the cost/fan relies on several factors such as the product/service, facebook content, and brand. However, you can not deny the fact that when people “fan” a site, they ultimately are advocating your brand and are in tune with your company.

I’m not as interested in the “broadcasting measurement” as you so put it; as I am in the fact that fans have a lifetime value. In your Lamborghini example, that means when a new improved model comes out, 40x (versus Toyota) the amount of people will receive an newsfeed update alerting them to the fact….and keeping mind that they asked to know that in the first place. Lets go a step further and talk about how that could be monetized. What if a new James Bond film came out that featured a new Lambo. What would that announcement be worth to the film producer if that were seeded in Lamborghini’s news feed?

Best Regards,

Christian

By: yinka olaito

yinka olaito — Thu, 24 Sep 2009 09:04:00 +0000

I like your cost per impression analysis, it speaks volumes about your knowledge. keep it up

By: Alex Frakking

Alex Frakking — Sun, 16 Aug 2009 06:47:43 +0000

that $5 CPM isn’t unreasonable considering the “ad” is coming from a trusted source (a friend), and placed exactly where people are looking for information (the newfeed, as opposed to the ad strip).

However we can’t assume an update will reach 164 people just because that’s the number of friends they have. 1) Facebook filters the feeds, 2) some people won’t log on in time so it won’t even be displayed to them.

Good post!

By: Bruce Dietzen

Bruce Dietzen — Sat, 15 Aug 2009 21:07:51 +0000

Adam,
I’ve tried to crunch the numbers every which way, but couldn’t convince myself of any solid way to value a fan. I’m guessing that the ultimate value of a fan is what a comany like Pepsi will pay a developer or advertiser to increase its fanbase so its bigger than Coke’s

Have you heard of any companies paying on a “Cost Per Fan” (CPF) basis yet? Is anyone even using such a term?

By: Adam Goldberg

Adam Goldberg — Wed, 21 Jan 2009 22:37:52 +0000

Hey Gab,

Didn’t mean to infer Facebook charges a $5 CPM. I was only using a $5 CPM to demonstrate how one could calculate the value of the free impression one receives when a Facebook user becomes a fan. You can replace that $5 CPM with whatever CPM you are more comfortable with.