If you're like most of the marketers or business owners I talk with these days, you're wondering what exactly are the benefits of Facebook fans (i.e., "Likes") to your brand. Also, how much more likely are they to do business with you than those who don't "like" you on Facebook?
Those who profess to be fans are much more likely to participate in "desirable actions" using Facebook, such as making a purchase, installing an app, entering a sweepstakes or voting online in a contest. That's according to SocialCode, a full-service social agency owned by the Washington Post Company, which looked at 50 brands and more than 5 million Facebook ads over a five-month period earlier this year.
Of course, it should come as little surprise that fans are more likely to perform desirable acts than nonfans. But the knowledge that they do so at a situational rate of up to 547 percent higher than nonfans is eye opening.
Specifically, the survey shows that Facebook fans are 291 percent more likely to engage with brands than nonfans. For example, the fan conversion rate to install an app is 38 percent compared with 12 percent for nonfans. That's a 239 percent difference, or, in other words, fans are three times more likely to convert than nonfans. The conversion rate for existing or new fans to enter a brand's contest was found to be 6 percent as opposed to 1 percent for nonfans -- a 545 percent differential.
When it comes to making an actual purchase, the SocialCode survey shows that fans do so at a 7 percent rate, while nonfans buy at a rate of just 2 percent.
Among the seven actions a user might perform on a fan page, SocialCode found that the difference in cost per acquisition, or CPA, between fans and nonfans is $9.56. That number is calculated by dividing the total cost of clicks by the total number of actions. For fans who install an app, for instance, the cost per acquisition is $2.61 compared to $8.49 for nonfans. Similarly, for fans making a purchase, the fan CPA is $14.88 compared to a nonfan CPA of $43.86.
Others costs include: contest submissions ($17.21 for fans, $76.25 for nonfans); contest voting ($3.26 for fans, $21.09 for nonfans); fan acquisition ($3.39 for fans, $5.17 for nonfans); program signup ($41.25 for fans, $75.90 for nonfans); and sweepstakes entry ($2.57 for fans, $5.81 for nonfans.)
In Facebook fan studies from last year, the value of a fan ranged from $3.60 in a Vitrue survey to $136.38 in a Syncapse assessment. Problems I see with the SocialCode survey is the assumption that all of these fans engage in actions to the same degree and that these desired actions can be weighed the same. I would think, for instance, that a purchase "action" would trump a contest vote every time. Similarly, the value of a fan should be measured by how much money he or she is bringing to the table in the form of purchases made, with the cost per action subtracted from that figure. The bottom line: How much more did we sell to the folks who signed on as our fans?
What value do you place in your business's Facebook fans? Leave a comment and let us know.
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Comments:
Needless to say the article is self serving - which is fine. They should have links to the actual results. Although our company is embracing the FB craze I am left unconvinced of the value proposition as of this writing.
thanks for the link mate i am in need of it
I think the true value in a Facebook Fan is in his/her activity on your page and the way that activity becomes a shared "story" on their wall/timeline. For instance, someone likes my page. Now, there's a link to my page in this person's "Recent Activity". This same person likes or comments stuff on my page, and again, their activities are broadcast via the story ticker in the top right corner. THAT to me is the true value of a Facebook fan, because it's constant promotion. I have friends who have told me that they never stop seeing my name and/or brand in their top right ticker or on their news feed.
They article does touch on some relevant points, however it doesn't take into consideration how fans are obtain. You have those "liking" ladders that business owners participate in where hundreds of other business owners blindly like your page without even visiting the page simply by right clicking your link from a designated post. Those types of fans are rarely engaged fans and they are more likely to "unlike" your page once they see numerous feeds from your page in their timeline. They like you forget they like you then unlike you. Not really a desirable fan if you ask me.
Buying facebook fans is a must today for any business or artist! I found a great discount program for this at www.fbfansgenerator.com
not a very clear one....pls explain program sign-up is more for a non fan?
I'm not very clear about this CPA in your article,I don't know if I understood correctly,are you saying that we tend to spend more for non fans-example...Program signup for fans is $41.25 and $75.90 for non fans?
No doubt there is some truth in the article, however how the FB 'like' is acquired must have an impact. Was it to enter a competition or earn point/ prizes etc. Also what about the product or service a business is selling, does this change the benefit of the fan?
More fans-more likes- more sale. Www.politefollowers.com Melissa
Let me see if I understood well: Fans buy us more because they clicked "I Liked this"? Because if so, we are not speaking about fans value, we are speaking about the cost to outreach people with our adds and maybe additionally the value of engagement with our brand or company. In fact, "fans" as a concept is missleading because they are customers, not fanatics. I agree more on measuring value of postings or retweets, which maybe far more tradable.
I agree!
Interesting! What would one suggest to another that suddenly can't physically carry items to live parties and yet wants to continue to sell the product I'm open to ideas! I can sell and ship anywhere in the US. I really could use the extra cash too. We do direct sales as well as fundraisers.
This article is quite silly. But it's instructive that SocialCode and other companies are producing such misleading statistical analyses. But to be fair, one can't tell from this article whether it's SocialCode's error, or Belicove just misunderstood what he was reading. In any kind of statistical analysis, the main problem is interpretation of the data -- giving meaning to it -- and especially of assigning causality. In a proper statistical analysis, "Like" would be called a *marker* or an *indicator*, meaning there's not a causal link but nevertheless a clear association. In other words, if you artificially increased the number of "Likes", or artificially increased the number of "Sales", you would not find an increase in the other number. Both "Likes" and "Sales" are markers for likability/value/quality. Increase the latter, and you've addressed the real cause, and both "Likes" and "Sales" will naturally follow.
Oh! It is amazing. Nice informative post.
I think it is more important to look at "likes" or "fans" that are actually engaged.If you have 10K fans and only 10 are "talking about it" that were is the true reach?
Isn't this a little bit like saying that people who walk into a supermarket are 291% more likely to buy something than those who don't? They've already become a fan - THAT is the measurable engagement with the brand. Also - as Dennis hints below - many fans are already customers. How does that $3 acquisition cost sit if that's the case? Sorry, not buying these numbers at all.
I like the statistics, those help people understand how fans / likes / RT's can be effective in first driving brand awareness and then ultimately more sales
Based on the recent $100bn Facebook valuation, every user is worth $150 to Facebook. Something seems off, but I don't know where.
NIL
I guess the real question after someone liked your Facebook fan page is just how you can keep their interest burning for the longest time? With Edgerank on the loose, I think it became a bit tougher for those doing a lot of self-promotions on their pages.
Fascinating stats and very similar to what we are finding with our own company's brand
I see Facebook fans as an extension of a brand's existing community, and by that - FB page owners should have an idea of what information is helpful or of value to these people who like you. I think a brand shows how much valuable their fans are to them by providing quality content that reflect the interests/values of the community.
It is interesting to see such a huge response difference between fans and non fans. This reveals the level of influence social media sites have on society as a whole. It would be interesting to see these survey statistics extended to analyze the difference between the same two groups in regards to similar offline decisions to shed light on how embedded these influences have become. Just a point to ponder. Martin http://officefrontline.com/
Guess what? The "high quality" folks who fan your page are usually existing customers. So how do you value that vs incremental fans who weren't existing customers?
We owe a lot to facebook for establishing ourselves and getting our name out there - in one year we have grown to 10,000 subscribers. We are now publishing our first book and creating a line of products. I'm not sure we would be where we are today without facebook! Travis Smith Modern Bear www.facebook.com/modernbearwww.modernbear.net
Earlier the Facebook pages used to be means of advertising, now it is medium of extortion and blackmailing and the revenues of facebook will more be dependent on the blackmailing money, it started off in college dormitory to being a entertainment sharing network to now a blackmailing business. FTC has already issued probe in the Privacy concerns. Security threats are large and the utility value is negative or zero. Just delete your Facebook account is only thing I can suggest. Cheers
Do you have any advice for Fan Page owners who might be starting a brand new fan page? Is there a food straightforward system to bring in more fans?
The ongoing question of the value of a Facebook "Like" never ceases to stir the passions of marketeers, flacks, and always, always, always, a bevy of social media gurus. As Director of PR and Social Media for Century 21 Real Estate, I have more than a passing interest in the subject. From a brand perspective I believe it is more difficult to place an accurate metric on each "Like". However, you are beginning to see more and more brands pay attention to social media as a business platform / opportunity to engage with their customers. I know we certainly do at facebook.com/century21. For our over 112,000 sales professionals I believe the value of a "Like" is more tangible. It would be the difference between cold calling someone and having them agree to take your number and meeting someone at the coffee shop and having an impromptu discussion while waiting in line...you might learn that they are moving into the area and are looking to buy a home. Maybe their children play an instrument or soccer just like your kids do. While you cannot place a dollar value on the interaction, the good sales person knows in their gut that the value they received from the interaction at the coffee shop was worth far more than what they received on the cold call. In my opinion, we are now moving into the next phase of social commerce where the metrics are beginning to take shape. For example, The Story Of The $1.1 Million Facebook Referral And Century 21 Realty's New Social Media Era - http://c21.in/uqsQYm It is incredibly important for brands and small business to optimize Facebook as a primary driver for leads. Does this resolve the question of what the value is of a "Like" on Facebook...I certainly hope not, its too darn much fun to talk about. Here was my take a few month's back http://thesocialguyblog.com/?p=126. Best Regards, Matt Gentile - "The Social Guy" Sender - Channel - Message - Receiver Same as it ever was.
Very well said.
"Like" or not - any engaged "fan" is more likely to come back, buy more, and tell others. Facebook is just another way for them to be engaged. Can't argue that. However, I think the link between Facebook and purchases is a bit far fetched. Your best engaged customers will always buy 3x more than others. So of course, that translates to the Facebook population as well. This study should have more to do with the demographics of your target market and the products you are selling to them. Outside of that, it's just more hype to build the perceived value of Facebook.
So, as I've mentioned in previous comments probably to the point of being boring, users of Facebook and the like are merely commodities to be sold to any advertiser that wants to buy. In this study we're starting to see a value put on individual users through their activity of pressing the Like button. But I wonder how long it will be before the number of Social Media Fans a brand has starts to influence the value of a merger or acquisition, or possibly even share price? Once it does, Joe and Joanne Public can start having a little bit of viral fun :-)