By Joel Windels, Community Manager, Brandwatch
Quantifying the value of a Facebook ‘like’ or Twitter follower is the holy grail for retailers online. If a company could determine exactly how much revenue each interaction generates, they could build marketing strategies around that figure and start to calculate an overall ROI for social media activities.
It is no surprise that countless attempts have been made to put a fixed value on each social media user. Although many appear to have randomly assigned a cash value to each Facebook fan based on very little analysis or minimal methodology, others have approached the topic with some idea of scientific process.
Step forward the guys at Social Code, who last year looked at the data of fifty different companies over a few months, clocking over five million adverts during the research project. Taking a whole host of factors into consideration, they put the actual value of a Facebook fan at $9.56.
Despite revealing some interesting data, Social Code’s ambitious study arguably falls short of accurately evaluating Facebook interactions, but it isn’t alone in doing so. According to various other estimates a “like” can be worth anything from $136 to $3.60.
Of course, one fixed price assumes that all fans are equal — something which we know is never the case. In terms of quality and value of a fan, a lot depends on a brand’s industry, size and other factors. A local bakery offering a specific promotion is more likely to receive a significant revenue change with 500 likes than a multinational insurance provider. Equally, if you favour volume over quality and attempt to get too many fans too quickly, these followers are likely to be flimsy in their support and cannot be compared with a true brand advocate who likes a company or product for genuine reasons.
The true value of a fan should be judged by what they do as a fan or how a brand can engage their support. The useful information for retailers is not how many fans you can attract, but rather making use of the what, where, who and why people are talking about them. This is where monitoring is vital — pulling in data from all over the web and showing with much more clarity what users are saying about a brand. Only then, armed with this knowledge, can a brand truly determine the strength (or wealth) of its social media presence.