Social Media ROI: The Dollar Value of a Facebook Fan
There’s a certain term in the social media lexicon that I really don’t like. It’s not the meaning or even the use that I have an issue with. It’s the way it’s used. Overused. Thrown around. Thrown in when one is coming up dry. This word works as a shield for many folks in our industry – “Hey, what I do has value to you. Here’s an acronym we can use when I am trying to convince you of this, and the important-sounding-ness of it will put both of us at ease.” That term is ROI.
Alas, when talking about any investment, the return on that very investment is obviously something worth talking about. In fact, it’s the whole point, isn’t it? But sometimes the term ROI gets thrown around when you aren’t really talking about that. ROI at its core is about financial return, not “buzz” or “sentiment” or “engagement.” Of course, I would argue that those things can and do have real impact on the bottom line – often, a greater impact than other approaches. But while it’s valuable to measure metrics like audience growth and community engagement, that’s not really ROI. When you say ROI, you should be talking about numbers – numbers of dollars.
The good news is that as social media is becoming less of a trend and more of an expected component of a marketing plan, folks are studying the dollar value of marketing on social networks. For example, there’s a new report out: The Value Of A Facebook Fan. And as GigaOM puts it, “The key findings of the report are likely to come as music to the ears of advertisers that have been pursuing a Facebook-based social media strategy.” That’s because Syncapse, a social media measurement firm, found that each Facebook fan has a dollar value – $136.38 on average.
They came up with this number by surveying Facebook fans of 20 of the top brands on Facebook. Starbucks was one of them. At over 24 million Facebook fans, their Facebook community is worth $3.2 billion (at least according Syncapse’s conclusions). What does this really mean? Well, fans spend an extra $71.84 on average compared to those who are not fans. They are also 28 percent more likely than non-fans to continue using a specific brand, and 41 percent more likely to recommend a product they are a fan of to their friends. Now, that is some REAL return on investment.
Of course, you can’t just create a Facebook page and watch the Benjamins roll in. Syncapse is careful to point out that all comes down to how active the fans are. The top brands Syncapse studied are all excellent examples of pages that drive meaningful activity. They also use Facebook to foster customer satisfaction and loyalty – a key component to marketing ROI online and off. Still, the facts remain that there is real, measurable value to social media marketing. When you have that, there’s no need to put an acronym on a pedestal – the numbers speak for themselves.
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