Social media. ROI. They often seem like two pieces from two different puzzles. And for good reason: it can be hard to quantify the value delivered by a single 'friend' or human interaction.

But for major brands, figuring out the ROI of a social media initiative is something that realistically has to be done if social media is to prove itself worthy of larger investment.

But there's potentially good news for brands: social media management company Vitrue thinks it has the answer to a piece of the puzzle, namely an answer to the question "How much is a 'fan' on Facebook worth?"

The answer: $3.60.

To get that number, Vitrue looked at data collected from its clients, which combined have over 40m fans on the world's most popular social network. The data related to impressions generated for these brands by their presence in Facebook's news feed. According to Vitrue's math, 1m Facebook fans produces $3.6m in media value over the course of a year if one assumes a $5 CPM.

So is this the news brands have been waiting for? Not quite. That's because, in my opinion, 'media value' analyses are some of the most deceptive around. Instead of looking at what an initiative or campaign produces in action (sales, etc.) that clearly translates to the bottom line, media value is often an easy way for marketers to come up with a nice-looking number that seems to justify the initiative or campaign and nothing more. An ad campaign costing $2m might produce only $100,000 in sales, so determining that another campaign generated $2m in 'media value' might look good on paper, but it doesn't mean that this campaign delivered $2m of real value either.

In the sponsorship world, where the equivalent media value metric gained its popularity, its credibility is on the decline. In discussing equivalent media value in his book, Sponsorship for a Return on Investment, Guy Masterman wrote, for instance, that "the method is now being increasingly discredited, in particular by sponsors who are far from convinced of its accuracy." One of the problems, Masterman notes, is that "in many cases, rate-card prices are used, and yet in industry, rate-card prices are seldom the final prices that are paid."

In this case, Vitrue's $3.60 figure is based on an assumption of a $5 CPM, which any online media buyer knows is very high, especially for user generated content properties, where CPMs (and eCPMs) are usually measured in pence, not pounds.

None of this is to say, of course, that a Facebook friend isn't potentially worth $3.60 to a brand. But if questions around social media's true capabilities are ever going to be addressed to the satisfaction of brand marketers for the long haul, much more than 'media value' is needed.

Patricio Robles

Published 15 April, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (5)


Steve Walker

People are very sniffy about AVE and other such value assessments.  And, while I agree that it's better to arrange things to use digital metrics to track everything, there are times it's just not possible to arrange it this way. 

Under these circumstances, simple numbers have to do - number of retweets, number of follwers, number of fans, number of LinkedIn group members, etc.

And what's wrong with this?  Apart from the fact that it's less desirable than a clear trail of analytics, I would contend that it is, at least, a Plan B. And I can't think of any others - can you?

Let's face it, there are few people who would argue that getting a positive mention in, say, the Financial Times is more valuable to an IT Vendor than getting mentioned in an IT Trade publication.  But just because you have appeared in a publication doesn't mean that you will be read about - all you can say is that your chances are improved.  So appearing in the FT represents a better chance of getting read about by business decision makers than appearing in a computer publication.  So it has more value, even if it's difficult to quantify.

Of course, if you can design your mention with a clear call to action that can be digitally tracked, then you have got your opportunity to measure the effectiveness of your mention in real terms.  But in my experience, this is not possible in many cases (e.g. appearing in a feature on a topic not of your own choosing).  Under these circumstances, one has, surely, to use what other data one can, and readership, target audience and other value assessments at least give you some insight into probability of succcess in conventional media;  so attempting to put a value on the social media numbers is not, in and of itself, an idiotic idea, IMHO.

There are times when these value statements are all a PR professional has to go on.  And AVE is at least an attempt to quantify this probability so that you can compare or aggregate your overall effectiveness in a way that outsiders can understand.  So why not, under these circumstances, try to apply it to social media?

So - hands off AVE and value - there are times when it's the only thing to go on.

over 8 years ago

Billie Andersen

Billie Andersen, User Experience Consultant at Foviance

I think that there is a danger with simplifying the value of a Facebook fan and clear parameters need to be placed around the statement for it to be used in  practise. The important aspects of the article are the variables that will affect the real value that you get from a fanbase, such as how a company uses their fans.  1000 unengaged fans will be worth a lot less than 1000 fans that are engaged with effectively. While the value is an interesting guide, the value of any type of social media should be looked at on a campaign by campaign, or project by project basis.

over 8 years ago


Ann Holman

I agree with Billie. On top of that its not how many people are fans or followers, its actually what you are doing with them that matters. Quantifying everything just leads to a numbers obsessed strategy that doesn't take into account campaign by campaign  as well as the next level; individual fan/customer/client engagement. Or should I say, individual customer experience.

about 8 years ago

Rob Mclaughlin

Rob Mclaughlin, VP, Digital Analytics at Barclays

Main issue with 'media value' for me is the the CPM value assumes that this is a general aquisition. Facebook fans are, by definition brand loyalists. If someone is your brand's fan then you should not have to pay for them to transact with you - they already love you! Now build the model around a CRM idea and maybe it is closer to the reality.

about 8 years ago

Ashley Friedlein

Ashley Friedlein, Founder, Econsultancy & President, Centaur Marketing at EconsultancyStaff

Whenever I read about 'media value' it just reminds me how overvalued that media appears to be. 

about 8 years ago

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