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Facebook Fans of Car Dealers; What Are They Worth in REAL Money?

How Much Is a Facebook Fan Really Worth?

Lots of companies — more every day, it seems — want to have Facebook “fan” pages, where customers or would-be customers can connect with them and become part of their online community. But what are those fans actually worth to a company? Everyone has their own views on that question, but now a social media measurement firm called Syncapse has come up with an actual dollar value in a report released today (PDF link).

The answer? An average fan is apparently worth about $136.38, although for some very successful social marketers the value can be dramatically higher, while for some less successful companies it can be virtually zero.

Syncapse came up with the figure by asking 4,000 fans of 20 of the top brands on Facebook — including Nokia, BlackBerry, Victoria’s Secret, Adidas, Nike, Coca-Cola, Starbucks and McDonald’s — why they were fans of those companies or brands, and about their past and future purchasing behavior. Syncapse then tried to estimate what the value of each fan’s spending would be to a company, as well as the value of continuing to have that fan as a customer over time.

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. According to the survey:

  • On average, fans spend an extra $71.84 they would not otherwise spend on products they describe themselves as fans of, compared to those who are not fans.
  • Fans are 28 percent more likely than non-fans to continue using a specific brand.
  • Fans are 41 percent more likely than non-fans to recommend a product they are a fan of to their friends.

That probably helps to explain why, according to recent statement by the company, the number of advertisers working with Facebook has doubled in the past year. But Syncapse also said that its results showed how the value of a fan can vary widely:

"An average fan may participate with a brand ten times a year and will make one recommendation. But an active fan may participate thirty times and make ten recommendations. The impact this has on fan value is quite dramatic. In the case of Coca- Cola, the best case for fan value reaches $316.78 but is $137.84 for an average fan. In the worse case scenario, a fan is worth $0."

As the chart below shows, fans of McDonald’s spent on average, more than $300 on the company’s products, while non-fans spent just half that. Fans of Starbucks also spent more than twice as much as non-fans.

Some might argue that these conclusions aren’t exactly rocket science — after all, one would assume that if someone goes to the trouble of becoming a fan of a product on Facebook, that person would be enough of a supporter of the brand that they would buy it more often, recommend it to their friends and so on. And Syncapse’s results may also not be 100 percent reliable if extended to the entire universe of 500 million Facebook users, since a few thousand users is a relatively small sample. But it’s still interesting to see someone try to put an actual dollar figure on the value of a Facebook friend.

Written By Mathew Ingram

Related content from GigaOM Pro (sub required): Social Advertising Models Go Back to the Future

Post and thumbnail photos courtesy of Flickr user Ali Brohi

Views: 12

Tags: Car Dealers, Facebook, Facebook Fans, REAL Money, What Are They Worth

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Comment by Eric Miltsch on June 28, 2010 at 9:26am
Ralph,

You raise a good point & one that many probably don't think of too often. The difference between an active fan and an average fan can be significant.

Adding to your point, especially for those building their fan base via sponsored ads, is the amount of fans who have elected to hide your fan page activity. These are simply people who liked your page & maybe don't want to unlike (just being polite) but have chosen to hide your page's activity.

On your Fan Page, click on the "See All" link within your insights box on the left sidebar.

On your insights page, scroll down to the bottom left graph & uncheck "Total Fans."

This will display the total number of fans who have chosen to hide your page's activity. If the percentage of people hiding your content is high, you may want to rethink what you're pushing to your fans.

Doesn't seem worth it if you're paying for 5000 fans, only to have 35% of them hide your content.

Our fan base is a lot lower than many dealers as its cultivated organically - no ads, no invites - people "like" us on their own. (FYI: 497 total fans as of today; 5% elected to hide our content - I can live with that)

No ROI, simply ROE. (Return on Effort)
Comment by Thomas Raymond Stokes on June 25, 2010 at 6:35pm
Great post Ralph - I will send you some stats on Inventory Blasters new social media accelerator we are the only ones that I know of with the solution to gain 2000 - 5000 fans within 30 days. Our 90 day beta will be complete by mid July. http://www.inventoryblaster.com/Social-Media-Accelerator.htm

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