you have been weighed and measured

April 21st, 2010 • posts i've written

and it makes absolutely no damn sense

I probably shouldn’t even mention this, as it only gives it voice, but Vitrue (a social media management company) recently released their estimation for the value of a Facebook fan to a brand – $3.60. And it couldn’t be more preposterous.

For the sake of brevity, I’m just going to list all of the reasons why you should ignore valuing fans in this way:

• Vitrue’s primary assumption in divining (and I mean divining) this figure was that each wall post by a brand is seen by the same number of people as they have fans (have 60k fans? then 60k people will ‘see’ your wall post). Vitrue says that they arrived at this figure from ‘sampled data across varying pages.‘ I can’t question that data because they don’t provide it, so I’ll just go by the rules of reality and patently call that bogus. B-o-g-u-s. If you’ve ever administered a fan page, you know this smells rotten. Even with the best social spread, 1:1 is incredibly rare.
• Then they go on to multiply those impressions by a CPM figure of $5 – I’ll leave the vitriol here to my mate Mike who put it frankly, “just the fact that they consider themselves to be a social media marketing solutions company, and yet they think it’s a good idea to measure the value of a fan in display media terms seems like enough to write them off to me.” Ouch. Just for clarification, Mike is the nice guy in our office. He’s right though, it’s a trap to frame metrics using a standard that is as flawed as it is incongruous to this relationship.
• A universal monetary valuation of Facebook fans is foolish and dangerous. I get frustrated by these attempts because it does more to distract our clients from setting real objectives for social spaces than inform them. Facebook fan counts were already empty-calorie filled Pokemon for our clients to chase blindly – now here’s a nice shiny dollar figure that I’m sure to see in an excel sheet or powerpoint presentation soon enough. This is not an ROI measurement, it is quicksand. A small but active Facebook fan group can be much more valuable to a brand that an enormous one that ignores you.
• The question of value around the technological relationship of a Facebook fan (or liker, now?) is an important question – but we won’t be able to truly decipher it until Facebook steps up and offers more than their shallow reporting metrics/capabilities. I’m more interested in the ‘value’ of those fans that come to a page organically vs the ‘value’ of fans that brands buy through display media. Who is more likely to buy your products or recommend them to friends? We won’t be able to explore that until Facebook allows you to re-target those purchased fans (and only those purchased fans) a week later and serve a poll or other interaction that would garner some level of insight. Facebook has said that their ‘normal benchmark’ for retargetting is 100,000,000 impressions. Thus, to even consider using their ad platform this way, the brand has to pay for at least 100MM impressions. Ultimately, it’s prohibitively expensive for most of the brands I’ve worked with, and I’ve worked with the biggest brands around. Until Facebook steps up to offer better reporting, it’s little more than a casino for brands. The money you spend there is a gamble. Brands need to exert financial pressure on Facebook to offer better reporting.
• Setting an explicit value for a relationship inherently changes the function of the market. Once you assign a value to a fan, you cannot avoid the implications of that valuation. The glut of ‘free’ labor by fans/consumers/people has been taken for granted by brands and we should all consider shutting up about a monetary value for that up-to-now free behavior.

Ultimately, Vitrue produced a piece of linkbait and not a unit of measure … which is the game more people seem interested in playing when talking about social media and business objectives. Perhaps we should do as the saying goes: hate the game, not the player.

My colleague Clay had his say about this as well, and he thoroughly geeks out over sports statistics, you should check it out.

Related posts:

1. fans: the rising tide
2. the big money facebook 50
3. fans: rise of the machines

Tags: facebook, fans

Trackback URI.