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16 June 2010
Posted in
Social Media
As Facebook grows larger than we ever thought possible, businesses are finding yet more and more ways to earn money using its different features and functions. Along with that, more people are voluntarily involving themselves with these brands and businesses on Facebook.
Not only are businesses getting a nice flow of traffic from Facebook, but they’re also forming relationships and getting a direct tap into the news feeds of the people that have become more than just an ordinary ‘fan’. People who are more involved with the brand, and more likely to buy from/recommend the said brand they “fan” or “like” (since the change in Facebook, you can no longer become a fan of a page, instead you may only "like" them, but for ease of terminology I will call these people that "like" a brand's page "fans") on Facebook.
A study taken by Syncapse (in association with hotspex), a social media measurement firm, has come up with an average dollar value for the standard Facebook fan, which amounts to a grand total of $136.38. To try and describe how they have calculated this figure, Syncapse explains, “We have adopted a unique approach to understanding the financial returns that social members on Facebook provide to a business. Facebook fan ROI can be understood though a knowledge of key performance indicators that have traditionally led to increased sales and profit in business and the key differences between Facebook users who have opted to 'fan' a brand and those who have not.”
There is a final report, which you may view as a PDF here. The study looks at: brand loyalty, brand affinity, product spending, propensity to recommend, and earned media value. Some key findings found in the study are as follows:
- On Average, fans compared to non-fans spend an additional $71.84 on a product.
- Fans are 28% more likely to continue using the brand than non-fans
- Fans are 41% more likely to recommend a product than non-fans
The study was taken by questioning 4,000 fans of 20 of the top brands on Facebook, including big brands, such as: Nokia, McDonald’s, Coca-cola and Nike. They asked fans questions regarding their past and future purchasing attitude, and why they are a fan of this brand. As this is a study of just a tiny percentage of Facebook users, companies and brands, the facts stated are not set in stone. With this said, it’s still interesting from the point that ROI (Return On Investments) is still a major concern when trying to justify a budget for social media campaigns.
Adding a Facebook plugin on your site may also boost traffic enormously, in the form of “Facebook Like”. Typepad released a very interesting graph (above) that shows, since Facebook Like was included into their blog sidebar on their website, 1,500 users had added it. This accounted for an increase of 50% in referral traffic from Facebook. Then they introduced a like button in the footer of each blog post. Within a few weeks over 2,400 bloggers had added it, and traffic to the Typepad Blogs that was referred from Facebook increased by 200%. All of these figures were produced from Typepad’s analysis of their site traffic.
As we have seen over the past few months, Facebook is still growing, and even through there have been many privacy concerns it still carries on growing fast. Curt Hopkins at ReadWriteWeb found some interesting information on Facebook’s growth in different countries.There were 131 countries surveyed, and out of those countries, Facebook was top social networking site for 111. What it comes down to is, the more users on Facebook, the more site traffic brands can acquire from Facebook, and if the brand is smart on how they use this then they can make a good profit from it.
As Far as a cost of a “Facebook fan” goes, we cannot yet generate an exact value for each individual Facebook user, nor an exact value for the average user to the average brand. But we do know that the more active a user is, the more likely that they will be a very valuable fan, and if you better the way you involve your fans, the value of the profit they bring you will increase.
