Vitrue research that said brand Facebook fans are worth an annual $3.60 apiece in media value caused quite a stir this week in the online marketing community. For some industry players, the report – which is based on impressions and so-called earned media – created as many questions as it did answers.
Such as, are the findings air-tight enough to actually guide marketers budgeting for fan acquisition campaigns? Does the valuation truly inform brands how much earned media their current audience is worth? And perhaps most importantly, are all impressions created equal?
Nick Wilson, CTO for Break Media, a Los Angeles-based company that runs an ad network and has over 60,000 Facebook fans, said he believes that Facebook impressions could be worth less than targeted ads seen elsewhere on the Internet. “But statistically, you could analyze this from a number of perspectives,” he said.
In Vitrue’s blog post about the research on Wednesday, the firm said it crunched the numbers for its wide range of clients and their 45 million fans before coming to the $3.60 valuation. The Atlanta-based social media company stated the number – an average – is primarily based on two frequency factors. One, that brands author two posts a day on their pages. And, fans view their personal Facebook news feeds once a day to create what the firm calls “wall post impressions.”
According to the blog, the final math was calculated as follows: “So our last step is to place a CPM value to our earned media. We factored a very conservative $5 CPM – how much would you pay for highly targeted impressions? This final assumption gives our 1 million fan page $300,000 in earned media per month or $3.6 million annually.”
Speaking to ClickZ, Reggie Bradford, CEO of Vitrue, pointed to the blog’s title – “$3.60 Facebook Fan Valuation Is Just the Tip of the Iceberg” – as a clue that his firm believed the social site was in a nascent stage as it pertains to advertising-oriented measurements while suggesting more sophisticated analysis was likely to come. “I would argue that we tried to be super conservative in our estimates,” he said. “I think that’s why the title of the blog makes sense. This is just the tip of the iceberg in that all we are talking about is earned media, if you will, on a fan page for a brand.”
Bradford also seemed to acknowledge that the research didn’t take some potential variables into consideration. For instance, it didn’t account for when the brand’s post gets pushed below the fold by other friends’ comments and fans do not scroll far enough to see the message. According to Vitrue’s analysis, that scenario would still constitute an impression.
John Keehler, director of digital strategy for the social media company ClickHere, said he found the application of a paid-impression model to an earned media setting like Facebook to be potentially problematic. “When you are doing paid impressions like that you are controlling the message completely,” Keehler said. “In the case of Facebook, you only really control the original post. And so many of those impressions could be negative or positive when it comes to messages other than the original post… I would value a positive impression very differently than a negative impression.”
Bradford argued that Facebook news feed impressions may have a greater value to media buyers than $3.60 per fan due to the fact that the fans are more likely to respond positively to a brand post than to a search or display ad. “I agree it is like apples and oranges, but in a good way,” he said. “I think the media buyers should definitely be thinking about siphoning more dollars into Facebook…to grow fans. And marketers need to be engaging those fans in the news feed.”
Scott Swanson, president of boutique social media company Scott Swanson LLP, agreed with Bradford that the valuation was conservative. He said fan audiences often see a brand post up to five times per day, which represents an impression rate much higher than what Vitrue used.
Swanson explained that if several fan comments are made under a brand post, it will reappear at the top of a news feed throughout a day and people will see it repeatedly as they revisit the page. “I think 5X is safe,” he said, while speaking to Facebook impressions.
Wilson from Break Media compared the current state of Facebook metrics to a decade ago when marketers were trying to figure out how much a banner ad or a click was worth. “Research like Vitrue’s – that attempts to put an ROI or a value on social media – is a step in the right direction,” he said. “Whether it’s valid or not, I cannot really comment on. It’s too early.”
You can follow Christopher Heine on Twitter at @ChrisClickZ.
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