Starbucks’ 7.7 million Facebook fans are worth roughly $1.8 billion annually, according to Syncapse’s new study focusing on the Facebook audiences of 20 major brands. From the same research, McDonald’s fans annually spend an average of $159.79 more with the chain than do non-fans, representing the largest differential value of all the brands. And Oreo – affected in the calculations by its low price points and low purchase frequency for its products – saw the lowest value with a difference of $28.52.
Syncapse’s study attempts to put a monetary value on Facebook fans and comes up with wildly different results than Vitrue’s research from two months ago. Syncapse says that the average value of a fan is $136.38, while Vitrue came up with $3.60.
The difference in the two findings lies in divergent criteria and emphasis. Syncapse primarily zeroed in on how much Facebook fans spent on a brand vs. non-fans, while Vitrue focused on so-called earned media.
Syncapse found that fans of Starbucks annually spend $235 with the coffee brand – more than twice as much as non-fans. Fans of McDonald’s average a spend of more than $310, while non-fans spent half as much. That means its 2.3 million Facebook fans are worth almost $713 million per year collectively.
But take those numbers with a grain of salt, suggested Syncapse CEO Michael Scissons. Since the report first hit the Internet on June 11, Scissons said there have been some misinterpretations about what the major takeaway should be.
“I think people may get confused by reading this as a top-line synopsis on Twitter, Facebook, or on a blog,” he said. “We are not saying that if Facebook didn’t exist the fans wouldn’t still be worth that much, and that the value would disappear. We are trying to show marketers what the value of that audience represents to the company vs. a lot of traditional tactics… The sum of the [report] really talks about the overall value that the Facebook-specific audience brings to the company.”
How Syncapse Got to the $136.38 Figure
Among other elements, Syncapse took three key factors into consideration to produce the $136.38 valuation – product spending, brand loyalty/affinity, and willingness to recommend. According to the Toronto-based company, 4,000 Facebook fans (or in the official parlance, “People Who Like This”) and non-fans participated in the quantitative research. Conducted at the beginning of this month, the study compared Facebook fans vs. non-fans on various levels. Another Toronto company, researcher Hotspex, orchestrated the online survey.
The $136.38 valuation was calculated by crunching the following data. For product spending, the firm learned fans annually spent an average of $35.92 more than non-fans. It concluded that Facebook fans are 28 percent more likely to continue using a brand compared to non-fans. Sixty-eight percent of Facebook fans said they were “very likely” to recommend the brand’s product to family and friends, while only 28 percent of non-fans said the same. And 81 percent of fans said they feel a connection to the brand vs. only 39 percent of non-fans.
“The value of the fan is calculated by aggregating…the average direct value of the audience, plus spend influence they exert on others, and the reach/frequency of the impressions they generate,” Scissons explained. “Over time the differential in value between Facebook fans and non-fans cannot just be isolated and/or calculated but impacted by adjusting the campaigns and triggers that affect the elements of the above three variables.”
Interestingly, the study concluded that the spending power of an average individual fan for BlackBerry was $83.98, while Nokia’s was $180.87. Said the report: “BlackBerry manifests a lower loyalty premium for Facebook fans because the strength of their product among non-fans is much higher compared to Nokia. For Nokia, fans are intense stalwarts but less enthusiasm is evident with non-fans. In that light, fan value is not simply a question of ‘good’ or ‘bad,’ but rather must be understood in terms of the overall profile of a brand’s loyalty inside and outside of the social channel.”
Vitrue Study Aimed More at Ad Budgeting
In Vitrue’s blog post about its research on April 14, 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 for earned media. In short, the Atlanta-based company’s methodology valued fans by estimating how much it would cost to advertise on a website that reached the same number of people.
The social media company stated the number – an average – was primarily based on two frequency factors. First, brands author an average of two posts a day on their pages. Second, 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.”
Lastly, the two vastly different studies underscore the “early days” stage in which marketers find themselves as it pertains to assigning value to Facebook fans. Eager to manage Facebook audiences for brands, there’s little doubt other social media firms will soon be releasing their own reports. And it’s probable that their methodologies and aims will look dramatically different than these first two.
Correction: The original story said Starbucks fans were worth $1.8 trillion, when it should have been $1.8 billion. And McDonald’s fans were said to be worth $7 billion, but should have been $713 million.
Follow Christopher Heine on Twitter at @ChrisClickZ.
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