How The Monetary Value of Facebook Fans is Calculated

How The Monetary Value of Facebook Fans is Calculated

Facebook has unquestionably transformed the way people interact on the internet. Its features also make it easy to meet people, share information, and receive news updates within your network. For marketers, the same popularity that makes Facebook engaging also poses a big challenge. The main question they want answered is, "How much value can they expect from engaging in Facebook marketing?" A latest study conducted by Vitrue tries to place a monetary value on each of the fans you receive on the website.

Based on their research, they concluded that each Facebook fan is worth around $3.60 on average. Of course, certain companies were outraged by the small estimate. It is easy to expect more since Facebook is one of the mostly visited websites on the internet, rivaled only by Google.com. There are several claims that the formula used to arrive at the $3.60 average is flawed. But whatever the case, having financial figures will help web owners determine how much budget they need to allot for a social media marketing strategy.

It will provide a more accurate idea of the expected return on investment (ROI). Yet, it is vital to note that it is really not viable to perfectly identify the real worth of a Facebook fan because of different trends ofcustomer behavior. They can easily change their minds from one second to the next. Privacy concerns is also an issue that marketers faces from optimizing the full use of Facebook. While users are generally open to the idea to divulging basic information to register, they want their data to stay secure.

Page Impressions

A popular way to calculate fan value is to know the amount of page impressions it receives. While there are many other factors that needs to be considered, this remains a basic considerations that experts agree on. The calculation provided below will hopefully clear some questions:

* 1M Page Impressions x 30 Days x 2 Posts = 60M Page Impressions

* 60M Page Impressions/ 1000 x $5 CPM = $300,000 * $300,000 x 12 months = $3.6 Million

* $3.6 Million / 1 Million Fans = $3.60/Fan

Aside from the number of fans though, probably a more important factor is the frequency of their posting. For example, Coca-Cola has 5.3 million fans from all over the world yet it receives around 15 posts on any average month. Taking a look at the NBA fan page, with 2.1 million fans worldwide, it is easy to recognize that these members are more active than Coca-Cola's. During play-offs, they post around 100+ times in a month, sometimes a lot more. It's now the right time to start creating a fan page if you don't have one yet.

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