What Are Facebook Fans Worth to Retailers?
How much is a Facebook fan worth? It’s pretty high if you’re Walmart with 28.6 million Facebook fans valued at $834.76 each. Not so much for Coca-Cola where each fan is worth $70.16.
That’s the analysis of a new study from social media marketing firm Syncapse Corp. and market research firm Hotspex Inc.
In January and February, the companies asked Facebook fans and non-fan panelists to explore their loyalty and word-of-mouth tendencies around 21 brands. Overall, the study found the average Facebook fan was worth $174.17, up 27.7 percent from $136.38 in 2010. The increase was attributed to a doubling or tripling of fan bases by most brands and significantly advanced "brand interaction" tools across social media.
But fan values varied widely. Besides Walmart, others valued highly include Target, with each fan worth $618.53; Zara, $405.54; Levi’s, $312.01; H&M, $309.57; and Victoria’s Secret, $289.88. The highest was BMW, $1,613.11. Joining Coca Cola on the low-end was Nike, $74.93; Oreo, $75.97; Subway, $127.61, and Disney, $132.88.
The findings were based on six factors:
- Product Spending: The difference in spending habits on each brand within the category
- Loyalty: The consumer intention to keep purchasing the brand in the future
- Page Recommendations: Probability and propensity for word-of-mouth recommendations to lead to future sales
- Media Value: Efficiencies of earned reach and frequency via the Facebook platform
- Acquisition Cost: Efficiency of fans in enticing others to participate and drive organic membership
- Brand Affinity: The perceived personality or emotional draw felt by fans toward their brands. Data for brand affinity was collected using Hotspex’s PersonaSphere, a proprietary tool to measure the emotional drivers of marketing stimuli.
In the report, researchers said brands with less-expensive retail prices or products that have a frequent purchase cycle have smaller fan values. Examples include soft drink brands such as Coca-Cola and Dr. Pepper ($73.58 fan value) as well as confectionaries such as Oreo and Skittles ($104). Categories with higher retail prices, such as BMW, and higher category purchases, such as Walmart and Target, showed higher fan values.
Also, brands with high equity, longevity, and those with "high-emotional connections" in the marketplace (Coca-Cola, Xbox and Nike) also tended to have lower fan values because non-fans also showed a high propensity to purchase and recommend the brands. Conversely, brands with polarized profiles between fans and non-fans (i.e., BlackBerry, Monster Energy Drink, Target) had higher fan values. Fans in these cases tend to be high frequency and loyalists whereas non-fans become "disenchanted consumers, sometimes brand detractors."
Which metrics (purchase intent, recommendation likelihood, acquisition cost, etc.) are most important in determining the value of a brand’s average Facebook fan? What challenges do you see in accurately gauging a brand’s Facebook fan valuation?