One of our strategic account managers asked this question:
“How much value do we place on a Facebook follower?”
This is both simultaneously a simple and difficult question to answer. The short answer is that a Facebook fan alone is worth nearly nothing. Why? The process to Like a Facebook page is one of the lowest commitment activities you can do. One click and you’re done – you never have to engage with the brand, talk to anyone, or interact in any way. A Like by itself is fairly close in value to a website hit, and as Katie Delahayne Payne says, HITS is an acronym: how idiots track success. We’re asking the wrong question.
So how do you apply any value to Facebook? As Batman says, it’s not who you are that matters, it’s what you do. Before we begin this evaluation, I will assume that you know what a converted lead on your website is worth and have correctly configured Goals and Goal Values in Google Analytics.
Start by creating a custom traffic segment in your Google Analytics. Call it Facebook, and set traffic source to match a regular expression.
The regular expression I use is this:
This matches traffic from facebook.com as well as Facebook’s built in link shortener, fb.me.
Once you’ve got the custom traffic segment set up, visit your Assisted Conversions panel in multi-channel funnels and filter all of your conversions using the Facebook traffic segment.
Sum up all of the Facebook goals met and their respective values. In the example above, Facebook traffic represents $1,706.08 in assisted conversion value and $5,544.76 in last touch value for a total value of $7,250.84.
We know from careful tracking (and liberal use of spreadsheets) that we’ve had approximately 60 fans over the same time period. Does that mean that a fan is worth $7,250.84/60? No. Why? Because what’s creating value isn’t the fan but the engagement of the fan combined with their network. A super-influential fan who doesn’t like or share the content posted on your Facebook Page or site has an effective value of zero. A regular person who shares or likes some content that you posted that gets people back to your website and into your marketing funnel has significantly more value, even if they’re not a social media personality.
How do you measure that engagement? In Facebook Insights, you can export all of your available data, including Daily Active Users, into a spreadsheet:
For the time period we’re looking at, the daily active users total is 40,279. That’s the sum of interactions of our fans, friends, and their respective networks (fan and non-fan alike).
Our value per interaction, then, is $7,250.84/40,279, or about 18 cents per interaction with us. That’s a useful value, a metric that indicates that our audience in the broadest possible sense is engaging with us and the value we provide, which in turn lets us derive business value from them.
This also gives us an actionable metric we can use to judge our efforts on Facebook. If we do more things that generate more interactions but don’t substantially increase the value per interaction, then we’re doing things that might be fun or cool but not valuable. On the other hand, if we find that our value per interaction is going up but our interaction quantity is going down, we might be doing things that are deriving business value but alienating our audience.
Our goal should be to provide content and interactions with our fans that is increasingly valuable to them. They in turn should share, like, and talk about our content, which should in turn drive business value back to our website. What we’d want to see in 6 months’ time, as a goal, might be something like 50,000 interactions with a value of $1/interaction.
I hope this post helps clarify that it’s not the fans themselves that do or don’t have value, but the actions, the engagement people take once they’ve made the connection with you.
Christopher S. Penn