How much is that Facebook Fan in the window?

Recently Vitrue, a popular Social Media Brand Management company, posted a method for evaluating the potential value of a Facebook Fan.

Their formula was based on the following:

1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000

Making each Fan have a value of $3.60 ($300,000 x 12 / 1M)

While I think this formula is a good starting point, it needs to be tailored to each organization.

Depending upon who the company is that is posting, 2 posts may be an ok number to use, but I don’t know if I’d say 30 days, more like 20 days (4 weeks in a month x 5 business days) in my opinion unless the company is actually employing multiple full-time employees to manage their social media outlets, such as Dell.

For Team San Jose we typically post between 1 and 3 posts a day, so 2 posts average is fine, though we don’t have a full-time social media person. It’s a part-time Mon-Fri function.

Another consideration is the CPM value of $5. While that may be a business average, based on our key word estimates with Google Adwords we’ve seen costs closer to around $1.00, though I personally think that is too low. I’m considering $3 for our average CPM. The average CPM is really the tricky part to define for us as we have no historical data for web advertising to pull from.

The formula for Team San Jose would be changed to

1M impressions x 2 posts x 20 days = 40M impressions
40M impressions / 1000 x $3 CPM = $120,000

Valuing our Fans at around $1.44 ($120,000 x 12 / 1M) – so a Facebook Fan base of 500 is comparable to a publicity or advertising promotion of around $720.00

Of course, many other factors come into play here such as how many of those people share a post, “like” a post, or promote a site on their own through some other word of mouth outlet. These are what can make the value of social media increase exponentially.

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