Maybe $174.17. Then again, maybe that’s not important, some retailers say.
What’s the value of a Facebook fan? On average, $174.17, according to a new report from social media marketing firm Syncapse Corp. and market research firm Hotspex Inc. That’s a 27.7% jump from 2010, the last time the vendor attempted to quantify Facebook followers’ value, which it then estimated at $136.38.
The two firms based the report on data collected from more than 2,000 U.S. panelists in January and February. They arrived at the figure using a survey that asked Facebook fans and non-fan panelists to share their thoughts about brands such as Wal-Mart Stores Inc., Target Corp. and Coca-Cola Co.. For instance, the survey examined how loyal shoppers are to Wal-Mart and how likely they are to recommend the retailer to their friends. The vendors also compared fan and non-fan panelists’ shopping behaviors, such as how often they bought a brand’s products or shopped at a retailer and how much they spent, across the 21 brands examined in the report.
While $174.17 is an average, for certain brands the value of fans is significantly higher, the report found. For instance, each of Wal-Mart’s 28.6 million fans is worth $834.76, according to the report. And Target’s 21.8 million fans are worth $618.53 each. That’s largely due to the frequency that consumers shop at those stores, the typical amount they spend, as well as shoppers’ affinities to the brands.
However, not everyone agrees with the report’s methodology, including Wal-Mart and Target. Both retailers suggest that seeking to peg a dollar value on Facebook followers is an inexact science and not an approach they take.
“We don’t put a dollar value on our Facebook fans,” says a spokeswoman for Wal-Mart, No. 134 in the Social Media 300, an Internet Retailer research guide that ranks retailers by the percentage of traffic to their web sites from social networks. “But we do value them. We see social media as an amazing place to have a conversation and dialogue with our customers.”
The value, she says, is that unlike other marketing channels, such as e-mail, social media is a two-way dialogue that can inform the company’s business practices. For instance, Facebook fans suggesting on the social network that the retailer offer healthier foods in its stores led Wal-Mart and its suppliers this month to remove unhealthy trans fats from its prepared bakery items.
Moreover, the retailer can post many messages on Facebook without turning shoppers off. For instance, yesterday Wal-Mart posted five different messages on its page. Sending five e-mails in a single day would undoubtedly lead consumers to unsubscribe from its e-mail list, she says.
Target similarly says it views social media as an “important platform to connect with our guests, share enthusiasm for our brand, listen to feedback and provide great deals,” says a spokeswoman. Moreover, she says, it reaches consumers on the sites where they’re already spending time. A recent Nielsen Co. report found that social networks account for 20% of the time consumers spend on a PC and 30% of their time on a mobile device.
Even so, Target, No. 169 in the Social Media 300, doesn’t assign a value to its Facebook fans, the spokeswoman says.
The report suggests that there are stark differences between a brand’s fans and non-fans. 39% of fans use social media to research products before making a purchase, compared with 14% of non-fans. And fans’ average purchase of items from brands featured in the study was $255, 83.5% more than the $139 non-fans.
As more consumers spend more of their time on social media, brands should take notice and use the channel to reach consumers, says the report. “Business now is social,” the report says.