Each Facebook fan is worth $3.60 to a brand annually, according to Vitrue research published in Adweek. The value of was calculated per million, thus $3.6 million for every million fans. If this calculation is correct then Star
bucks, the retail brand with the most fans, should be bringing in $23.4 million per year with its fanpage.
Vitrue based the value on a $5 CPM (cost per 1,000 impressions) and calculated that a million fans generate $300,000 in media revenue per month. Vitrue came to this figure by examining the number of impressions in the news feed. On average, each fan generates an extra impression per brand update.
Vitrue’s data is compelling because it puts a price on something that’s still really labile. We all know that social media can work wonders for brand engagement, but we don’t yet have a lot of metrics on hand to measure it.
“We still don't have a clear and coherent story for traditional advertising and media professionals that enables them to easily begin buying and selling online media” writes Microsoft’s Advertising Technology Advisor, Eric Picard.
Granted, there’s a lot less brand hesitation than there was even a year ago, but advertisers need to really work on developing a new set of metrics to track the effectiveness of advertising across social networks. Vitrue’s data is a good start.