Knowing the Cost of Everything and the Value of Nothing: What Is a Facebook Fan Worth?

'He knows the cost of everything and the value of nothing,' was Oscar Wilde's contemptuous bon mot about the mores of an earlier era. But we live in a transactional time. Such niceties seems beside the point when friend is a verb and numbers delineate competitive advantage.

Turns out the 'worth' of a Facebook fan is pretty easy to figure out. Add up friends and calculate sum. The trick in migrating from friend to fan to eyeball to customer is in the rate of degradation both of viewership and commitment. Come to think of it, that is not a bad analogy for life offline. JL

Kunur Patel reports in Advertising Age:

Online analytics firm ComScore and Facebook set out to answer an old question once more: What's a fan worth? Their answer: A fan is worth the sum of its friends. For example, Facebook mega-brand Starbucks reached 8% of all U.S. internet users in May through unpaid posts and the majority aren't even fans of the brand.

How's that work exactly?
When Starbucks posts to its Facebook page, only a portion of its 24 million fans are actually online or paying attention to their newsfeed to see that post. About 3% of all 216 million U.S. internet users were in that camp in May, according to Comscore's new social-measurement tool based on its 2 million-person global panel. When those fans like or comment on Starbucks' post, their friends -- an additional 5% of all U.S. internet users -- see the brand pop into their newsfeed and, boom, Starbucks gets even more eyeballs without having to cajole their friendship in the first place. (The average Facebook user has 130 friends.)

All that comes at no media cost to the brand, considering posting updates to Facebook brand pages is free to advertisers. Of course, Facebook execs called the brands in the study -- Starbucks, Southwest and Bing -- major advertisers and many use paid media on the site to amass their followings. Facebook made nearly $2 billion in global ad revenue last year, up from $740 million in 2009, according to eMarketer.

In all fairness, Starbucks is somewhat of an anomaly on Facebook, considering its massive fan base and the fact that many U.S. consumers visit its stores daily. But even brands with fewer fans such as Southwest and Bing reach more friends of fans than fans themselves with Facebook posts. Southwest reached 917,000 fans through posts in May, but 1.1 million friends of fans. Similarly, Bing reached 1.2 million fans and 2.2 million friends of fans. The study also found that the majority of those views don't happen on brands pages, but in users' own newsfeed. The most activity, 27% in May, happened on Facebook's homepage and in the newsfeed. Profile views accounted for 21% of activity and photos 17%. Only about 10% came from apps or tools.

The study also aims to put social-measurement tools in the language of media buys in general, namely gross ratings points and frequency. Starbucks, for example, reached both fans and friends of fans about three times on average.

"The default assumption is that when you publish [on Facebook] you're hitting 100% of your fan base all of the time," said Brad Smallwood, head of measurement and insights, Facebook. "That's not the case. When you publish you have the same tendency to hit the same fans again and again."