A Facebook fan is worth $174 to a brand, up 28% since 2010, according to Syncapse, a social media marketing firm.
Syncapse worked with research firm Hotspex on a survey based on data collected from more than 2,000 U.S. panelists in late January and early February. The study compared Facebook fans and non-fans based and their corresponding product spending, brand loyalty, propensity to recommend, media value, cost of acquisition and brand affinity to arrive at the figure.
Though $174 is an average figure, the value varies from brand to brand:
The reason, says Syncapse CEO Michael Scissons, is "what a consumer would spend on Zara vs. Coke." A higher average purchase price makes a fan more valuable.
The study also contrasts fans and non-fans. The former are much more active in social media. The average fan is a fan of 10 brand pages at a given time. On the other hand, almost two-thirds of non-fans have followed 10 or fewer brand pages. Three quarters of fans are likely to share good brand experiences and share promotions and discounts with their Facebook friends. About two-thirds of fans are likely to share a bad brand experience.
Sycapse isn't the first to try to put a value on a Facebook fan. Another social media agency, SocialCode, claimed in 2011 that a Facebook fan was worth $10 — a far cry from Syncapse's figure. That study assumed a cost-per-click of $1.
To download Syncapse's full study for 2013, click here. You can also download Syncapse's full study for 2010, by clicking here.
COMMENTARY:
Deriving Fan Value: Methodology
Identifying differences in behaviors and motivation between fans and non-fans is the key to understanding the value of a brand. Syncapse has identified and isolated these factors, and has associated them with key factors that drive shareholder value. These factors are widely identified as fundamental to both short-term and long-term sales performance and have been tested across multiple organizations to confirm their importance.
The Value of A Fan: 2010 Vs 2013
Brands for both the 2010 and 2013 study were among the top global brands in terms of Facebook fan counts. In 2010, the brand page often had a few million fans each. Brands selected for the 2013 study had well over 15 million fans and some popular brand pages like McDonalds have well over 25 million fans. Coca-Cola has over 60 million fans. Many brands have separate or multiple page listings to support international or multi-lingual pages. As an example, Nike has several pages including Nike (12 million fans), Nike football (17 million fans), Nike basketball (4 million fans), and Nike cricket (2 million fans). BMW cars has over 13 million fans, BMW X5 has 1.2 million fan, BMW India has 1.5 million fans, and BMW Egypt has over 750,000 fans.
Even a slght increase in the value of an average fan is magnified by the increase in fan volume. In 2010, the average value of a fan across all brands under study was $136.38. Using a cross-section of brands that are directly comparable from 2010 to 2013 (so excluding the luxury vehicle BMW and mass merchandisers Walmart and Target), the average of a fan has risen to $174.17 in 2013. Despite the overall increase in fan value from the initial study, some brands have experienced a decline in fan value. Part of the explanation for this decline lies in the ubiquity of the affected brands, as explained in the key findings from the study of the value of a Facebook fan below:
- Brands with smaller retail prices have comparatively smaller fan values - Brands with smaller retail prices or products that have a frequent repeat purchase cycle have smaller van values like the soft drinks (Coca-Cola and Dr. Pepper) and confectionairies (Oreo and Skittles) industries. Categories with higher retail prices, or higher category purchases, have higher fan values like mass merchanise retailers (Target and Walmart) and luxury automobile brands (BMW).
- Users of brands who are also fans are more receptive to those brands versus users who are not fans - Facebook brand fans:
- Are 80% more likely than non-fans to be brand users.
- Spend 43% more in respective categories versus non-fans, despite not having a higher income.
- 18% more satisified with their brands than are non-fan users.
- 11% more likely to continue using the brands than are non-fan users.
- Brand fans are super consumers - Before comparing brand preferences and attitudes of fans and non-fans, it is important to understand fundamental behavioral differences. For example, fans are much more active in social media, with two-thirds of brand fans also being a fan of more than 10 brand pages at any given time. Conversely, almost two-thirds of brand users that are non-fans have fanned 10 or less brand pages. On average, three-quarters of fans are likely to share good brand experiences and share promotions and discounts with their Facebook friends. On the other hand, almost two-thirds of fans are likely to share a bad brand experience.
- Fans spend more than non-fans - Excluding BMW of the mass merchandising category, fans spend approximately $116 more per year than non-fans, in their respective categories. The clothing-fashion category had the biggest difference with fans reporting that they spend approximately $257 more per year than non-fans. Coca-Cola and Xbox are least likely to benefit from differences ($29 and $24 difference respectively).
- Fans advocate more - On average, 85% of Facebook fans are likely to recommend that brand compared to 60% of non-fans. Among fans, Disney (93%) had the highest percent of fans that are likely to recommend, followed by Dr. Pepper (92%), Xbox (91%) and Nike (90%), with Levi's, Coca-Cola and Oreo very close behind. Notably, these top brands also received high non-fan likelihood to recommend scores, with 68% of non-fans indicating they were likely to recommend the brand. The likelihood to recommend among fans for BMW, BlackBerry, Monster, McDonalds and Walmart are among the lowest and also are the lowest for non-fans.
Overall impression and likelihood to purchase measure follow a similar pattern as likelihood to recommend. The beverages/soft drinks, sporting and confectionary categories received the highest overall impression and purchase intent scores among fans. At the brand level, Levi's outperforms all other brands as 95% of fans have a very strong impression of the brand compared to 75% of non-fans, and 89% of fans would purchase the brand next time they are shopping compared to 70% of non-fans. Notably, Walmart an Target receive considerably lower overall impression scores among fans and non-fans, however purchase intent is on par with the Levi's brand.
- Brands with high equity or longevity in the marketplace have lower fan value - Examples where high brand equity lowers relative fan value include Coca-Cola, Xbox, Nike and Walmart. Purchase and recommendation intent among non-fans of these brands are disproportionately high compared to non-fans of other brands resulting in smaller spending gaps between their respective fans and non-fans. The phenomenom is also apparent in brands with high emotional connections, i.e., Coca-Cola, Xbox and Nike also have very high positive personality profiles among fans and non-fans alike. These brands over-index at being inspiring, interesting and fun. Essentially, non-fans appreciate these brands as well, thus lowering overall fan value.
- Brands with polarized profiles tend to have higher fan values - Larger noticeable differences between fans and non-fans on core brand metrics such as intended usage, overall impression and personality drivers reflect a polarized view of certain brands. Fans become high frequency users and loyalists, whereas non-fans become disenchanted consumers, sometimes brand detractors. This occurs in brands like BlackBerry, Monster Energy Drink, Skittles and Target. Non-fans of these brands under-index on either persnality profiles or core metrics such as purchase intent and overal impression. Brand perceptions can be more negative among non-fans. For example: BlackBerry is seen as out-of-date and unfashionable, while Monster Energy Drink is seen as pretentious. An exception to this rule is Walmart, where non-fans have a more negative view of the personality of the brand, yet continue to shop there. Non-fans perceive the brand to be unfriendly and insincere, yet purchase intent is still high.
- Fans tend to be brand users before they "like" a brand's Facebook page - Comparing timing of initial brand purchase with timing of becoming a fan shows that consumers typically do not fan a brand without trying it first. In fast, most fans are current brand users. On average, 80% of fans currently use the brand. The exception to this rule is the one brand that is not price accessible to all consumers: BMW, where the usage rate for fans is 36%, and 46% of BMW fans have never owned or used the brand.
- Personal expression trumps coupons as reasons for fanning brands - Among the brands we studdied, fanning is driven by two main reasons: 1) to get a coupon, a price discount or some type of purchase rewards (cognitive/practical) or 2) to show their support for the brands they like and to receive regular updates on their favorite brands (emotional/personal). Interestingly, on average, the emotional reasons trump the practical ones as fans are looking to express themselves through the brands they "like" rather than expecting price discounts and coupons from the brands that they would choose to purchase anyway.
Courtesy of an article dated April 17, 2013 appearing in Mashable
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