How Much Is A Facebook Fan Worth?

According to a new study by Vitrue the average Facebook fan is worth $3.60 in earned media. Vitrue calculates the value of a Facebook fan based on impressions generated in the Facebook news feed. It then applies display banner advertising pricing to the number of Facebook fans you have and viola, an instant metric.

From the Vitrue blog:

This means our 1 million Fan Facebook Page can average 1 million impressions with a single post to the wall. Factor frequency; a two post per day strategy would garner approximately 60 million impressions per month. Now here’s a metric all marketers are familiar with – we’ve been buying impressions since the dawn of the Internet.

These impressions are practically free, similar to earned media – that we are all familiar with. So our last step is to place a CPM value to our earned media. We factored a very conservative $5 CPM – how much would you pay for highly targeted impressions?

This final assumption gives our 1 million fan page $300,000 in earned media per month or $3.6 million annually.

Here is a recap of the formula used to calculate the valuation:

1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000
$300,000 x 12 months = $3.6M
$3.6M / 1M fans = $3.60

What do you think of this formula? Is it an accurate way to measure the value of Facebook fans or is it simply an agency trying to put a metric on social media marketing?

Source WebTechUniverse.com