More Absurd Social Media Analysis – The Value Of A Fan

April 14, 2010 Author Adam Singer In Digital Marketing and PR

I wrote the other week that the idea of time normalization in social media is a fallacy.  But it goes further than just time being a fallacy.  The marketing industry is obsessed with looking for normalizations everywhere.  And other than providing a feel good number for presentations – it’s an exercise in futility.  Well, other than the fact that it generates PR for those who come up with the numbers.  It’s infotainment at best, misinformation at worst.

It’s no surprise then, that a company called Vitrue – which makes social media management solutions – has determined that, on average, a fan base of 1 million translates into at least $3.6 million in equivalent media over a year.  Or as AdWeek tells the story through the misleading headline:  the value of a ‘fan’ on social media: $3.60.  The findings are “based on impressions generated in Facebook’s news feed.”

Vitrue analyzed Facebook data from its clients — with a combined 41 million fans — and found that most fans yielded an extra impression. That means a marketer posting twice a day can expect about 60 million impressions per month through the news feed.

I’ll let you take that in for a second.  Another gem from the article:

Vitrue arrived at its $3.6 million figure by working off a $5 CPM, meaning a brand’s 1 million fans generate about $300,000 in media value each month. Using Vitrue’s calculation, Starbucks’ 6.5 million fan base — acquired in part with several big ad buys — is worth $23.4 million in media annually.

OK.  Let’s ignore that…

  • This company is lumping together their clients who are from multiple verticals – something that makes this number muddied even if you were going to take it seriously (you shouldn’t).
  • They are in the business of selling social media management solutions and clearly working the sensationalist angle with AdWeek for press (and to try to tag feel good numbers to social media to sell more product).
  • Impressions by themselves from the news feed – or from the web in general mean absolutely nothing to a company’s revenue (unless the company is ad supported).
  • Tagging a fan to impression value makes no sense.
  • They claim a $5 CPM without any rationale for that number.
  • Many of us gloss over their news feed in Facebook anyway.
  • The signal to noise ration in Facebook is pretty terrible.
  • The article headline declaring the value of a ‘fan’ on social media $3.60 when this “data” (yeah, I’ll put that in quotes) only looks at Facebook.

Let’s ignore all of that and just consider – as usual – both media and companies are still attempting the normalization thing.  And it’s absurd – the entire premise is flawed.  The power of web analytics and data isn’t about coming up with normalized numbers to apply blandly across hordes of consumers, but about segmentation, detailed analysis and accountability.  It’s about understanding and activating your true fans, and not even treating them all the same.  They are not all created equal, after all.

These unscientific data points are why companies are blindly chasing bigger numbers for numbers sake – when in reality they are increasing KPI metrics and not necessarily objectives.

Blanket statements like “each new fan = X more dollars in revenue due to impressions” are a joke, and marketers with this mindset are already relics.