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Valuating a Facebook Like

by warriorforumrocks
18 replies
I'm used to bidding in AdWords based on ROI. Bidding in Facebook is tricky since I can't seem to come up with any conversions via the tracker. Bidding for likes should be a lot easier and more natural, but it's difficult to valuate a like.

If the conversion rate on my website is 2% and my average profit per order is $20, should I figure a like is worth $0.40 (1*.02*20=.4) so I should be wiling to pay $0.20 per like in Facebook advertising costs?
#facebook #valuating
  • Profile picture of the author ReferralCandy
    Hi Warriorforumrocks,

    That sounds about right for a CPA campaign. Obviously, though, you'll want to use some form of web analytics software to figure out precisely how much traffic is coming from Facebook as well, and compare that against what you're spending elsewhere on your PPC efforts. It might also be prudent to consider how much activity you're putting into Facebook—how often do you post a link to your site, how much traffic does that drive and how much of that leads directly into conversions? Google Analytics offers a relatively simple way to track that; here's an article detailing how to go about it. Cara Pring from The Social Skinny also has a really cool idea: offer your Facebook fans a time-limited exclusive offer, and monitor the direct impact that has on your sales.

    It also goes without saying, of course, that the value of a Facebook like exceeds the calculable as well—brand recognition, brand loyalty, the relationship you get to build with your consumers...these aren't things that fit easily into precise metrics. With social media, the incalculable very often ends up being immeasurable.
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  • Profile picture of the author warriorforumrocks
    ReferralCandy, the problem with that sort of tracking is:

    1. it makes for big ugly URLs
    2. it doesn't track someone who visits by clicking a tagged link, leaves, and then returns in a new session
    3. it doesn't track someone who clicks an untagged link or types the domain name into the browser

    I was hoping I'd be able to add code to my checkout page which determines whether or not the user has liked my FB page. After gathering enough data, I could then determine the percentage of FB fans which convert. Unfortunately I don't think this is possible.

    Another idea is to maintain a list of people who have liked my FB page. I think only the latest 500 names can be downloaded at any given time, so the list could be downloaded periodically to maintain a fairly accurate list of names. Then the names of converting users could be checked against the names of FB likers. Obviously plenty of room for error here but at least it's something with which to calculate the percentage of FB fans which convert.

    It also goes without saying, of course, that the value of a Facebook like exceeds the calculable as well--brand recognition, brand loyalty, the relationship you get to build with your consumers...these aren't things that fit easily into precise metrics. With social media, the incalculable very often ends up being immeasurable.
    I find myself coming back to this more and more. How can you determine how much should be spent on these sort of goals? How does Coca-Cola decide that a 30-second commercial during the Super Bowl is worth $4 million? How would they know if $40 million is too much?
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  • Profile picture of the author bonvideo
    Before I even start promoting my Facebook Fake Page I will consider to outsource the targeted likes work for my fan page first, this because nobody wants to join or Like a fan page with just a few hundred followers, in some cases even a few thousands wont do the trick so a no fans page, never mind what your advertsing efforts are will lead to a very low conversion rate. if you need any further help just pm me I will be gald to help!

    Maurice





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  • Profile picture of the author ronrule
    That's a myth, nobody cares how many other people like a Facebook page. The only people who say that are people who sell fake Facebook likes, you've never been interested in a page and said "Nah, I'm not gonna click the like button because there aren't a lot of other people who like it"
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    • Profile picture of the author FirstSocialApps
      Originally Posted by ronrule View Post

      That's a myth, nobody cares how many other people like a Facebook page. The only people who say that are people who sell fake Facebook likes, you've never been interested in a page and said "Nah, I'm not gonna click the like button because there aren't a lot of other people who like it"
      100% true Im so glad that someone else said it. I have NEVER in my life went to a fan page and saw posts , topics, pictures etc that I loved and said .. hey this is a great page. But oh wow only a few people like it so Im not going to like it now. Simple fact if you post good content that people want to see they will like your page so they can see it again.

      The like sellers are basically the penis enlargement pill sellers of the Facebook world. They are preying on peoples insecurities to try to push a product that no one really needs.
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  • Profile picture of the author warriorforumrocks
    ronrule,

    Only about 10% of your users will see your posts in their news feed unless you promote it
    Are you sure? My personal FB account likes my business FB page and posts to the business page show up in the personal account's news feed every single time.

    but if you pay to promote it, you aren't just promoting it to them, you're also promoting it to their friends in THEIR news feeds.
    Are you referring to the Promoted Posts method?

    http://www.facebook.com/business/promoted-posts

    I'm sure you know you can reach only those connected, only those not connected, or only friends of those connected or others when using different Facebook advertising methods.

    So not all Likes are created equal. If your audience consists of people who have friends who frequently interact with them on Facebook, then your promoted posts will have higher visibility than if your audience consists of people who are less social on Facebook - and it has nothing to do with how often they engage YOUR page, it's all about how THEY use Facebook.

    BUT - that higher visibility doesn't mean their friends will be as interested in your brand as they were.

    So the answer to your question: There is no formula, no scale, no value, no ability to project. It will be different for everyone. And it doesn't scale the way PPC does either... if you have 10,000 fans today, and 15,000 fans a month from now, you could test the same type of post again and get completely different results because those 5,000 new fans may interact differently with their friends on Facebook than your first 10,000.
    But the same could be said of PPC or any other advertising method. Each click comes from a different person and so has a different value. The same goes for each like. The idea is to find an average value for each click or like based on ROI so you can bid appropriately.

    You got me thinking about something. All of my FB ads have been targeted to those who are not connected to my page. It sounds like you target those who are connected to your page. This morning the FB conversion tracker reported its first conversion for my account and it is for a Page Post Ad I ran briefly which was targeted to those who *are* connected to my page. Maybe I should be targeting my ads to them?
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    • Profile picture of the author ronrule
      Originally Posted by warriorforumrocks View Post

      ronrule,


      Are you sure? My personal FB account likes my business FB page and posts to the business page show up in the personal account's news feed every single time.
      Yeah, you're an admin on the account, of course you'll see your own posts every time. But users who have only "Liked" the page, and haven't added manually added it to their interests lists, will see it based on how often they interact. Not all users will see the post, and the less they interact, the less important Facebook considers your posts to them and eventually squelches it. You probably have a ton of stuff you've liked on Facebook that you never see posts from in your feed, even though they've been posting.

      That's why they created the promoted posts method - it goes beyond the suppression algo and makes you visible to people who liked your page that you wouldn't have been visible to.

      Are you referring to the Promoted Posts method?

      http://www.facebook.com/business/promoted-posts

      I'm sure you know you can reach only those connected, only those not connected, or only friends of those connected or others when using different Facebook advertising methods.
      You're not just reaching the people who liked you, you're also reaching their friends. If I like you on Facebook and you promote a lost, if I interact with that post (like or comment), my friends will see that activity in THEIR news feed.

      That's what I mean by the value of a Like being subjective. If my friends are into the type of crap you sell then they, because I liked your page, may also click your link and become your customer.

      But the same could be said of PPC or any other advertising method. Each click comes from a different person and so has a different value. The same goes for each like. The idea is to find an average value for each click or like based on ROI so you can bid appropriately.
      What I search for on Google isn't being broadcast to the rest of the web. Your ability to sell to me is relative only to how well you captured what I was looking for, and how well you presented it to me. Since my "friends" aren't seeing our interaction via PPC, there is no chance of you getting a sale from them. But there is with Facebook.

      You got me thinking about something. All of my FB ads have been targeted to those who are not connected to my page. It sounds like you target those who are connected to your page. This morning the FB conversion tracker reported its first conversion for my account and it is for a Page Post Ad I ran briefly which was targeted to those who *are* connected to my page. Maybe I should be targeting my ads to them?
      Try running an ad that's shown to the people who DO like your page - they've already expressed an interest in you, you have a greater chance of selling them something than some random stranger. Plus the ads will be cheaper.

      It goes against conventional logic, you think "I already "have them" because they liked my page so I only want to show ads to people who don't already like me", but in reality just because someone Likes your page doesn't mean they're a customer. Maybe they're just waiting for a reason to become one.
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    • Profile picture of the author FirstSocialApps
      Originally Posted by warriorforumrocks View Post

      Are you sure? My personal FB account likes my business FB page and posts to the business page show up in the personal account's news feed every single time.
      This is because you have a high affinity with that page (see link describing edge rank
      What is Edge Rank? | First Social – Blog ) , with your general fans most people will have a much lower affinity and hence lower edge rank so that on average 10-15% of your fans will see any give post. The way to increase this is to increase the affinity, by posting good content that they consistently want to see.
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  • Profile picture of the author warriorforumrocks
    Eye-opening. Thank you ronrule and FirstSocialApps. I hadn't read up on Edge Rank.

    Would you choose the Promoted Posts method over Page Post Ads for reaching more of the people who have liked your page? Promoted Posts always struck me as a sort of shortcut with less control.

    If I target people who do like my page, I'll likely pay for some clicks or impressions that I would have received for free otherwise but I guess that's just how it goes.
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  • Profile picture of the author abbe77
    Adwords are targetted based customers and more ROI while FB only social network where people come to talk, read and share not for buying. Yes, if its a physical product rather than digital then it can have some conversion.
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    • Profile picture of the author ronrule
      Originally Posted by abbe77 View Post

      Adwords are targetted based customers and more ROI while FB only social network where people come to talk, read and share not for buying. Yes, if its a physical product rather than digital then it can have some conversion.
      Which is why you run the Google AdWords remarkteing code on the landing pages of your Facebook ads.

      You're exactly right about Facebook - people go there to socialize, not to shop, I say this to people about every 5th blog post and at every speaking engagement. BUT - if they were interested enough to click your ad, even though they aren't likely in a buying mood right then and will quickly get distracted by pictures of cats and people's food on Facebook, now that the remarketing cookie is on their system, your ads will follow them around the Internet on sites that run AdSense. So when they ARE in a buying mood, they'll be reminded of the product they saw on Facebook that they liked enough to click through to.

      I tend to get better results with that style of marketing than with AdWords directly, because the combination of FB and Remarketing is much less expensive than paid placements in Google for the keywords I target. The ROI ends up being a lot better with this combo.
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  • Profile picture of the author warriorforumrocks
    When you go on Facebook, where are your eyes going? Your news feed or the sidebar?
    I think this is meant to be a vote in favor of Promoted Posts over Page Post Ads, but Page Post Ads can target only the News Feed if created or edited in the Power Editor. Also if you bid via CPC you won't have to pay for sidebar impressions if they aren't effective at generating clicks.

    Another thing about Promoted Posts is you aren't able to target only fans of your page, friends of those fans must be included. Are friends of fans an effective group to target? Unlike fans, they haven't demonstrated any interest in what you're offering.
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  • Profile picture of the author adeelv
    To go back to your original question about the value of FB, it depends on whether you want to connect it to the actual cost of acquiring a like or connect it to actual cost of a sale that may come from a like. Here is some research I've done.

    ----
    1) Cost of a Facebook fan: $2.35
    a) Source: Business Insider: How Much Is a Facebook Fan Worth? $10. Or Possibly 2 Cents. - Business Insider
    i) Ranges between $1.07 and $3.60 if fans are not bought (they’re mostly fake or paid to like by a third party) or if fans are not associated with a direct e-commerce purchase (if fan value is directly derived from the value of how much they will purchase, then the value of a fan significantly increases based on the value of what is being sold). To ensure an average range, my calc does not take purchase consideration in the calculation to calcualte a cost/fan that is irrespective of whether companies sell advertisements or actual products.

    Does that make sense? You can also check out the article link.
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  • Profile picture of the author warriorforumrocks
    adeelv, I'm not sure what you mean here. How can info like this be used in an ROI calculation to determine how much to bid on FB advertising?
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