How much is a “Like” worth to your business? Do you count the number of likes you have and eagerly report those totals to your management team to proclaim your social media success? Well, as I have stated previously, you first need to understand your goal with social media, and in this case, what you hope to get out of your Facebook page. If you are going for brand awareness, likes might be a good place to start. If you are trying to introduce your brand into a market place that is aware of your industry/product/service, but not your brand, you can use advertising on Facebook to target your potential customers. If you get a like, you’ve succeeded in making this potential customer aware of your brand (or you have succeeded in getting an existing customer to like your brand). Either way, I would proclaim you successful in the first step. Now, you must engage these fans on your page by providing compelling content, contests, discounts or other materials that make them respond.
Once a fan responds to something on your page (including their initial like) it shows up in the news feed of all their friends.
So, if you get 100 likes, and the average Facebook user has about 150 friends, you’ve essentially received as many as 100 times 150 impressions, or 15,000 brand impressions. How much would you pay for 15,000 brand impressions? Maybe a CPM of $1, for instance? that would mean an ROI of about $15 extra dollars for those earned impressions. Certainly not a windfall, but that’s just what you would pay for the impressions, not what they are worth. So, what is the value of 15,000 brand impressions? Maybe you know that for every 2500 impressions you typically make a transaction. So now, you have the earned media value, plus six additional transactions (15,000 divided by 2500).
Obviously, I’ve made a huge amount of assumptions here. And that’s my point! You need to plug in your own data and metrics to understand the value of earned media and engagement on Facebook. Go beyond the raw count of “likes” you have and look at what value that brings your business in branding and other activities to establish the true ROI of a like. Only then can you understand if it is worth advertising on Facebook.
Here’s a great five-minute video overview of a ComScore report on this very issue.