What is a Facebook Fan Worth, Part 2: Vitrue CEO Speaks

Social media company Vitrue generated quite a bit of buzz this week for its study pegging the average media value of a Facebook fan at $3.60. After Adweek covered the study (I blogged about it Tuesday), Vitrue followed up with a blog post of its own, offering an additional explanation.

Still, many bloggers have said the methodology is flawed. Among the criticisms: that Vitrue focused on the media value in terms of impressions, rather than engagement value or customer value, and that it didn’t reveal enough about its methodology to make its conclusion believable. See here and here for two critical takes.

I spoke with Vitrue CEO Reggie Bradford yesterday to dig deeper into the study and what it means for marketers. Here are some excerpts from our conversation:

eMarketer: Why did you do this study?

Reggie Bradford: We get asked all the time from people in the market about this notion of what’s a fan worth, and we hadn’t seen anybody try to answer that question. We’ve got lots of information [from Vitrue’s client base, which has a combined 41 million fans] and we wanted to see what it looks like from an earned media perspective. … We wanted to get out there and, frankly, stir up some conversation. It definitely struck a chord in the sense that there’s a lot of interest in this topic.

eMarketer: Why approach the question from the perspective of media value, rather than customer value?

Mr. Bradford: Our intent was to just focus on the earned media facet for now and come out with a subsequent study on the engagement value, which would be an incremental value on top of the media value.

This study didn’t look at shares, comments or likes, which I think are probably an even better set of information for marketers to understand. We only looked at the message a marketer creates [and the media value when that message appears in fans’ news feeds]. We decided to start with understanding the earned media value and add to it as we go along.

eMarketer: But isn’t focusing on something like fan count sending the wrong message about the value of fans on Facebook?

Mr. Bradford: The broader point is why you need a meaningful presence on Facebook and why a million fans matters to a large marketer. Large marketers need to aggregate a large presence on Facebook.

eMarketer: What about the $3.60 average? Couldn’t that figure be very different depending on the marketer or the brand?

Mr. Bradford: We’re putting a stake in the ground and looking at something people can understand and get their arms around. We wanted to make it super simple and take an average. There’s a lot of conservatism built into the numbers. They don’t include engagement metrics [such as likes, comments or shares], which would drive the value figure way higher.

My take is that Vitrue obviously has a vested interest in this subject, as a supplier of social media management. Assigning an arbitrary value to a fan will guarantee that the study will have legs: I can envision myriad presentations in the next several months citing that $3.60 statistic.

That said, I also envision many marketers asking their own agencies and social media suppliers to create media valuations for their fans, comparing them to the Vitrue figure. That is a good thing. If more marketers start discussing fan value, more marketers will begin exploring engagement metrics—and engagement, if anything, is where the true value of a fan lies.