Archive for July 9th, 2010

Methodology for Measuring Monetary Value per Social Media Fan Interested in a Brand

Posted by Laura on Friday, 9 July, 2010

I wrote this in April. I thought it was posted here or on Fan History’s blog. After a bit of searching, nope, it isn’t. Therefor, posting it here. This was written at the request of a friend who works for a marketing company in Chicago to discuss the challenges of measuring ROI.


April 19, 2010

One of the most important metrics that people discuss is the value of a customer and the value of followers of brands on various social networks. What is the return on investment for generating buzz in social media? What is the per individual value of having a fan on Facebook, having a fan create their own video content and upload it to YouTube, the value of some one belonging to or listing a brand as an interest on LiveJournal? Virtue, a social media management company, has put the value of a Facebook fan at $3.60 per fan.1 Their methodology is suspect and their conclusions should not be read as universal across the many industries that utilize social media to promote their products and drive revenue.

Social media is composed of many networks, each catering to their own demographic and interest base. Each of these groups has their own behavioral patterns. Canadians and Brits have different usage patterns for Internet based radio than their American counterparts. The buying power and education level of a Facebook user is different than that of a MySpace user, even if both groups are composed solely of Americans. Added to this mix, there has been a fair amount of research done that says brands themselves do not influence purchasing decisions as much as friends and family. 2

Given this reality, a standard industry wide number is impossible to calculate. A smart company should independently develop a number for measuring the monetary potential of people interested in their brand. To do this, a company should first identify a specific network where they are aware of a community that is already interested in their product. This community can be expressed by listing the brand as an interest, as is the case for Facebook and LiveJournal, by belonging to a group dedicated to the brand for sites like ning and Yahoo!Groups, or by uploading user generated content on sites such as YouTube. Remember: Each of these sites has a different demographic base so you cannot arrive at a single metric across all networks unless you have the same uniform population using multiple networks.

Once you have identified the community you wish to find the individual value for, determine the demographic and geographic composition of the community on that particular network. Stick with information that is publicly available. In the case of LiveJournal, that data includes date of birth, geographic location, the type of account a user has (paid, plus, permanent). For Facebook, this information can be much deeper if you use the data provided to people interested in marketing to them. For a fan page that you do not run, you are limited to their name (for which you can attempt to determine gender) and the network that a person belongs to.

After you have this data, compare it to your known information regarding people who support your brand. If the demographic information does not match information, there is something wrong with that community and you will never get meaningful data. For example, a United States based Christian bookstore may be gaming for autofollowers on Twitter and have a huge following of people from Iran, Saudi Arabia and Morocco. On the whole, that demographic is unlikely to convert into potential customers for the bookstore. Trying to go further to assess value of one’s Twitter followers would thus not be useful. 3 If the data does match internal numbers or is a demographic base that you wish to explore, go on to the next step.

If the community demographics match with what you want to explore, create a survey for people who express an interest in your brand. It would be best to make the survey using a format that people inside the network would find easiest to use. For example, on LiveJournal, you may wish to use the service’s polling data; on Facebook, you may wish to create a survey using FBML and make it a tab on your fanpage or create a Facebook application. When conducting the survey, ask demographic and geographic questions that are represented by the data you pulled from public sources on that network. The survey should also ask questions regarding what other networks the individual uses. The survey should also inquire as to how often the customer has made a purchase from your company, what type of purchase was made, who influenced the decision to go with your particular brand, where the people who influenced them were sharing their influence, and what percentage of time those particular influences helped with a purchasing decision.

After the survey results are in, an analysis should be conducted to determine the particular value of each respondent in terms of monetary value of a customer. For example, a person may be a fan of your Facebook fan page. If for example you are a baseball team, the person may be inclined to purchase tickets to attend games anyway. They may respond that they have bought $200 worth of tickets. They may also tell you that they bought $20 worth of tickets to games they would not have otherwise attended as a result of coupons that you posted to the Facebook fanpage wall. The fan may also have purchased tickets they would not have purchased otherwise because a friend on Facebook talked about how they loved the team but had never attended game. The Facebook based conversation created a situation where the person spent another $40 on tickets. The value of this customer on Facebook thus is not $200 but $60 or 30% of their total spending is a direct result of a social media activity on Facebook.

Once the value for each respondent has been determined, normalize this against the demographic composition of the whole population, as every person expressing interest in a brand on a particular social network is not likely to respond to a survey. Remember, different groups behave differently. Some groups are incentivized to respond for their own reasons in order to try to meet their own needs. If the a particular network has two thirds of the population that is female that expressing interest in your product and the survey response is only a quarter for women, the monetary value of your community is going to be wrong.

This method of determining the monetary value of individuals expressing interest in your brand has other benefits. It can help you set benchmarks for improving sales to key demographics and help you identify new demographic bases for your product that you may not have realized. It may also help you identify other networks where you can potentially attempt to drive buzz for your product where the community is less obvious. Most importantly, this method uses real numbers for real customers rather than relying on unproven hypotheticals.

1 http://mashable.com/2010/04/14/facebook-fan-valuation/
2 http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=109574
3 If you find yourself in a situation like that, the best response is to re-evaluate your social media strategies. Something is clearly broken.

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World Cup, through quarter finals: Foursquare and gowalla checkin totals

Posted by Laura on Friday, 9 July, 2010

The World Cup is done.  Based on averages, there do appear to be trends for usage around different teams.  I don’t have any other large international competition which to compare this two but it might be of interest to others who are organizing such events like the women’s World Cup for soccer and the Rugby World Cup.  Some national contingents will be the same and if we assume that these patterns hold across nationalities… it might give national sides, companies and organizers using geolocation services an idea which one is better for their audience and which games to target.  This is especially true if we assume that Foursquare and Gowalla users are representative of active social media users period who will use other services to discuss the event.

Related to the results: For the Germany vs. Spain game,between getting data before the event and after the event, Foursquare merged two locations.  If I had just used the one, it would have possibly included an additional 43 checks for the game that were from previous games.  Thus, I subtracted the previous venue’s totals from the venue that they were merged into.

Onwards with the results…

Foursquare

Country Total Checkins Total Unique Visitors Average Checkins Average Unique Visitors Games played Grounds
Uruguay 1037 426 172.83 71.00 6 Green Point Stadium ; Loftus Versfeld Stadium ; Royal Bafokeng Stadium ; Nelson Mandela Bay Stadium ; Soccer City ; Cape Town Stadium
Ghana 819 362 163.80 68.40 5 Loftus Versfeld Stadium; Royal Bafokeng Stadium ; Soccer City ; Soccer City
South Africa 399 179 133.00 59.67 3 Soccer City Soccer Stadium; Loftus Versfeld Stadium; Free State Stadium
Germany 735 394 122.50 65.67 6 Moses Mabhida Stadium; Nelson Mandela Bay Stadium ; Soccer City ; Free State Stadium ; Cape Town Stadium ; Moses Mabhida Stadium
Spain 681 400 113.50 66.67 6 Moses Mabhida Stadium; Ellis Park Stadium ; Loftus Versfeld Stadium ; Cape Town Stadium ; Ellis Park Stadium ; Moses Mabhida Stadium
Mexico 453 199 113.25 49.75 4 Soccer City Soccer Stadium; Peter Mokaba Stadium ; Royal Bafokeng Stadium ; Soccer City
Argentina 512 228 102.40 45.60 5 Ellis Park Stadium; Soccer City ; Peter Mokaba Stadium ; Soccer City ; Cape Town Stadium
Portugal 317 166 79.25 41.50 4 Nelson Mandela Bay Stadium; Cape Town Stadium ; Moses Mabhida Stadium ; Cape Town Stadium
Netherlands 461 219 76.83 36.50 6 Soccer City Soccer Stadium; Moses Mabhida Stadium ; Cape Town Stadium ; Moses Mabhida Stadium ; Nelson Mandela Bay Stadium ; Cape Town Stadium
Nigeria 228 89 76.00 29.67 3 Ellis Park Stadium; Free State Stadium; Moses Mabhida Stadium
England 302 150 75.50 37.50 4 Royal Bafokeng Stadium; Cape Town Stadium ; Nelson Mandela Bay Stadium ; Free State Stadium
Italy 186 99 62.00 33.00 3 Cape Town Stadium; Mbombela Stadium ; Ellis Park Stadium
North Korea 176 83 58.67 27.67 3 Ellis Park Stadium; Cape Town Stadium ; Mbombela Stadium
France 166 82 55.33 27.33 3 Green Point Stadium ; Peter Mokaba Stadium; Free State Stadium
Brazil 265 156 53.00 31.20 5 Ellis Park Stadium; Soccer City ; Moses Mabhida Stadium ; Ellis Park Stadium ; Nelson Mandela Bay Stadium
Chile 211 108 52.75 27.00 4 Mbombela Stadium; Nelson Mandela Bay Stadium ; Loftus Versfeld Stadium ; Ellis Park Stadium
USA 205 102 51.25 25.50 4 Royal Bafokeng Stadium; Ellis Park Stadium ; Loftus Versfeld Stadium ; Royal Bafokeng Stadium
Honduras 142 75 47.33 25.00 3 Mbombela Stadium; Ellis Park Stadium ; Free State Stadium
Denmark 134 59 44.67 19.67 3 Soccer City Soccer Stadium; Cape Town Stadium ; Royal Bafokeng Stadium
Paraguay 209 115 41.80 23.00 5 Cape Town Stadium; Free State Stadium; Peter Mokaba Stadium ; Loftus Versfeld Stadium ; Ellis Park Stadium
Slovakia 152 95 38.00 23.75 4 Royal Bafokeng Stadium ; Free State Stadium ; Ellis Park Stadium ; Moses Mabhida Stadium
Serbia 76 41 38.00 13.67 3 Loftus Versfeld Stadium; Nelson Mandela Bay Stadium ; Mbombela Stadium
South Korea 149 77 37.25 19.25 4 Nelson Mandela Bay Stadium; Soccer City ; Moses Mabhida Stadium ; Nelson Mandela Bay Stadium
Cameroon 110 64 36.67 21.33 3 Free State Stadium; Cape Town Stadium ; Cape Town Stadium
Algeria 102 60 34.00 20.00 3 Peter Mokaba Stadium; Cape Town Stadium ; Loftus Versfeld Stadium
Switzerland 94 55 31.33 18.33 3 Moses Mabhida Stadium; Nelson Mandela Bay Stadium ; Free State Stadium
Slovenia 93 43 31.00 14.33 3 Peter Mokaba Stadium; Ellis Park Stadium ; Nelson Mandela Bay Stadium
Côte d’Ivoire 88 59 29.33 11.19 3 Nelson Mandela Bay Stadium; Soccer City ; Mbombela Stadium
Australia 85 44 28.33 14.67 3 Moses Mabhida Stadium; Royal Bafokeng Stadium ; Mbombela Stadium
New Zealand 75 49 25.00 16.33 3 Royal Bafokeng Stadium ; Mbombela Stadium ; Peter Mokaba Stadium
Japan 85 57 21.25 14.25 4 Free State Stadium; Moses Mabhida Stadium ; Royal Bafokeng Stadium ; Loftus Versfeld Stadium
Greece 55 29 17.33 9.67 3 Nelson Mandela Bay Stadium; Free State Stadium ; Peter Mokaba Stadium

Gowalla

Team Total Checkins Average Checkins Games Grounds
Germany 26 4.33 6 Moses Mabhida Stadium ; Nelson Mandela Bay Stadium ; Soccer City ; Free State Stadium ; Cape Town Stadium ; Moses Mabhida Stadium
Netherlands 26 4.33 6 Soccer City ; Moses Mabhida Stadium ; Cape Town Stadium ; Moses Mabhida Stadium ; Soccer City ; Cape Town Stadium
Argentina 18 3.60 5 Coca-Cola Park (Ellis Park Stadium) ; Soccer City ; Peter Mokaba Stadium ; Soccer City ; Cape Town Stadium
Ghana 17 3.40 5 Loftus Versveld Stadium ; Royal Bafokeng Stadium ; Soccer City ; Royal Bafokeng Stadium ; Soccer City
Uruguay 19 3.17 6 Loftus Versveld Stadium ; Cape Town Stadium ; Royal Bafokeng Stadium ; Nelson Mandela Bay Stadium ; Soccer City; Cape Town Stadium
Denmark 9 3.00 3 Soccer City ; Loftus Versveld Stadium ; Royal Bafokeng Stadium
Cameroon 8 2.67 3 Free State Stadium ; Loftus Versveld Stadium ; Cape Town Stadium
Spain 17 2.83 6 Moses Mabhida Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Loftus Versveld Stadium ; Cape Town Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Moses Mabhida Stadium
England 10 2.50 4 Royal Bafokeng Stadium ; Cape Town Stadium ; Nelson Mandela Bay Stadium ; Free State Stadium
Algeria 7 2.33 3 Peter Mokaba Stadium ; Cape Town Stadium ; Loftus Versveld Stadium
Italy 7 2.33 3 Cape Town Stadium ; Mbombela Stadium ; Coca-Cola Park (Ellis Park Stadium)
Portugal 9 2.25 4 Nelson Mandela Bay Stadium ; Cape Town Stadium ; Moses Mabhida Stadium ; Cape Town Stadium
Slovakia 8 2.00 4 Royal Bafokeng Stadium ; Free State Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Moses Mabhida Stadium
Brazil 9 1.80 5 Coca-Cola Park (Ellis Park Stadium) ; Soccer City ; Moses Mabhida Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Soccer City
Japan 7 1.75 4 Free State Stadium ; Moses Mabhida Stadium ; Royal Bafokeng Stadium ; Loftus Versveld Stadium
Mexico 7 1.75 4 Peter Mokaba Stadium ; Soccer City ; Royal Bafokeng Stadium ; Soccer City
United States 7 1.75 4 Royal Bafokeng Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Loftus Versveld Stadium ; Royal Bafokeng Stadium
Paraguay 8 1.60 5 Cape Town Stadium ; Free State Stadium ; Peter Mokaba Stadium ; Loftus Versveld Stadium ; Coca-Cola Park (Ellis Park Stadium)
Chile 6 1.50 4 Mbombela Stadium ; Nelson Mandela Bay Stadium ; Loftus Versveld Stadium; Coca-Cola Park (Ellis Park Stadium)
Australia 4 1.33 3 Moses Mabhida Stadium ; Royal Bafokeng Stadium ; Mbombela Stadium
France 4 1.33 3 Cape Town Stadium ; Peter Mokaba Stadium ; Free State Stadium
Honduras 4 1.33 3 Mbombela Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Free State Stadium
South Korea 4 1.00 4 Nelson Mandela Bay Stadium ; Soccer City ; Moses Mabhida Stadium ; Nelson Mandela Bay Stadium
New Zealand 3 1.00 3 Royal Bafokeng Stadium ; Mbombela Stadium ; Peter Mokaba Stadium
Nigeria 3 1.00 3 Coca-Cola Park (Ellis Park Stadium) ; Free State Stadium ; Moses Mabhida Stadium
Serbia 3 1.00 3 Loftus Versveld Stadium ; Nelson Mandela Bay Stadium ; Mbombela Stadium
Switzerland 3 1.00 3 Moses Mabhida Stadium ; Nelson Mandela Bay Stadium ; Free State Stadium
North Korea 2 0.67 3 Coca-Cola Park (Ellis Park Stadium) ; Cape Town Stadium ; Mbombela Stadium
Slovenia 2 0.67 3 Peter Mokaba Stadium ; Coca-Cola Park (Ellis Park Stadium) ; Nelson Mandela Bay Stadium
South Africa 2 0.67 3 Loftus Versveld Stadium ; Soccer City; Free State Stadium
Côte d’Ivoire 1 0.33 3 Nelson Mandela Bay Stadium ; Soccer City ; Mbombela Stadium
Greece 0 0.00 3 Nelson Mandela Bay Stadium ; Free State Stadium ; Peter Mokaba Stadium

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