Many social media campaigns are very exciting, and many will provide you with a return on your investment that can’t really be measured with dollars and cents, such as enhancing your brand image or getting the word out there about your product.
But sometimes, you can and should try to estimate the benefits of a social media campaign before giving it the green light, and in fact, whenever you CAN measure with dollars and cents, you should.
Recently, I talked with one of my clients about running a contest on their Facebook page. The goal was to get more Facebook fans, so we talked about adding a fan gate and requiring the participants to like the page before entering the contest. The cost of the contest for my client: the cost of the third-party app we would use to run the contest (Offerpop), the cost of the prize, the cost of shipping, cost of Facebook ads to support the campaign, and the cost of my time planning and executing the contest. The total cost came to $3,000.
I wanted to present my client with exact (well, as exact as possible) numbers that would help them decide if the expense was worthwhile. So I did some research, and found that there are several opinions out there about how much on average, in annual dollars, a Facebook fan is “worth.” Everyone agrees that facebook fans are valuable, but some sources have tried to actually place a dollar value on a Facebook fan.
The most recent number is $174. This is an average figure that reflects a fan’s value for big brands. For those big brands, the numbers ran between $70 and $400. So for my small and-midsize clients, I estimate that the number is probably around $10 per fan, per year.
Now we can do the math. For most small and midsize businesses, a well-executed Facebook contest will probably generate up to 500 new Facebook fans, and as we saw, worth (according to my estimate) $5000 per year. Which means that an investment of $3,000 should be well worth it for the brand. In addition, while some of these fans will end up unliking the page, many others will stay on board for more than one year and will refer new fans. And of course, we can safely assume that there IS a return here in terms of the brand image and reputation that is beyond immediate dollars and cents.
It IS possible to come up with a conservative estimate about the ROI for a single social media campaign. If the numbers support running the campaign that’s great, but in my opinion, even if the immediate raw numbers do not support running the campaign, for most small and midsize businesses, the larger-picture benefits of enhancing brand recognition and of gaining new, loyal Facebook fans do justify running at least one big promotion per year.