The price of a Facebook fan – post reprinted from Ellie Behling's Blog, Vital Business Media

How much do you have to pay to get people to “like” you?

A new report from digital marketing firm Webtrends examined Facebook ad campaigns and the “cost per fan,” or the ad spend required to acquire fans, among different industries.

The good news for media companies is that they typically spend less acquiring Facebook fans than companies in most other industry sectors. That shouldn’t be a big surprise, considering media and entertainment-based companies have built-in fan bases, unlike a sector like healthcare that is just beginning to interact directly with customers.

The study also found that media and entertainment companies advertising on Facebook get better click-throughs than other industries.

The report analyzed 4.5 billion Facebook ad impressions across 1,529 campaigns. Across all industries, the study revealed that Facebook ads perform half as well as traditional banner ads. It also found some differences in how geographic and demographic groups interact with Facebook ads (“the older we get, the more we click”).

The price of a Facebook fan
Advertising campaigns from media channels stood out from other industries, receiving a 0.165 percent click-through rate, compared to 0.050 percent across all industries, according to Dennis Yu, managing principal of Facebook marketing at Webtrends. Media properties also acquire Facebook fans at a cheaper price than other industries (between 31 and 41 cents compared to $1.02 across all industries).

The chart below illustrates how media companies have higher click-through rates and lower cost per clicks than companies in other industries. While Facebook is usually more of a focus for consumer media, B2B media companies might be interested in how particular industries fared.

(Use quick link to the right: Industry Comparison Table – Facebook click through rates and costs per clicks)

The value of Facebook fans
The study by Webtrends, which offers a Facebook advertising platform, mostly looked at media companies that are more entertainment-focused, rather than traditional, print-based publishers, which aren’t advertising much on Facebook. Yu said more traditional publishers could be taking advantage of Facebook advertising in order to acquire fans, for instance by targeting friends of fans.

“The traditional, brick-and-mortar folks aren’t there yet; it’s a new opportunity,” he said in a phone interview.

But why is acquiring fans valuable for publishers? Yu compared the ROI of Facebook fans to the ROI of having an e-mail list; it’s another method to drive revenue to subscription products.

Yu added that Facebook is now the foundation of where people are interacting; the next step is doing something in the platform. “Now the game is ‘who can build applications and other things on top of this infrastructure?’,” he said.

Media companies have a built-in advantage because they have the ability to engage Facebook fans with content.

“Naturally, social media is a great medium for news ― it’s shareable, has emotional context, is current, and can be made very relevant to highly targeted audiences,” Yu said in an e-mail.