From GoFISHn’s standpoint, a Facebook impression is worth a lot. I explained why in a post yesterday marking our 100,000th fan on Facebook and the start of our first major sponsorship. How much is an impression really worth? To answer that question, it’s important to grasp that “impressions” are not the same as “fans” or even “posts.” Anyone can build fans on Facebook, but fans don’t necessarily see page posts. A post becomes an impression only when it actually appears in front of a Facebook user, typically in the Top News feed in their profile. And the post only gets there if Facebook’s Edge Rank algorithm (more on Edge Rank here) decides the post is worthy of that Facebook member.
To get on the right side of Edge Rank takes careful programming. According to Facebook stats, GoFISHN’s Facebook page gets 300,000+ impressions in front of Facebook users most days. And each day hundreds, sometimes thousands, of Facebook members “like,” comment or click on the GoFISHn posts contained in those impressions. That’s trust and engagement, and that’s what Edge Rank looks for.
So how do you value a connection to consumers that’s so carefully programmed by a media company, on the one hand, and Facebook’s Edge Rank on the other? Consider these comparisons: Facebook impressions versus…
v. Print advertising. Magazines are great, and they will be with us for a long time. They are a good venue of grand, visual branding statements. A page of advertising in a sportsman’s magazine that reaches more than a million paid subscribers is priced at more than $100,000! The audience is big and targeted, but at the end of the day the advertiser will not learn much about how many readers actually saw the ad, or what they thought. Never mind the long lead times associated with monthly magazines. Compare that to the immediacy of Facebook programming, the quality of impressions (guaranteed by Edge Rank), and the almost instantaneous metrics to gauge response. Decision: Print has a place, but when it comes to reaching consumers in a timely, selective, and accountable way, Facebook impressions are in another galaxy.
v. Online display advertising. The most valuable display advertising is smart in the sense that the ad network tries to place the ad in front of certain types of users and certain contexts where it is more likely to get clicked. But the reader has not opted to see the ads, nor is there an agent like Facebook filtering ads on the consumer’s behalf. It’s about the advertiser trying his luck with a cold call based on your zipcode, or maybe a shred of a tip because someone who used your computer a week ago showed an interest in golf clubs, and the ad network is hoping that was you. Facebook knows who you are and know what you like, in a lot more detail. Decision: the Facebook impression beats online display.
v. E-mail advertising and sponsored e-mail. Once marketers have a consumer’s e-mail, they can bombard the consumer with messages until the subscriber decides to click on the unsubscribe notice hidden in 4-point type. At best, e-mail is roughly equivalent to a Facebook fan. You’ve got access but that doesn’t mean you’ve got attention. Facebook is paying attention on members’ behalf: when there is no evidence that the member cares about your post, even if they “liked” your profile or page, then the post will not become an impression. Facebook members won’t see it. It’s as if Facebook pre-reads your in-box to decide what’s important. That sort of filtering doesn’t happen with e-mail (though Google is trying with it’s new Priority inbox.) For that reason, it’s no contest: the Facebook impression crushes marketer e-mail.
v. Sponsored text links. The most successful advertising innovation ever. Google determines the context of a sponsored link by either the terms in your search query or by the content of the page you’re reading. Relevance is almost guaranteed for that instant. And for that reason sponsored link advertising is hugely powerful and profitable. But Google knows much less if anything about who you are or what your friends think. Facebook knows a lot about all that, which is why Facebook advertising is growing fast and will become the second great, endemic online advertising success story. It’s also why Facebook impressions are so valuable. Let’s call this one a draw. (More on a click versus an impression below. Clicks win).
So back to the original question: What is the value of a Facebook impression? Consider pricing today for products like e-mail and online advertising.
e-mail newsletters in niche categories like sport fishing can command $100+ cpms. If we valued Facebook impressions at that rate, then a 100,000 impressions on Facebook would be worth $10,000. But it’s clear that Facebook impressions are worth more.
A click on a typical sponsored link or display banner priced on a cost-per-click basis can cost anywhere from pennies to several dollars, but a conservative number is $.50 in the fishing category. If we thought of an impression as the equivalent of a click, then 100,000 impressions would be valued at $50,0000, which doesn’t sound reasonable. That’s because clicks are a deliberate act by the consumer, whereas impressions are informed programming suggestions by Facebook. The click does beat the impression.
What’s more like a click, when it comes to a Facebook impression, is interaction with impressions—likes, comments, click-thru. But if you see 2 per cent interaction rate with 100,000 Facebook impressions, and you price those like clicks at $.50, you come out at $1,000, which values the impression well below what we argue is an inferior product, the marketing e-mail.
In the end (finally, a stake in the ground), we think a sound way to view the value of a Facebook impression is the impression itself + the interaction with the impression. The impression is inherently valuable because it reaches consumers due to the programming smarts and accumulated trust that get the post through Edge Rank to become an impression for any given Facebook member. That’s much harder to do than delivering e-mail or blanketing the Web with sponsored links. But interaction is also key because marketers want to know what consumers think, not just what Facebook’s Edge Rank thinks.
In the end, price is not objective. It’s what the market will bear. GoFISHn is in experimental territory, and we are pricing so that marketers feel comfortable trying out our ideas and theirs in the programming and promotion framework we’ve created. We deliver many times those 100,000 impressions within Facebook for our clients, not to mention we also have e-mail lists, banner ads, and all that. We think the Facebook impressions and interactions are worth more than e-mail cpms and less than clicks in a sponsored link. That’s a big spread, and there is plenty of room to build a great business there.
Ned Desmond is the president and founder of GoSportn Inc. Drop him a line if you’d like to discuss a promotion on GoFISHn ([email protected]).This article originally appeared at GoSPORTn and is republished here with permission.