Calculate How Much Should You Pay for a Facebook Like

by DigitalAlex on November 25, 2011

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What is the value of getting someone to Like your Facebook page? Hitwise released research that claims that a Facebook Like will produce 20 additional visits to your site over the course of a year.

If that’s true, it’s easy to back into an allowable cost-per-like. You can follow along with this Google spreadsheet.

Let’s use the example of an ecommerce website. If your target is 1 order and your conversion rate is 1%, then you need 100 visits to generate 1 order.

If 1 like produces 20 visits, then you need 5 likes. Next, plug in your average order value (AOV) and target ROI. That tells you how much you can spend in total on Likes (Max Like Spend). Divide that by the Likes Required (5) and you get a Max Cost/Like, $3.33

The same logic applies to a lead gen business. In this example, I’ve calculated a target Cost-Per-Lead, which is then the same as my Max Like Spend. If you want, you can add in a line or two for Target ROI or other conversion metrics, but I kept it simple:

Check out the Google doc to see my formulas.

{ 3 trackbacks }

Internet Marketing & Marketing Research Consulting | The Search Marketer
March 15, 2012 at 12:56 pm
A Guide to Social Media Success « OMG! Marketing Blog
April 25, 2012 at 11:01 am
Le guide interactif, en 13 étapes, du succès de votre stratégie social média | Consonaute
June 17, 2013 at 9:46 am

{ 11 comments… read them below or add one }

1 Wil Reynolds November 26, 2011 at 2:13 pm

Hey Alex, how would you account for the fact that being connected / liked on facebook could influence conversions that happen in other channels? For example would you recommend looking at conversion rates & conversion values for people coming from google who type in your brand name vs those doing the same behavior who like you on facebook? then lets say you see that those likers buy more frequently at a 30% clip, and their AOV is larger. How would you account for something like that in the above model? Or would you not want to and try to keep things simpler.

2 Alex Cohen November 26, 2011 at 3:23 pm

Hi Wil,

Great question. I found this model helpful when trying to answer the question of how much to pay for a Like before you start a Facebook advertising campaign. Once actual data comes in, you can adjust. Of course, it’s a challenging to measure influence instead of direct response.

You’ve done this more than I have. What have you found effective?

Alex

3 Wil Reynolds November 27, 2011 at 11:39 am

We actually haven’t…we’ve stayed away from a lot of the social stuff except in fringe cases, in 2012 we will have a LOT more to share on things like this.

4 James Norquay November 28, 2011 at 12:54 am

Interesting thanks for sharing this, but I wonder how you value all the Fiverr style $5 for 500 likes hehe…0 engagement =) 0 conversion

5 Alex Cohen November 28, 2011 at 9:28 am

Hi James,

I’m not sure I understand your comment. If you mean to say that people who like your Facebook page may not convert at the average rate of your site, you’re definitely correct. There are a lot of assumptions in the Hitwise research and the spreadsheet. It’s meant to be a place to start, rather than a definitive answers.

Hope that helps,
-Alex

6 User Psychology February 4, 2012 at 4:10 am

Great post, Alex.
It’s very important from a business oversight POV to establish the value of social media activity. Using your calculations we can clearly see the value (of say, the marketing department) spending time attracting ‘likes’ from Facebook or ‘followers’ from Twitter. What’s the mathematical equation for your theory?

7 OrgSpring February 17, 2012 at 9:20 am

Will,

there’s no way to tell if your facebook viewer visits your website and then goes and interacts with your other profiles, like linkedin or twitter, and then re-engages (visits your site again or purchases something,etc.) due to things posted on those other sites. Even though some of those sites are starting to implement their own analytics pacakges, it would be a nightmare to try and overlay that with your website analytics package and discern value from that.

Taken on an individual basis, that data is very valuable, and the basis for Alex’s post and spreadsheet. If you follow it back far enough you could consider that first engagement as the ground zero traffic source, and the main reason that individual viewer visited your site. Like Alex says, its an iterative process and if done often enough, you can get pretty close to a real cost per click, or in this case, cost per like.

8 Caroline March 18, 2013 at 8:46 am

I just wanted to make sure you got my message..

My question was concerning the formula you have with the e commerce. You have your Max Like Spend calculated like this 50/300% but I think you meant 50*300%. (Try with 400% ROI your way, it gives you a Max Like Spend that is smaller than with 300%, which makes no sense) Could you clarify this for me?

Thanks a lot !

9 NABrokers April 25, 2013 at 7:55 am

Ahh that makes sense, thanks for that. Trying to get to grips with the value of social media & likes etc.

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11 pay for facebook fans November 15, 2013 at 1:22 am

Pick-up lines on friendss can evoke laughter amongst friends and will definitely arouse comments and likes for
the status. All because these define the community thast uses
Facebook. Understaand thaat the facebook privacy policies aare quite strict.

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