The Cost of Engagement
I stumbled across some data about Facebook engagement rates the other day. Apparently Michael Leander has been analyzing how Facebook fans react to brand posts based on how big a following that brand has on Facebook. It’s made me wonder – If we know engagement rates, and we know how much it costs to acquire a Facebook like, we should be able to calculate the cost of fan engagement. How much does it cost? And is it really worth it?
Leander found that the rate of people who like or comment on a post starts at less than 1% for a brand of 10,000 Facebook followers and then plummets the larger the audience. Here are his statistics:
Number Of Fans/Likes
Average Engagement Rate
Compared with banner ad engagement rates, those numbers might look good. I’m also starting to wonder what the cost of all this is. For the sake of simplicity, I’m not going to calculate the cost of what it takes to manage the Facebook channel or to create all of that content people are engaging or not engaging with.
Instead, I’m going to look at the cost of attaining those fans and calculating what the cost per interaction is.
Let’s take one year. I’m going to assume that brands might reasonably attain 10,000 fans without buying any likes (a leap, I know, but bear with me). For each number above 10,000, I’m going to assume that 1/3 of those total fans were purchased. That is, brands spent money on Facebook ads to get people to “Like” them.
According to a WebTrends report in 2011, the average cost for a Facebook Like acquisition was $1.07. Maybe that’s gone up or down since then, but let’s use that as a starting point.
Let’s also assume that, on average, a brand posts on Facebook once a day, or a total of 250 posts per year. With that, the cost per interaction for a smaller Facebook brand starts at $0.49/interaction over the year. For a big brand, the cost jumps to $1.59/interaction for a year.
Posts Per Year
Cost Per Interaction
Remember, that’s not covering the cost of managing the channel or creating content. That’s just the interaction cost. Of course this is only for a year, if you spread that over 2 years it gets a little cheaper.
The number of interactions isn’t terribly impressive either. But it starts putting things into perspective, such as:
- What is the real impact of an engagement?
- If people engage more with emotional imagery, say of kittens, is it worth the cost to the brand?
- None of this starts connecting interactions to real business goals. Does that matter?
- Is it really worth it to purchase fans on Facebook?
Actually, it’s that last question that’s important. Based on this calculation, however imprecise, I’d say no.
What do you think?