What is a Facebook Member Really Worth?

Facebook and Small Business Credit Card ProcessingWe at the BizEdge Blog, along with a majority of marketing and social media enthusiasts has espoused the virtues of a paradign shift convergence of all things search and social related, especially where small business is concerned – “Facebook beats Google traffic” – “Twitter phenomena undeniable – yada yada.  But now a true industry pioneer and visionary is pouring a little much-needed cold water on the ‘dream-scape’.  Mr. Pace Lattin has analyzed the value of a Facebook member and put things back into perspective. –BJK


From SiteProNews – “In perhaps the fastest growing industry ever, one person has made a name for himself as a leader and innovator. Pace Lattin, the publisher of the top newsletters in new media and online advertising, is one of the inventors of many of the technologies and methods that have become standards in the industry. He has been called many things, including a rabble-rouser, a guru, an innovator and a watchdog — but one thing stays the same: he is one of the most interesting leaders and commentators in the online advertising industry. Marketing Sherpa, a leading marketing research publication called him the most influential journalist in online media for a reason.”

One-Third of All US on Facebook, Yet Users are Worthless?

Pace Lattin – “First of all, I don’t hate Facebook anymore than I dislike any internet fad. One of my 30,000 readers asked me why I always write negative things about Facebook. First of all this isn’t quite true, since I’ve written a few articles about how to make money on Facebook and the top ads on Facebook. I just like to question what is going on, look beyond the headlines and the spin.

“So, in that light, I want to examine the numbers: According to Comscore, in June, over 130 Million people within the US used Facebook. This is about one third of the population of the US that uses Facebook – some of them day after day, many times a day, making it one of the most popular media sources ever in the history of the world. However, despite this, Facebook may only bring in $1 Billion this next year, even with expected growth. This may seem like a lot money, but it’s actually not – and I know why.
“The Superbowl gets around 100 million viewers each year. While the number goes up and down, it’s a good round number for this post and makes it easier for me to do the math. According to my research (Google) there was last year 62 ad slots sold at between $2.5M and $2.8M. That’s at least $155M in revenue, perhaps even as much as $175M in revenue for whichever network broadcasts the Superbowl. That means each viewer is worth at least $1.50 for the Superbowl.

“In contrast, the number $1 Billion estimated in Facebook revenue is for their 500 Million (and growing) users throughout the world. While I can’t find any numbers that say how much revenue is generated in the US and how much is generated internationally, I’m going to make a conservative guess that at least 90% of the revenue is US based, meaning that next year $900 million dollars is expected to be made from Facebook. That means that each US user, over the period of the year is only worth about $7.00 for the entire year.

“That is a ridiculously low number if you think about it. Viewers watching a several hour football game are worth 21% of the value of a Facebook user who may use the site 365 times plus a year, spend hundreds of hours a year talking to their friends and family, and more importantly interact with people of similar interests, communicate their needs, buying habits and much more. If you translate the value into hours of use of a Facebook user compared to a Superbowl watcher, an hour of a Facebook user is insignificant – I can’t even do the math, but you are talking about hundredths of a cent per hour for each Facebook user compared to around 50 cents per hour per Superbowl watcher. 

“The value comparison here is hard to believe, in light of all the media coverage about Facebook. This raises two possible sets of questions.”