The current obsession with FB likes can be explained by many factors, from Web 2.0 fashion trends to psychology, yet more reasonable answer is lying on the surface. Likes have their own quality and price, and this price differs from page to page and from user to user. Let us explore this matter and see what it means for your business.

Who’s Setting The Like Price?

Pay attention to word “quality” in relation to likes. Likes do not always come from people, they may be generated by hundreds of bots, and the price of these likes is zero or even a bit lower (as they may harm the search list position of your website).  Only likes from real people interested in purchasing your product are worth something, and this price may also differ a lot from business to business.

A simple example will illustrate the issue better. There are two online shops, one selling, say, custom cardboard gift boxes, and the other dealing in expensive household repair toolkits. Under condition that people who like both pages convert to purchasers, the like of a gift box purchaser is worth 15 bucks, and the like of an expensive toolkit buyer amounts to cash equivalent of 1,500 bucks. In other words, one like from a toolkit seller customer is worth 100 likes from cardboard box purchasers.

One more point is the number of people who will see the page after a FB fan has liked it. The more followers a fan has, the more valuable his/her like is. It is prompted by common sense and Edge Rank principle (although the algorithm may be a bit outdated). So a valid profile with hundreds of friends is a more desirable source of likes. However, these calculations are not worth deep consideration if these followers do not check the pages liked by their friends. In this case their engagement is equal to zero, and the value of these connections is also close to none.

How Much Is It Reasonable To Spend On FB Fans?

Okay, let’s face it, most business pages purchase a part of their FB fans. How much does a real and profit-bringing fan cost?

At first it seems a bargain to buy 10 kilos of followers for $5 or $10. Yet such offers usually originate from click farm owners and do not promote your business. It is not an investment, it’s total marketing failure.

As Jon Loomer, the Facebook’s own advertising wizard, confesses, today the cost of a single valuable fan is somewhere between $1 and 20 cents.  The fast expansion of FB and its huge audience mean that small ventures will have to pay less in this kind of deals. Lots of people today make a worthy audience for you, and you can offer lower price for more unique fans.

Yet as this primary supply exhausts itself it is time to look for less desirable fans (but not for obviously bot-like entities) and looking for more or less adequate followers mean additional costs. Cost of showing ads to them adds up to the total bill, and in the end the price of a single valuable fan is just below 1 dollar.

However, the cost of final conversion may vary due to a set of additional conditions.

How Conversion Rates Relate To FB Fans Cost

Okay once again, a fan purchases a special extended toolkit for 1,500 bucks. Then a cost of a converted fan seems to be $1,500. Alas, no. These fifteen hundred should be compared against the average conversion rate at this website. If your site has 10,000 fans, and 100 of them purchase something, i.e. convert, on your site, than the conversion rate is 1%. Thus, in order to get one real conversion, one must buy 100 valuable fans. To see the real value of each fan it is necessary to divide the cost of one conversion by these 100 fans that enable this single conversion, which will be equal to $150 per fan.

Simple calculations will show what your real business BF expenses are and what can be made to optimize them, and if the game is actually worth the candles.

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