Seems like coming up with a value for social media has become a cottage industry, for example, $3.60 Facebook Fan Valuation Is Just the Tip of the Iceberg. These values are often derived from what is paid for online media. So you have to ask, if someone is basing the value of a Facebook fan on the value of impressions generated, what is the real value of those impressions? Because unless this is known, the whole framework is faulty.
Just because you pay $5 / CPM for impressions, does not mean they are worth $5 / CPM, does it? Do people really still have that kind of mentality? Is the price of the media equivalent to its value?
For example, I’m sure you have heard of multi-million dollar campaigns that generate very little lift in sales. Happens frequently in fast food, for example. What is the value of that media? Is it the millions paid?
What really blows my mind about this approach is it’s so offline, so old school PR. Do the folks who put forth these kinds of models believe nothing has changed in 50 years? What happened to the whole rap of online being “different”, that you can’t measure it like offline, blah blah.
Except when it’s convenient to do so?
If you want to know the value of a Facebook fan, why not measure the value of a Facebook fan? Because it’s hard, and would require organizational discipline? Too bad. Substituting the kind of models used in the example above for actually measuring the value of a Facebook fan is misleading at the very best.
Make sense? If you’re with me on this line of thought, let’s not stop here. We should go ahead and question the value of awareness.
Now comes a better view, but likewise, just because an event happens does not mean it has value or contributes value. Looking at the recent post Social media and SEO massively undervalued: study we see a great data collection effort through TagMan but a similar premature jump as above: that because an event occurs, it somehow must contribute value to the final outcome. Again, this is a very old-school idea being applied to an environment where there really is no need to guess; set up a test and measure it.
I realize people get excited by the potential of new applications and tools, but have to wonder why folks are so willing to throw logic out the window and “find an answer” even if they have to torture the data to do so. In many cases the reason is promotional, to sell a product or service, and hopefully this is pretty transparent to the reader.
One of the big problems at the root of all this is the lack of a common value reference point. In other words, a standard that can be applied to compare the relative value of impressions, events, touches, opens, clicks, and so forth.
This standard exists, it’s called a controlled test. In academic environments, where all the studies, results, and conclusions are peer-reviewed before they are published, it’s the gold standard for determining “the value of”. This is a particularly important concept when you are dealing with interactivity; the results of controlled tests can be surprisingly different from common perceptions.
Perhaps it’s time for this community to require (OK, at least ask for?) the same level of transparency. Count me in.