What is the value of a Facebook app user?
Clarification added June 18, 2007:
Please submit an empirical answer, only.
Answers (5)
A Facebook app user will evangelize your brand. Just by installing the app they are announcing to all their "friends" that they use your service.
Expected value for a single app:
EV = PV {(CPV x CTR x RpC x (1+K) x 12), r, 3}
where:
CPV = avg. Canvas Page Views / month
CTR = avg. ClickThrough Rate from Canvas Page on ads
RpC = Revenue per Click
K = viral corefficient for unique FB friends incrementally added by each app user
r = annual discount rate over, say, a 3 year planning horizon
But that's just a mechanical answer.
I think some underlying questions are going to be decisive for determining CLV on FB:
* what will average retention of a FB app be? days? weeks? years?
* how will the viral K factor for FB apps change over time? will FB continue to retain a fairly laissez faire attitude towards app invites?
* how successful will app vendors be at cross-marketing multiple apps to a single user?
Clarification added June 18, 2007:
Oh, and Keith, you should post this on FB via "My Questions", too! :-)
It depends on the Facebook application.
Your question is like saying "what is the value of a Google user to a Google adwords advertiser". PPC bid prices show they're different depending on what is being searched for. For example, mortgage traffic is worth far more than Britney Spears traffic (in every sense!)
The value of a Facebook App user will be extremely high for some applications and extremely low for others. The key is building the right applications.
Links:
Michael J
COO MySpace, Angel Investor and Board Member
Best Answers in: Mergers and Acquisitions (1), Business Analytics (1)
We are now powering ads on numerous Facebook apps - simply stated - Facebook apps are worth alot - and I believe it will provide a full lifecycle for launching rich apps within Facebook with the large ones then branching external.
$100 per user, is a reasonable median rule. This figure will vary depending on the app, and how well-formed (and targeted) the user demographic pulled in by the app.
Clarification added June 20, 2007:
Whoa. The key-repeat was fatally fast on my reply above. Meant to type $10 per user, not $100. Boy it is very inconvenient that you can only clarify your answer, and not correct typos. Get on that Keith! ;)
