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CMMarzi said on November 8th, 2012 at 12:02 pm

This is an interesting way to valuate a post, but I’m not sure if it scales well to brands who don’t need to pay for Facebook impressions due to sizable organic reach. In that case, another option would be to back into a CPM based on an average guaranteed impression. In that case social posts can be attributed a premium over the CPM of a display banner, as they are significantly more valuable due to the 1-on-1 nature of engagement with social media.

Food for thought!

Peter Amador said on November 8th, 2012 at 12:57 pm

Thanks for the feedback. I agree with you that the 1-1 nature of social engagement does deserve a premium CPM; however, we are not at a point where advertisers are willing to pay a premium. That is why Facebook is pricing its posts as such. The pricing model described in this post is for properties that are looking to leverage their social media audience for financial gains, and enable sponsors to understand in quantifiable terms exactly what they are receiving for their investment.
It will be interesting to see how sponsored Facebook posts evolve.
Thanks again for the comment!

CMMarzi said on November 8th, 2012 at 1:00 pm

Peter – completely disagree. Many sponsors are not only willing to pay the premium, but are asking for more and more custom social engagement. Dream big for big returns!

Peter Amador said on November 8th, 2012 at 1:08 pm

Caty – I noted that the Execution Charge would vary by property, and used .75 merely for example purposes. To produce sustainable, long-term social marketing programs for sponsors there needs to be a pricing advantage. I am not saying the Execution Charge in the post needs to be applied by everyone, but the model can be used by any property.

Ernie Burrell said on November 9th, 2012 at 9:21 am

Very interesting article Peter, a lot of insight into the present day revenue model…what do you think is the 3 year outlook on a “fee” model? The possibility of rights fees?

Peter Amador said on November 9th, 2012 at 12:48 pm

Ernie – Facebook’s monetization strategy will continue overtime. It may very well be that they take an approach similar to LinkedIn and guarantee Pages different levels of access at different pricing options. LinkedIn uses flat fee approaches to generate its revenue and we could see that coming to Pages very soon. I believe what they are doing is testing the market with their current options. However, they have provided us with a pricing guideline which we can use indefinitely.

Haynes Hendrickson said on November 9th, 2012 at 4:13 pm

Very insightful and thought provoking article. I would be very interested to hear the debate from properties. Can they sell it? How would their social media fans react?

Peter Amador said on November 9th, 2012 at 4:30 pm

Haynes – Thanks for the kind words. The challenge properties face when selling social media activations is the ability to put the receivables into standard media language. The model is my attempt to put the activations into plain language for media and sponsorship buyers.
In regards to fans, the challenge is to make sure it is contextually relevant. Just as you would approach sponsored content on your website, you should approach you social media activations.