Brands are making plenty of money in social media:  Dell Outlet’s Twitter account has generated millions for Dell, the Intel Channel Voice community has decreased costs by eliminating the need for expensive in-person events and P&G used media mix modeling to demonstrate that the BeingGirl.com community is several times more effective at driving sales than the brands' television ads. 

Many marketers can draw a straight line between investments in social media marketing and financial results, but many more cannot.  This doesn’t mean social media marketing is ineffective; it just means that marketers have to recognize benefits beyond dollars and cents.  Facebook fans, retweets, site visits, video views, positive ratings and vibrant communities are not financial assets -- they aren’t reflected on the balance sheet and can’t be counted on an income statement -- but that doesn’t mean they are valueless.  Instead, these are leading indicators that the brand is doing something to create value that can lead to financial results in the future.

Forrester has been publishing research on social technologies for several years, much of that being focused on the Interactive Marketing role. Recently, we have expanded our research on social technologies to apply to many other roles, such as Customer Intelligence, Market Research, Customer Experience and eBusiness and Channel Strategy. You can now add Consumer Product Strategy to that list. As our recent panel survey report demonstrates, social technologies are relevant to Consumer Product Strategy (CPS)  professionals as well because they give companies the opportunity to listen to and embrace consumers — and allow them to help create new products and innovate existing products. While the idea of social co-creation has been referenced in Forrester's research reports many times, this concept has not been explored deeply, until now.

In my just-published "Social Co-Creation" report, I define co-creation as "the act of involving consumers directly, and in some cases repeatedly, in the product creation or innovation process." Social technologies like online communities, Facebook, Twitter, company blogs, and Web sites provide CPS professionals with relatively easy access to engaged consumers. Through a combination of listening and embracing, companies can understand what unmet needs exist in the market today, recognize where current products are coming up short, tap the wisdom of the crowd to test ideas, and develop relationships with engaged consumers to drive new concepts into the market. 

It is a question I hear several times a week:  What is the value of a Facebook Fan?  I’ve seen answers ranging from $136.38 to $3.60.  I can’t blame vendors, agencies and consultants for trying to answer the question -- the hunger from clients is so great that anyone promising a simple answer is likely to get attention.  The problem is that there is no simple answer to such a complex question. In fact, it may be best if marketers approached this question as if the answer is zero -- unless and until the brand does something to create value with Facebook Fans. 

There are numerous reasons the question of Facebook fan valuation is problematic: