What is the Real Value of Facebook Login?

These days, everyone says that you should add social registration capability to your website or mobile app, such as Facebook Login. After all, social registration provides an easy way for your users to register with your site without going through the hassle of creating yet another username and password to remember. On top of that, you can enable really effective ways to engage with your users and keep them active on your site. But what real monetary value do these social registration platforms provide? The answer is a lot — especially if you are talking about Facebook Login.

Facebook’s market value, like any other web or mobile property, is a product of its user base. That means that the multiple billion dollar valuation that Facebook has to its name is based on the social network having over one billion monthly active users. When you break down the value of each Facebook user based on the current market cap of the company (as of 10/31/2012), you get a value of approximately $45.65 per user. This is merely a simple calculation of the total value of the company divided by the total number of active users.

Taking this analysis one step further, you can calculate the value of each type of data point Facebook has on its users. When you utilize Facebook Login, you are provided with an opportunity to request upwards of 52 types of data points on your users from their profiles and activity on Facebook. Breaking down the value of each type of data point based on the $45.65 per user value we calculated above, you get a value of approximately $0.88 per data point.

Just to make sure you’re still with me, the previous calculation took the $45.65 value per user and divided it by the 52 possible types of data points available for each user. You can see a summary of these calculations in the spreadsheet below.

What does all this mean? That if you utilize Facebook Login on your website and request all available permissions of your users, you could increase the monetary value of each of your users by almost $42.

Now, realistically you will not be requesting every type of data point from your users available with Facebook Login (at least we hope you don’t!). We suggest to our clients who use Facebook Login to request a minimum of 5 specific data points from their users. This allows us to provide a thorough level of analysis utilizing the social activity and data of our client’s user base. According to the calculations presented above, just requesting 5 data points from your user’s Facebook profiles (such as basic info, email, likes, birthday, and location) adds about $4.40 per user value. This is a figure that can really add up when you take into account your total user base!

Certain types of data points could be perceived more valuable depending on what information you’re looking for, and what we’ve presented here is based on Umbel best practices and averages. However, it’s hard to argue that utilizing Facebook Login to gather specific data about your audience doesn’t add tangible value to each of your users at the end of the day.