Social Or Email: Which Is The More Cost Effective Audience?

Scott Fenstermaker

When we run social ad campaigns for audience building, our clients usually fall into two camps: those who want an audience of followers or Page Likes, and those who want to build an email database.

Both of these are legitimate marketing goals, but it’s hard to keep track of which method is more cost effective in the end. In terms of initial acquisition, Page Likes are typically cheaper to acquire than email addresses.

However, once you have your audience, you have to figure in the reach. Facebook, for example is notorious for choking the organic reach of branded pages, meaning that you have to pay additional advertising in the form of boosted posts in order to actually reach your audience.

Let’s do a little back-of-the-envelope exercise and compare the conversion effectiveness of follower engagement with email engagement using some basic cross-industry averages.

Question:

You want to market a limited time promotion to your B2C audience, and you will judge success based on how many people act on your offer (acquisitions). All other things being equal, is it more cost effective to market to an audience of 5,000 Facebook Followers or 5,000 email addresses (assuming that you’ve paid to build both audiences)?

Assumptions:

1. Facebook Followers
   
   
   
   1. Acquisition cost = $ 1/Like (average cost of a true, engaged follower according to Search Engine Journal)
      
   2. Post Boost Cost: $ 20
      
   3. Reach: Organic = 7%, Boosted = 21% (300% increase)
      
   4. Conversion rate = 4%
   
   
2. Email Database
   
   
   
   1. Acquisition cost = $ 4 (This figure varies widely depending on how the emails are acquired. In this case, paid ads leading to a collection page.)
      
   2. Emailing cost: = $ 100 (monthly Mailchimp pricing)
      
   3. Open Rate = 20%
      
   4. Conversion Rate = 2.5%

Results:

• Facebook Followers
  
  
  
  • 5,000 Likes x 21% Boosted Reach = 1,505 followers reached
    
  • 1,505 Followers x 4% conversion = 42 participants
    
  • 5,000 Likes x $ 1 per Like = $ 5,000 acquisition cost
    
  • $ 20 Boost cost x 1 boosted post = $ 20 marketing cost
    
  • Total cost = $ 5,020
    
  • Cost / participant = $ 5,020 / 42 = $ 119.52
  
  
• Email Subscribers
  
  
  
  • 5,000 subscribers x 20% open rate = 1,000 subscribers reached
    
  • 1,000 subscribers x 2.5% conversion rate = 25 participants
    
  • 5,000 subscribers x $ 4 per subscriber = $ 20,000 acquisition cost
    
  • $ 100 monthly emailing cost x 1 email blast = $ 100 marketing cost
    
  • Total cost = $ 20,100
    
  • Cost / participant = $ 20,100 / 25 = $ 804.00

Conclusions

This is only meant to be a quick calculation using defensible numbers. We can see already what the chief cost factors are.

The marketing costs are negligible compared to the acquisition costs. In other words, the cost for a subscription to Mailchimp or Constant Contact basically cancels out the cost to boost posts, and both methods achieve a very similar reach (21% vs. 20%).

One might argue that email becomes more cost effective as you send more emails, and yes, it does. But no matter how many emails you send, the chief financial factor is the audience acquisition cost.

The important conclusion to take from this comparison is NOT that social followers beat email subscribers every time. It’s that the email acquisition cost is the most important and troublesome variable. You can get Facebook Likes reliably for anywhere from $ .30 per click to $ 1.00 per click, depending on if you’re counting all Likes or just the really engaged Likes. But the email acquisition cost is very hard to predict. If you’re an established brand with a great lead capture offer, you can probably get the cost per acquisition well below $ 4.

It makes sense, then, to make sure you have tested and understood your email subscriber acquisition cost before running a comparison like this.

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