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[7 comments]

Sorry Forrester But Facebook Benefits Marketers

December 2, 2013

Through a special arrangement, presented here for discussion is an excerpt of a current article from the Joel Rubinson on Marketing Research Consulting blog.

A recent blog by Forrester claims Facebook is letting marketers down, but exhibits an astounding lack of understanding of the ways in which Facebook's presence benefits brands.

Nate Elliott of Forrester writes, "First, your company focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers. ... Everyone who clicks the like button on a brand's Facebook page volunteers to receive that brand's messages — but on average, you only show each brand's posts to 16 percent of its fans.

"Second, your company isn't good enough at the pure advertising business onto which you've shifted your focus."

Let's take the point that Facebook shows each post to only 16 percent of fans. ONLY? Starbucks has 35 million fans. If they provide only one news story each day, that amounts to 168 million "free" impressions each and every month in which fans remind friends that they like Starbucks, thereby reinforcing brand beliefs. This ties into my recent blog that makes the case for the importance of this reinforcement as those who like and even prefer a brand buy it far less than 100 percent of the time. In other words, updates in the newsfeed of fans are highly targeted messages towards "easy to win" purchases.

As to the claim that "Facebook isn't good enough at pure advertising," this is just a potshot from Forrester that is not based on referencing experiments, which often do, in fact, prove the sales lift from Facebook advertising. Facebook gives you a window into the values and lifestyles of users that you could not get otherwise and then allows you to target advertising based on this knowledge. In addition, Facebook is the first major digital player to present a credible way of cracking the code on mobile advertising, one of the issues that keep marketers up at night. When the investor marketplace realized this, Facebook stock started rising and has doubled from its low.

More evidence that Facebook provides marketing value comes from the analysis of Compete data I conducted last year which used a pre-post design approach to show the lift in website visitation as a function of becoming a fan of the brand on Facebook. Finally, two marketing mix modeling exercises I was involved last year proved lift as a function of Facebook activity.

FINANCIALS:     [NASDAQ:FB] [ ]

Discussion Questions:

Do you think Facebook has proven its marketing benefits? How do you see Facebook fitting inside brands' and retailers' advertising mix now and in the future?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much do you think brands and retailers will increase or decrease their advertising spend on Facebook over time?

Comments:

Brands need to include social media in their marketing mix. Those marketing plans need to be more thorough than just building likes on Facebook. Through Facebook and other sites, brands can communicate directly with customers, listening and disseminating information. Companies that have become adept at using Facebook offer information and promotions. They also use these sites to listen.

I expect companies to integrate social media and Facebook in to their marketing budgets. They should to this on a gradual basis. It's easy and economical to experiment with Facebook, consistently testing new ideas. Few other marketing outlets offer this type of flexibility.

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Max Goldberg, President, Max Goldberg & Associates

Facebook - along with many other social channels - provides a vehicle of POTENTIAL consumer engagement. This has never been a case of "build it and they will buy." The vehicle is there to create awareness of brands. The brands have the responsibility to create an engaging conversation with those who "like" or follow the brand's social presence.

Facebook does indeed have potential marketing tools of which to take advantage, however, very little ROI occurs for the brands if fan engagement is not a top priority. There are great examples of brands leveraging Facebook and other channels to establish tangible marketing ROI. I believe these channels will remain an important part of the mix of tolls for the foreseeable future.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

"Pure advertising"? That is advertising that a company does where the results can't be measured. That is the advertising that has been around for the last 75 years. That is the advertising that the advertising "professionals" want to continue. That is the advertising where opinion trumps results on what is good "advertising."

What Facebook and other internet advertising alternatives offer is measurable results. This scares the s**t out traditional advertising, media and marketing experts.

Over time, measurable results will drive advertising budgets and as a result more and more of the promotional budgets will go to Facebook and others.

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Gene Detroyer, Professor, Independent

I work for a Facebook Activation company. Being able to directly offer digital incentives "rewarding fans" for being fans is a great way to advertise and monitor results. Specifically, we have also seen great engagement using Facebook's Promoted Posts function to ensure fans know about the deals and drive sales.

Bob Romell, Director of Sales, CoupSmart

A quick review of grocery retailer Facebook sites: The average retailer's "Like's" represent 6% of their estimated customer base. Of the 6% that "Like" their retailer, 6% are engaged in some way ("talking about this"). That suggests an engaged impact of 0.4%. Could mean there is a lot of room for improvement regarding engaging content. Could mean Facebook isn't a viable marketing channel. Too early to tell, but Gene's comment about measurable results scaring the s**t out of traditional advertising, media and marketing experts, may have some merit....

Frank Beurskens, CEO, ShoptoCook, Inc.

I think we limit our understanding by trying to characterize Facebook as a new model ad or promotion medium. Yes, that may seem like a present necessity to separate brands from their marketing dollars, but I think it will ultimately be more effective to interpret social media as a kind of communications overlay, where flow is more significant than opportunities to see, or even conversions.

Whether Facebook sustains its position as the communications environment of choice, or whether it is supplanted by a newer, faster-moving model yet to come, one thing is certain: Reach, frequency and CPMs won't be adequate for setting the price.

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James Tenser, Principal, VSN Strategies

Just to be clear, I think that encouraging those who like your brand in real life to like it on Facebook is NOT about engagement. It is about finding a way of reinforcing brand messages via "free advertising" to those who already buy your brand but who also consider other brands.

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Joel Rubinson, President, Rubinson Partners, Inc.

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