BrainTrust Query: Surprising New Study on Facebook Marketing Effectiveness for Brands
Through a special arrangement, presented here for discussion is an excerpt from an article from the Joel Rubinson on Marketing Research blog.
I recently partnered with Compete, Inc. on what is believed to be the first study that precisely measures the effect of ‘liking’ a brand on Facebook. The study looked at the same person’s clickstream behavior towards a brand for 30 days before and 30 days after they liked that brand.
We studied 63 brands across four months in beauty, food/restaurant and retail (sectors where sessions on owned media lead directly to sales).
The first thing to note is that the assumption about people who like a brand on Facebook already being predisposed to that brand turned out to be true. They are eight times more likely to already be interacting with the brand’s website vs. non-fans. This creates an analytic challenge because you need to control for this in determining if liking a brand on Facebook causes any increase in value to the brand, otherwise you will overestimate the impact.
So here is what we found:
There is, in fact, an 85 percent lift in the number of sessions on a brand’s website within 30 days of becoming a fan of a brand on Facebook. Liking a brand on Facebook does matter. However, the effect all comes from the small subset who return to the fan page. For them, there is a four-fold increase in their visits to that brand’s website after liking the brand. Likers who did not return exhibited virtually no increase at all in website visits.
Our study also found that those returning to the brand page tend to be a small percentage of fans so the overall impact on brand website sessions is modest under current marketing approaches.
The fact that a second visit to the brand page is needed to create impact suggests that Facebook social impressions in a fan’s newsfeed have little impact beyond their role in encouraging a return visit to the fan page. The inferences I draw from this is that every Facebook brand newsfeed update should offer a reason for a fan to go back to their brand fan page and the page itself should encourage stickiness.
This research also has importance measurement implications. It supports the need for a metrics approach I have trademarked called "Tyme with brand"™ that is intended to measure the patterns and quantity of time people spend with a brand, going beyond the gross number of impressions that marketers get via social media. If you do not measure tyme with a brand, a marketer will certainly overestimate the importance of social media vs. owned media.
Discussion Questions
Discussion Questions: What do you think this study reveals about the impact of Facebook likes on the value of the brand? What lessons does it offer for retailers and brands looking to optimize Facebook pages and outreach?
Joel’s work is interesting, but says nothing about the value of a brand. The key contribution is that it is not “likes” but “revisits” that make a site sticky. So far, the data on whether social media is driving purchasing behavior is iffy to negative. Joel points out one of the main confounding factors though — visitors to social media tend to be fans already, which much of the negative research has not accounted for.
This is a great piece, and I’m happy to find the emotion taken out of FB for retail, replaced by data. Certainly this is true for me, I’ll “like” almost anything I am encouraged to “like.” But there are very few pages I actually visit with frequency.
As usual, sales are an outcome of a complex set of behaviors, and our endless desire to use direct comp increases as the direct result of any one initiative proves faulty.
It looks like Joel and Compete built a really nice study based on logic and and a proper granular approach. A couple of things are not a surprise to me, but I like that there is some hard data to back up what until now, has been instinct. There are definitely way too many brands/businesses assuming that FB has created an ecosystem for them that with a minimal effort will have a big effect on their business This study shows that a brand really has to engage meaningfully from the customer’s perspective, or they are living a fantasy.
If you don’t have something to say, don’t worry about posting on Facebook. Success comes from the second visit to the brand page (at least from this study). The only reason a customer is going to go back to the page is if you are sharing something of value. Recipe, coupon, secret deal or possibly a secret event. Good example of this strategy: Whole Foods.
“Likes” are okay on Facebook. They become great when you can tie them to purchases.
Very interesting stuff, but I am a bit surprised that there is so much energy focused on correlating the impact of social media on website visits and no mention in the study about how this relationship does or does not translate into incremental sales.
To that end, retailers who are tracking shopper sales by household and can also connect the households behavior back to their social media practices could begin to understand how retailers and brands can intelligently build business via social media. To accomplish this, there must be ONE customer database that is fed by the various customer touch points, not just the cash register, but also email, online sales, social media and SMS.
Inquiring CEOs and CFOs always ask the same question: “What did this do for sales?” Being able to provide an answer will go far in advancing social media to the mainstream of the enterprise!
Given the snapshot of insights ‘Liking’ a brand or product, as different products or services may trigger very different responses to any one particular brand, simply ‘liking’ a brand certainly does not translate into an ongoing dialog or purchase of that brand. The study does indicate that social media is an important element in an overall recipe of cross-channel communication between a brand and its audience. It is logical that the amount of time a shopper spends with your brand is directly proportional to the ‘bond’ that is created between the shopper and that brand. The more a brand can tell different compelling stories through all the different channels available to the shoppers, the tighter the affiliation between the consumer and the brand.
The study, while interesting, does not get to the heart of a consumer-brand relationship: whether the consumer purchases the brand’s products. A number of factors can contribute to a consumer visiting a FB page and liking a brand. And FB is not the end all, be all marketing tool for any brand. It is part of a coordinated effort.
Brands should use FB to engage consumers through dialogue and promotion. The more a consumer engages with a brand, the greater the opportunity to cause trial, then repeat purchase, and loyalty. FB is one potential factor in this cycle.
With all due respect, I take issue with the premise of this article: that the study truly measured the effect of “liking” a brand on Facebook. All it did was kick the question down the road; if liking a brand’s page on Facebook generates an 85% lift in sessions on a brand’s website, then the obvious new question becomes: “what is the effect of a session on a brand’s website?”
Facebook pages, websites, TV ads, dancing mascot puppets, etc. — they all only matter if they drive *sales*. Now, tie this study to loyalty card data and measure what the impact is on *purchasing behavior* when someone “likes” a brand on Facebook — that is a study I’d gladly “like” (and retweet, and +1, …).
Trying to determine causation from the analysis of social media data is very problematic. The classic analysis of shopping data was the association of beer and diaper purchases. The assumption was that the diapers were the trigger for the store visit and retailers should be merchandising beer in the diaper aisle. But maybe the trigger was really the beer and the diapers were just an excuse for picking up a six pack on the way home. Without a few shopper interviews, we really don’t know.
Now we have tons of data that is more ambiguous than the actual purchase of a product. Becoming a fan could be nothing more than an effort to save money by receiving brand promotions. Liking a brand or product could be an effort to raise one’s status even though they have never actually bought the product. (That’s why the Amazon reviews indicate whether the product was purchased.) Unless the brand has a robust online sales channel, there is really no way to understand whether any of the online promotion activity had an impact on sales.
I guess I am a little confused by the whole effort to build brand popularity on the Internet. Obviously a lot of people think a strong presence on the Internet is essential for better sales. That would be a key correlation to understand. How often do fans actually buy a product? How many new buyers had just become fans?
But then I have never understood how a cute lizard sells insurance, either.
This is a great study that helps us understand how Likes lead to further brand engagement. I don’t disagree with others who want to see purchase outcomes, but that doesn’t change the fact that this is an enlightening piece of research.
Most interesting to me is the fanatical subset that showed a 400% increase in brand website visits. If the overall increase was 185% and the non-fanaticals did not increase visits, I presume the fanaticals account for over 1/3 of those who “Liked.”
What makes them different? How did their purchase patterns change beyond 30 days? And, as Byron Sharp pointed out on Joel’s blog, was there a third variable independent of Likes that influenced both Facebook and brand site activity?
Nice work. I hope there will be further study.
I agree with Mark Heckman. It’s great to see some granular analysis. Would love to see the sales impact as I suspect many fans and visitors to brand pages are seeking coupons and may not be that loyal to the brands themselves.
I am finding the discussion enlightening and illuminating. Similar to the concepts of the dot.com age, eyeballs do not equate to dollars in all instances. Just being seen, just being liked, does not in and of itself translate to success in any revenue-related way. Is it an indicator of something compelling, something of interest to many, etc.? Certainly. It is that CONVERSION that really matters. Great topic and lots of good perspectives (even those that are not in agreement with each other).
It’s a beginning to understanding what is given so much press as gospel. Which brands and why likes matter is missing, of course. But there’s time to figure that out. Website effectiveness also impacts stickiness so we have to factor that as well. But as others have indicated, anything that gives us more of a context in which to assess value is helpful. Just don’t forget that grain of salt as you use the information.
Since the overall objective is for the consumer to actually buy something from the retailer, I’m not so sure about the need for stickiness on a FB fan page. I ‘like’ several retailers, yes I already liked them before FB, but I read their news feeds to see what they are offering, new ideas, etc, and determine if I am interested in anything they have to sell today. If not, I move on.
Much of FB is like scanning the news paper for anything of interest. The question I would like to hear answered is, have any consumers changed their minds about a brand because of the retailers FB page? Now take a look at that content and see how you might make a difference to your customers.
This study does not answer the sticky value of “Liking” a product/retailer/etc. But there is something to be gained in determining the value of the “like” process by individual. Determine whether a “Liker” is passionate or casual about a brand and then marketing can craft future initiatives aimed at both the passionate and the casual “liker.” From there a like-to-sales is a more manageable analytic exercise.
This Reuters piece got picked up by papers worldwide last week. It may point further at the ways in which retailers use Facebook and what they expect to get from it. "Retailers feast on free Facebook tools, shun ads"
There are two issues with Facebook. 1) The people who like a brand are already fans and they’re re-asserting their like for that brand. This would not necessarily lead to increased sales, they are already a customer. 2) Facebook forces people who dislike the brand to also click on the like button in order to post on the brands site. This would have the effect skewing the correlation between people who like the brand and sales. Not everyone who clicks the like button actually likes the brand.
Additionally, there has been limited correlation between one user who likes the brand and the influence on their friends to cause purchase behavior for that brand.
While I applaud Joel for attempting to quantify things, I have to go along with those that point out that his study falls short in the precision department. Or to be more specific, it falls short in measuring what it is we really want to know, i.e. how do visits turn into “likes” and finally, into sales, concentrating on the first part, but omitting the latter…the important one.
The challenge is how to monetize this activity. Fans don’t pay the bills. Consumers do. This is merely one aspect of a consumer relationship that ultimately builds brand value. Nothing in this article states how brand value is tangibly driven by this social channel activity.
My key take-away from Joel’s research is that Likes, in and of themselves, are not valuable. The goal needs to be engagements.
Attributing value to likes, is a bit like smiling at a bunch of girls on the street, and assuming all the ones that smile back want to sleep with you (they don’t, they are just being polite).
This is not a heavy thinking contribution, but after talking with my kids (early 20s) and watching my wife on Facebook, they all seem to have “grown past” the overload of “likes.” My daughter said she ignores them and gets shopping advice from her many friends.
So the meaning? Social overload and likes are becoming unliked by many shoppers (I also asked my daughter about likes and her shopping friends…they had the same thoughts. This is 9 mid-20s young women who shop every day — margin heaven).