Firstly, some new data
How “liking” a brand connects with consumer loyalty is still vague and this is clear for everyone now. According to a study by eMarketer, for 47 percent of people, there’s no value in a like, while 41 percent said they were somewhat more likely to purchase and 13 percent said they were much more likely to purchase. There aren’t numbers you can take to the bank, though you can’t blame Facebook for trying.
But....
Nielsen last quarter released results from 79 Facebook ad campaigns, and on average, Facebook’s social ads had 55% higher recall than non-social ads. ComScore has released data that shows Facebook fans spend more than customers who are not Facebook fans. In Starbucks’ case, that number is 8% more non-fans who were also Starbucks buyers.
When it comes to advertising and marketing...
The first thing you want to do when you sit down to plan a lead-gen campaign is identify your audience—not the friends and acquaintances of your audience. Someone who went to high school with someone else isn’t necessarily to share the same professional interests, taste in food or even the same socioeconomic class. Why would I want to target them?
Of course, if you were selling Ben and Jerry’s ice cream this could work for you. According to Facebook’s roadshow, Ben and Jerry’s are getting back $3 for every $1 spent on Facebook. I believe it. You offer me a Ben and Jerry’s coupon, you bet I’ll click on it. Well.. simply because... did you see how much Ben and Jerry's ice cream costs? If so, I believe you would understand me and ask for a coupon as well!
Moreover, the number-one trusted source of information for consumers is recommendations from friends and family. Facebook provides a reliable platform to leverage that insight at scale. And do not forget about the online brand communities! The sense of belonging (members constantly posting), particular rituals associated with brands... yes, brand communities do really exist! So these are the positive sides of advertising on facebook, combined with global and fast reach!
One more 'but' or the negatives
The core user experience of engagement with content is the newsfeed and as Facebook analysis indicates only the minority of fans see content from a brand page in a given week - on average, 16 percent of fans are reached by branded content by a brand that posts 5 of 7 days. Why do not all fans see a particular piece of content from a brand?
Some fans may miss content if they are not logged onto the site during the period when brands are active and posting. Additionally, the Facebook newsfeed uses an algorithm to rank content based upon the likely interest to a user. So, unlike other social media settings, in Facebook, only the content determined to be most relevant to a user is delivered at a specific time.
So.... here the featured sponsored content comes!
Also... it has been said, that only 12% of Facebook friends see the statuses. Therefore, even if a person liked/posted/shared brand news - there is a small possibility that the relevant people - target audience will see it!
So... it is still unclear if liking/becoming a fan leads to increase in brand loyalty and if advertising on facebook is generating sales. Well there should be ROI if more and more companies are creating facebook campaigns! Let's consider car industry. VW recently launched facebook campaign as well as Citroen created a facebook car design app.
BUT General Motors plan to stop advertising with facebook! Why? Because they decided that paying for ads on the social network has little impact on consumers when it comes to car purchases.
Last year GM only spent about $10m advertising on Facebook – while it spent $30m on content. This is a nice investment!
GM will still use Facebook, promoting its products on its various pages, it just won’t pay. It will not break facebook, however, it send a message to the other brand companies, particularly for a pricy products like cars. It might work for promotion of small products or local events, etc. since Facebook is a word-of-mouth tool it should work good for this things, but may not work for cars and even luxury brands? Who knows... Probably companies just need to re-consider their strategies, as in my opinion, advertising on Facebook requires a completely different strategy to for example, advertising on TV. That's completely different things. So.. the topic is still unclear, at least for me..
If someones wants to read more about Facebook advertising, loyalty, sales, facebook fans and liking etc. I recommend these three online articles.
One from the Forbes. The other from the Fast Company and the final one from the Wall Street Journal. And if someone has access to academic journals - there is an interesting article written by Lipsman A., et al (2012) ''The power of 'Like' - How brands reach (and influence) fans through social-media marketing' Journal of Advertising Research, March 2012 pp 40-52
Enjoy reading ;)
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