At the outset, online advertising made a big mistake by deciding on the click as a measure of success. Unfortunately, it looks like we're about to do the same with social media.
Back in January, researcher Karen Nelson-Field of the Ehrenberg-Bass Institute ignited a debate over the value of Facebook advertising when she argued that marketers are wasting time talking to their fans – i.e. "heavy buyers" of the brand – because only a small percentage of them interact with the brand message. Instead she suggested that brands should be looking at other channels to attract "light buyers."
This again came up at the ARF Re:think conference, but it reminds me of a similar debate from the early days of Internet advertising over whether click-throughs were a sufficient measure of display ad effectiveness. As comScore argued at the time, clicks are often a poor measure of performance – particularly for brand advertisers – because focusing on the 0.1% of ads that are clicked ignores the impact of the other 99.9% of exposures.
This time, instead of a "click," we're talking about "engagement" which really means likes, posts, comments, check-ins, shares and other actions by the user. In other words, a click.
Nelson-Field's focus on engagement also ignores important aspects of how social media delivers brand messages and impacts consumer behavior. Even absent any engagement with a social marketing message, brands have an unparalleled opportunity to communicate with their fans. And when these fans do engage with brand messages, even at a low incidence, they become exponentially more valuable in delivering branded messages to their friends.
The Friends-of -Fans Effect
In comScore's 2011 white paper The Power of Like: How Brands Reach and Influence Fans through Social Media Marketing, we found that friends of fans represent a much larger set of consumers than a brand's fans - 81 times larger, on average, for the top 1000 brand pages. The link to this extended network occurs when fans engage with your messages, thereby sharing the message with their friends.
Procter & Gamble CMO Marc Pritchard recently talked about this friends-of -fans effect, stating, "Social media is not just about the number of fans or friends [your brand has] – it's the number of fans they have to create amplification." This amplification over a series of messages increases the effective reach and frequency of these impressions to – can you take a guess? - lighter buyers.
Our research confirms this effect: we frequently observe that friends of fans represent the majority of the earned reach brands are able to achieve. In the Power of Like, we reported that in May 2011 Starbucks reached 10.6 million friends of fans (4.9% of the U.S. internet population) compared to 6.3 million fans (2.9% of the U.S. internet population).
Exposure Drives Purchase Activity among Fans and Friends
But what makes this multiplier effect truly powerful isn't just the reach of a brand's message to friends of fans, but the influence fans have on their friends. Fans are of course more likely than the average consumer to have an affinity to the brand and purchase from it, but our research shows that so too are their friends.
In the Power of Like, we found that Starbucks fans and friends of fans spent 8% more and purchased 11% more frequently in-store than non-fans who were also Starbucks buyers. The Ehrenberg study asserted that fans are primarily heavy buyers; however, if fans were comprised exclusively of heavy buyers the differential would be orders of magnitude higher. This indicates that fans may include both heavy and light buyers and therefore presents an opportunity to increase their purchase rate.
We've also observed more sizeable amplification effects in other categories, such as online retail, where visitation to the retailer website is often 2x higher among fans and 1.5x higher among friends of fans. In the entertainment vertical, we consistently find that desired behaviors such as watching trailers, visiting an official movie trailer or searching for the film's title occur with much higher incidence among fans (4-10x) and friends of fans (2-5x) than the general population.
So What Should Marketers Do?
Marketers should realize that investing in social marketing efforts does not amount to preaching to the converted. Instead, this channel offers a truly unique marketing opportunity in its ability to amplify the modern equivalent of word-of -mouth. How often do you get your best customers raising their hands to not only open a direct channel for brands to talk with them, but also to facilitate viral communication at an unprecedented scale to the people who most trust and value their opinions?
So while message engagement is important, focusing solely on the engaged one percent of fans ignores the value of the other 99% of fans who are reached, in addition to those coveted light and heavy buyers in a fan's extended network. Brands that adopt a more holistic view of their social audiences and understand the importance of message exposure, resonance, and amplification will get a much better sense of their overall performance – and will get a leg up on those still caught up on engagement and clicks.
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