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Marc is a monthly contributor to AdExchanger, where this article was originally published.
A parade of limousines filled with elaborately dressed high schoolers is a sure sign that prom season has arrived. The season evokes memories of confusion and awkwardness. Whether it happened to you or one of your friends, there’s no doubt you were familiar with at least one prom crash-and-burn, in which someone asked that special someone else to prom, only to elicit the dreaded response: “I like you… but not in that way.”
You (or your friend) misinterpreted signals and bet everything on bad data. Worse yet, you (or your friend) lost precious time courting the wrong person while alternative dance cards filled up quickly.
This is the same fate that digital advertisers face every day.
For years, you were able to repress your prom memories by burying them deep in your mind — that is, until you decided to become a digital marketer and apply your skills to Facebook. Now you have to interpret the value of a Like to try to understand if it truly indicates what you ultimately covet — a strong lifelong customer.
Those of us who spend time at the intersection of social media and direct marketing frequently debate the value of a Like. To this end, numerous studies have been compiled on the subject, one of which went deeper into methodology than usual.
Last month, Syncapse released a study titled, simply,Value of a Facebook Fan. This study arrived at the conclusion that the average Facebook fan was worth $174.17 (an increase of 28% since 2010, when Syncapse completed a similar study). The value of a fan ranged from $70.16 (for Coca-Cola) to $1,613.11 (for BMW), with tremendous variation in between.
The study found that the range of a fan’s value for the brand depends on a number of variables, including product pricing and the number of fans the brand has amassed.
Unfortunately, though, studies like these tend to raise more questions than answers.
Digital marketers, and brand marketers in particular, have focused on acquiring fans since the onset of Facebook marketing. Fans opt in to receive communication from your brand, in the same way they do with email marketing. This digital flirting comes with an expectation that your brand will provide value in that communication.
Developing a fan base and cultivating relationships with those fans can yield great results in some cases. Much like the adage says, not all customers are created equally. You must look at segments of individuals to assess their true value to your business.
An example from the Syncapse report illustrates this concept:89% of Levi’s fans are likely to purchase a product from the brand, whereas only 70% of nonfans are likely to purchase.This data point suggests that fans may be more likely to purchase from a related brand than nonfans.
Once you assess your fans’ value, it’s time to figure out if there’s correlation — or even causation — between your fans and your buyers. In other words, are fans more likely to spend on your brand or are those who spend on your brand more likely to become fans?
Core to the Facebook experience is sharing interests with friends. When you Like a brand’s Page, this story is published on your Timeline and publicized to your friends, family, and colleagues. While this move signals a display of interest, it does not always mean that you buy the brand’s products. Luxury brand pages are a great example of this; many people who Like Gucci or Rolex may not have means to buy the brand’s products.
If a brand like that expects its fans to become its future buyers and, therefore, focuses marketing efforts on those fans, it may be spending a disproportionate amount on unlikely buyers.
This is not unlike investing a lot time on that special someone in high school, who then ends up liking you only as friends.
Strong social strategies are focused, not only on acquiring customers via social channels, but also on providing value through these channels. Before launching a fan-acquisition campaign, outline the cadence of communication you will have with your fans and the reasons they were initially attracted to your brand page. They may be looking for:
If you don’t live up to their expectations, how will scorned fans exact revenge? According to the Syncapse study, two-thirds of fans are likely to share a bad experience with others — and fans are 21% more likely to share a bad experience than non-fans.
CMOs should ask themselves: How much will my fan-engagement strategy cost in terms of content creation? And what is the negative impact if you mismanage a relationship? Will this damage a single relationship or will it hurt your overall reputation and make you undesirable to all?
Based on their purchase behavior, observed over time, your customers each represent varying value to your brand. Fans vary in value as well. It’s imperative to think about the elements that define great customers and apply this to your fan base.
If your core buyers are women aged 35-54 with a household income of more than $200,000, target your fan-acquisition campaigns to people within this bracket, as fans from different target audiences will — by definition — represent less long-term value.
The same Likes from different people can lead to very different outcomes.
This raises the core questions of this discussion: What behaviors are most evident in a loyal customer? Which elements in the customers’ DNA truly matter, when choosing whom to court from browsers to buyers? Where should you focus your dollars to drive the best customer base? Likely you will find that a Facebook “Like” is part of that equation, but must be measured against all other qualification criteria to understand the value for your particular brand.
Thankfully for high-schoolers everywhere, the complexities around digital direct response are far more complicated than interpreting social signals in the formative years. My one wish is that DSPs would have been conceived decades ago with a slightly different application as they may have improved my chances of securing a prom date.