The question on every marketer's lips is, "What is the value of a 'like' on Facebook?" Companies are spending millions of dollars building fanbases, followers and advocates, but is it the best use of marketing dollar for the short and long term?
A session at Internet Week attempted to tackle this problem, but only further highlighted the friction between the two prevailing models of social media marketing:
Model 1: Track purchases and prove value
Model 2: Use an idea to build engagement and overtime this will create brand value which will convert to sales.
So how should you spend your money?
Model 1: Karolis from Campalyst told a very interesting story of tracking value for Blue1 airlines. It's the kind of story that makes the data geeks rub their legs, and the creative types shudder. A very simple test investigated the effectiveness of display ads verses Facebook ads (driving to e-commerce site)s verses links from the Facebook brand page.
The results where extremely clear: brand page engagement is massively more valuable than either display or social ads. The data geek in me was satisfied. Click-through rates from the page were 0.45%, nine times higher than display and 28 times higher than Facebook ads. Conversions followed a similar pattern, 0.82% conversion rate (they are buying airline tickets... a high priced item) from the Facebook page, 57% higher than display and six times higher than Facebook ads. The basket sizes were also better with "fans" spending 30% more on average. So fans click more, convert better and spend more... go and tell all your clients!
The interesting point in this was how poorly the Facebook ads converted. The client has decided to use the ads to drive to the facebook page. But I suspect their failing was something more profound. The power of an idea.
Model 2: Claire from BBH told the story of the other model. Do something cool, focus your energies and participate in the social buzz and fingers crossed people will by your product. Claire worked on the Yeo rapping farmers campaign. Whether you think they and the X factor are annoying or not, you can't fail to have heard about them. "Build a user ecosystem", "share your voice" and "Use super bowl super social", all the good stuff you expect of an ideas-driven agency. And they had good results... people bought yogurt.
So which model works best?
It is a shame Karolis and Claire could not put their heads together. Ideas are powerful but they need to be able to prove value, ROI is important but it can lead us to focus on shortermism, to miss bigger opportunities and forget that we are talking to people not robots.
A combination of ideas and data is essential. That's why at SapientNitro we call ourselves idea engineers. It's a combination of both skill sets working seamlessly together. The bigger question I will leave unanswered... how do you get the data and understanding to engineering great social ideas that work?