You can’t read the press these days without an article telling how fantastic Facebook is. Indeed with 900 million members, it’s very much comparable to being one of the world’s largest countries. Facebook has milked its IPO to full effect. It’s as if the world is infected with a “Facebook fever” which makes companies forget to make the necessary investments on their website and conduct real and vital communication with their audience by email and newsletter.
It’s important to look beyond the hype and investigate whether Facebook can really help your business.
Does Facebook translate into business value?
Companies have been in a race to get Likes on their Facebook pages. Facebook has upped the stakes by adding a new measure of People Talking About This, as if to provide a real-time finger on the pulse of what’s hot.
But Facebook has not necessarily translated into business value for companies. Just look at General Motors which recently cancelled their $10 million Facebook advertising campaign. Sure, we can snicker about the old American car company that is hopelessly out of date, but nevertheless, $10 million should be enough to hire the best social media agency. Their 380,000 Likes on GM’s page did not translate into more cars sold…and there is a question of whether their efforts to engage their customers worked. If General Motors can’t get it to work in spite of all they spend, who else can?
Take a look at the mobile telecom industry, another industry that spends billions of dollars in marketing and advertising. For these companies and all their teams and agencies, they can’t get more than 2% of their subscriber base to Like them in Facebook. Such small results hardly seem worth the effort.
This is not to say that companies should not have a Facebook presence. Indeed, we have seen solid evidence from around the world that social media can help reduce support costs. That is user-driven support on companies’ websites, Facebook, Twitter, and other user-driven tools. However I have yet to see Facebook as a solid driver for leads and sales.
I suspect that there is a drive for Likes because it’s measureable. More of some number seems like a good thing. But measurable does not equate to meaningful. A company could slash prices to get more subscribers, but it’s not the number of customers that matters, but how much they spend and how well they are retained.
Put Facebook into perspective with other marketing channels
At a deeper level, I sense desperation among many companies. Profits are squeezed, and the long term outlook is not positive. So getting more Likes seems like something a marketing director can influence in an environment with larger forces of his control.
I suggest that companies take a hard look at their marketing investments, and put Facebook into perspective with other marketing channels. The attention Facebook receives is over the level of any other media, but its results underperform other channels.
Consider the fact that Facebook shows any company’s posts to just 16% of the community that Likes a page. This is part of Facebook’s algorithm to show posts only to a subset of the community. The ability to serve updates to the entire community that Likes a particular company’s page must be purchased through Facebook’s “Reach Generator”. In practice this means that just .0032 of given customer base can be reached via Facebook. On top of that, unless companies undertake the task to identify the people who Like their page (which can be a difficult task for technical and legal reasons), they may engaging with people who are not even their customers.
I think that companies should invest their limited marketing budget in proven channels such as email, search and newsletters. In fact, email is the best converting channel of all, and only a handful of companies are taking advantage of it. I suspect this is because marketers think email isn’t sexy.
I see a value to companies developing their own content and improving their websites to show that content, as well as making that content findable and shareable. Next I suggest that companies developing meaningful, authentic messages and deliver them to customers in a personalized way.
Companies have a lot of traffic on their website that they don’t monetize. Potential customers are searching the web for information related to your products and services. Companies can take better advantage of this on their website and with email. Furthermore, companies still have a lot of knowledge within their own business intelligence systems that they fail to action for a variety of reasons. I suggest they pick these low-hanging fruits before making a campaign to get more Likes in Facebook.
More on the results of Facebook marketing is covered in this excellent article by Andreas Ramos: Facebook Fan Pages: What Changed? What Does This Mean. Roslyn has also previously written on digital marketing on these pages with a posting on avoiding the top 10 errors in email newsletters
You can meet Roslyn at the Aarhus 12 conference for web & intranet professionals in November. Roslyn will be speaking on the digital marketing conference track.
If you are interested in meeting with other social media professionals, then you should join our European Social Media Experts Group.