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July 10th, 2012

Measuring Facebook's Impact on Marketing (via JAR)

I’m a big proponent of the power of Facebook. Yet all the attention surrounding the “value of a Fan” reminds me of the story of the drunk crawling around under a street lamp one dark night. A policeman walks over and asks “what are you looking for?” “I dropped my watch”, replies the drunk. So the policeman begins to assist in the search until, after a few fruitless minutes he asks the man “are you sure you dropped it here?”.

“No”, says the drunk, “I dropped it across the street over there I think” and points to the far corned.

“So why are we looking for it here?” inquires the policeman?

The drunk stops his searching, looks up, and in a slightly exasperated tone, replies “because this is where the light is.”

Too many efforts to value Facebook and other “social media” activity can be characterized as “blinded by the light” - looking for answers where the data is readily available.

To truly understand the predictive value of a Fan, we need to acknowledge that all Fans are not created equal. For example, what causes people to become Fans in the first place? There are many possibilities:

- Brand X may indeed have such a cool Facebook page that all their Friends are telling them to check it out. And when they do they find it hard to resist “Liking” it and becoming a Fan (even if only out of social pressure).

- Perhaps the motivation to become a Fan stems from that greatest of all gifts… the prospect of a discount or coupon just for clicking the “Like” button.

- Maybe they were inspired to go search online for more information after seeing a well-executed television campaign and/or outdoor billboard on the interstate. They entered an organic query into a browser and then clicked-through to the Brand X Facebook page.

- Or, heaven forbid, they were actually TOLD though old-fashioned word-of-mouth to go check it out.

Fans can be earned – through good content, good media, or both. Or Fans can be bought through discounts, points, miles, or other ex-brand value drivers. Fans can come to the brand through many pathways, and only a small percentage of those pathways BEGIN on Facebook. When you model all those pathways in the holistic context of the full breadth of the consumer decision journey, you tend to find that correlations between Fans and brand engagement vary substantially based on their motivation for and path to becoming a Fan in the first place.

Equally important is the recognition that not all people who feel strongly positive about or are transactionally loyal to a brand will become Fans. Yet most of those will continue to purchase and feel engaged.

So was it the act of becoming a Fan that led to higher levels of brand engagement, purchase intention, or actual purchase behavior? Or was becoming a Fan just another (albeit more measurable) way of engaging with the brand in the first place. Did it replace wearing t-shirts with the brand logo or participating in a loyalty program? It takes more than simple logistic regression to find the true answers.

To sum it up, here are two quotes that have changed the way I view measurement of social media in general and Facebook in particular:

First, “all media are social” – this from Ed Keller and Brad Fay in their 2012 publication The Face to Face Book. The implication is simple… done well, all marketing tactics stimulate word-of-mouth offline, online, or both – and the measurement of no single path captures the story adequately.

Second, from Tim Ambler, Professor Emeritus at London Business School, who summed up several decades of research into marketing measurement by concluding “Marketing metrics inspire certainty and confidence. Cannabis has much the same effect.”

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