5 HUGE Misconceptions About Facebook’s Value to Your Business
“Facebook, it seems, is unstoppable.” – Adrienne LaFrance, The Atlantic, April 29, 2015
Nowadays, advertising value equivalency (AVE) is recognized as a poor way to measure the effectiveness of a PR campaign. AVE measures value relative to a fixed cost rather than to actual business objectives. As much as the PR profession has distanced itself from AVE, many businesses measure the value of Facebook Likes in a similar context.
A Facebook Like may be valued at $174 according to AdWeek and $161.30 according to npEngage. People may develop equations or algorithms to express this meaning in a more personalized way, but all of these methods input a number, make some assumptions and calculations, and output a number — all benchmarked against a nebulous “average.”
The value of Facebook Likes are (generally) misrepresented and misunderstood. Facebook’s value to businesses is better understood in the context of how people use the platform and relative to a business’s overarching goals.
What I want to explore in this post are some misconceptions about Facebook that you would be well-served to correct.
1. Brand interactions are tertiary
The average person may spend 40 minutes per day on Facebook AND never engage with a brand or business. According to a Pew Internet survey, one-to-many sharing, updates from their friends, and humorous content are the reasons that users frequent Facebook so consistently.
- Social care (customer service)
- Product research
Sounds reasonable, right? Keep the coupons flowing and enjoy Facebook mastery. Sadly, this isn’t the case. Forrester reports that less than .07 percent of Facebook fans engage with the brands that they “Like” (.07 percent isn’t a misprint, incidentally – seven-hundredths of one percent). And the diminishment of Facebook Page reach is pretty well known by now: AdWeek reports it to be between 1 and 3 percent.
So, the first misconception about Facebook’s value to your business is that your “Fans” and targets see an imminent value to your Facebook presence. More likely than not, they don’t.
2. Users share for personal (self-serving) reasons
User interest for business Pages strongly indicates their value relative to the promotional budget that you have to spend. But what about content that people share and Like on Facebook? It turns out that there is a psychological aspect that determines what we share on Facebook. To co-opt a Facebook term: it’s complicated.
The primary value of Facebook is peer connection. Stephen Wolfram’s research into his Facebook datasets show that on average Facebook users are connected to three distinct peer groups (of the same age), and this deviates only at the most extreme ages (very young or very old). This may explain some of the guilt and anxiety that many people feel on Facebook.
Take all of that baggage and consider this: marketing professor Jonah Berger writes that before we share something on social media we evaluate its “social currency.” Here’s how he describes that algorithm:
“The better it makes them look, the more likely they’ll be to pass it on.”
A Facebook social share is a uniquely special social currency: it must be evaluated through a ego filter across three peer groups and will only occur if it passes this gauntlet.
The second misconception about the value of Facebook is about how easily you can circumnavigate the back channels of content distribution with social sharing. Facebook’s scale may mask the sophistication of how and why people share.
3. Business outcomes aren’t universal; neither are Facebook’s contributions
We read these fantastic numbers about the efficacy and the value of Facebook Fans, but what do they really entail? Answer: assumptions.
The $174 figure for example was derived from 20 very popular brands on Facebook. Assumptions were made about social contribution to sales, the value of impressions (probably similar to AVE), and average frequency (and probably other stuff) to arrive at that number. Its relevance to YOUR business is tenuous to begin with.
Then consider the diminishing Page reach on Facebook over the last two years. Presumably as a function of impression frequency and sales attribution, the value of a Facebook fan should be steadily decreasing consistent with the graph below from social@Oglivy.
The bigger issue is that we shouldn’t look to a third-party to quantify the value of Facebook for us. Most companies wouldn’t benchmark their business against the Fortune 50, sense the sales of those 50 companies, add some padding for good measure and claim that to be the value of their customers. We probably shouldn’t do this with Facebook, either.
There are pragmatic ways to vet social media metrics (this Cision post explains more about this). The misconception that others can articulate the value of a Facebook fan is both inaccurate and counterintuitive.
4. Facebook’s business objectives cannot be disregarded
I was reading a post on LinkedIn the other day about how millennials and Gen Z uniquely “get” social media. The thesis of the article was that the relationship building aspect of social trumps the tangible financial aspects of it. I don’t think this is a unique point-of-view, and it’s ironic given the mechanisms for major social media platforms to monetize. Facebook (and LinkedIn) are great examples of this.
Here’s an excerpt from Facebook’s last SEC filing:
“The most important factor driving advertising revenue growth was an increase in revenue from ads in News Feed on mobile devices. News Feed ads are displayed more prominently, have significantly higher levels of engagement, and a higher price per ad relative to our other ad placements…. Factors that influenced our advertising revenue growth in the first quarter of 2015 included (i) an increase in the number of marketers actively advertising on Facebook, which we believe increased demand for our ad inventory, (ii) certain product changes to increase the value and performance of our ads“
In a very clinical way, this is Facebook describing how they act like any other publicly-traded business. Although there are some very unique and special aspects to Facebook the misconception that there is a magical, distinct value proposition that works counterintuitive to its profitability is false. For Facebook to be valuable for your business, odds are you will have to work within its profit-driven mechanisms (or have very small expectations).
5. Good is good…which is to say it’s scalable, rather than “viral”
This is where I tell you how to make all of your Facebook posts go viral. Just kidding.
There is a lot of advice about going viral, which is typically a retroactive list of commonalities between the rare content pieces that claim a disproportional share of attention. Jonah Berger (who I mentioned above) researches this quite extensively and writes that the amount of available attention is relatively fixed, and the potential for virality is quite low. On Facebook (and everywhere else), the desire for virality is like the desire to win the lottery. It would be nice, but it likely won’t happen.
But what about writing specifically for Facebook? Is this something that can be done? Probably not – and the research for this is quite revealing. When Searchmetrics and MOZ do SERP analyses to determine what may lead to higher SERP position, they regularly find that social media shares all impact the SERP about the same. More succinctly: the best content is popular agnostic of platform.
The final misconception is that Facebook is this special beast with high potential for virality and specificity. It turns out that good content on Facebook will probably be relatively popular on Twitter, Google+ and Pinterest as well. The value of Facebook is probably better understood as scalable.
What I wanted to do in this post is give a greater perspective of Facebook for businesses. There is a mythology and there is a reality, and I hope some of these points help to keep you grounded in the latter.
To close I want to share an excerpt from Harlan Coben’s book Stay Close that epitomizes the misconceptions that Facebook engenders:
“… She looks really happy.”
“Everyone looks happy on Facebook.”
“I know, right? What’s up with that?”
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