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TECHNOLOGY

Are Facebook Fans Really Helping Your Brand?

New research shows that a large Facebook fanbase isn't necessarily key to growing a brand.

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Marco Arment, creator of Instapaper, recently blogged about the three great lies told by Apple, Google, and Facebook.

Number one on the Facebook list? That its users want to interact with brands.

Not that it’s impossible to advance a brand and marketing strategy by using social media like Facebook — quite the opposite. Such major brands as Captain Morgan and Old Spice have used the service effectively. But the old Rocky & Bullwinkle cartoon show had a joke about an upcoming advertising message being “fan mail from some flounder.” Social media can present the problem of Facebook likes from some flounder.

To plan smart, an entrepreneur has to understand what really happens on the service and what to realistically expect.

Hardly anyone pays attention

Many business owners think that marketing on Facebook means getting users to like their brand or business page. They will host contests, offer discounts — sometimes effectively bribing consumers to click that like button. Are they creating a business?

It’s statistically unlikely, according to data that Facebook analytics firm PageLever released over the summer. Information from the company’s beta testers, which collectively had 400 million Facebook fans, showed that, on average, only 7.49 percent of page fans see posts daily. The more fans, the lower the percentage. But wait, it gets worse. As PageLever notes:

Technically, an impression is counted whenever a status update is rendered in the browser. So if someone visits their Facebook newsfeed or your fan page wall, then Facebook counts impressions for all the posts that they send to your browser, even if the user doesn’t scroll down the page to see them.

So even 7.5 percent is likely overstating what really happens.

Hypo-active users

Furthermore, Facebook’s daily active users measurement can be misleading. An active user is anyone who has “engaged with, viewed, or consumed content generated by your application or Facebook Page.” The content may have had no effect. (According to Facebook’s way of counting impressions, a person doesn’t even need to have actually read content to be counted, so long as that content loads into the browser or app.)

To get a better sense of what people actually do beyond an assumption of taking note of content, here’s a table from PageLever showing what percentage of active users engaged with content, which means they liked it, commented, or posted it on their own walls (click to enlarge):

Active User Activity Benchmarks

Less than 2 percent. And that’s of the active users. And how much of this activity actually turns into business?

Walking away from social media is the wrong message to take. It would be like saying to give up on direct marketing because the response is so small. Design the program right and a company makes money. However, be realistic about the potential returns so you don’t act out of disappointment.

Last updated: Jan 3, 2012

ERIK SHERMAN's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.
@ErikSherman




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