What’s the ROI of a ‘like’ on Facebook?
For too many marketers, getting fans or ‘likes’ on Facebook is a goal unto itself. It’s about as legitimate a goal as measuring how many ‘hits’ a website got circa 1998. Just as those ‘hits weren’t translating into revenue in the early days of the commercial internet, so too are many Facebook advertisers and marketers having difficulty determining if their efforts are bearing fruit, and how to leverage fans and likes into actual revenue.
Others are being more methodical about it. Research published today by Facebook in conjunction with comScore reveals that of 60+ campaigns measured, 70 percent of major brands have seen 3X to 5X ROI – in many cases offline, in-store sales, as a result of combining paid media buys on Facebook with the earned media from fans and friends of those fans.
On a call yesterday, Brad Smallwood, Facebook’s head of measurement and insights, told me, “These are very healthy numbers. The vast majority of these campaigns had really, really positive ROI.”
The question now, of course, is dissecting, mapping and documenting why these campaigns worked. “Paid [media] for us is actually an amplification of earned,” Smallwood told me, a trend Jeremiah Owyang and I are learning in the process of our in-progress research on the confluence of paid, earned and owned media.
Earned media – how to get it at scale and how to leverage it effectively – is a brand new skill. Facebook’s new research (the report is entitled “The Power of Like 2″) demonstrates that there’s not just synergy in combining paid, earned and owned media, but there’s profit in it as well for brands such as Starbucks, Target, Applebee’s, Nutella and Best Western.
Yet doing so requires new alignments in vendors, creative, media, agency relationships and even the internal org chart. Stay tuned for lots more work on this important topic.