What’s A Facebook “Like” Worth?

Facebook LikeIt seems everyone’s obsessed with Facebook’s IPO right now. And while CMOs are beginning to understand the possibilities of Facebook, and other social technologies, to connect and engage with customers, many CIOs remain unclear on the value of Facebook.

A question many business executives ask is this: “What’s the value of having someone like your page?”

On its own, maybe not much. But the true potential lies in the ability to collect insights about the people who like brands, products or services – be it your own or someone else’s.

For example, the chart below shows the percentage of consumers by age group who have “liked” Pepsi or Coca-Cola. These data suggest Coca-Cola is significantly more popular with 17-28 year olds than Pepsi, while Pepsi appears more popular with the 36-70 crowd. I pulled these data points directly from the Facebook likes of each of the brand pages using a free consumer tool from MicroStrategy called Wisdom. Using this tool I can even tell that Coca-Cola fans are likely to also enjoy the odd Oreo cookie and bag of Pringles.

"Wisdom" illustrates the potential for companies to leverage the massive amount of data embedded in Facebook to help target more refined advertising campaigns, build new product affinities and ultimately deliver greater value to their customers. New analytics tools from MicroStrategy and others designed to integrate with social networks will make this possible.

The opportunity for CIOs is to help lead the way toward integrating this stream of customer data into other sources of customer insight to provide a competitive advantage. MicroStrategy is clearly hoping their investment in data analytics will pay off by providing a bridge between enterprise data and Facebook for their clients. Delivering a free consumer app to create buzz around their product could be a stroke of marketing genius.

Comments

The value of ongoing dialogue.

Wisdom looks like a cool tool, will definitely check it out. In my experiences direct marketers, like those who run email campaigns, are really fascinated by the potential of Facebook Likes. Automatically accessing data like Coke fans tend to like Oreos & Pringles is amazing, but they also want to unlock the value of ongoing dialogue with customers. The Facebook Wall alone is translating the potential from weekly longer-form email communications to lots and lots of tiny micro communications happening daily - something no customer would tolerate in an email form.

The value of ongoing dialogue

You are absolutely right Darika, and a number of the reports referenced below the blog post highlight great research we've published on the value of engaging fans and detractors through Facebook. For interactive marketers, Facebook has enormous potential value on a number of fronts - unlocking the customer data is key to delivering meaningful value and extending the customer lifecycle. For many large companies, this BIG value will come when marketing and IT are able to collaborate on building an integrated customer insight engine that employees across the enterprise are able to leverage.

Yay to collaboration!

Yay to collaboration!

Looks good! Data mining gone

Looks good! Data mining gone FB.

A good example of how social

A good example of how social media and analytics can provide insights on customer behavior. And with FB being the reigning king of all social media, mining it deeper should result in excellent data on what customers 'like.' That knowledge should surely help companies move in the right direction. You may be interested in a related white paper : http://www.wipro.com/Documents/insights/SOCIAL-MEDIA.PDF

CIO meets Facebook -- that's BT

If your CIO is engaged with integrating Facebook data, that's a sign that you are leaving the cobwebs of IT for the new world of Business Technology. How many CIOs of the top 1,000 companies in the world are thinking about Facebook as they walk into work this morning? My best guest is 5%.

Define: Gimmick

The article title hints that you might have something to offer in the way of valuing a Facebook Like, but instead we're given another analytic technique. That's frustrating. The article content is NOT an answer to the question posed in the title. If it were, we could make intelligent budgeting decisions for creative technology projects on Facebook.

My work as a technology professional in a world-class digital agency is much more difficult (and ultimately more expensive) when marketers chase unreasonable returns from over-hyped tactics like this. In most companies, this type of optimization should almost always be considered high risk, if not wasteful, spending. (Yes, I know people win the lottery, and I know some kids do become star baseball players. Most don't.)

I am constantly looking for data to help companies choose investments in (marketing) technology. I was hoping to re-post this on my site.

Define: Gimmick

I think you miss the point here - this does indeed point to the value of a Facebook like - it's not in the sense of an individual "like" having a monetray value. It's actually in the ability to analyze customer data through the lens of Facebook Likes and other social data. See http://www.forrester.com/home#/Mastering+Customer+Data+8212+A+CIO+Impera...

As a technology professional in a digital agency you understand better than most that your world is changing at a fast pace. I'm not clear what you are referring to by "over-hyped tactics like this" since the blog post discusses the value of being able to disect Facebook data - something that most comapnies and digital agencies are only just beginning to get tehir arms around. But this is indeed where I see the a real future benefit of social technologies - eventually connecting customer data across multiple streams and making it possible to make real-time decisions which impact customer value.

Nigel

Marketing technology

You may also be interested in this report on marketing technologies. http://www.forrester.com/home#/Emerging+Technology+Applications+For+Mark...

Reply

Nigel, I appreciate the reply.

I have worked with the marketing departments of some of the largest companies in the world. They're swimming in data. I agree that being able to derive segments from the Facebook channel is neat, but developing, deploying and managing such an infrastructure costs money. I can tell you a dollar amount for certain businesses. My frustration comes from the fact that your article leads many to believe the return on such an investment is guaranteed and significant. It isn't. In fact, I am suggesting to you that spending on such initiatives is wasteful for the majority of companies. I'm utilitarian and pragmatic–I believe the relative value of this kind of optimization makes it unworthy of pursuit. Does that make sense?

The big agencies aren't behind this curve. They lead it. The agencies' customers are the patrons we all serve, after all. Articles like yours are great for short-term business, because the hype leads to spending. It's bad for long-term relationships, though, because the investments are perpetually under-delivering.

The symptoms are out there, Nigel. I don't disagree with the content of your article. It just isn't a significantly useful answer to the real question, which should be about monetary value.

The monetary value

Thanks for being engaged!

I agree that for many the big question is how to drive monetary value from social engagement. I also agree that the cost of building the infrastructure to master customer data is not insignificant. I don't suggest the return on investment is guaranteed for any project, including digital agency investments - after all, that really depends upon many factors, not the least being the ROI value saught, the investment cost and the expected benefits. If your client's investments are perpetually under-delivering I would ask why their expectations are being set so high when they buy?

I think that if you consider the bulk of our research, we take a very pragmatic view of what companies can realistically expect from social media marketing. There exist some fantastic examples showing tremendous returns - undoubtedly there are other digital strategy investments are at best, sub-optimal. In this respect digital is no different from any other marketing. That could also be said for a wide range of business investments. However, it doesn't make the pursuit of improved effectiveness wrong.

You suggest that you believe the relative value of customer data optimization makes it unworthy of pursuit. I respect your right to your own opinion. Our research suggests that there is an alternative viewpoint here. The reality of either position will be borne out over the coming years as those companies who are pursuing customer data integration learn how to turn their investment to their advantage.

Monetary value in a free

Monetary value in a free market is calculated by looking at market pricing. I don't think that at the scale that Coke and Pepsi operate at its easy to get a good determination. I think that looking at the pricing of Facebook ads, the average pricing of the numerous companies listed at http://www.buyfacebookfansreviews.com for example, you can come up with something much closer to what the true value of a Facebook like is. Now, what researching that info wouldn't tell you is what the return on investment is with a Facebook like. Now that's something far more complex and subject to a different set of calculations that has to take into account the cost of getting likes and a calculation of what monetary value each user brings to your business.

I appreciate this comment.

I appreciate this comment. Data may be deeply interesting, but a business (and its consultants) cannot properly prioritize planning and spending for initiatives relating to such data without the extended calculations you refer to. Spending without those extended calculations must be considered high risk–the odds and amount of return are both unknown.

My experience is that outlays required to deploy and maintain the infrustructure for this type of initiative greatly outweigh the returns. Without numbers, Nigel may claim a user's mileage may vary. That's possible. But most companies will not be investing in these initiatives using money allocated for high-risk projects, and therefore shouldn't seriously consider them at all. (Until we have a process for assessing the ROI–I hoped that is what Nigel provided when I read his article title.)

In another note, I also brought Nigel a lot of traffic. What's the value of that? I wish he wouldn't keep deleting the references to my extended opinion of his article. :)

In another note ...

Just so we're clear, your original comment closed with a link to your promotional advertising page which did not add anything to the discussion - we try to remove such advertsising links as a matter of course. Since your last link is a link to someting that furthers the discussion it was not deleted. (Though I did edit your post to remove the duplicate text which I presume was an error). :)

Monetary value in a free

There are many useful research paths to follow to prove the ROI of social and we've published a number of reports on the topic (e.g. The ROI Of Social Media Marketing - http://www.forrester.com/home#/The+ROI+Of+Social+Media+Marketing/quicksc...). We'll continue to research this topic. But that still misses the point of the blog post - The point I am making is that the real value of a Facebook Like cannot be determined solely by looking at the incremental value of a like, it must also be done by assessing the value of the customer insight that in-depth analysis of customer data brings to the company. The wisdom app is a useful, easy-to-understand vehicle for demonstrating how such analysis works for companies already investing in this technology.