It’s not really been the best of times for the world’s biggest social network recently.
Now that might sound a strange thing to say, given that Facebook floated only a matter of weeks ago for a record initial public offering price of $38 a share, making Messrs Zuckerman and Bono squillionaires. However, behind the scenes things were not quite so great. First GM pulled the plug on its $10 million social media marketing deal with Facebook, claiming that paid advertisements on the channel simply didn’t work; then the shares went into free fall, justifying the concerns of many traders who argued that the IPO was ridiculously overpriced. The share price is currently 25% lower than it was when it floated. The last month could never be described as good, no matter what sort of gloss you put on it.
However, Facebook didn’t reach its lofty position by sitting on its laurels.
It’s managed to attract over 900 million users because it markets itself aggressively when necessary and is always prepared to fight its corner. So Facebook, a client of comScore, partly commissioned a new survey by the internet research firm to determine whether paid advertising on its channel does actually work. The result, unsurprisingly, would suggest that it does. The research firm claims that marketing on the world’s most popular social network can help to increase sales. So how did comScore come to that conclusion?
The report which was released earlier this week discovered that people who were fans of either Starbucks or Target Corp, or were friends of those fans, were far more likely to buy something than those who were not fans. The conclusion is hardly surprising given that generally people who hit the ‘like’ button and become fans have already bought into the brand: they’re already what you would term advocates or disciples, and therefore receive frequent updates about the brand mixed with content shared by their friends.
What might come as a surprise is the extent to which these brand advocates do actually respond to targeted paid advertising.
In the case of Starbucks, those fans who were exposed to the brand messages on Facebook were 38% more likely than other Facebook users to make a purchase in the four weeks that followed. Target, the internet marketing retailer and daily deal provider saw a 21% increase in sales in a similar sort of time frame.
According to comScore, the inevitable conclusion that had to be drawn, therefore, was that Facebook paid advertising definitely worked, in spite of what GM had claimed. There will be some who question the validity of the findings, given that the results were based on the opinions of a panel of users who agreed to participate in the study: this fact alone it is argued could potentially skew the results. The research firm naturally dismissed such claims and argued that the results were fair and the process was robust.
However, not everything was quite so positive: the comScore study came the day after the research firm had confirmed that the number of unique visitors to Facebook’s website is now growing at a slower pace than at any time over the last couple of years. Whether that has anything to do with the inflated floatation is open to debate, but it will be of concern to Facebook never the less.
What comScore has urged all marketers to do is to look beyond acquiring as many fans as possible on Facebook and focus on their message and on social media marketing campaigns. In other words, if businesses want to hopefully turn consumers into purchasers, then it’s engagement and resonance that are of primary importance. Accumulating fans is all well and good, but it’s only the first step on the journey. The trick for a company is to build the brand thereafter and take the followers with them on that journey.