March 21, 2010

Does Facebook Work? Facebook is a phenomenon. With 400 million active members, if Facebook was a country, it would be the 4th most populous on the planet. “But,” my clients ask, “Does it work?” It depends on what you want it to do. Is it a brand building or an e-commerce platform? Some clients want to adopt a social sensibility. They aim to build brand awareness and amass large numbers of fans hoping to better engage customers and prospects in conversation leading to brand preference, loyalty and maybe goose a few more sales. Others want to reduce the distance between a brand and its clientele quickly and build intimacy necessary to accelerate the number, frequency and value of sales. The guys mounting the campaigns and buying the ads aren’t so sure themselves. While 49% of marketers surveyed by MarketingSherpa think Facebook is very effective at brand awareness only 12% think it increases sales revenue. As if to validate this perception, only 25 percent of the top 100 online retailers have Facebook pages. And yet the evidence of effectiveness or efficiency for either marketing objective isn’t really clear in spite of these stunning statistics. 86% of American women have a social network profile and 95% of them are on Facebook, according to the SheSpeaks Annual Media Study. Remember women buy everything. More than half of everyone who shops online has a Facebook profile and of those online shoppers who use social media, 80 percent of them are on Facebook says ForeSee Results. 50% of female social networkers bought products because of information they found on social networking sites. 44% of social sharing, according to Gigya, takes place on Facebook, 35 percent more than on Twitter, so there is plenty of opportunity for girlfriends to shop they way they do offline. Nielson reports the average user spends 7 hours a month on Facebook, three times more than Yahoo and the numbers and the time spent are increasing. Compete reports that Facebook represents 13% of all inbound web traffic to Yahoo, MSN, and AOL portals. Facebook is the number one web traffic driver. Facebook’s unique monthly visitors, 134 million in January 2010, are second only to Google. Roughly half (49%) of Facebook brand followers are after sales and offers and 45% are interested in learning about products. The Hub Magazine survey reported that 47.5% of these Facebookers are neutral about as on Facebook. So they are congregated, interested and open to brand messages. Some analysts, notably Kevin Ertell at ForeSee Results, are downright bullish. ““Facebook is, by far, the best place to reach shoppers – both because it’s where they already are and it’s where they want o hear from retailers.“ He insists, “ Get a Facebook page!” And the big bucks will start rolling in. But reported results are much less convincing no matter what the marketing objective. Hometown Favorites Candies increased the number of fan posts read by 564%, extended their reach by signing up new fans by 146 percent and got a 184 percent lift in SEO conversions from optimizing their Facebook page. No word on candy sales. TGIF Fridays gave out burgers and Victoria’s Secret gave out panties in Fall 2009. 1-800-Flowers set up a retail flower shop on its Facebook fan page and allows registered users to buy directly from the page. No revenues or results have been announced yet. Microsoft increased their BING fan count from 100,000 to 500,000 by luring Facebook users with Farm Cash to fuel their Farmville addictions. Morton’s Steakhouse got a lot of fans to upload Valentine’s Day photos and, according to SVP Roger Drake, “ we’re driving more business to our Morton’s steakhouses in general.” TurboTax has 20 million Facebook fans. Each has an average of 150 friends. Intuit is using Facebook to generate more buzz about its do-it-yourself tax software. No word on what happened next. Due Maternity, a maternity clothing retailer, created a Pregnancy Countdown Clock that Facebook users added to their walls. They track more than $100,000 in orders since it was launched in 2007. No direct attribution of sales to Facebook wall displays. Houston’s Dessert Gallery case study appeared in the Harvard Business Review. Their “Sweet Fan” page drew 20% more store visits by Facebook fans who spent 33% more than the average customer and allocated 45% more of their eating out dollars to DG. Although only about 5% of the store’s customers became Facebook fans. Now maybe I’ve done too much direct marketing and e-commerce, but these are not the...
Servicing Small Businesses Marketing small businesses has always been a challenge. Small business owners often don’t know much about marketing, want it to go away and have parochial tastes. They frequently change their minds. And most want world-class creative and account service for $1.98. Agencies have reluctantly approached and serviced this market segment that can often yield remarkable creative latitude sometimes offset by mercurial client behavior. David Gash wants to own this market with his crowd sourced service called Prova; Swedish for “to try”. David, an LA-based web designer and serial entrepreneur, wants to put the science of advertising into marketing for small businesses. His concept is simple and arguably brilliant. He takes a piecework approach, assuming the little guys want specific items to achieve specific objectives within specific time frames. The underlying premise is that small business owners act viscerally; they know it when they see it. David and his team do not vet any participants. Prova is capitalism in its simplest raw form. So he’s organized a competitive auction where business owners post their needs (e.g. a logo, a website, a flyer, business cards, a small space print ad) and kids, students, freelancers and small agencies create ads on spec to meet these needs. This approach has evolved since the site first went live on Halloween in 2008. To date, most of the projects have been design oriented. The work is open and transparent to everybody and the client picks his favorite. Clients frequently comment on the first few submissions and give clues to inform subsequent executions. This has encouraged later submissions and stimulated competitive juices on the part of participating designers. There is an option to do a private round hidden from the growing community. A typical fee ranges from $250 to $600 and attracts competitive creative contributions from the US, Sydney, London, Prague, Sofia, Tel Aviv, Costa Rica, Mumbai and all the places known for outsourcing. Clients pay a $39 listing fee and pay the bid price upfront. So far, no one has failed to pick a winner and there have been no litigious customers. The recession and the visibility for work on site seem to have offset inhibitions about doing work on spec. In theory the site provides options to create web, audio and video ads and marketing tools, but the majority of projects, so far, have been logo designs and traditional print jobs. This is a great way for small clients to get daily needs met. Its unorthodox but so are they. It does not give them a comprehensive marketing strategy, a positioning or an approach to growing their businesses. It does give them what they immediately want, the way the want it at a price they’re willing to pay. Maybe there’s a lesson for the big guys in this way of thinking

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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