With healthcare costs as the leading cause of bankruptcy, Lively's goal is to reduce that burdenRead more...
Study shows only 1% of Facebook fans of a given brand engage with that brand in the real world
You often hear companies bragging over how many "likes" on Facebook they've managed to rack up, as if operating under the assumption that social network popularity translates to brand monetization. However, an AdWeek report citing new research from the Ehrenberg-Bass Institute calls foul on this thinking, claiming that only 1% of Facebook fans of a given brand actually engage with that brand in the real world.
Researchers collected data by watching one of Facebook's own metrics called "People Talking About This," which tallies likes, posts, comments, tags, and shares as concerning a given brand page. They looked at the top-200 brands on Facebook over a six-week period in October 2011.
They then compared the amount of hits from the People Talking About This metric and compared that with a page's overall fans, finding that those who actually posted something about the brand was only about 1.3% of the number of page fans. Subtracting "likes," which researchers though could be considered negligible, that percentage shrunk to only half a point.
Translation: Those who are actually using a brand product enough to report back to their Facebook pages is a tiny percentage of those who claims to be "fans" of said product.
This research references a unique way of thinking about advertising, as spearheaded by mathematician Andrew S.C. Ehrenberg, for whom the Ehrenberg-Bass Institute was named. Ehrenberg's iconoclastic concepts about data collection, statistics, and mass marketing innovated much of what is thought by the advertising industry as conventional wisdom.
One of Ehrenberg's ideas is that brand growth occurs not when a product has a few loyal customers latch on to a product, but when a multitude of light and medium buyers do.
This is significant, because those consumers who click the "fan" button on a brand page would be considered as more loyal customers, as opposed to the lightly engaged customers a company needs to grow.
A different study done in December 2011 by the CMO Council, as reported by Social Commerce Today, shows that only 57% of e-marketers believed that customers engaging with a brand page on social networking had anything to do with their actually liking the brand. 41% of e-marketers thought it was about customers being heard, while 33% said they thought customers were looking for discounts or other incentives.
For their part, 67% of customers said they engage with brands on social networking for exclusive offers, 60% to share with other customers about their experience, and 41% to share ideas for new products and features.
This seems to amount to what most everyone on social networking already knows: Online life, and especially that of social networking, doesn't reflect real life very closely.
Read more from our "Trends and news" series
The company began as an insurance provider for drone operators, but now covers 119 professionsRead more...
They include NEA, Versant Ventures, SOSV and Innova MemphisRead more...