Posts tagged ‘social media’

Unpacking The Horrific Math of Facebook Advertising

Adweek is reporting on a study by Webtrends that shows that the performance of advertising on Facebook, which was astonishingly bad in 2009, has gotten worse in 2010. The average click-through rate has fallen from .063% to .051%.

Let’s think about what that means. To get a single person to click on a Facebook ad, 2,000 people must be exposed to it. If all 500 million people on Facebook were exposed to an ad, it would net just 250,000 clicks. Put another way, if your ad were seen by a group of people the size of the combined population of the United States and Brazil, it would be clicked on by a group the size of the population of Chandler, Arizona.

Webtrends’ study covered 11,000 ad campaigns and 4.5 billion impressions. All together, 4.5 billion impressions generates a total of only 2.25 million clicks. That’s not much to spread around among all the brands clamoring to advertise on Facebook. In fact, when you divide this number up among the 11,000 ad campaigns, each one averages an embarrassing 205 clicks. I don’t know of too many brands–or for that matter too many corner dry cleaners–for whom this type of performance is acceptable.

Yes, yes, of course, Mark Zuckerberg and his pals will protest that click-throughs aren’t important on Facebook. They’ll tell you brands benefit from Facebook’s “social value,” not its ability to drive traffic. I give them full marks for this, if only because it must be extraordinarily difficult to say such things without giggling when they know that ad spending on Facebook is projected at $2.19 billion in 2011.

Don’t misunderstand me. I’m not saying Facebook is completely without value for brands, but I am saying advertising on Facebook is damned close to it. Agencies that want to deliver value to their clients have an obligation to go beyond ads. They have to think harder and invent ways to be genuinely engaging. Forsman & Bodenfors in Gothenburg, Sweden did it brilliantly for IKEA, leveraging the basic photo tagging feature of Facebook in a way no one had ever thought of before. Presumably, clients who can do small amounts of math will demand comparable thinking.

Photograph © Jason McELweenie

February 2, 2011 at 2:22 am Leave a comment

Maybe Your Customers Don’t Want A Relationship With You

"Customer Effort Score" is a better indicator of likelihood to make additional purchases than either Net Promotor Score or Customer Satisfaction.

Much oxygen is wasted inside advertising agencies in this, the age of social media, bloviating about the desirability of using technology to build relationships between brands and consumers. Few stop to ponder the possibility that consumers don’t want a relationship.

This thought, however, has occurred to Matthew Dixon, Karen Freeman and Nicholas Toman. They’ve written a provocative article in the Harvard Business Review called “Stop Trying To Delight Your Customers” (sorry, you may have to trade some personal information to read it for free). Their argument, which is backed up with some lovely statistics, is that exceeding the expectations of consumers is not nearly as good a way to increase purchase intent as simply removing the bits from your interaction with them that consumers consider to be an ass-whipping. People don’t need (or even want) to feel all a-tingle every time they come in contact with a brand. They just don’t want to be battered about the head and shoulders–either online or in person–to get something done. The key metric is the Customer Effort Score, which, as you have doubtless already ascertained, measures the energy a consumer has to put into dealing with a company. Lower is better.

If you doubt this, think about how an industry like banking has changed. Technology has made it possible to accomplish almost any banking task at the time and place of our choosing. Convenience used to mean a branch on every corner. Now it means an ATM in every convenience store and an app on every smart phone. I would go so far as to say that any time you have to go inside a bank today, the “relationship,”–such as it is–has failed.

One mistake brands (and their agencies) consistently make is overestimating the importance of the role they play in the lives of consumers. Most brands are bit-players in our life stories–and maybe just extras. That being said, I’m not suggesting that delighting consumers is never a good idea. Sometimes it will be the only idea. But what I am suggesting is that we need to be more discriminating about when and where we do it. Marketing devolves into brute noise when everything we do is calculated to bludgeon with pleasure.

July 13, 2010 at 9:29 pm 1 comment

Team Coco – Your Outrage Cannot Be Monetized

A reader—and not just any reader but the great Skip Tramontana–recently asked me to weigh in on the NBC/Jay Leno/Conan O’Brien imbroglio. I was not inclined to do so because so much has already been said about the cascade of bad decisions involved. No point in beating a dead talk show host. Whether there is any point in beating a dead network executive I leave you to work out among yourselves. (And before you send hate mail, I will point out that I am a fan of Mr. O’Brien’s; Mr. Leno merely makes me tired.)

All that being said, it does strike me that there is some wisdom about social media to be gleaned from this situation. A few points to consider—some obvious, some less so:

• NBC makes money when people watch its programs. No one makes money off the social media outrage that results when they make controversial decisions to change them. (Figure out a way to do so, and you’ll be able to buy a bigger jet than Larry and Sergey.)

• The decision to watch a late-night talk show is a significant commitment. Not an hour-long commitment. It’s a commitment that lasts years or even decades (See Carson, Johnny and Leno, Jay). It’s a habitual behavior. The commitment required to tweet about your displeasure is–what?–twenty-five seconds. Even if it could be monetized, it wouldn’t be worth much when stacked up against the commitment of people who have made watching a particular program every night for a number of years. Or in this case, the lack of such people.

• Yes, Conan’s numbers went up dramatically over the last couple of weeks of his tenure. So too will crowds gather around a burning building. What counts in the world of programs that are on every night is not whether they’re worth watching when the set is burning to the ground, but whether they’re worth watching when they’re ordinary. The evidence is that these were not.

Will Conan be able to convert the tweeters of outrage into ratings when he reemerges, most probably on Fox, and slaughter Leno, Letterman and all comers? Unlikely.

• From a purely demographic standpoint, Leno’s fans are more likely to make an appointment to watch every night at 11:30 than Conan’s fans. The younger the audience, the more absurd the idea of doing anything on someone else’s schedule.

• What the marketing industry is crying out for is a way to quantify the relative value of different types of media interactions based on the commitment level of the viewer. For example—for a pure lean-back experience (i.e., watching a television show or an online video), multiply the number of minutes spent by 1. If you forward that video to a friend, multiply the number of minutes spent by 2. For a lean-forward experience with some interactivity, multiply the number of minutes spent by 3. For a lean-forward experience that includes consumer’s pushing out of some form of content (e.g. a tweet, blog post, etc.), multiply the number of minutes spent by 4. Whether these number are right, I haven’t the slightest idea. I leave the math to the great Michael Fassnacht and other propeller-heads of his ilk.

Whoever gets it right will be a billionaire. He/she can mail me a check whenever it is convenient.

January 28, 2010 at 5:15 am 5 comments


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