Whisper it, but Facebook likes do appear to have a significant impact on sales. Within the marketing industry, it's become rather unfashionable to suggest they have any meaning at all.
Researchers are told to 'measure what matters, not what's easiest to measure.' But what if the easiest thing to measure does matter?
That's what a new study from RWTH Aachen University suggests.
Using 12 months of aggregate-level, daily data from a major German e-commerce retailer, the authors analysed four types of advertising stimuli on Facebook - news feed impressions, page views, likes and user contributions (comments on the page/posts) - to determine their short-term and long-term impact on sales.
Their key findings are:
- A user's click on like is a strong long-term sales driver due to high carryover effects.
- Visits to a company's Facebook page are strong short-term sales drivers.
- Likes and contributions to a Facebook page create substantial, positive synergy effects.
The first finding has particularly important implications for social media marketers: long-term effects exceed short-term ones by a factor of more than 20.
Previous studies of traditional advertising effectiveness have found that 90% of the cumulative effect on sales occurs three to nine months after exposure.
If long-term effects are not considered, it results in a highly misleading interpretation of the effectiveness of a channel.
It's time to abandon short-termism in social media marketing
The ability to instantly see how well any form of digital copy is performing encourages similar short-term thinking when it comes to its effectiveness.
As a result, marketers focus on CTRs and the direct impact on sales.
However, this study suggests that, like traditional advertising, the effect on sales isn't always immediate, frequently occurring months later.
Their research also suggests that practitioners need to invest time in engaging users. Promoted posts that merely aim to interrupt can evoke a negative effect if used too frequently.
The authors only recommend using Facebook for advertising if the aim is to engage the person in the process.
To have an immediate impact on sales, they also recommend that marketers should focus on inducing impulsive purchases through offers.
However, Binet and Field's 'The Long and the Short of It' study warns against frequent use of price discount-base promotions which increase price sensitivity and damage the brand in the long term.
Brand-building consumer promotions (such as competitions and gifts) are more effective in reducing price sensitivity because they enhance the desirability of the brand without discounting.
Although their impact on driving short-term sales won't be nearly as strong, they do provide a better way of managing the tension between short and long-term success.
The pair's research into the IPA Effectiveness databank suggests that the optimum balance of brand: activation expenditure is around 60:40.
Aim for fame and brand-building
Emotional campaigns that aim to generate fame and buzz effects also produce considerably stronger long-term business effects than rational persuasion campaigns.
Taken together, the two studies underline the importance of taking a longer-term approach to Facebook and social media marketing more broadly.
Balancing both the investment in social media in the long-term (brand) as well as the short-term (activation) requires a radical shift in thinking.
Although this latest study is confined to one market (Germany) - and thus has some limitations - its headline-finding (Facebook likes have more of a long-term impact on sales) merely echoes what numerous previous advertising effectiveness studies have found.
As marketers, we need to better balance the need to realise immediate sales through (rational) activation with the more important longer-term (emotional) brand building. However, the first step to achieving this is to be a little less seduced by those immediate metrics.
In the communities we manage, fans of the page spend up to fives times more than average customers of the brand.
Additionally, those who have been members of the community for six months spend 21% more than those who have just joined.
Measuring the incremental value delivered by a Facebook fan is just one way we look to measure success beyond the soft, social metrics.
Measuring what matters doesn't mean measuring the data that's harder to find, it means measuring what you actually want to achieve, not what you think will affect it.
So, while social metrics may be important KPIs, they should never form part of what you're looking to achieve.
Defining a clear business objective and figuring out how you will measure it plays an integral role in any strategy.
And understanding the effectiveness of any channel in the long-term will ultimately lead to more long-term thinking and stronger business results further down the line.