The Value of a Fan: Webit 2011: Script
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The Value of a Fan: Webit 2011: Script

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The Value of a Fan: Webit 2011: Script The Value of a Fan: Webit 2011: Script Document Transcript

  • Value of a Fan Script.txt Page 1 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrison0!==!## Ask audience to hold up iPhones, iPads, MacBooks.!## How many of them are fans of Apple?!!!1!==!So theres this social media revolution going on around us. Everything has changed. We needto change the way we think about everything.!!Only this doesnt help advertisers allocate their budgets. And if youre an advertiser or aplanner, the way you allocate your budgets will play a big part of your ultimate success orfailure.!!Everything may have changed, but we still need to be able to compare apples with apples.!!We cant just pretend that social media valuations exist in a vacuum. We need to find waysthat we can relate them back to familiar metrics.!!One of the biggest questions that we have to deal with is "whats the value of a fan"? Thisis the most divisive questions in Social Media planning.!!2!==!Lets take a step back. What do we mean when we say "Fan"?!!3!==!Heres a definition from Kevin Kelly - from a brilliant blog post that you should all readwhen you have time.!!## Read Quote!!Thats instructive, but unless youre a musician or an artist thats probably not relevant.!!4!==!What motivates people to become a fan of something? Briefly, fandom helps us tell a storyabout ourselves, about who we are and where we belong. They are badges we adopt to identifyourselves as individuals, and as part of a group.!!5!==!Of course, theres a whole spectrum of fandom. What you should notice here is that mostpeople just dont care very much.!!Another way of looking at it is that you can only reasonably be a fan of one or two things.Otherwise youre not really a proper fan, are you? For example, how many football teamscould you support and still call yourself a supporter?!!This is interesting for marketers; were mostly used to targeting and engaging with the fatbelly of the distribution curve, and not the mad bits at the edges.!!6!==!Heres an interesting thing. Those people with the mad love create the space for theordinary fans to exist. The more mad fans you have, the more youll find that your averagefan population grows.!!You could argue, for example that the existence of a few hardcore Apple fans makes it
  • Value of a Fan Script.txt Page 2 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrisonpossible for lots of other people to call themselves Apple fans. After all, no-one callsthemselves a Dell fan, or an HP fan.!!Have you noticed how people will take their iPhones out in meetings or at a bar orrestaurant and *put them on the table*? No one does that with a Nokia.!!So these Superfans create the space for this behaviour.!!It would be good if we could create a measurement for that; if we could understand thecorrelation and causality.!!7!==!This is all very interesting, but thats not what Im here to talk about. Im not talkingabout True Fans or Superfans, but about Facebook fans. Statistically speaking, Facebook fansarent True Fans or Superfans. So why am I talking about Facebook? Whats so important aboutFacebook?!!8!==!Well, for one thing, Facebook is very big. Its currently valued at around $100 per activeuser, and it has around 800 million users.!!That whole "value per user" is all very late nineties, isnt it? All very dot com boom. Abit devalued.!!But Facebook’s numbers are BIG!!9!==!Just looking at Europe, Facebook accounts for 85 BILLION European user minutes per month. Ifyou were to go back in time 85 billion minutes, then the Neanderthals and wooly mammothswould still be around. Every month.!!!10!==!And those users consume 163 billion page views.!!That circle there is Google. And that one is Vkontakte.!!!11!==!So brands are understandably interested in how we capture a share of that audienceattention.!!About 4 years ago, Facebook introduced advertising and brand pages.!!They told their users "weve built a way for you to connect to things other than people".What they meant was "now you can tell people who you are based on the things you like." FanPages were originally intended to be a bit like t-shirts, mugs and tattoos.!!Brand Pages are free to build. When Facebook introduced them, they effectively set brandsFacebook marketing strategy for the next 4 years.!!We were going to make people Like our Page.!!12!==!So now, four years later, Brands are beginning to ask this question: “I’ve got all these
  • Value of a Fan Script.txt Page 3 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrisonfans. Which is great. But what are they worth to my business as a marketing asset?”!!13!==!!Now I could just tell you that every business case is different.!!This is a great answer that you’ll hear from time to time. You can’t fault it. It’s true.!!But it’s not very instructive, is it? !If I tell you this at any point in the presentation or the Q&A you have my permission tothrow stuff at me.!!I want to give you some framework for thinking about and answering the question; threesimple general approaches. And I’ll try to tell you how to make the most of each of theseapproaches.!!!14!==!The Pages may be free, but it costs money to recruit fans and it costs money to maintainthat community.!!So we know what our cost-per-fan. Thats fairly simple.!!15!==!But when it comes to public Value of a Fan studies, theres a massive discrepancy. How canthis be?!!Actually, lets get rid of these two -- even though analysts refer to them as "Value of aFan" theyre actually just sales referral values; nobody became anyones fan in thosecalculations.!!16!==!!When we started in this space, we asked our clients why they wanted fans. Heres what itboiled down to. There are some good reasons here; and we shouldnt dismiss the top one.!!17!==!We can reduce those reasons even further to this short list. We want to value our fans by:!- the value of the Earned Media that they deliver!- the value of the sales that we can directly attribute to our fans!- and how recruiting fans improves brand measures like preference and likelihood to purchase!!18!==!Lets look at these in more detail!!19!==!Heres that Earned Media Value model that Vitrue published last year.!!The calculations fairly straightforward - But I wont waste time reading it out to you --itll be in your packs.!!20!==!Instead Ill touch on how that model falls apart.!
  • Value of a Fan Script.txt Page 4 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrison!Most importantly - brand posts dont reach every fan. We find that only 5-20% of fansreceive the impression.!!When were planning media campaigns, we try to cap frequency. That avoids wastage andburnout. Weve no control over how often Daily Average Users are exposed.!!Thats OK, but its hard to value those subsequent impressions as much as wed value thefirst ones.!!Are 20 impressions against 50K users the same as (say) 2 impressions against 500K?!!Id like to take you on a bit of a detour now to look at how this works.!!21!==!This is a very simplified model that shows how fans interact with Facebook Pages.!!This is taken from real client data.!!And here are some real client numbers.!!What you need to see here is that users see and engage with Brand content on their NewsFeeds. They dont really visit the Page very often.!!And one of the key factors controlling whether they see that content is timing.!!Are they online and active when you post your content?!!How many other voices are competing for their attention? Thats partly other brands, butmost of the competition comes from their Facebook friends photos and status updates.!!22!==!So we pay particular attention to timing. Heres some before and after charts that show howone of our clients has responded; We found that audiences were more active, and more likelyto engage at weekends -- so theyve upped their posting activity on Saturday and Sunday.!!Timing isnt everything; its only half the story.!!23!==!Facebook uses an algorithm called EdgeRank to try to make the stories that appear in yourNews Feed as relevant and interesting as possible. I hope youre all at least vaguelyfamiliar with this, but if not, Im happy to chat about it afterwards.!!Here’s the thing: Facebook owns the relationship between you and your Fans. Thatrelationship lives as a record in THEIR database, not yours. And Facebook decides what’sinteresting to your fans and what isn’t – not you. Facebook owns the content that your fanspost on your Wall, and the rights to anything that you post there. If you haven’t read theTerms & Conditions you signed when you created your Page, now might be a good time!!!For now, the thing I want you to understand about EdgeRank for now is that -- if users dontengage with your content, EdgeRank will - over time - show them less of your content, tillthey no longer see any of your content at all.!!Thats how you can have 1m fans, but only reach (say) 200K of them.!!!24!==!
  • Value of a Fan Script.txt Page 5 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat MorrisonThe Vitrue model assumed that Pages were posting twice a day, every day of the week.!!Our own research shows that our clients posts have an active window of engagement between3-6 hours long.!!That implies that we could profitably increase impressions by posting twice in a day.!!And if we were chasing Earned Media Value, then more impressions = more value.!!So there’s a lot of pressure to increase frequency.!!What might the impact of that be?!!25!==!Our research shows that it has a strong impact on impressions; if we double our postfrequency, we more than double our impressions.!!Reach grows too; less strongly, and theres an upper limit – only a certain portion of youraudience will be online in any given day.!!!26!==!But unsubscribes also increase. If we increase post frequency, we have to be prepared forfan attrition.!!27!==!Here are our big problems with the Vitrue model;!!- This is incremental media value. Its not like were saving media budgets. So we cantcount that as real ROI!- Fan audiences are small relative to our total target audiences.!!Even Coca Cola only has 35m fans -- and in theory they have a global audience of 7 billionpeople. So that’s 0.5% of their audience they can reach through Facebook!!Of course, because of EdgeRank they can only reach a minority of those fans.!!And how much does Coca Cola NEED to advertise to people they call Fans? How much more CocaCola can these people drink?!!- Thirdly, impressions arent a proxy for incremental revenue growth. Media impressions needto be carefully planned to have any value. One impression is not the same as another.!!!28!==!Thats the BAD news. Heres the GOOD. Social Media is all about taking advantage ofhomophily and social proof. Whats that?!!29!==!We all prefer to hang around with people like ourselves -- thats homophily. Youinstinctively prefer the company of people who share your values and beliefs andpreferences.!!30!==!And conversely, a lot of our decisions are based on unconsciously copying our friends, their
  • Value of a Fan Script.txt Page 6 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrisonvalues, beliefs and behaviours.!!This self-reinforcing behaviour is very important for advertisers.!!31!==!Because it allows us to find more people like our fans. And it allows us to use social cuesfrom fans to make our messages stronger, more noticeable.!!For example, targeting friends of fans with increases our media efficiency by around 20%.!!And running Facebooks sponsored stories (where the message comes from the friend, and notfrom the brand) increases efficiency by between 300% and 400%!!32!==!Heres the output of some famous Nielsen research:!- Facebook ads improve brand metrics, but not as much as Facebook Ads that contain afriends name. It seems that peoples eyes may naturally be drawn towards their friendsnames, and dwell there a little longer.!!And if theres an organic impression, a spontaneous, untargeted earned impression, thatseems to improve brand measures further.!!(11 mins fluent)!!!33!==!So heres my advice about how to make the Earned Media Valuation work for you;!!- Dont focus on fan growth at any cost.!- But DO focus on the fundamentals, and on what makes social interesting. Look at how youcan encourage sharing.!!SHARING is very important. Focus on fans as a means of reaching friends of fans.!!34!==!Lets take a look at the Direct Response value.!!35!==!After all, survey data shows that a good proportion of fans Like a Page so that they can bealerted with news and deals. We should be able to convert some of that interest to value.!!36!==!Here are some casual examples - not from my clients. Tesco regularly posts deal links on itsFacebook Page. They seem to drive a lot of traffic; some of that has to convert. So Tescocan begin to work out some kind of Average Lifetime Value for their Facebook fans.!!Obviously it has to be Average Lifetime Value because Facebook owns the relationship; Tescocan’t segment or target. But it’s still good.!!37!==!Heres a lovely example. ASOS, an online clothes retailer, got 130K clicks in a single daywhen they ran their live sale last weekend. Thats pretty impressive.!!You’ll see that they were offering dresses for £1 – but believe me ASOS aren’t in this
  • Value of a Fan Script.txt Page 7 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrisonbusiness to be generous fools. You can bet they were making money off the back end.!!38!==!Heres how you make Direct Response values work for you.!!Track everything.!!Make sure that you use unique links, and that those links pass campaign data to GoogleAnalytics (or whatever site analytics package youre using.)!!Never use the same link twice. Track source, message, campaign.!!And make sure that you continue to optimise your Earned Media metrics.!!Focus on being able to compare your performance here to other non-social channels. How doesyour fan base compare?!!39!==!Of course, if youve not got an e-Commerce (or a publishing) business, this isnt going tomean anything to you.!!Youll want to focus on brand measures.!!40!==!1-to-1 engagement is great. Heres an example from some activity we ran for our nationalbakery client, Hovis earlier in the year.!!That personal touch is great; its really meaningful, and has tremendous impact.!!Only no-one sees it.!!Id argue that this is a customer service role. Customer service is a brand attribute, itspart of the product that people offer. Tony Hsieh at Zappos built it into his business;everyone in the company has to spend some time on Customer Service. As a result, he was ableto cut back his marketing costs massively.!!Customer Service is great, but its not what Im talking about.!!!41!==!So weve been running a series of major surveys across Brands "Leased Spaces" -- Twitter,YouTube, Facebook.!!And what we find confirms others research: people who engage with a brand show improvedmeasures against brand metrics compared to people who only visit those spaces.!!Which sounds like common sense; and which continues to leave us open to the question - "Isthis a causal relationship? Do they engage because they like you, or do they like youbecause they engage?"!!Weve got smart people working on that question, but we have access to a level ofgranularity thats useful when it comes to planning activity.!!42!==!And that granularity tells us that what we REALLY want people to do is share our content orrecommend our product.!
  • Value of a Fan Script.txt Page 8 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrison!Its about making a public declaration.!!Psychologists will tell you that people want to behave in a consistent manner (its all todo with preserving a sense of self.)!!Previous behaviour isnt just a predictor of future behaviour: if I have committed tosomething on a small scale, Im likely to eventually commit to that same something on alarger scale in order to be consistent to myself.!!So asking people for a small public commitment is a fairly secure method of confirming theirbrand preference.!!Essentially we can create fans simply by asking them to identify themselves as fans.!!This is social media at its BEST.!!!43!==!What do you need to make the Brand Metrics Valuation work?!!You need to invest in market research. And you need to be able to compare your social mediaresearch with your press and TV and PR market research. Otherwise, Id argue, youre justtaking a shot in the dark.!!And - again - you need to optimise your earned media metrics; with a strong focus on howpeople are SHARING your content and messages.!!44!==!Now -- just to make things a bit interesting, I think its worth pointing out that someonedoesnt need to be a Facebook fan in order to share your content.!!These are four examples of brilliantly shareable content. They all use the same method, moreor less; they allow the user to make the story about themselves, and not the Brand.!!Remember those tattoos from the beginning of the presentation?!!Remember Facebooks initial reasons for allowing users to connect to Brands?!!To tell stories about THEMSELVES Not to tell stories about the brands.!!Mugs and T-shirts and Tattoos.!!These four examples all make great use of Facebook. And only one of them (the Aviva case)insists that you become a fan first.!!They all care more about the Share. About the Brand action.!!45!==!So where does this leave us?!!46!==!Lets take a look at this survey data again. We should notice that only two of the reasonsgiven are "Truly Social" -- the others are a bit self-centred.!!Arguably, the other reasons could apply equally well to (say) subscribing to an email list.Its all old-think. Not new-think.!
  • Value of a Fan Script.txt Page 9 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat Morrison!These people are subscribers; only theyre subscribers whose data you dont own.!!Look at the Terms & Conditions of your Facebook Page. Facebook - quite rightly - owns thedata, and the relationship.!!Through EdgeRank, Facebook controls which of your fans see your content, and which dont.!!Should this make us think?!!47!==!On the left is the traditional Social Media funnel. If we follow that, we recruit people inat the top of the funnel, keep them engaged, then occasionally try to sell them something.!!On the right is an alternative way of looking at things. What if some brands are making amistake with all this fan stuff? What if we unbundled the user journey?!!For example, what if we DIDNT insist that they became a fan before they engaged with ourcontent, or bought our products, or recommended us to a friend? What then?!!Heres the big question - does every brand need to maintain a day-to-day relationship?Because in this competitive world, in a world where your Facebook Page automatically becomesa new customer service channel that needs maintaining in public, and with EdgeRank breathingdown your neck, day-to-day is what it takes to maintain a Page!!!48!==!Heres more for you to think about:!!Facebook has changed almost beyond recognition since they introduced Pages 4 years ago.Remember that graph? Back then they only had 50m users. Not 800m. Back then, MySpace wasworth $65bn. Facebook was barely a fraction of that.!!Id argue that Facebook has begun quietly to change the rules. And smart marketers need tochange along with that.!!49!==!Heres how Facebook used to be: you had all your leased spaces, Pages, Places, Apps INSIDEFacebook, where your audience was.!!Today, Facebook provides a platform that lets you connect Facebook to your Owned spacesOUTSIDE Facebook.!!You can pass data and communications back and forth between the two spaces. You dont evenneed to have a Facebook Page to make Facebook work for you. In fact, if youre thinkingabout Fan recruitment, that may even be holding you back!!!50!==!So its not about building your brand on Facebook. Its about building Facebook into yourbrands products, services and communications; and about understanding how you tie your Paidand Earned Media together.!!51!==!Before I dismissed the valuations from EventBrite and Spinback because they werent reallyabout fans.!!
  • Value of a Fan Script.txt Page 10 of 10Printed: 31/10/2011 11:09:42 Printed For: Mat MorrisonWhat they are is a valuation based on incremental sales delivered through the Facebooksharing mechanisms built into their sites.!!These are reports of REAL money being made by REAL businesses, not interesting models andtheory.!!Was I wrong to dismiss these?!!!52!==!Id like to leave you with a thought.!!Is a fan someone who likes you on Facebook?!!Or is it someone who engages with your content?!!Or someone who buys your product?!!Or someont who promotes your content!!Or your product?!!Or is it someone who by using your content to promote themselves becomes themselvescompelling content for your campaign?!!Why not ALL OF THESE!?!!Here’s what I say. A fan isn’t worth ANYTHING unless they DO something.!!Focus on what you want them to DO.!!You define and control the relationship. You decide what the value is.!!Make sure that youre in control, and not some 4 year old model of how we might do businessin the future.!