Mat MorrisonStarcom MediaVest Group@mediaczarTHE VALUE OF A FAN
…so please bear with me  (Try telling that to your CFO)                                   1
WHAT IS A FAN?
Kevin Kelly, “1,000 True Fans” A True Fan is defined as someone                                     name. who will purchas...
We use brands to tell a story about ourselves.         MUFC            Harley Davidson      Legend of Zelda         Playbo...
The spectrum of fandom  Mad Love   Really Like   Fairly Oblivious   Actively Dislike                                      ...
Superfans: True Fans with body paint & tattoos…       This fan…            …creates the space for                         ...
But I’m only talking about Facebook Fans Not “True Fans” Not “Superfans” But “Facebook Fans”                              ...
Why is Facebook so important?1000       Facebook growth: users and                     100           estimated market cap ...
European Web Usage   85 billion        user minutes/mo          nth  Data: comScore EMEA August 2011                      ...
European Web Usage  163 billion       page views/mont            h  Data: comScore EMEA August 2011                       ...
The most-loved brands on Facebook last weekBrand             Fans              • November 2007;Coca-Cola                35...
WHAT’S THE VALUE OF AFAN?
I won’t insult your intelligence…  (Of course it does. Now I can go home.)                                            13
The costs are fairly simple                                Annual cost of Annual cost                     Communityof Recr...
Value is more complexValuation Method        Publisher          Date    $3.60 Media         Vitrue             Apr 2010   ...
Why Brands like FansSign of my brand’s popularitySource of insightGenerate increased engagement with brandGenerate increas...
Why Brands like FansEarned Media ValueDirect Sales/Sales PromotionBrand Preference Metrics                               17
EARNED MEDIA VALUE
Vitrue’s Advertising Value Equivalent model       Fans           Posts               CPM              1,000      1m fans ×...
And where that model goes wrong:Daily Active UsersReach       Pages reach between 5% and 20% of their fans            1m f...
How people use a Facebook Page (real client data) Audience Activity             Day Part         Week Day               Co...
Post engagement by hour and day                         (most responsive days highlighted)                           To Ma...
The effect of EdgeRank                                             åuwd   e     e    e                                    ...
Could we earn more value by posting more often? • 80% of responses within 3              50%                              ...
Impressions & Reach grow strongly inlinewith post frequency                           15.5                                ...
..but Unlikes increase, too •   Nearly all Unlikes are a response to                              7.5     post activity*  ...
Why direct media value isn’t enoughIncremental media value, not costreductionFan audiences remain small vs. totaltarget au...
INDIRECT MEDIA VALUE
Homophily  We like to hang around with people like ourselves…                                                       29
Social Proof  …and we unconsciously copy what our friends do                                                   30
Indirect Media Value: Homophily & Social Proof           Better targeting (& less wastage)Paid           Greater impact   ...
Indirect Media Value: Homophily & Social Proof                                              Nielsen BrandLift             ...
How to make Media Valuation work for youRemove focus from    Fan growth at any cost                     Reach/FrequencyFoc...
DIRECT RESPONSE VALUE
Why people “Like” Brand Pages on Facebook To receive discounts and promotions                                            4...
Example from a major multiple       493 Clicks                      3,008 Clicks       £5 Off Code                     Hal...
Online Retailer                  130,000 Clicks                  Live Sale  ASOS data is in public domain courtesy of Bit....
How to make DR Valuation work for youObsessive Tracking      Use [[Google Analytics]] (insert own choice)                 ...
BRAND METRICS
Building loyalty. One fan at a time.     Customer Services does one-to-one     Marketing doesn’t                   40
Social Interactions appear to impact brand metrics                            SMBI: Impact on Brand Metrics               ...
What did we learn from the SMBI study?Sharing/recommending is the key action we shouldseekNot simply because it reaches ot...
How to make Brand Metrics Valuation work for youInvest in market research to justify activityCompare across multiple chann...
Don’t have to Like a Page to engage & share… People want to promote themselves, and they’re prepared to let Brands help. M...
WHERE DOES THIS LEAVEUS?
Why do people become Fans?          To receive discounts and promotions                                      40%To show my...
What if we unbundled the user journey?   From a consecutive model                                …to parallel streams     ...
Caveat         Facebook changes fast & often         Marketers must be prepared to change minds         and direction     ...
How is it changing?                                                 Owned Space                                           ...
It’s less about your brand on Facebook,more about putting Facebook in your brand comms • Used in varying ways by   publish...
Are we looking at this the right way?Valuation Approach      Publisher          Date    $3.60 Media         Vitrue        ...
So for our purposes, is a fan…Someone who engages with your content?Someone who promotes your products?Someone who promote...
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Mat Мorrison - The Value of a Fan

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Mat Мorrison from Starcom Mediavest - "The Value of a Fan", presentation on Webit Congres, 2011, Bulgaria

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Mat Мorrison - The Value of a Fan

  1. 1. Mat MorrisonStarcom MediaVest Group@mediaczarTHE VALUE OF A FAN
  2. 2. …so please bear with me (Try telling that to your CFO) 1
  3. 3. WHAT IS A FAN?
  4. 4. Kevin Kelly, “1,000 True Fans” A True Fan is defined as someone name. who will purchase anything and They bookmark the eBay page everything you produce. where your out-of-print editions They will drive 200 miles to see show up. They come to your you sing. They will buy the super openings. deluxe re-issued hi-res box set They have you sign their copies. of your stuff even though they They buy the t-shirt, and the have the low-res version. They mug, and the hat. They cant wait have a Google Alert set for your till you issue your next work. They are true fans. http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php 3
  5. 5. We use brands to tell a story about ourselves. MUFC Harley Davidson Legend of Zelda Playboy Apple Nike Some brands are easier to co-opt than others 4
  6. 6. The spectrum of fandom Mad Love Really Like Fairly Oblivious Actively Dislike 5
  7. 7. Superfans: True Fans with body paint & tattoos… This fan… …creates the space for these fans to exist 6
  8. 8. But I’m only talking about Facebook Fans Not “True Fans” Not “Superfans” But “Facebook Fans” 7
  9. 9. Why is Facebook so important?1000 Facebook growth: users and 100 estimated market cap 800 80 600 60 Facebook users (millions) 400 40 Facebook valuation ($bn) 200 20 0 0 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Data: Facebook, VentureBeat, SharesPost, SecondMarket 8
  10. 10. European Web Usage 85 billion user minutes/mo nth Data: comScore EMEA August 2011 9
  11. 11. European Web Usage 163 billion page views/mont h Data: comScore EMEA August 2011 10
  12. 12. The most-loved brands on Facebook last weekBrand Fans • November 2007;Coca-Cola 35,017,182 Facebook introducesStarbucks 25,747,572 PagesOreo 23,271,622Red Bull 22,673,250 • “We’ve built a way for youConverse All Star 20,883,240 to connect to things otherConverse 20,410,948 than people”Skittles 19,460,585Pringles 15,855,303 • Effectively sets strategyMonster Energy 12,504,459 for Brand Advertisers foradidas Originals 11,273,177 next 4 years. 11
  13. 13. WHAT’S THE VALUE OF AFAN?
  14. 14. I won’t insult your intelligence… (Of course it does. Now I can go home.) 13
  15. 15. The costs are fairly simple Annual cost of Annual cost Communityof Recruitment Management Fans 14
  16. 16. Value is more complexValuation Method Publisher Date $3.60 Media Vitrue Apr 2010 Value $71.84 Incr. Spend Syncapse Jun 2010 $136.38 Agg. Value Syncapse Jun 2010 $2.53 Incr. Sales EventBrite Oct 2010 470% Incr. Spend WFA/Millward Brown/ Mar 2011 Dynamic Logic $2.10 Incr. Sales Spinback May 2011 15
  17. 17. Why Brands like FansSign of my brand’s popularitySource of insightGenerate increased engagement with brandGenerate increased short-term spendGenerate increased long-term spendIncreased loyaltyIncreased advocacy/recommendation Source: SMG London Client Interviews 16
  18. 18. Why Brands like FansEarned Media ValueDirect Sales/Sales PromotionBrand Preference Metrics 17
  19. 19. EARNED MEDIA VALUE
  20. 20. Vitrue’s Advertising Value Equivalent model Fans Posts CPM 1,000 1m fans × 2 posts x 30 days = 60m impressions 60m impressions ÷ 1000 × $5 CPM = $300,000 $300,000 × 12 months = $3.6m $3.6m ÷ 1m fans = $3.60 19
  21. 21. And where that model goes wrong:Daily Active UsersReach Pages reach between 5% and 20% of their fans 1m fans may mean 50K Daily Active UsersFrequency Smart advertisers cap frequency to avoid burnout DAUs are exposed multiple timesResult? Hard to value this way – but let’s dig deeper 20
  22. 22. How people use a Facebook Page (real client data) Audience Activity Day Part Week Day Competitor Activity See Brand See/Don’t Ignore, Post in See Like Page Like or News Future Comment Feed Posts Like source First exposure Responders Ongoing Exposure 0.6% 11% 36% 99% 0.6% attributed to Estimate Comments + Likes DAU “on Page” Likes Total DAU 21 Fans
  23. 23. Post engagement by hour and day (most responsive days highlighted) To May 2011 Since May 2011 60 40 30Count of Posts by Hour 40 20 20 10 - - 0 6 12 18 0 6 12 18 80 40 60 30Count of Posts by Day 40 20 20 10 0 0 Mon Thu Sun Mon Thu Sun Single client data. Your mileage will vary
  24. 24. The effect of EdgeRank åuwd e e e edges e EdgeRank See Brand See/Don’t Ignore, Post in See Like Page Like or News Future Comment Feed Posts Like source First exposure Responders Ongoing Exposure 0.6% 11% 36% Key take-out: if you don’t use them, you lose them 99% 0.6% attributed to Estimate Comments + Likes DAU “on Page” Likes Total DAU 23 Fans
  25. 25. Could we earn more value by posting more often? • 80% of responses within 3 50% 91.4% hours. 40% • 90% within 6 hours 30% • (There’s a small blip after 24 hours: engaged/non-daily users) 20% • What does this imply about 10% how often the page could 0% post? 0 6 12 18 24 30 36 42 48 • How does post frequency Elapsed Hours impact other KPIs? %age responses cumulative 24
  26. 26. Impressions & Reach grow strongly inlinewith post frequency 15.5 -1.4 y = 1.108x + 11.63 15 R² = 0.9438 -1.6 14.5 y = 0.4005x - 2.3461 -1.8 R² = 0.5301 14 ln(7-day rolling imps) 13.5 -2 ln(reach) 13 -2.2 12.5 -2.4 12 -2.6 11.5 11 -2.8 0 1 2 3 4 0 0.5 1 1.5 ln(7-day rolling posts) ln(posts) 25
  27. 27. ..but Unlikes increase, too • Nearly all Unlikes are a response to 7.5 post activity* y = 0.4594x + 5.5239 R² = 0.5779 • Post frequency seems to lead to fan 7 attrition: ln(7-day rolling unsubs) Increase from 1 to 2 posts = 46% 6.5 increase in Unlikes. • Recent f8 changes suggest that 6 users may increasingly hide posts rather than Unlike the page: 5.5 This should have a long term impact on DAU/Reach – but Post engagement may increase and 5 Unlikes decrease. 0 1 2 3 4 ln(7-day rolling posts) 26
  28. 28. Why direct media value isn’t enoughIncremental media value, not costreductionFan audiences remain small vs. totaltarget audienceImpressions not a proxy for subsequentuser behaviour or revenue growth 27
  29. 29. INDIRECT MEDIA VALUE
  30. 30. Homophily We like to hang around with people like ourselves… 29
  31. 31. Social Proof …and we unconsciously copy what our friends do 30
  32. 32. Indirect Media Value: Homophily & Social Proof Better targeting (& less wastage)Paid Greater impact Implied/explicit endorsement Higher responseEarned Spontaneous endorsement Greater impact Free marketing = reduced marketing spend 31
  33. 33. Indirect Media Value: Homophily & Social Proof Nielsen BrandLift Ad Exposure Social Ad Exposure Social Ad + Organic +30% +16% +13% +10% +8% +8% +8% +4% +2% Recall Awareness Purchase Intent http://blog.nielsen.com/nielsenwire/online_mobile/nielsenfacebook-ad-report/ 32
  34. 34. How to make Media Valuation work for youRemove focus from Fan growth at any cost Reach/FrequencyFocus on Sharing Engagement Integration with campaigns Audience quality Efficiencies & cost reductions 33
  35. 35. DIRECT RESPONSE VALUE
  36. 36. Why people “Like” Brand Pages on Facebook To receive discounts and promotions 40% To show my support for the company… 37% To get a "freebie" 36% To stay informed about the activities… 34% To get updates on future products 33% To get updates on upcoming sales 30% For fun and entertainment 27% To get access to exclusive content 25% Someone recommended it to me 22% To learn more about the company 21% For education about company topics 13% To interact (e.g. share ideas, provide… 12% Data: ExactTarget/CoTweet September 2010 35
  37. 37. Example from a major multiple 493 Clicks 3,008 Clicks £5 Off Code Half Price Sale Tesco Data is in public domain courtesy of Bit.ly 36
  38. 38. Online Retailer 130,000 Clicks Live Sale ASOS data is in public domain courtesy of Bit.ly 37
  39. 39. How to make DR Valuation work for youObsessive Tracking Use [[Google Analytics]] (insert own choice) Combine with (branded) short links Track individual channels and posts/tweets Form & test hypotheses Learn from other channelsOptimise Earned Media ReachMetrics Frequency Sharing Engagement Audience quality Efficiencies & cost reductions 38
  40. 40. BRAND METRICS
  41. 41. Building loyalty. One fan at a time. Customer Services does one-to-one Marketing doesn’t 40
  42. 42. Social Interactions appear to impact brand metrics SMBI: Impact on Brand Metrics Visit Only Visit + Action +78% +79% +79% +81% +82% +74% +41% +43% +31% +34% +35% +28% SMBI is a Starcom MediaVest Product 41
  43. 43. What did we learn from the SMBI study?Sharing/recommending is the key action we shouldseekNot simply because it reaches others…..but because it’s a public commitment…and has high impact on futurepreference/behaviour 42
  44. 44. How to make Brand Metrics Valuation work for youInvest in market research to justify activityCompare across multiple channelsOptimise content and earned media metrics forsharing 43
  45. 45. Don’t have to Like a Page to engage & share… People want to promote themselves, and they’re prepared to let Brands help. Make the content about them, and they’ll share it. 44
  46. 46. WHERE DOES THIS LEAVEUS?
  47. 47. Why do people become Fans? To receive discounts and promotions 40%To show my support for the company to others 37% To get a "freebie" 36% To stay informed about the activities of a… 34% Mostly, they’re “Subscribers” To get updates on future products33% or “Permissions”, and not 30% Tp get updates on upcoming sales “Fans” For fun and entertainment 27% To get access to exclusive content 25% Should this make us think? Someone recommended it to me22% To learn more about the company 21% “Truly social” For education about company topics 13% Channel duplication To interact (e.g. share ideas, provide… 12% Data: ExactTarget/CoTweet September 2010 46
  48. 48. What if we unbundled the user journey? From a consecutive model …to parallel streams Fan acquisition & MGM MGM & Sharing Fan acquisition Engagement DR Engage DR Sequential Parallel • Orthodox model insists • Allow users to interact Question: Does every brand need to maintain that users “join with brand on own terms community” before • Increased a day-to-day relationship? focus on receiving benefits Performance Marketing or Brand Metrics 47
  49. 49. Caveat Facebook changes fast & often Marketers must be prepared to change minds and direction Seemingly established models are only 12 or 24 months old Smart marketers are asking questions about value of their fans 48
  50. 50. How is it changing? Owned Space Your Your Your Site Apps Pages CRM messages Your Places Social Signals Your Apps Targeting Data Friends Fans of Fans User Data Targets Your Traffic eCRM 49
  51. 51. It’s less about your brand on Facebook,more about putting Facebook in your brand comms • Used in varying ways by publishers (HuffPo, Independent, TechCrunch, Travelocity), retailers (Amazon, ASOS), and advertisers (Aviva, Intel, Heineken Group) • Recent f8 announcements make it even more important to begin integrating Facebook elements into your site. 50
  52. 52. Are we looking at this the right way?Valuation Approach Publisher Date $3.60 Media Vitrue Apr 2010 Value $71.84 Incr. Spend Syncapse Jun 2010 $136.38 Agg. Value Syncapse Jun 2010 $2.53 Incr. Sales EventBrite Oct 2010 470% Incr. Spend WFA/Millward Brown/ Mar 2011 Dynamic Logic $2.10 Incr. Sales Spinback May 2011 51
  53. 53. So for our purposes, is a fan…Someone who engages with your content?Someone who promotes your products?Someone who promotes your content?Someone who buys your product?Someone who becomes content for campaign? 52
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