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With more than 750m users, Facebook is one of the most populous online hubs through which consumers can be reached.
That, not surprisingly, has made it a platform of significance to brands which thrive only when they reach consumers.
On the surface, many brands are succeeding, piling up 'likes' for their Facebook Pages by the tens of thousands, hundreds of thousands, and in some instances, millions.
But according to London-based monitoring and analytics company Market Sentinel, brands aren't doing as well on Facebook as it might appear.
Facebook COO Sheryl Sandberg wants the company's primary ad offering, Facebook Ads, to become as indispensible to small businesses as Google AdWords, but Market Sentinel notes that "Even with the ability of the user to determine how and to whom an ad is served with great demographic accuracy, Facebook ads have click-through rates of only 0.011-0.165%, compared to Google’s 0.4-0.7%".
As I've noted before, there's an obvious explanation for this: Facebook doesn't deliver intent.
This manifests itself in the form of lower CTRs (because the ads are not relevant to the individual's current activities) and lower conversions (because brands have to convince an individual to take an action that wasn't planned).
The Facebook Pages of the most popular celebrities and brands count hundreds of thousands and millions of fans. But what is a fan, and what are fans doing?
According to Market Sentinel, "the vast majority of 'fans' don’t actually interact with [a Facebook] Page".
In looking at the most popular celebrities on Facebook, the company looked at how many fans were "core fans", those who have engaged (read: commented) more than average. The result? "Eminem had over 41 million fans and Lady Gaga over 39 million fans, but their core fan counts are 575 and 1,231 respectively (just 0.001% and 0.003% of their overall fan numbers)".
Market Sentinel explains why this is important:
Unless someone has actively interacted with your page, they won’t receive your updates. Many brands launch a Facebook contest to boost their fan count, assuming that their future updates are now reaching the thousands or millions of people who clicked “like”. But that’s not how Facebook works.
It also notes:
To compute the core fan count, we calculate the average number of posts-per-contributing fan. This number ranges from 1.14 for Bob Marley to 2.03 for Bob Marley. Any fan whose comment count is higher than the average is a “core fan”. As you can see it doesn’t take much to become a “core fan” by this measure, making the low totals even more notable.
For brands, this discussion harbors a crucial point: it isn't enough to rack up the 'likes'; if those who 'like' your Facebook Page aren't interacting with it, you're probably not reaching them.
As Market Sentinel's data shows, most brands are probably reaching far fewer individuals than they might otherwise assume.
Beyond Facebook Ads and Facebook Pages, some brands have invested even more in the Facebook platform by developing branded applications.
A few have had success, but Market Sentinel notes that "no branded app (outside those from telcos and tech businesses with skin in the game) makes Facebook’s top 100."
Is Facebook a big waste of time?
Certainly, brands can't simply ignore Facebook. It's the largest social network in the world, and while it may not be a great fit for every brands, arguably it isn't without value for many brands either. But the devil is in the detail, and Market Sentinel's numbers, particularly around Facebook Pages, should worry Facebook executives.
They should also worry brands. Many are making significant investments in Facebook. Some, for instance, even promote their Facebook Page URLs in ads instead of their website URLs, harkening back to the days of AOL keywords. But if Facebook investments exceed what the platform is delivering, brands lose out.
The solution? Brands need to define meaningful KPIs for Facebook and collect the analytics data necessary to determine whether performance is meeting expectations.
Without this, brands will continue to 'like' what they see, but be disappointed once they learn what they're actually getting.