Monday, 16 August 2010

Cause and Effect

One of the inherent problems with marketing things on the internet is that some bits of the process are very very easy to measure. That's not a problem for people who sell things online, as they can easily understand how many of them were sold and at what cost. The problems start to arise when the things being marketed are either sold elsewhere, and even more so if they are not intended to be bought immediately: if for instance the goal of the marketing is to change people's perception of a brand. Hence banners are still regularly measured on click through rates, even if the product they are advertising isn't for sale on the page being clicked through to. Clickthrough rate is clearly to wrong thing to measure in this instance but it is EASY to measure, so often taken as a proxy for less tangible results.

As brands become more interested in the social web, there is a real danger of making the same mistake again. As for many brands the social web currently means social networks (and for a large proportion of them social networks largely mean Facebook) the easy measurement tends to be numbers of Likes (/fans/followers/etc). Social networks are where people are spending more time, so brands want to be there. To justify being there, they
need to measure something. Numbers of fans are easy to measure as brands and their agencies can plan, track and optimise their activity over time, and because Facebook has a straightforward advertising platform they don't have to think differently to how they always have done.

The problem with using these numbers as an objective is that no-one knows what value to attribute to them. You and I know that attributing a single value to them is meaningless, as every brand will be investing in community for different reasons and starting from different places, but that hasn't stopped a range of 'one number' valuations being put on Facebook fans. I'm going to ignore the Nielsen research published a few months ago, as I'm sure you have too if you have read more than a few lines into the introduction, but it's worth reading
The Ad Contrarian's analysis of it. Syncapse's 'Value of a Fan' study is more interesting because unlike Nielsen it is genuinely empirical research - it starts from the premise of trying to things out find out, rather than trying to prove them. It also accepts that all brand communities are fundamentally different so any 'one number' can only be an average.

So in ambition and objectives it seems sound - and is worth a read (download from here). But then I get very confused by the methodology. This is a summary of the findings:
Or alternatively have a look at the higher res image here. The study looks at money spent on a brand by fans and non-fans, and find that fans spend more money than non-fans.

Let's stop and think about this for a minute. A major research organisation actually thinks that it is worthy of our time and attention to know that if you like a brand, you will spend more money on it than someone who doesn't like it as much. Or put another way, brand marketing for the last 40 years works, but it's only now that we've got a survey of 4,000 Facebook users that it can finally be proved.

OF COURSE people who like a brand spend more money on it. That is A. not news and B. nothing to do with Facebook. Attributing that as value to Facebook fans is a basic misunderstanding of cause and effect. People liking brands has any number of CAUSES, of which what they do on Facebook is a tiny part. One EFFECT of their liking the brand is that they choose to sign up to receive more information from the brand, or to display their affection to their friends (this in turn may cause more people to interact with said brand, but that is not the subject of this study). Quite often people liking a brand is a result of great advertising - the best advertising makes people fans for no other reason than because the ads are so good, and one of the places that this is reflected is in social networks. Old Spice and Compare the Market saw their Facebook fans numbers increase as dramatically as their market share in response to great advertising. Both increases were therefore EFFECTS of great advertising. But to take one effect and infer a causual relationship with the other is plain wrong: so if instead of more bits of culture, Old Spice bought a load of 'become a fan' ads, this would not have the same impact on their market share. The implication of causal relationship made by this study is no different to saying that for instance:

When it snows, there are more road traffic accidents
When it snows, my toes get cold
Therefore by warming my toes up, we can reduce deaths on the road.

This confusion of cause and effect starts to lead marketers into dangerous territory - if one number can be applied to fans without questioning whether it means anything, then there is genuine justification in buying them - either by soft methods like 'Become a Fan' ads, or by harder ones like buying them on Ebay (no seriously - you can buy Twitter followers on Ebay. Fuck knows why. Check this pic courtesy of @sparkey).

Now there are lots of ways that Facebook is a great set of tools for marketers, but by buying into the cause & effect confusion we are in danger of missing the most important ones.

2 comments:

Holycow said...

Very wise words mate - hopefully some less intelligent people than yourself responsible for planning social campaigns will start to realize this. Good work fella.

M

Graeme Wood said...

Thanks Mark - much appreciated!

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