Monday, April 4, 2011

How many "likes" should I have?

As of one minute ago Oreos had 17,541,788 "likes" on Facebook. This is roughly the equivalent of the population of Chile. And if all the Oreo-likers would form a nation, it would be the worlds 60th largest. This is an impressive number. If compared against to another brand from the same company, Chips Ahoy! has only a miniscule 81,999 likes. As nations go Chips ahoy! would only match the mighty country of Andorra. Just based on these two data-points one could assume that Oreos are significantly larger brand. Comparing seventeen million to eighty thousand from a traditional packaged goods marketing point of view is simple, more share-of-mind should translate into more sales. So Oreos should blow Chips Ahoy! out of the water.

Right?

But comparing cookie sales statistics from last year show that, in fact, Chips Ahoy! is the most sold cookie in the country, by selling over 112 million units and creating $313 million in sales, regular Oreos sold 96 million units and generated $290 million.

What the Zuck does this mean?

How come consumers vote with their wallets to love one brand and with their mouse to like another?

I think the value of a Facebook engagement has been misjudged. Or perhaps it hasn't been estimated at all. The most common argument for engaging in facebook communication is that "you can have a conversation with your audience and engage in a deeper relationship". This is a nice thought, but for a "conversation" it's quite one-sided, as typically only few per cent of your fan-base engage with the fan-page monthly.

So how valuable is a like?

Let's say for arguments sake that this engagement factor would be in the case of Oreos around 3%. (I guestimated this by just looking at the posting frequency of the Oreo fanpage and the amount of likes and comments they get per post). This estimate would put the number of people interacting with the Oreos brand in the ball-park of half a million people. And let's say that as a consequence of this interaction these consumers increase their consumption by 0.1 packs of cookies per month. That means I've estimated that every tenth like or comment would sell a pack of cookies. This would lead into a roughly 600k sales boost per year, which is again roughly a +0.6% increase in sales. Although the numbers are ball-park and the math is simplified this should put us in the right postal code. Hardly a spectacular success. And surely not worth all that yapping about social media changing the face of marketing.

What are marketers thinking going after facebook "likes"? Well, I'm not a mind reader, but this is what I think is happening:

1) All the cool kids are doing it. Social media is trendy - It's cool to do social media. Huge companies are political organizations and having a social media project on your resume can make it a lot sexier.

2) There is a void of meaningful digital metrics and likes are the easiest thing to compare. Although my hill-billy-math-exercise demonstrated that sales might not sky-rocket after mongering facebook likes, it doesn't mean it doesn't make sense. The number of "likes" is just the easiest number to look at. I would love to see metrics on the quality of likes. A gigantic number likes is a comforting thing for marketers. It soothes the soul and makes you sleep better, when you know you've accomplished something to push your product; especially if you have more than your competitor.

3) Cookie-cutter approach for all brands. I suspect that some product or service types work better than others in a social media context. Perhaps a singular FMCG brand is not the right thing to promote on the platform. Although I like Oreos, I really wouldn't want it to give me a call at 7pm and ask me about "dunking habits" or whatnot when I'm decompressing on the couch. Similarly I don't want to see any of it's zero-value updates on my newsfeed. My bandwidth is fixed. I can not manufacture more attention, so to use this for cookies talking about themselves is not something I want to waste it on.

At the end of the day, we might come back to the simple truth that giving me either entertainment or utility is the only thing that makes me give a damn. And brands that can deliver that in a Tweet or a facebook post should really care about the number of likes.

1 comment:

  1. Great post. Looking forward to more.

    I've been thinking about this a lot recently, especially as Pepsi Refresh is getting a lot of criticism, despite its apparently stellar performance in terms of social media metrics: http://adcontrarian.blogspot.com/2011/03/social-medias-massive-failure.html

    My view right now:

    Social Media is a great tool to engage customers with your product. But not all products are worthy of engagement. We seem to have forgotten the term "low-involvement purchase"; for these categories (cookies, cola), engaged customers are not much more likely to purchase, so you may be wasting your time and money engaging them.

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