THE VALUE OF A FAN Mat Morrison Starcom MediaVest Group @mediaczar
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THE VALUE OF A FAN
Mat Morrison
Starcom MediaVest Group
@mediaczar
2
…so please bear with me
(Try telling that to your CFO)
WHAT IS A FAN?
4
Kevin Kelly, “1,000 True Fans”
A True Fan is defined as
someone who will purchase
anything and everything you
produce.
They will drive 200 miles to see
you sing. They will buy the super
deluxe re-issued hi-res box set
of your stuff even though they
have the low-res version. They
have a Google Alert set for your
name.
They bookmark the eBay page
where your out-of-print editions
show up. They come to your
openings.
They have you sign their copies.
They buy the t-shirt, and the
mug, and the hat. They can't wait
till you issue your next work. They
are true fans.http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php
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
6
The spectrum of fandom
Fairly Oblivious Actively DislikeReally LikeMad Love
7
Superfans: True Fans with body paint & tattoos…
This fan… …creates the space for these fans to exist
8
But I’m only talking about Facebook Fans
Not “True Fans”
Not “Superfans”
But “Facebook Fans”
9
Why is Facebook so important?
Data: Facebook, VentureBeat, SharesPost, SecondMarket
Dec 04
Dec 05
Dec 06
Dec 07
Dec 08
Dec 09
Dec 10
Dec 11
0
200000000
400000000
600000000
800000000
1000000000
0
20,000,000,000
40,000,000,000
60,000,000,000
80,000,000,000
100,000,000,000
Facebook valuation ($bn)
Facebook users (millions)
Facebook growth: users and estimated market cap
10
European Web Usage
Data: comScore EMEA August 2011
85 billion user
minutes/month
11
European Web Usage
Data: comScore EMEA August 2011
163 billion page
views/month
12
The most-loved brands on Facebook last week
12
Brand Fans
Coca-Cola 35,017,182
Starbucks 25,747,572
Oreo 23,271,622
Red Bull 22,673,250
Converse All Star 20,883,240
Converse 20,410,948
Skittles 19,460,585
Pringles 15,855,303
Monster Energy 12,504,459
adidas Originals 11,273,177
• November 2007; Facebook introduces Pages
• “We’ve built a way for you to connect to things other than people”
• Effectively sets strategy for Brand Advertisers for next 4 years.
WHAT’S THE VALUE OF A FAN?
14
I won’t insult your intelligence…
(Of course it does. Now I can go home.)
15
The costs are fairly simple
Annual cost of Recruitment
Annual cost of Community
Management
Fans
16
Value is more complex
Valuation Method Publisher Date
$3.60 Media Value
Vitrue Apr 2010
$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/Dynamic Logic
Mar 2011
$2.10 Incr. Sales Spinback May 2011
17
Why Brands like Fans
Sign of my brand’s popularity
Source of insight
Generate increased engagement with brand
Generate increased short-term spend
Generate increased long-term spend
Increased loyalty
Increased advocacy/recommendation
Source: SMG London Client Interviews
18
Why Brands like Fans
Earned Media Value
Direct Sales/Sales Promotion
Brand Preference Metrics
EARNED MEDIA VALUE
20
Vitrue’s Advertising Value Equivalent model
Fans Posts
1,000
CPM
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
21
And where that model goes wrong:Daily Active Users
Reach Pages reach between 5% and 20% of their fans
1m fans may mean 50K Daily Active Users
Frequency
Smart advertisers cap frequency to avoid burnout
DAUs are exposed multiple times
Result? Hard to value this way – but let’s dig deeper
22
Like Page
See Brand Post in News Feed
Ignore, Like or
Comment
See/Don’t See
Future Posts
How people use a Facebook Page (real client data)
11%
Ongoing Exposure
36%
Like source
99%
First exposure
0.6%
Responders
0.6% attributed to “on Page” Likes
Estimate Comments + Likes
DAU
DAU
Total Fans
Week DayDay PartAudience Activity Competitor Activity
Post engagement by hour and day (most responsive days highlighted)
0 3 6 9 12 15 18 21 -
10 20 30 40 50
0 3 6 9 12 15 18 21 -
10
20
30
40
Mon Tue Wed Thu Fri Sat Sun0
10
20
30
40
Mon Tue Wed Thu Fri Sat Sun0
20
40
60
80
To May 2011 Since May 2011
Co
un
t of P
os
ts b
y H
ou
rC
ou
nt o
f Po
sts
by
Day
Single client data. Your mileage will vary
24
The effect of EdgeRank
Like Page
See Brand Post in News Feed
Ignore, Like or
Comment
See/Don’t See
Future Posts
11%
Ongoing Exposure
36%
Like source
99%
First exposure
0.6%
Responders
0.6% attributed to “on Page” Likes
Estimate Comments + Likes
DAU
DAU
Total Fans
EdgeRank
Key take-out: if you don’t use them, you lose them
25
Could we earn more value by posting more often?
• 80% of responses within 3
hours.
• 90% within 6 hours
• (There’s a small blip after 24
hours: engaged/non-daily users)
• What does this imply about
how often the page could
post?
• How does post frequency
impact other KPIs?
0 5 10 15 20 25 30 35 40 450%
10%
20%
30%
40%
50%91.4%
%age responsescumulative
Elapsed Hours
26
Impressions & Reach grow strongly inline with post frequency
0 0.5 1 1.5 2 2.5 3 3.511
11.5
12
12.5
13
13.5
14
14.5
15
15.5
f(x) = 1.10798048236944 x + 11.6301274541707R² = 0.943832409201569
ln(7-day rolling posts)
ln(7
-day
rol
ling
imps
)
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6-2.8
-2.6
-2.4
-2.2
-2
-1.8
-1.6
-1.4
f(x) = 0.400548543900821 x − 2.34612898150891R² = 0.530097676971872
ln(posts)
ln(r
each
)
27
..but Unlikes increase, too
• Nearly all Unlikes are a response to post activity*
• Post frequency seems to lead to fan attrition: Increase from 1 to 2 posts = 46% increase in Unlikes.
• Recent f8 changes suggest that users may increasingly hide posts rather than Unlike the page:
This should have a long term impact on DAU/Reach – but Post engagement may increase and Unlikes decrease.
0 0.5 1 1.5 2 2.5 3 3.55
5.5
6
6.5
7
7.5
f(x) = 0.459424051640054 x + 5.52388776980412R² = 0.577933880572257
ln(7-day rolling posts)
ln(7
-day
rol
ling
unsu
bs)
28
Why direct media value isn’t enough
Incremental media value, not cost reduction
Fan audiences remain small vs. total target audience
Impressions not a proxy for subsequent user behaviour or revenue growth
28
INDIRECT MEDIA VALUE
30
Homophily
We like to hang around with people like ourselves…
31
Social Proof
…and we unconsciously copy what our friends do
32
Indirect Media Value: Homophily & Social Proof
Paid Better targeting (& less wastage)
Greater impact
Implied/explicit endorsement
Higher response
Earned Spontaneous endorsement
Greater impact
Free marketing = reduced marketing spend
33
Indirect Media Value: Homophily & Social Proof
Recall Awareness Purchase Intent
+10%
+4%+2%
+16%
+8% +8%
+30%
+13%
+8%
Nielsen BrandLift
Ad Exposure Social Ad Exposure Social Ad + Organic
http://blog.nielsen.com/nielsenwire/online_mobile/nielsenfacebook-ad-report/
34
How to make Media Valuation work for you
Remove focus from Fan growth at any cost
Focus on Reach/Frequency
Sharing
Engagement
Integration with campaigns
Audience quality
Efficiencies & cost reductions
DIRECT RESPONSE VALUE
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To receive discounts and promotionsTo show my support for the company to
othersTo get a "freebie"
To stay informed about the activities of a company
To get updates on future products
To get updates on upcoming sales
For fun and entertainment
To get access to exclusive content
Someone recommended it to me
To learn more about the company
For education about company topicsTo interact (e.g. share ideas, provide
feedback)
40%
37%
36%
34%
33%
30%
27%
25%
22%
21%
13%
12%
Why people “Like” Brand Pages on Facebook
Data: ExactTarget/CoTweet September 2010
37
Example from a major multiple
3,008 ClicksHalf Price Sale
493 Clicks£5 Off Code
Tesco Data is in public domain courtesy of Bit.ly
38
Online Retailer
ASOS data is in public domain courtesy of Bit.ly
130,000 ClicksLive Sale
39
How to make DR Valuation work for you
Obsessive Tracking Use [[Google Analytics]] (insert own choice)
Combine with (branded) short links
Track individual channels and posts/tweets
Form & test hypotheses
Learn from other channels
Optimise Earned Media Metrics
Reach
Frequency
Sharing
Engagement
Audience quality
Efficiencies & cost reductions
BRAND METRICS
41
Building loyalty. One fan at a time.
Customer Services does one-to-oneMarketing doesn’t
42
Social Interactions appear to impact brand metrics
Financ
e
Med
ia & E
nter
tainm
ent
Tech
& Tele
com
s
Food
& Drin
k
Health
& B
eaut
y
Retail
+28% +31% +34% +35% +41% +43%
+78% +74% +79% +79% +81% +82%
SMBI: Impact on Brand Metrics
Visit Only Visit + Action
SMBI is a Starcom MediaVest Product
43
What did we learn from the SMBI study?
Sharing/recommending is the key action we should seek
Not simply because it reaches others…
..but because it’s a public commitment
…and has high impact on future preference/behaviour
44
How to make Brand Metrics Valuation work for you
Invest in market research to justify activity
Compare across multiple channels
Optimise content and earned media metrics for sharing
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.
WHERE DOES THIS LEAVE US?
47
To receive discounts and promotions
To show my support for the company to others
To get a "freebie"
To stay informed about the activities of a company
To get updates on future products
Tp get updates on upcoming sales
For fun and entertainment
To get access to exclusive content
Someone recommended it to me
To learn more about the company
For education about company topics
To interact (e.g. share ideas, provide feedback)
40%
37%
36%
34%
33%
30%
27%
25%
22%
21%
13%
12%
Why do people become Fans?
Data: ExactTarget/CoTweet September 2010
Mostly, they’re “Subscribers” or “Permissions”, and not “Fans”
Should this make us think?“Truly social”
Channel duplication
48
What if we unbundled the user journey?
Fan acquisition & MGM
Engage
DR
Sequential• Orthodox model insists
that users “join community” before receiving benefits
Fan
acq
uisi
tion
Parallel• Allow users to interact
with brand on own terms• Increased focus on
Performance Marketing or Brand Metrics
From a consecutive model …to parallel streams
MG
M &
Sha
ring
Eng
agem
ent
DR
Question: Does every brand need to maintain a day-to-day relationship?
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
50
How is it changing?
Your Apps
Your Pages
Your Places
FansFriends of Fans
Targets
Owned Space
Your Site
Your Apps
Your eCRM
User Data
Social Signals
Traffic
CRM messages
Targeting Data
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.
52
Are we looking at this the right way?
Valuation Approach Publisher Date
$3.60 Media Value
Vitrue Apr 2010
$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/Dynamic Logic
Mar 2011
$2.10 Incr. Sales Spinback May 2011
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?
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