February 11, 2013

Blogger Math Takes On Facebook

I saw some numbers last week on how the top 10 retail brands are doing on Facebook.

The numbers came from the 4th quarter of 2012 -- the Christmas selling season which is by far the best season for most retailers and, presumably, the season at which Facebook activity would be highest for retailers.

The numbers are startling.

We know that ads on Facebook are alarmingly invisible, with click through rates somewhere around 5 in 10,000. But we've been told that the real value in Facebook is not in display ads but in engagement on brand pages.

From what I can tell, these things are just as ineffectual as display ads. Let's do some blogger math (full disclosure: blogger math is known to be unreliable and is not to be confused with real math.)

Let's take Walmart as an example. According to the report I read at Business Insider among retailers Walmart has the most fans on Facebook -- over 26 million. When Walmart posted something during the holiday period, they averaged about 19,000 "fan actions" per post. A "fan action" is defined as either a "like" or a "share" or a "comment."

I did a little math to find an "engagement rate" -- in other words, to find out at what rate people who self-select themselves as fans of Walmart interacted with Walmart's posts on their page. The engagement rate came out almost identical to the average click-through rate for ads -- .0007.

In other words, 7/100 of one percent, or 7 in 10,000. This isn't even rounding error. This is almost all noise and no signal.

Not only that, the calculation uses the most charitable possible definition of "engagement."

The people who did the study (and have a vested interest in the advancement of social media) cavalierly include "liking" as engagement. I doubt that disinterested observers would agree that an action that takes a third of a second is anything approaching "engagement."

Then deduct from that number all the people at the agency who were directed to do gratuitous liking, sharing, and commenting and all their friends and relatives, and all the people in the marketing department and all their friends and relatives, and all the hate comments on Walmart's page that are counted as "engagement," and all the click-bots that are working overtime in the Ukraine, and all the inadvertent clicks due to poor hand-cursor coordination, and you have yourself the real number.

If you can call it a number.


CRL said...

Read the report with interest. I'd rather be Amazon.

Anonymous said...

According to FB, now it is not about engagement......is about R/F; same as in "traditional media"

Geoff said...

Walmart has a fan page that costs them minimal amounts of money to manage.

They have 26 million people who see what they post.

Yet you're calling it a failure because, when they post "towels for 1/2 price," only 19,000 people gave that ad a thumbs up or made a comment.

You're ignoring the 26 mm who saw the virtually free ad.

I'd say you're missing the forest for the scrub brush.

It's a bit like having a TV commercial that is seen by millions, but calling it a failure because only .007% talked about it at the office the next day.

Anonymous said...

On an average fanpage only 4% or 5% of the "fans" are exposed to a particular post.....how many actually SEE (read) the ad? A lot less.

Tom Chandler said...

"They have 26 million people who see what they post."

Currently, the average Facebook page post is actually shown to only 1/6 or 1/7 of the people who had "Liked" a page -- how many actually saw it in their stream isn't clear.

In other words, we're all "publishers" now, but Facebook wants us to "promote" our posts (pay extra) to reach the people we've already acquired once.

I work with a lot of small businesses, and Facebook has become something my clients cover as an afterthought, automating the process as much as possible. It almost never moves the revenue meter even one bit, and we simply stuff that particular pipeline with information when available.

It's just not worth their time.

David S said...

If Walmart is working their Facebook page like all large companies with humongous numbers of fans tend to do, they have a full-time staff of marketers farming the site. On top of creating, running and paying for online ads to milk that fan count.

All that costs money. Lots of it. The greatest myth social media proponents spew is that social media is "free". Social media done right is in fact anything but free.

Dannye said...

Contrarian, I'm sure you've come across the daily mash, kind of an English The Onion.

Today they had a great article about fbs new 'indifferent' button. Topical.


Paul Benjou said...

That's a 40% increase over click thru rates. What's not to "like" with this media math! Seriously, a waste to time, money and thought

Tom Callaghan said...

Geoff, the only important number is how many towels did people buy that week after the post. The old days of split-run would give you a pretty good idea of the success or failure of a specific piece of work (as opposed to ongoing brand awareness or popularity). When you can tell me how many people bought towels because of the post, rather than wandering around Walmart and thinking, 'hey we need some new towels, that's a good price', then I'll change my views on social media...

Tom Callaghan said...

PS: Geoff, I didn't repeat my post twice because I thought you might not understand it first time round, I did it because I'm an idiot who pressed the button twice. As perhaps did some of the 19,000 who commented on the towels...

Anonymous said...

"We know that ads on Facebook are alarmingly invisible, with click through rates somewhere around 5 in 10,000."

No offense, but you are either clueless or are intentionally un-critical in your thinking when citing this number.

That CTR includes all the bazillion of people/small businesses/newbies who have no clue how to advertise via FB. I, and any other marketer who has a clue, get 20x the CTR you posted, or 100 in 10,000.

btrandolph said...

re Liking as engagement: see also LinkedIn endorsements.