What's the Value of a Like?

 

Brands invest millions of dollars each year to establish and keep their social media presence. But can these campaigns result in increased the amount of money they earn? Recent research offers an answer to this question that has been a source of contention for marketers since social media came onto the scene.

In a series they examined four ways the way that Facebook could influence customers behaviour. They first looked into whether the act of liking a brand, or simply following it, makes consumers more likely to buy it. Then, they looked at the impact of people's likings on the purchases of their friends. Thirdly, they examined the extent to which liking influences other aspects than buying (for instance, whether it could influence people to take part in healthy actions). In addition, they investigated whether paying to have your brand's content shown in their followers' feeds can increase the chance of making a meaningful changes.

The results were obvious that liking a brand does not increase buying or encourages friends to spend more. The encouragement of likes by the brand's content can trigger meaningful change in behavior.

Brands invest billions of dollars every year on complex efforts to establish and sustain the presence of social media. Imagine the live-streamed video of a man attempting to set an international record after jumping from 18,000 inches (Red Bull) and the bizarre tweets from a hacker-infested Twitter account, which actually was created by the company (Chipotle).

Facebook is the most popular platform. More than 88% of Fortune 500 companies have active Facebook pages. Everyday, massive amounts of content from brands--articles videos, photos etc.--are posted in these pages as well as in other media channels. They are all created to convince people to join, connect with, and even purchase from brands. The U.S. State Department seems to be awed by the prospect of getting followers. They spent $630,000 between 2011 and 2013 to increase the number of Facebook followers.

Marketers typically justify these expenditures by saying that attracting people to social media and increasing the visibility of the brand's image will eventually boost sales. In this way those who endorse a brand such actions as liking the brand by liking it on Facebook are likely to spend more than they normally would and their endorsements can make those around them (and the friends of their buddies) to shop, resulting in a cascade of business. The evidence at first suggests this logic Some brands have found that people that interact via social media spend more than other customers. A recent study that was influential of comScore and Facebook discovered that, compared to people in general, customers that liked the Starbucks Facebook page or had an existing Facebook friends who were fans of the page, spent 8percent more and made transactions 11% more often throughout one month.

Simply liking a brand on Facebook does not change the way you behave or improve the purchase.

However, this study and other like it suffer from an unfathomable logical flaw. They misinterpret cause and effect. It's possible that attracting followers of the brand's social media accounts can lead them to spend more. However, it's also possible that those with positive impressions of the company are much more inclined to be a follower of the brand in the first place and, therefore, spend more money than non-followers. In 23 studies carried out over the past four years, and with more than 18,000 participants using an A/B test technique to investigate a vital alternative: what people who follow brands would have done if they had not been following the brand. With the billions of dollars which are allocated to social media in many firms, the difference isn't trivial. It can have huge implications for the marketing budgets of marketers as well as what they do with their brand's web presence.

In our tests we gradually increased the complexity in order to examine four more interactive ways that Facebook can influence consumers their behavior. We first examined whether liking a brand, or being a passive follower of it -- makes consumers more likely to buy it. We also examined how people's likings impact their friends' buying habits. Thirdly, we looked into whether liking influences other things than buying, for example, whether it could influence individuals to adopt healthier actions. We also examined whether increasing likes through paying Facebook to display brand-name content in their news feeds improves the likelihood of significant behavior changes. We chose to utilize Facebook in our study since it is the most popular social media platform, but we believe our results can be applied to other platforms too.

The results were obvious that social media does not work as many marketers believe it should. The act of expressing support for an organization's brand does not alter the behavior of a consumer or increase their purchasing power or encourage buying by friends. The endorsements that are backed by branding-related content could yield significant effects. Since social media sites provide a place to connect faithful customers, they are able to give brands an unrivalled source of feedback from customers and a significant group. With this information marketers can create innovative, more effective strategies for social media.

Testing the Effects of Likes

The basic psychological principles provide a the reason to believe that liking a Facebook page can be a positive change in behavior and help increase sales. Studies have shown that people suffer from "cognitive dissonance" when their actions do not align with their beliefs. Therefore, it stands to reason that a person who supports a brand on Facebook is more likely to purchase the product. But that's not the case. discovered.

One of our very first research studies, which was conducted by our colleagues (Leslie John, and Oliver Emrich) and our Harvard Business School colleagues Michael Norton and Sunil Gupta. Half of participants were invited to join a newly launched cosmetics company on Facebook and the majority of them accepted. The remaining half didn't get this invitation. The participants were then all offered coupons for a no-cost trial--the redemption could serve as an indication of when to purchase. Participants from both categories were similarly likely to use the coupon, it did not matter if they had been invited to join the page on Facebook or not. This result was confirmed throughout the subsequent research studies in which we extended the interval between the announcement of invites to "like" and then extending the coupon; it was also true when we ran the test with a range of brands both existing and new. Through 16 research studies, we didn't find proof that following any brand's social media affects people's buying behaviour.