What’s the Value of a Like?
Summary. Brands spend billions of dollars a year on lavish efforts to establish and maintain a social media presence. But do those campaigns actually increase revenue? New research provides an answer to this question, which has vexed marketers ever since social media burst upon the scene.
In a series of experiments, the researchers tested four increasingly interactive ways in which Facebook might affect customers’ behavior. First, they explored whether liking a brand—passively following it—makes people more likely to purchase it. Second, they examined whether people’s likes affect their friends’ purchasing. Third, they looked at whether liking affects things other than purchasing (for example, whether it can persuade people to engage in healthful behaviors). And fourth, they tested whether boosting likes by paying to have branded content displayed in followers’ news feeds increases the chances of meaningful behavior change.
The results were clear: Merely liking a brand neither increases purchasing nor spurs friends to purchase more. Supporting likes with branded content, however, can prompt meaningful behavior change.
Brands spend billions of dollars a year on elaborate efforts to establish and maintain a social media presence. Think of the live-streamed video of a man setting a world record by skydiving from 128,000 feet (Red Bull) and the strange tweets sent from a supposedly hacked Twitter account that in fact originated with the company itself (Chipotle).
Facebook is the preferred platform: 80% of Fortune 500 companies have active Facebook pages. Each day enormous amounts of brand-generated content—articles, photos, videos, and so on—appear on those pages and on other social media platforms, all designed to entice people to follow, engage with, and buy from brands. Even the U.S. State Department seems enamored of acquiring followers, having spent $630,000 from 2011 to 2013 to garner Facebook likes.
Marketers often justify these investments by arguing that attracting social media followers and increasing their exposure to a brand will ultimately increase sales. According to this logic, recruits who socially endorse a brand by, for example, liking it on Facebook will spend more money than they otherwise would, and their endorsements will cause their friends (and friends of friends) to shop—creating a cascade of new business. At first glance the evidence seems to support this rationale: Many brands have discovered that customers who interact with them on social media do spend more money than other customers. A recent influential study by comScore and Facebook found that compared with the general population, people who liked Starbucks’s Facebook page or who had a Facebook friend who liked the page spent 8% more and transacted 11% more frequently over the course of a month.
Merely liking a brand on Facebook doesn’t change behavior or increase purchasing.
