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Does It Pay to Buy Likes

Does It Pay to Buy Likes

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Published by David Cohen
A white paper from SocialCode Chief Innovation Officer Addie Conner and Marketing Content Strategist Ben Weiss.
A white paper from SocialCode Chief Innovation Officer Addie Conner and Marketing Content Strategist Ben Weiss.

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Published by: David Cohen on Aug 20, 2014
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09/10/2014

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Does it still make sense to purchase likes? Absolutely. But how many you buy depends on lifetime value.
The decline of organic Facebook reach, a result of growing News Feed competition, raises questions for brand marketers. Among the most burning are questions about fans. In the early days of Facebook advertising, marketers sought to acquire as many fans as possible, assuming they were building an owned audience for messaging at scale.Now that marketers can only reach a small percentage of their fans organically, questions linger around whether fans still have value and whether investing in fan acquisition is still a smart strategy.
by Addie Conner
Chief Innovation Ofcer 
Ben Weiss
 
Marketing Content Strategist 
Does It Pay to Buy Likes?
 
Does It Pay to Buy Likes?
2
Let the data speak 
Fans are still valuable even as organic reach declines for a number of reasons.
1. Less expensive reach costs
Though marketers need to pay to reach many of their fans, the fact that fans opted in to receive brand messages means they respond positively at higher rates. They also react negatively less often (hiding posts, marking posts as spam). These engagements signal high quality to Facebook’s ad serving
algorithm and can reduce reach costs (CPMs) signicantly.
2. Greater ad impact through social context
When target consumers get product or service recommendations from a trusted person, that interaction is invaluable to marketers. Facebook imitates this concept when fans engage with brand content by serving ads with “social context.” This means when fans engage with an ad, their friends are served ads with the context that someone in their network liked, commented or shared.
Kind of like an unofcial
recommendation.
 And since fans engage with brand content at higher rates than other audiences, they
produce more stories with social context. This is a huge benet.
For example, 
 found that users seeing ads with social context had
greater ad recall, awareness and purchase intent
 compared to those who saw ads without social context. More
specically,
 written by Facebook’s VP of Ads Product Marketing Brian Boland describes how ads with social context drive, on average,
35 percent higher online sales lift.
 
Our data corroborate this idea. A rollup of ve early 2014 campaigns run for one of SocialCode’s highest
spending clients shows ads with social context drove, on average,
11 percent greater ofine sales lift
 than ads served without social context.
Note:
We are only assessing the validity of campaigns that measure success strictly through likes. Brands putting out quality content that’s true to brand standards and personality will always pick up new
fans and gain a degree of added performance from that audience. It’s the decision to pursue fan-specic
KPIs that requires consideration.
 Ads with social context drive, on average,
35 percent higher online sales lift.
 
Does It Pay to Buy Likes?
3
 Are likes valuable enough to buy?
The question remains, are fans so valuable that marketers should advertise to acquire them?
The answer is two fold. 1.
 From one perspective, brands want enough fans that their target audiences see ads with social context, which as explained above, achieves high impact.
2.
 The other important consideration is
 lifetime value
 — a prediction of how much actual revenue marketers can secure from a person, in this case a fan, over time.With all that in mind, here’s how to determine
how many fans
 to purchase.
Compare fans against non-fans
In some cases, fans have a lifetime value so much higher than non-fans that an always-on campaign to purchase as many fans
as possible is justied by high returns. When this is not the case,
advertisers are better off acquiring just enough fans to achieve social context goals, using remaining budget against valuable, non-fan segments. This is why we urge comparing fan versus non-fan value before building an acquisition strategy.Here are examples of two different fan approaches surfaced through fan versus non-fan comparisons. Both examples are based on real
campaigns run for SocialCode clients in 2014.
Example 1: When Fan Lifetime Value is Low
Epiq Pictures is a ctional lm studio that’s harnessing Facebook to
sell tickets to its new comedy
The Hot Knife
. The studio nds fans
do indeed convert on purchase offers at less cost than non-fans. Nonetheless, through the lens of lifetime value, launching a limitless fan acquisition campaign for
The Hot Knife
 Page doesn’t make
sense. Even if fans convert more efciently, revenues are conned to low-cost purchases like tickets
and digital downloads. Further, movie tickets and personal copies are generally one-off purchases,
meaning that added efciency won’t continue to accrue over time.
Even still, Epiq Pictures wants to make sure the
The Hot Knife
 Page has enough fans to serve its target audience ads with social context.
Since Epiq Pictures provides a
low-cost product
 that is not bought consistently,
lifetime value for fans is low
.

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