April 18, 2011

The danger of buying Facebook fans

FB-fan-sites

 

A word of warning to brands looking to expand their Facebook footprint: There are no shortcuts

Editor’s note: A lot of social media marketers discuss how to create a Facebook presence or manage walls and Pages. But few go into details about strategic use of advertising on Facebook. In this series, industry expert Dennis Yu outlines the mix of strategy and analytics that’s required. Also see:
• Part 1: How to run an effective Facebook campaign for $5

Guest post by Dennis Yu
CEO, BlitzLocal

dennis-yuShould you “buy” Facebook fans from vendors that sell on a cost-per-fan basis? We have gotten this question a lot over the last couple of years, so let this article be your guide.

The short answer is: If it sounds too good to be true, then listen to your instincts. Whatever you decide, make sure the ads are being run in your own account, no matter what excuse they give you.

You’ve probably come across services that promise to deliver fans for just pennies each. (Or even cheaper!) That’s like saying you can buy a brand new iPod for a dollar. What’s the catch? Most of them can’t deliver, and most of the ones that do are offering you what’s effectively poison. Some reputable social advertising agencies like Epic Social can deliver you quality, but they are rare.

The top varieties of Facebook flim-flam

Here are the main flavors of snake oil, why they’re dangerous, and how to spot them:

Get 10,000 fans!

FB-fan-sitesIf you see any variation of this, run. Often they have only a couple of hundred fans themselves. It’s no different than SEO vendors that promise links and yet have no Google PageRank or inbound links to show for themselves. Notice that you don’t see any customer testimonials — at least not real ones. And their fan page looks like something pulled out of an infomercial selling dietary supplements. They probably just switched the images out on that landing page to sell whatever is hot.

Fans for pennies!

If you see a self-checkout right on the page where you can send a PayPal payment or order fans in bulk, run. You’re getting bot traffic, international traffic, traffic rings and other so-called fans that will never result in engagement or sales of any kind. Now if you just want to be able to say you have 100,000 fans but don’t care beyond a single boasting metric, then go for it.

Link exchanges!

The idea here is: If you fan me, I’ll fan you. Often there’s a credit system in place where it’s not a one-to-one trade, as you find on Twitter. Some of these trades are automated fan exchanges. Not only is this against the Facebook Terms of Service, but these firms require you to give them administrative access to your page. Might as well give them your social security number while you’re at it.

Our ‘proprietary’ system!

These charlatans will try to sell you an ebook or software, promising the “secrets” to making millions. If you believe that, I’d like to sell you some oceanfront property in Colorado. Do they have real examples to share, or must you pay to see them?

The alternative: A marketing strategy for fan acquisition and valuation

In the end, there’s just no substitute for a clear marketing strategy for fan acquisition and valuation. On Facebook, three things are key when appealing to customers: Decide what your best customers look like, write ads that appeal to them, and send them to a landing page that makes good on that compelling value proposition. Then test like crazy to fine-tune your targeting, ad copy, and landing pages. Know what your fan costs and what a fan is worth — hopefully, the former is greater than the latter.

The hucksters described above present you with a simple shopping cart check out to sell fans — select how many fans you want and then pay. Yet how could they possibly deliver on that promise if you don’t inform them of your unique selling proposition, which particular audiences to go after, and how you will engage or convert them? Are you trusting them to write whatever ad copy they want, buy traffic from underdeveloped countries, or make misleading promises about your brand to encourage users to click Like? We’ve seen some firms place a dozen Like buttons on a page and offer an incentive to users who click on all of them. Those users who are clicking on the Like buttons machine gun style — have they had a chance to learn about your brand?

Using analytics to optimize your outreach and campaigns

Click-through rate & cost per click

Click-through rate & cost per click advertising by industry on Facebook

No amount of software or gimmicks can substitute for not having a strategy in place. A key component of that strategy is analytics. You must be able to measure fan quality so that you can use this as a basis to optimize your campaigns. What is a fan worth to you? What are you doing with these folks once they become a fan? And how do you identify and reward your most loyal fans — the people who love your product or service in real life?

The idea of spending money on Facebook ads just because the CEO said to do it or because your competitor has more fans is ludicrous. You might be inviting derelicts to loiter in the lobby of your high-end hotel, which will discourage the very customers you want to serve. Your real fans will notice who is in your community and decide whether they want to spend time with you there.

Imagine your fan page now has a bunch of 13-year-olds from Indonesia and Turkey (no offense, folks). These could be people who clicked Like on your page because they wanted to earn some FarmVille dollars for a Facebook game. Not only do they not know about your product, but they don’t even speak English.

A simple litmus test for quality

Of 11,000 Facebook campaigns we analyzed in a recent study, the cost per fan was $1.07 — but the cost to acquire a customer varies dramatically depending on sector.

Whether you’re evaluating your page, the agency you’re considering, or the clients they put forth as examples, just look at their wall. Is there a lot of user interaction relative to how many fans they have? Count up the number of Likes and comments for the most recent post, which is the number of interactions. Divide that by the number of fans they have. If it’s less than 1 in 200 (half a percent), then the engagement rate is low.

Your cost per fan depends upon the industry your company is in, how well you can capitalize on your brand’s real-world awareness, and how effectively you run your Facebook campaigns. Of 11,000 Facebook campaigns we analyzed in a recent study, the cost per fan was $1.07. But that averages out entertainment categories that are half that cost, versus healthcare and financial companies that might be five times the cost. Just like in regular Pay Per Click marketing or even direct marketing as a whole, the cost to acquire a customer varies dramatically.

So determine what your real world customer is worth, ensure that your Facebook fans are of the same quality, and then apply the same ROI measurements you’d apply to any other channel. Don’t entrust your marketing strategy or Facebook advertising to an outsider. Does this mean don’t hire an agency? No, just make sure you run the strategy, while they execute the details. Does this mean don’t buy Facebook ads? No, just make sure you’re connecting with your valuable customers and nurturing them in a profitable way.

We’ll talk about how to craft the right strategy in the next article in our series.

What do you think? Have you seen these kinds of offers? Have they worked for you?

Dennis Yu is Managing Principal of Webtrends, a provider of social analytics software, as well as CEO of BlitzLocal, which does local online advertising. His team of 40 analysts have run 1,100 Facebook campaigns for global brands over the last four years. He studied finance at Southern Methodist University and economics at the London School of Economics. If you have any questions, please email him at [email protected] or visit him on Facebook, Twitter or his blog.
Related

How to run an effective Facebook campaign for $5 (by Dennis Yu on Socialmedia.biz)

Demystifying how Facebook’s news feeds work (Socialmedia.biz)

15 ways to increase your Facebook stature (Socialmedia.biz)

Cheat sheet: Key principles of social media marketing on Facebook (Socialmedia.biz)

SEO: 9 tips for optimizing a nonprofit site (by Dennis Yu on Socialbrite.org)

15 ways to increase your brand’s impact on Facebook (Socialmedia.biz)

Ultimate guide to marketing on Facebook (Socialmedia.biz)

Social media marketing: Facebook & Twitter aren’t enough (Socialmedia.biz)

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