PHD Perspectives: Want to Know the Value of a 'Fan?' Ask the Late 90s - Lance Neuhauser - MediaBizBloggers

Facebook has more than 400 million active usersTwitter has more than 75 million active usersBoth platforms have amassed these followings in record timeConsumers have changed the way they communicate as a result of these platformsMarketers are saying quotWe want in We need to be inquotCFO39s are saying quotTell me what we get in returnquotMarketers are then saying quotOh crapquotAnd therein lies the issueEver since Digital mediamarketing has burst onto the scene folks have been trying to figure out how to justify expenditures within itWe usually start by applying a model from another more established method of investing We then graduate into a modified version of an old method but it is very rare that we ever create a new investment justification model from the ground upThis repurposing is exactly why most new Digital platforms at one point or another make their way into the DR pigeonhole It39s easiest to understandHere are a couple examplesamp8230A recent study by The Independent asked quotWhat39s the value of a Twitter followerquotThey claimed that the results were still hard to quantify However one takeaway was that social media quotfansquot are twothirds more likely to recommend a brand they39ve quotfriendedquot to a friend or buy the products themselvesAnd another study released by Vitrue projected the value of a Facebook Fan as 360 based on the value of newsfeed impressions onlyThese types of studies make me fearful that every time something new in Digital is making an impact marketers will regress to a late 90s mentality of payforwhatwecaneasilytrack Unfortunately this keeps us behind the consumer usage curve and unable to capitalize on the promise that these revolutionary platforms can bringImagine if new models of investment were created as quickly as consumer adoption was happening The combination of money and usage would create an amplifying output effect listen test innovate and implement listen again The advancement of the platform would be staggeringHowever have no fear folks I am not here to just raise problems I am here to offer solutionsLet39s think back on the first study from The IndependentquotA fan is 23 more likely to recommend a product or buy it than a nonfanquotTo arrive at new solutions that allow for larger investment but are grounded enough to appease the CFO we must ask the challenging questionsLet39s start withamp8230amp8226How are we measuring a nonFacebook 39fan39amp8226How does the declared Facebook 39fan39 compare to our 39nonFacebook fan39Where we net out from these first two questions is searching for another source of customer information another source of 39optin39 dataThe light bulb sizzlesHave we compared our 39fan39 data to our brand39s email databaseI39m assuming an answer of no I have no choice but to ask whether or not we have realized yet that 39fanning39 is just another way for us to engage in permissionbased communicationHere39s the claimamp8230Feeds are the Modern Day InboxThink about it It39s quick communication from those we give our address to connect or follow We opt in for messages from brands we dig We read We respond We glance We disregard We move onTherefore as marketers we should not be asking the value of a fan but rather how can we best deliver value to our consumers in order to warrant a responseEmail marketing has advanced well into the new millennium and its metrics far exceed open and click rates We now evaluate product selection forwards feedback lifetime shopping patterns communication platform preferences multichannel experiences and more all in the name of understanding what a consumer valuedWe can then jump even further ahead in the technology continuum by applying the advancement of email value delivery to the space that Facebook provides for content applications social interactions and spontaneous influenceThis means our model should not be asking the ROI from a fan but rather it should be asking what the value was that a consumer received from the interactionTo calculate this we borrow a few lessons from economics 101 If someone made a purchase from an interaction the value they received is the price they were willing to pay We can also assess that if a consumer felt compelled to share the interaction talk about the interaction or build on top of the interaction then they also received value By following those interactions across the social map and the everevolving communicationtransactional methods available mobile web etc we can determine what did and did not provide value to a consumerTherefore we are not judging based on sales and engagement rates albeit some of the same metrics are used We are flipping the mentalityWe are judging based on aamp8230Consumer39s Return on Interaction CROIYou may be asking what39s the differenceImagine you39re a top beverage company with a large presence on FacebookImagine you only measured your Facebook investment via clicks event RSVP39s and salesYou would then look at major initiatives like a face match or free giveaway and inevitably back into a straightline analysis that saysamp8230we lose money on this You would say our media dollars promotional costs labor etc didn39t profitably drive enough salesLuckily for you you don39t need to think that wayYou can have a consumer first mentality and work off a new primary metricamp8230CROIYour CROI will let you know whether or not you39ve earned the right to continue talking to your consumersAnd at that point you would prioritize initiatives that delivered the most valueYour ongoing investment will pave the way for more fans larger future events and due to the nature of the platform the ability to listen and receive way more consumer insight about your product and services which of course will lead toamp8230more salesYou can then justify to your CFO further investment by showing himher the nonDR pathway to sales via the following value indicatorsConsumer sentimentfeedbackchatterFan recommendationsnew fansApplication engagementNews feed replies etcSo let39s do it marketers We finally have the chance to think about consumers first We have the opportunity to listen talk and then listen again It makes sense After all we were given two ears and one mouth for a reasonLance Neuhauser EVP US Digital Director PHD Media an Omnicom Company You can follow PHD39s Twitter feed at httptwittercomPHDisSmartMediaRead all Lance39s MediaBizBloggers commentaries at PHD Perspectives MediaBizBloggersCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBlogger

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PHD Perspectives: Want to Know the Value of a 'Fan?' Ask the Late 90s - Lance Neuhauser - MediaBizBloggers

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