SPMD SocialCode: Consider the Lifetime Value of Facebook Likes

By David Cohen 

LikeStickersMain650The debate over the importance of likes on Facebook for brands hinges on several factors, and the take from SocialCode, a Strategic Preferred Marketing Developer, is that brands and agencies must determine whether those likes have “lifetime value” before taking the steps to acquire them.

In a white paper (embedded below) titled, “Does It Pay to Buy Likes?,” SocialCode Chief Innovation Officer Addie Conner and Marketing Content Strategist Ben Weiss examine the value of likes on Facebook in the wake of declining organic reach for pages.

Conner and Weiss pointed to the lower reach costs enabled by Facebook, saying that users who like pages respond positively to brand messages and higher rates and negatively at lower rates, and to the positive impact of social context on ad campaigns, answering the question, “Are likes valuable enough to buy?,” as follows:

From one perspective, brands want enough fans that their target audiences see ads with social context, which achieves high impact.

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.

Conner and Weiss analyzed lifetime value by comparing two fictional campaigns — one by a movie studio promoting a film, and the other by a travel brand selling premium packages to a luxury resort, pointing to the greater lifetime value of the latter and writing:

In this case, though, scaling a fan-acquisition campaign aggressively is a smart decision. Why? Because travel is a much different industry than film. Consumers take vacations multiple times each year and purchase packages worth thousands of dollars. So when fans are determined to convert at markedly lower cost than non-fans, advertisers can capture that efficiency through both immediate and long-term gains.

SocialCode’s takeaways from its white paper were:

  • Business goals first. Always.
  • Beware diminishing return.
  • Look for learnings.
  • Get enough fans to serve target audiences ads with social context.
  • Never forget other targeting options.
  • Focus on quality in page like ads.

Does It Pay to Buy Likes