Social networks have moved to the forefront of marketing, and their impact will only grow in the future. But what role will they play?
Not long ago, the standard social strategy was to amass followers, and great brands were judged by how many followers they had. Today there are better ways to use social networks. The cost of gaining a follower is ____, yet the cost to buy an engagement is a fraction of the cost. It is now more economical to simply buy audiences than to build them, so the question remains: What value does a social follower hold?
Answering this question requires a pragmatic approach. Three stakeholders derive value from the follow:
- The social platform that hosts the interaction
- The user who does the following
- The brand that is being followed
The follower’s value is different to each of the three, and only by understanding the relationship that each stakeholder has with the other can the true value of a follower be discovered.
The Social Platform
The modern social network is no longer just a place to keep up with friends, but rather it is a new way of experiencing the world. Social channels spread news faster than any news network can, and they are more relevant than any local news show. Even better, they are interactive and free. Social networks are the new NBCs and CNNs of the world. Names like Zuckerberg are the Hursts of the new era.
Yet as free services, social networks’ revenue models must be analyzed to determine the value of a follower. How does a social network that gives away its service generate scalable revenue? This is where social networks are learning from Google. Google made $43 billion in 2013 by providing a free search engine. It gives away search and sells advertising.
Google’s advertising is some of the most targeted advertising on Earth. The company can serve up hyper-relevant ads because it knows what its users are interested in and it allows brands to put the correct ad in front of a specific user at the correct time. Google has become the digital point-of-sale.
This is what social channels have to do. They have to allow brands to pay to be in a user’s social feed. Social channels have realized that the paid promotional model is the only way to scale revenue without charging users. From Q1 to Q2 2014, Facebook’s revenue shot up 60 percent, quarter over quarter, simply through the increase in advertising revenue. So just as Google makes its money by answering questions correctly, social networks will have to provide the richest and most engaging experience they can, while allowing brands to get their messages to followers.
Users’ news feeds pose a threat not only to traditional media but also to every advertising option currently available. Today, users go to Google to shop, which allows Google to sell advertising. But what happens when Facebook can do a better job and owns more of your day than Google? Your social network knows what styles you like (because it has every photo of you) and knows when you have money (based on the content of your posts). As a result, the social network can pop up the best piece of clothing you’ve ever dreamed of while you’re on your phone and allow you to buy it with one click, all without a search
This is the new immersive experience, one that supports self-discovery and allows a user to do everything he can dream of in the same interface. This is how social networks view their future role. For social networks to provide this ultimate experience, they need data. The more data they have, the better they can execute the immersive experience. So everything a person does on and off the social network will be aggregated, ensuring the social channel provides the best possible experience.
This specifically comes down to serving ads. Amazon.com recently decided to open an ad network. For each sale they make on Amazon.com, they make ten times the margin by selling the brand’s advertising for those products. The value of a follower to a social network is in the data.
When a user likes a brand, the social network captures a key piece of data it can use to target a user. A company can go onto Facebook and buy ads based on what people like. The more information they have on you, the more transparent they can be with targeted advertising. The more transparent an ad, the more they can charge for it. It is in the social platform’s best interest to have you follow brands so it can collect that data and better serve advertisements to you. The social platform owns this key data, which it can use to compete against other social channels for your advertising dollars.
When users engage with a brand, it affects them personally. Some of the value a user receives is social goodwill. This is a low-level benefit, which is achieved by their “connection to a tribe,” as Malcom Gladwell says. This connection gives users a feeling of community. The emotional goodwill users feel when their membership to the tribe is displayed on your page allows others to relate to them. So it gives them value if it isn’t shown on their page, and even more value if their membership is shown to other users on the social network.
In addition to finding value socially, a user may garner financial value as well. Some users follow brands to receive special discounts or incentives. On the whole, though, following a brand seems to be mostly about connecting to others. However, of the three stakeholders, users are not the biggest winners.
For the brand, the social follower used to mean having reliable direct access to their social feed. Instead of reaching users through email, a brand could reach them via a type of two-way engagement. This wonderland lasted for a few years, but now is long gone. The average organic reach a brand has with its followers is currently between 2 percent and 4 percent. This is expected to dwindle as more brands pay to reach their followers.
So a follower’s value for brands in the future has to be something other than push-button access to followers. Value must be looked at as an emotional connection. It is an affirmation that the company did something right and has built a connection. The question is, how valuable is this emotional connection? Measuring the relationship between emotional connection and the follower’s actions is impossible. The real value to the brand is in something much more predictable, scalable, and profitable than a subjective emotional connection.
Followers receive emotional benefit from their connections, but the brand receives data to better target users. When you log onto Facebook. 1,500 posts are ready for you. A brand doesn’t get into a person’s social feed by having them fan its page; a brand gets into their news feed by paying for ad placement. This creates a new way of looking at social networks. Marketers must answer two questions: Who do I serve an ad to? and, How do I beat out the other 1,499 ads that are paying to be served?
This is where the value of the follower comes in handy. When someone likes your page, it gives you highly relevant and hyper-targeted demographic data and allows you to market to the user’s friends and other people like them. Email addresses don’t do this.
The second question must be answered by the position of the ad in a follower’s social feed. Social SEO will come into play just as Google has done with SEO for organic search results. Social SEO will be derived from an algorithm based on lots of data points. One data point will be how likely an ad is to have a positive effect on a user’s experience. One way to determine this would be to look at the user’s data, see how well it matches others who have the same profile, and figure out how they engaged with the ad. If you have hyper-targeted ads because you have data from your fan base and you serve up great ads, it is likely that the ads will be served in more feeds at the correct time because the ads will make the social network money and help them balance revenue with a positive user experience.
The value to the brand comes from not only giving them better targeting data, but also giving them more social SEO power to make sure they can make it in front of the users they are targeting.
If there are multiple bids to place an ad in a user’s news feed, the social network’s system has to not only maximize financial value for the social channel, but also balance the effect on the user’s experience. To do that effectively, the social channels will have to measure brands and ads, just like Google does for a webpage. They will diagram the pages and have context from likes, fans, followers, sentiments, aversions, and all other natural language interpretation available. Then the social network can optimize for experience and subsequently optimize for value.
Here is a list Facebook published that outlines what it looks at to optimize a user’s news feed (2009)
- Whose profile pages you visit — and how frequently, how recently, and how often
- Who you message, and who messages you
- Whose walls you write on, and who writes on yours
- Who/what you search for
- What’s on your profile
- Who you invite to events and groups, who accepts, and who invites you
- Who you tag in photos, and who tags you
- Which News Feed items you’ve clicked on before
The brand that can get a user to fan their page and then serve ads that drive constant engagement will break through the noise.
Brands should also be aware of the quality of their fans. On social networks, the quantity of your fans is not as important as the quality. If you have 200,000 fans, but none of them are your core demographic, when you do a look-alike campaign, you are wasting money. Additionally, Facebook will remember this. If your brand shows an ad with low engagement, it will have a low-engagement score, which means it will not be shown to other people.
By having the right fans and showing the right message, you increase your social SEO through paid marketing efforts as well. So there is value in fans for this too.
Looking at the Stakeholders Together
Looking to the future, one must ask, how rare will a follower be? Currently when a user is new to a social network, they don’t really understand how much data will be coming at them, so they may follow lots of people, brands, and things. In 2014, 74 percent of all Internet users used social media, and the average person spent three hours per day on social media. So at the rate of three hours per day, it would take only nine years for 74 percent of the population to become experts at social media (experts determined by using the 10,000-hour rule). This means when people know what to expect and how to manage a news feed, they will be less likely to follow brands that do not provide them with value or that clutter up their news feed, just like they have done with email. So it will be harder for brands to gain followers in the future, just as email addresses have become harder to obtain.
The result of the relationships between the social platform, the user, and the brand is social experience. Experience is the new measure for future social engagement, just as SEO is the current measure for search results.
When a brand engages a user, a like has value, a fan has value, and a new follower has value. However, engagement isn’t captured by the number of likes a brand has, but by the overall quality of the experience it provides. To the social networks and brands, a fan is a new piece of the social SEO equation, one that they will need to master. Even though brands can buy direct access, it still behooves them to create experiences that people want to be a part of. When people engage with what brands offer, brands will be rewarded by users’ follow, fan, or subscriber status, not to mention all the data and long-term SEO benefits they will gain. Do not underestimate the fan.
Originally published at mathewsweezey.com on October 13, 2014.