Posted: March 5th, 2022

REPRINT R1702H PUBLISHED IN HBR MARCH–APRIL 2017

REPRINT R1702H PUBLISHED IN HBR MARCH–APRIL 2017

ARTICLE MARKETING What’s the Worth of a Like? Social media endorsements don’t work the best way you would possibly suppose. by Leslie Okay. John, Daniel Mochon, Oliver Emrich, and Janet Schwartz

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

http://hbr.org/search/R1702H
WHAT’S THE VALUE OF A LIKE? SOCIAL MEDIA ENDORSEMENTS DON’T WORK THE WAY YOU MIGHT THINK.

Manufacturers spend billions of a 12 months on elaborate efforts

to determine and keep a social media presence. Consider the live-streamed video of a person setting a world document

by skydiving from 128,000 toes (Crimson Bull) and the unusual tweets despatched from a supposedly

hacked Twitter account that in actual fact originated with the corporate itself (Chipotle). HOL

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BY LESLIE Okay. JOHN, DANIEL MOCHON,

OLIVER EMRICH, AND JANET SCHWARTZ

FEATURE WHAT’S THE VALUE OF A LIKE?

2  HARVARD BUSINESS REVIEW MARCH–APRIL 2017

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG

MARCH–APRIL 2017 HARVARD BUSINESS REVIEW three

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

http://hbr.org
Fb is the popular platform: 80% of Fortune 500 corporations have lively Fb pages. Every day huge quantities of brand-generated content material—arti- cles, images, movies, and so forth—seem on these pages and on different social media platforms, all designed to entice individuals to comply with, interact with, and purchase from manufacturers. Even the U.S. State Division appears enam- ored of buying followers, having spent $630,000 from 2011 to 2013 to garner Fb likes.

Entrepreneurs typically justify these invest- ments by arguing that attracting social me- dia followers and growing their publicity to a model will finally enhance gross sales. In response to this logic, recruits who socially endorse a model by, for instance, liking it on Fb will spend more cash than they in any other case would, and their endorsements will c ause their associates (and associates of associates) to buy—making a cascade of recent enterprise. At first look the proof appears to help this rationale: Many manufacturers have found that prospects who work together with them on social media do spend more cash than different prospects. A latest in- fluential research by comScore and Fb discovered that in contrast with the final inhabitants, individuals who appreciated Starbucks’s Fb web page or who had a Fb good friend who appreciated the web page spent eight% extra and transacted 11% extra often over the course of a month.

However that research and others prefer it comprise a deadly logical flaw: They confuse trigger and consequence. It’s attainable that getting individuals to comply with a model on social media makes them purchase extra. But it surely’s additionally attainable that those that have already got constructive emotions towards a model usually tend to comply with it within the first place, and that’s why they spend greater than nonfollowers. In 23 experiments carried out over the previous 4 years and involving greater than 18,000 individuals, we used an A/B testing methodology to discover an important counterfac- tual: what followers would have accomplished had they not adopted a model. Given the thousands and thousands of in advertising budgets that movement to social media at many corporations, the excellence isn’t trivial. It has enor- mous implications for entrepreneurs’ useful resource alloca- tions and for the way they handle their manufacturers’ social media presence.

In our experiments, we step by step added com- plexity to check 4 more and more interactive methods through which Fb would possibly have an effect on prospects’ conduct.

First, we examined whether or not liking a model—that’s, passively following it—makes individuals extra prone to buy it. Second, we examined whether or not peo- ple’s likes have an effect on their associates’ buying. Third, we examined whether or not liking impacts issues apart from buying—for instance, whether or not it could persuade individuals to have interaction in healthful behaviors. Lastly, we examined whether or not boosting likes by paying Fb to show branded content material in followers’ information feeds

inc reases the possibilities of significant behav ior change. We selected to make use of Fb in our experi- ments as a result of it’s the dominant social community, however we consider that our findings apply to different widespread platforms as properly.

The outcomes had been clear: Social media doesn’t work the best way many entrepreneurs suppose it does. The mere act of endorsing a model doesn’t have an effect on a buyer’s conduct or result in elevated buying, nor does it spur buying by associates. Supporting endorse- ments with branded content material, nonetheless, can have sig- nificant outcomes. And on condition that social media pages are gathering locations for loyal prospects, they will provide manufacturers a singular supply of buyer intelligence and suggestions from an important cohort. Armed with this information, entrepreneurs can construct new, extra success- ful social media methods.

IN BRIEF

THE QUESTION Manufacturers spend billions of every year on lavish social media campaigns. However do these campaigns enhance income?

THE PROBLEM Entrepreneurs typically confuse trigger and consequence. It’s attainable that getting individuals to comply with a model on social media makes them purchase extra—but it surely’s additionally attainable that those that have already got constructive emotions towards a model usually tend to comply with it within the first place, and that’s why they purchase extra.

THE OPPORTUNITY To get probably the most out of social media efforts, corporations should mix “push” and “pull” advertising, supporting likes with branded content material.

THE MERE ACT OF LIKING A BRAND ON FACEBOOK DOES NOT AFFECT A CUSTOMER’S BEHAVIOR OR INCREASE PURCHASING, NOR DOES IT SPUR PURCHASING BY FRIENDS.

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four  HARVARD BUSINESS REVIEW MARCH–APRIL 2017

FEATURE WHAT’S THE VALUE OF A LIKE?

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG

MARCH–APRIL 2017 HARVARD BUSINESS REVIEW 5

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

http://hbr.org
6  HARVARD BUSINESS REVIEW MARCH–APRIL 2017

FEATURE WHAT’S THE VALUE OF A LIKE?

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

TESTING THE EFFECTS OF LIKES Primary psychological ideas give cause to suspect that liking a Fb web page may certainly change be- havior and enhance gross sales. Analysis has proven that individuals expertise “cognitive dissonance” when their actions don’t mirror their beliefs, so it will stand to cause that a social media consumer who endorses a model on Fb can be extra doubtless to purchase it. But that’s not what we discovered.

In one in all our first research, carried out by two of us (Leslie John and Oliver Emrich) and our Harvard Enterprise Faculty colleagues Michael Norton and Sunil Gupta, half the members had been invited to love a brand new cosmetics model on Fb; most accepted. The opposite half didn’t obtain this invitation. All partic- ipants had been then given coupons for a free pattern— redemption would function a proxy for buying. Members of the 2 teams had been equally prone to re- deem the coupon; it didn’t matter whether or not they had been invited to love the Fb web page or not. This discovering held in subsequent research, through which we in- creased the size of time between proffering the invitation to love and lengthening the coupon provide; it additionally held after we ran the experiment with a wide range of new and current manufacturers. Throughout 16 research, we discovered no proof that following a model on social media adjustments individuals’s buying conduct.

In our second set of experiments, we sought to find out whether or not liking a web page influences the be- havior of on-line associates. When individuals like a model on Fb, their endorsement is usually broadcast to a subset of their community. Any subsequent engagement with the model—likes, posts, feedback, and shares— additionally seems in a few of their associates’ information feeds. In basic advertising, word-of-mouth endorsements by friends have been proven to extend gross sales. However the worth of endorsements could also be decrease on social media, for a few causes. First, on many platforms, together with Fb, Twitter, and Instagram, following doesn’t assure model publicity for both endorsers or their associates. Fb’s algorithms decide what con- tent seems in a consumer’s information feed, and a consumer’s liking of a model is broadcast to solely a only a few associates (with out this intervention, customers can be uncovered to an aver- age of 1,500 posts day by day). Second, some Fb customers seem to love manufacturers indiscriminately or for varied one-off causes—to get a reduction, say.

To check the results of social media endorsements, we requested 728 individuals who had lately appreciated a model for the e-mail addresses of three associates. We despatched every good friend a coupon for one of many model’s merchandise, various the data offered concerning the referral. In every

group, one individual was advised that his or her good friend appreciated the model within the standard, offline sense and had despatched the coupon. The second individual was advised that his or her good friend appreciated the model on Fb and had despatched the coupon. The third individual was advised solely that his or her good friend had despatched the coupon; individuals on this class made up the management group.

We then in contrast coupon redemption charges among the many three classes. We discovered that 6% of these advised about an offline endorsement redeemed the coupon, whereas simply four% of these advised a few Fb like did

YOU’LL NEED: A METRIC. What’s your aim in buying likes? Is it to extend gross sales, change offline conduct, or accomplish one thing else? Your metric ought to mirror conduct that’s measurable. For some metrics, equivalent to gross sales, measurement is fairly easy; for others, equivalent to model attitudes, chances are you’ll must do further work, equivalent to administer a survey.

AN INVITATION METHOD. You might want to invite individuals to love your web page. One easy manner is to acquire e-mail addresses of individuals in your goal market.

THEN FOLLOW THESE STEPS: ACQUIRE LIKES. Invite half your pattern to love your web page; that is your “remedy group.” The opposite prospects kind your management group. File the group to which every buyer is assigned.

CONFIRM YOUR ASSUMPTIONS. Verify to see whether or not the liking induction labored—it is advisable to be sure that a very good chunk of individuals took you up on the invitation. You may approximate the quantity by trying on the enhance in your Fb followers on the time you issued the invitation.

ADVERTISE. Run some promoting on Fb to show your new recruits to your advertising messages. You are able to do this by paying to advertise posts.

CHECK YOUR RESPONSE. Measure the conduct you outlined up entrance. Say it’s gross sales: If the common spend of these within the remedy group is larger than the spend of these within the management group, the distinction is the worth of a like. In fact, your outcomes will comprise some “noise”; for instance, you would possibly miss the purchases of people that try utilizing an e-mail handle that’s completely different from the one you have got on file. To extend accuracy, intention for a big pattern measurement and be sure that your e-mail record is as present as attainable.

Entrepreneurs typically discover it arduous to show the ROI of social media investments. Right here’s a simple solution to quantify the worth of recruiting individuals to love your Fb web page.

MEASURING THE RETURN ON FACEBOOK LIKES

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MARCH–APRIL 2017 HARVARD BUSINESS REVIEW 7

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

http://hbr.org
so. And the redemption fee among the many management group was 5%; that’s, liking a model on Fb had no enhancing impact on the buying habits of associates.

THE DIVIDE BETWEEN DIGITAL AND REAL-WORLD BEHAVIOR In our closing set of experiments, two of us (Daniel Mochon and Janet Schwartz) and Duke College’s Dan Ariely partnered with Karen Johnson, an exec- utive at Discovery Vitality. An insurance coverage firm primarily based in South Africa, Vitality of- fers its prospects a complete wellness program. Folks earn factors for partaking in healthful behaviors, equivalent to exercising, buy- ing nutritious groceries, going for routine physicals, and getting vaccines; the factors will be redeemed for rewards. The corporate needed to know whether or not getting custom- ers to love its Fb web page would have an effect on these behaviors. To seek out out, we invited all new Vitality prospects to take part in a web-based survey about Vitality and Fb, throughout the course of which a randomly se- lected group was invited to love Vitality on Fb, with the others forming a management group. We monitored the factors accumu- lated by prospects in each teams over the following 4 months.

By advantage of getting appreciated Vitality, the cus- tomers within the first group may interact with the corporate on its Fb web page—an area through which it invests closely. The web page has in- novative branded content material, together with an app that lets individuals share their well being success tales, ask ques- tions of well being specialists, and take part in polls about upcoming health actions. However until prospects deliberately go to the web page, this content material is unlikely to look of their information feeds, even when they’ve appreciated the corporate; Fb’s algorithms will most likely filter it out. Due to this fact, we suspected that Vitality’s in- vestment in branded content material on its web page could be for naught. Certainly, after we in contrast the 2 teams of members, we discovered no distinction in conduct; those that had been invited to love the Fb web page accrued no extra factors than the others. As soon as once more, merely liking a web page didn’t change conduct. Put one other manner, liking an organization that provides flu photographs doesn’t translate into getting a flu shot.

UNLOCKING THE POWER OF LIKES The excellent news is that there’s a solution to convert likes into significant conduct, and it’s straight out of the 20th-century advertising playbook: promoting. Every

12 months Fb collects greater than $22 billion in advert income. Most of that comes from manufacturers searching for to avoid the platform’s algorithms by paying to ensure that their content material will likely be prominently exhibited to massive numbers of customers.

A follow-up experiment with Vitality, utilizing the liking and management teams from the primary experiment, proved that this method will be efficient. Over a two- month interval, Vitality paid Fb to show two posts per week to members of the liking group. This made

a distinction: Contributors on this group now earned eight% extra factors, on common, than individuals within the management group. Contemplating how difficult it may be to get individuals to go to the fitness center, purchase healthful meals, and under- take different wellness measures, that’s a profound consequence.

What does all this imply for entrepreneurs? As social media swelled in recognition over the previous 10 years, many predicted a revolution in advertising technique. It wasn’t unusual to listen to concerning the finish of “push advertising” (through which manufacturers promote and promote their items and providers) and the rise of “pull mar- keting” (efforts to attract prospects in via social media and different channels). “Extra judo, much less karate” grew to become a preferred aphorism. However our analysis sug- gests that advertising on social media will likely be inef- fective if it makes use of solely pull ways. The trendy social media advertising playbook ought to mix new and conventional approaches.

Make likes give you the results you want. Fb doesn’t cur- rently give corporations the choice of paying it to high- mild the posts of engaged prospects, one thing our analysis suggests may present important worth by

THERE IS A WAY TO CONVERT LIKES INTO MEANINGFUL BEHAVIOR, AND IT’S STRAIGHT OUT OF THE 20TH-CENTURY MARKETING PLAYBOOK: ADVERTISING.

eight  HARVARD BUSINESS REVIEW MARCH–APRIL 2017

FEATURE WHAT’S THE VALUE OF A LIKE?

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

influencing conduct. Savvy corporations may overcome this impediment by monitoring their social media chan- nels for eloquent endorsements and integrating these endorsements into their advertising messages. The athletic attire model Lululemon collects favorable customer-generated content material by monitoring hashtags (equivalent to #thesweatlife) and retweets it. The style retailer Free Folks provides prospects’ Instagram pho- tos to its product pages. And in a vacation promotion, Lamar Promoting’s billboards displayed images that individuals had tagged with #ThankfulThisHoliday. Extra manufacturers may additionally undertake the more and more widespread follow of “seeding” social endorsements by paying influencers to attempt the model and ship endorsements to their followers. This tactic has spawned a number of new platforms, equivalent to ReadyPulse, that mechanically match manufacturers with acceptable influencers.

Make endorsements significant. One other rea- son why liking a model doesn’t affect on-line associates is that liking is a really weak endorsement; our analysis reveals that it doesn’t carry the identical weight as a real-world suggestion. But analysis by MIT’s Sinan Aral and colleagues has proven that en- dorsements, and referrals extra usually, can spur motion. One experiment demonstrated that individuals had been extra prone to obtain and use an app if a good friend really useful it than in the event that they had been merely advised that their good friend had downloaded it. Different experi- ments point out that “deeper” social media endorse- ments may shut the effectiveness hole between real- world and digital suggestions. For exam- ple, a research discovered that Fb posts indicating that a Fb good friend is utilizing a product—not simply that she or he likes it—enhance the probabilities that a member will use the product too. The impact is pronounced when product customers ship their associates private mes- sages of advice. Nevertheless, encouraging this stage of engagement with a model will be tough and costly.

Our analysis means that on the subject of high- lighting prospects’ engagement, manufacturers will discover it fruitful to decide on on-line postings and different user- generated content material which can be extra inventive and meaning- ful than easy likes. For instance, TripAdvisor informs customers looking a resort which of their Fb associates have booked there. Within the political realm, a marketing campaign to extend voter turnout discovered that telling individuals a good friend has voted makes them extra prone to vote. A phrase of warning, although: This tactic can elevate privateness points. Fb discontinued its social advertisements—ones displaying the profile photos of associates who just like the product at hand—partially due to privateness considerations.

Use “pull” advertising to search out your greatest custom- ers, and hearken to them. One cause Fb adver- tising will be efficient is that a model’s social media

web page reaches a extremely fascinating viewers; likes illu- minate a path for focusing on advertisements. But even when a model decides to not spend cash promoting, it could use its social media channels to achieve intelligence from its most loyal prospects. This needn’t entail recruit- ing new followers via flashy content material and different lures; in actual fact, such ways would possibly backfire by attracting people who find themselves not strongly hooked up to the model. Corporations pursuing this feature ought to favor natural progress, letting prospects search out the model. Virtually by definition, the individuals who go to the difficulty of find- ing a model on social media will likely be its most devoted, and thus most precious, prospects. As a gaggle, these prospects are an incredible asset: They’ll enthusiastically present suggestions to enhance product improvement, administration, and supply; defend the model in opposition to unjustified complaints; and be early adopters of and evangelists for brand spanking new choices.

For instance, Lego makes use of its social media channels to assemble prospects’ concepts for brand spanking new merchandise and to tout new product strains. MyMuesli, a German maker of cus- tomizable granola, requested prospects to publish pictures of their very own granola mixes on Instagram and subse- quently bought a few of the customer- created merchandise via its web site. The Dutch airline KLM clearly makes use of its Twitter account as a buyer suggestions software; along with responding to prospects’ tweets, the airline reveals that it’s listening by prominently posting its estimated response time in its Twitter header (and updating it each 5 minutes). Understanding that their voices will likely be heard could make prospects extra keen to supply info and would possibly even trigger them to be extra civil once they (inevitably) have complaints.

AS SOCIAL MEDIA has grown as a advertising channel, so too has enthusiasm for its potential to drive gross sales. But a latest survey of 427 entrepreneurs at U.S. corporations confirmed that 80% are unable to quantify the worth of their social media efforts. And in a research of Fortune 500 corporations, 87% of CMOs acknowledged that they will’t doc that social media creates new custom- ers. Our analysis helps clarify why entrepreneurs are frus- trated by social media—they’re utilizing it the fallacious manner. Amplifying efforts with promoting can present larger returns on funding whereas creating a chance to attach with the most-loyal prospects.

HBR Reprint R1702H

LESLIE Okay. JOHN is an affiliate professor of enterprise administration at Harvard Enterprise Faculty. DANIEL MOCHON

is an Helpant professor of selling at Tulane College’s Freeman Faculty of Enterprise. OLIVER EMRICH is a professor of administration and social media on the Johannes Gutenberg College of Mainz. JANET SCHWARTZ is an Helpant professor of selling on the Freeman Faculty of Enterprise.

FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG

MARCH–APRIL 2017 HARVARD BUSINESS REVIEW 9

For the unique use of Okay. Tang, 2022.

This doc is permitted to be used solely by Katherine Tang in MGT 247 Promoting & Promotions Winter 2021-22 taught by Margaret Campbell, College of California – Riverside from Dec 2021 to Apr 2022.

http://hbr.org/search/R1702H
http://hbr.org

——

R1702H REPRINT PUBLISHED IN HBR MARCH–APRIL 2017

ARTICLE SEARCH ENGINE MARKETING What Is the Price of a Like? Social media endorsements will not be as efficient as you’ll count on. Leslie Okay. John, Daniel Mochon, Oliver Emrich, and Janet Schwartz contributed to this work.

2022, for the only real use of Okay. Tang.

This paper is just for Katherine Tang’s use in MGT 247 Promoting & Promotions Winter 2021-22, taught by Margaret Campbell on the College of California – Riverside from December 2021 to April 2022.

http://hbr.org/search/R1702H

WHAT IS THE IMPORTANCE OF A LIKE? SOCIAL MEDIA ENDORSEMENTS DO NOT WORK AS YOU MAY BELIEVE.

Manufacturers spend billions of every year on advanced advertising campaigns.

to create and maintain a social media presence Consider the live-streamed video of a person setting a world document

by skydiving from

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