Why Facebook pages are a bust for brands

Why Facebook pages are a bust for brands

ON NOVEMBER 13, 2013

Coca-Cola, Red Bull and Converse are the top three brands on Facebook, combining for more than 150 million fans. It’s a staggering figure, but they really can’t afford to have any fewer, given that only one out of every 15,000 fans responds to posts — slim odds. That is why Facebook pages, along with other obligatory social strategies, have largely been a bust for meaningful, two-way interactions between brands and consumers. They’ve just become a place where brands collect their customers to ignore them, right alongside the people who just wanted that free iPad. Facebook brand pages are not built to engage more than a tiny fraction of fans, and marketers need to understand this isn’t likely to change.Here are five cold, hard truths about Facebook brand pages and why the 1 percent of the 1 percent will never grow:

1. Publishing  interaction

An online publisher of business courses recently told me that his company’s lessons were interactive, because you had to click “next” to go from one screen to the next. Sadly, he wasn’t kidding. After a brand puts up a new Facebook post, users can “Like,” comment on or share the material. On one hand, each one takes just a few seconds. On the other hand, each one takes just a few seconds — how much of a real connection can you have in a matter of seconds?

When evaluating engagement, Facebook places the greatest value on comments because they take the longest amount of time to complete. In a recent review of more than 10,000 comments on posts from top brands, the average comment was nine words long. These comments ranged from full sentences to LOLs, smiley faces and completely off-topic responses like, “I like pop tarts.”

This isn’t engagement. It’s publishing. The fact that people can simply respond doesn’t make it truly interactive, meaningful or effective for brands. Users know this, and they know that they’ll never hear back from the brand or other users, which is why the vast majority never respond.

2. Spray and pray

You’re in a crowded public setting with an emergency. Do you: A) yell for someone, anyone, to call 911, or B) look at one specific individual and tell him or her to call 911? Choice B) is the one that will save your life. Social psychologists call it “diffusion of responsibility,” the greater the number of people present, the less likely they are to help an individual.

On Facebook, posting a status update and asking (or hoping) for “Likes,” shares, and comments is like calling out for someone to help you. You’re saying the same thing at the same time to the same people in the same way. Few, if any, respond. You need to speak to them directly and personally. While they can’t speak to each person in a purely one-to-one conversation, brands can share personal communication with their followers through targeting and segmenting posts to users based on individuals’ unique interests, “Likes,” response patterns, and other useful data. When you speak to people in highly specific and personalized ways, response rates are higher and more reliable.

3. Welcome, valued customer 0148382!

Imagine meeting one of your favorite celebrities. You excitedly introduce yourself and say you’ve always liked them. They pull out a piece of paper with a bunch of tick marks on it and, without a word, add another. Then they leave.

This is what it’s like to become a fan of a brand on Facebook. You go to their page to become a fan. You click the “Like” button and “Like” now says “Liked.” A check mark also appears. The end.

Facebook doesn’t allow brands to send welcome messages – no personal acknowledgement whatsoever. Of course brands want to say hello. If you join a mailing list, subscribe to a site or do anything with a brand, they’re quick to respond with a thank-you and “welcome aboard.” Facebook ensures no such correspondence occurs, even if brands and fans would like it to. Brands need an app to make this happen (with users agreeing to share contact information).

When Facebook thwarts the most fundamental attempts for two parties to start a relationship, it can’t actually be facilitating relationship building.

4. Some ignoring is free; the rest will cost you

Let’s say you’re throwing a party. You rent a private room at a popular bar and invite friends to attend. You also invite some regulars at the bar to hop in to your party. Just as you start talking to all your party attendees, the bartender says you can only talk to 16 percent of your guests. If you want to talk to any of the others, he’ll need a quick swipe of your credit card. This is essentially how Facebook pages work, limiting visibility of posts to around 16 percent of fans.

To be fair, Facebook has every right to charge you for using company pages. After all, you’re using its platform, and Facebook has hundreds of millions of users who can somewhat easily slide over to your brand page to become fans. You get to talk to some of them for free, and you have to pay to talk to the others.

This wouldn’t be the case if brand pages were truly meant for engagement. Instead, they’re advertising tools. Marketers just need to recalibrate their expectations. If they continue to think of Facebook pages as engagement tools, they’ll continue to be frustrated by a lack of fan interaction.

5. Look at how many people ignore us!

If there’s one type of fan that brands have on Facebook, it’s fans who didn’t win an iPad. This is more the marketers’ fault than Facebook’s. During Facebook’s largest growth period of fan acquisition, brands liberally used fan gates to encourage users to “Like” their page. Brands made it worse with a proliferation of sweepstakes: “”Like” us to win an iPad.” Facebook wasn’t directly culpable here, beyond making it easy to add fan gates. In the end, engagement is the brand’s prerogative, and the fact that these tactics yield low engagement from fans is one that brands have to accept before proceeding.

Yes, big fan counts are important signals to senior managers and competitors who want to know if you have a presence on Facebook, but brands know that value is driven from actual interaction and user participation on the page itself. With subsequent interactions not extending beyond a tiny sliver of fans, a large fan count is really a signal of just how many people you’ve gathered to ignore you.

So, should you be on Facebook or not?

Results that don’t meet expectations are results nonetheless. Many brands get tremendous value out of Facebook, though not from high levels of relationship building. Brand pages keep superfans updated in ways that email newsletters, company websites and more traditional communication channels do not. Brands gain mindshare and awareness and add social proof to sponsored posts, ads and other Facebook properties (e.g., company, product and event pages). Brand pages also help with one-off activities like distributing coupons, centralizing events, and reinforcing other marketing efforts (e.g., YouTube videos, sales announcements, etc.).

However, marketers need to understand what a Facebook brand page is and is not: It’s a publishing and advertising platform with limited relationship building capabilities. Too many brands expect solid engagement from Facebook. In the end, brands get various forms of participation from the “1 percent of the 1 percent,” some beneficial and some not. But Facebook pages simply don’t provide the type of customer engagement and two-way conversations social media first promised years ago.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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