I wrote last week on Brands and Social Media that 33% of Facebook users have become fans of brands.

That sort of number begs a follow-up question to be asked. What is the value of a Facebook fan? Well according to two companies called Syncapse and Hotspex, the average value of a Facebook fan for the twenty largest corporate brands on Facebook is $136.38. (see PDF of report).

Now the Syncapse/Hotspex calculation is very different from that of Vitrue, a social media company. Last year I wrote about a new study by Vitrue on How Much Is A Facebook Fan Worth? Vitrue’s calculation was that the average Facebook fan is worth $3.60 in earned media. Vitrue calculated the value of a Facebook fan based on impressions generated in the Facebook news feed. It then applied display banner advertising pricing to the number of Facebook fans you have and viola, an instant metric.

The Syncapse/Hotspex formula took a very different approach. Rather than compare a Fan to display advertising, they looked at a series of attributes of a Facebook fan: Product Spending, Brand Loyalty, Propensity to Recommend, Brand Affinity and Earned Media Value

• Product spending — Facebook fans spend, on average, $71.84 more than non-fans over a two-year period.
• Loyalty (meaning ability to influence and promote brand loyalty within a target audience) — Facebook fans are 28% more likely to continue using a brand than consumers who are not fans on Facebook.
• Propensity to recommend — 68% of fans are “very likely” to recommend a product to family and friends (as opposed to 28% of non-fans).
• Brand affinity — 81% of fans feel a connection to the brand (versus only 39% of non-fans).

Put together these attributes in a formula and you come up with a value of $136 per fan.

So who is right: Syncapse/Hotspex or Vitrue?

Not sure. I think the value lies somewhere between $3.60 and $136.38. The Vitrue calculation I believe is too simplistic. It treats all fans the same and treats them like a regular marketing campaign. I don’t think that is true. The Syncapse/Hotspex calculation had the earned-media component of a fan’s value at $6.79, nearly double that of Vitrue.

The Syncapse/Hotspex formula sounds nice, but other studies have shown that Facebook friends, for a very large degree, are already familiar with, and have a positive opinion of, the brand they are friends of. What is the value of that consumer off Facebook? It is higher or lower than $136.38.

Social media marketing has proven to be very successful for B2C marketing, but how is it for B2B marketing?

Not that good according to a study by lead generation provider LeadForce1. LeadForce1 looked at where visitors to B2B Websites from social media sites like Facebook, Twitter, LinkedIn and Wikipedia went.

There conclusion was that traffic from the top social media sites were generally uninterested in product or contact pages, suggesting they were not in the market for the company’s products or services.

Visitors from Facebook were most likely to check out a company’s “about” page or blog posts.

Twitter-directed visitors had similar behavior, with blogs coming out on top.

In addition, their research showed that most site visitors referred from Facebook or Twitter visited only one page before leaving. What this suggests to me is that if you are targeting social media users, that the landing pages that you are sending them too should be specifically created for them. If you are sending traffic to a generic home page, then your campaign will never be successful.

The LeadForce1 research so that LinkedIn users tended to be interested in “careers” pages (no surprise there) and that Wikipedia visitors were most likely to be carrying out product research (probably because the Wikipedia page links to a product page.

Following up on my post from earlier this week on Brands and Social Media and how social network users interact with brands.

At the end of that post I mentioned that my Twitter stream is full of people asking for brand recommendations and it seems that this is not that unusual. According to an April 2010 study by ROI Research, 33% of active Twitter users, at least once a week, share opinions about companies or products, while 32% make recommendations and 30% ask for them.

“Social networking has greatly contributed to the shift from strict consumerism to more lively, two-way participation between brands and everyday customers,” said Daina Middleton, CEO of Performicst. “It’s a groundswell of technology-enabled word-of-mouth, and many of the brands involved in these active discussions are effectively satisfying their fans.”

Social media has become such an important marketing channel for brands that it is not surprising to read that a February 2010 survey by Chadwick Martin Bailey showed that 33% of Facebook users have become fans of brands.

Read that again. A third of Facebook users have became fans of a brand. That is pretty amazing to me. And leads me to ask the obvious follow-up question: Why?

Well coupons are by far and away the most popular driver of brand interactions in social networks. After that, people say that learning about sales and new products is also a strong motivator for them to fan brands.

Those two actions (coupons and learning) are usually taken by people who are already aware of your company/brand. But if you are not aware of a company/brand, how do social network users research?

Interestingly, they do not tap into their existing social network of friends for advice or recommendations. According to a study by PowerReviews and the e-tailing group, only 3% of online buyers said they sought recommendations from social network friends first, compared with 57% who started with search engines.

“While people trust their friends for advice and use social networks as part of their research process, social networks are long way from replacing search, if they ever will, as a source of information leading to a purchase” Said Debra Aho Williamson, eMarketer senior analyst.

I find this data most interesting as my Twitter stream is full of people asking for product recommendations. Am I that much of a minority here? Do you ask your social network friends for brand recommendations?

Great interview on eMarketer with Pete Blackshaw, vice president of Digital Strategic Services at Nielsen, and his colleague, Maya Swedowsky on how to deal effectively with customer feedback via social media.

I thought the interview was very interesting, especially around how to deal with negative feedback. Excerpts from the interview is below:

eMarketer: What causes negative buzz to escalate into something big?

Mr. Blackshaw: It depends on what you might characterize as “plausible believability” or the extent to which others feel like they have direct or relevant experience, even something that approximates it. So a lot of what you see is, in fact, consumers seconding the emotion. They can relate to that issue. In some cases, it may move in a really irrational, sometimes unfair, direction. But quite often, especially in retail, there are quite a few consumers who truly have relevant experience. So if they feel like they can relate to the emotional pain, they’ll pile on. Now, if the criticism is unfair, it’s not uncommon for other consumers to call that out. There is a bit of a self-correcting mechanism when the issue goes too far.

When you do have a consensus of negatives, that’s a big watch-out. We typically will take that data and go back to the clients and often ask really hard questions about company operations, mismanaged expectations, depth of training of employees, because sometimes that can trigger a lot of the negatives. We do look at this with the assumption that there typically is an issue that needs to be resolved.

eMarketer: Do consumers post negative comments online other than to get a direct response from a retailer?

Mr. Blackshaw: A lot of times they’re not looking for a response. Again, that’s what’s so important, even curious, about the social media space. We sometimes have this stereotype that consumers are just looking for coupons or free stuff or handholding by the company. There’s definitely a lot of truth to that. Today, consumers get a lot of validation and satisfaction and a sense of community with other consumers around a common experience. Marketers really need to understand that. It’s one big reason why the CRM space has pushed into this more informal zone of feedback where consumers aren’t necessarily providing direct feedback, but they’re talking around the company. It still merits interventions of sorts, but it’s a completely different dynamic. It’s really important to understand what is truly motivating that consumer.

eMarketer: What factors should retailers consider in deciding how to respond to a negative comment online?

Ms. Swedowsky: If that person has come to one of the company’s social media outposts, like Facebook or Twitter, to make that comment, that the retailer should respond to that and should try to respond to really most comments that are posted directly on the Facebook fan page or directed at their Twitter account, because it’s clear that that person is making their statement or their stance known and presumably wants a response. But there are conversations happening everywhere.

So companies like Best Buy are really at the forefront of proactively monitoring with their Twelpforce customer service program. They really are one of the first retailers to be so proactive. At the same time, even if they have 1,200 people, let’s say, doing that, they can’t necessarily answer everyone. So they need to prioritize. If it is someone who had a very specific negative experience at a store and they’re complaining about that, then that person might be more straightforward to address versus someone who’s just airing general negativity. At some point you need to prioritize simply because there is so much discussion happening.

Mr. Blackshaw: It’s all how you provide context, how you measure the influence. If it’s an issue where you historically have shown volatility, you may want to dial up. Sometimes there’s a real cost of not engaging and responding. Sometimes the response is just how you make sure that your Website has content that might thoughtfully deal with their issue.

eMarketer: How are retailers using YouTube to respond to consumer complaints?

Mr. Blackshaw: Brands are leveraging every available communications outlet to clarify and correct issues, whether it’s an auto manufacturer seeking to deal with a recall or whether it’s a retailer dealing with all sorts of nasty-grams because they got things wrong on Black Friday. What’s powerful about rapid response tools like YouTube is they can often speak to emotion. You’re looking at the executive. They’re giving a very heartfelt apology or clarifying an issue. Facebook is a 24/7 platform. Twitter is always on. So they afford you these additional outlets to deal with the issue.

Keep in mind that most companies have call centers that are living in the Neanderthal age where they close at 5:00 p.m. They typically don’t operate in the off hours. That’s not good enough in a world where the consumer doesn’t care. They will throw the nasty-gram at any time of the day. So making sure that you hedge your bet and have these opportunities to engage and respond across all these different platforms 24/7 is a really good strategy.

Some interesting stuff.  Totally agree with the call center quote. Customer service has became 24/7 and you need to respond quickly to customer feedback.

According to a new study by Vitrue the average Facebook fan is worth $3.60 in earned media. Vitrue calculates the value of a Facebook fan based on impressions generated in the Facebook news feed. It then applies display banner advertising pricing to the number of Facebook fans you have and viola, an instant metric.

From the Vitrue blog:

This means our 1 million Fan Facebook Page can average 1 million impressions with a single post to the wall. Factor frequency; a two post per day strategy would garner approximately 60 million impressions per month. Now here’s a metric all marketers are familiar with – we’ve been buying impressions since the dawn of the Internet.

These impressions are practically free, similar to earned media – that we are all familiar with. So our last step is to place a CPM value to our earned media. We factored a very conservative $5 CPM – how much would you pay for highly targeted impressions?

This final assumption gives our 1 million fan page $300,000 in earned media per month or $3.6 million annually.

Here is a recap of the formula used to calculate the valuation:

1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000
$300,000 x 12 months = $3.6M
$3.6M / 1M fans = $3.60

What do you think of this formula? Is it an accurate way to measure the value of Facebook fans or is it simply an agency trying to put a metric on social media marketing?

Great interview with Roger Drake, senior vice president of marketing and communications for Morton’s The Steakhouse by Chain Leader on how this restaurant chain uses social media. What I found really interesting from the interview was how Morton’s uses all different social media channels like YouTube, Facebook and Twitter to read different audiences.

YouTube

What are the benefits of YouTube?
It is a great way to get your message out. Whether it’s a special event or a promotion, we are trying to post more and more video on YouTube and other Internet sites.

Give me an example.
We are doing a celebrity-server series. These are fund-raising events where we close the restaurant for a night and professional athletes actually serve the guests. We had one recently with Larry Fitzgerald and the Arizona Cardinals. Kurt Warner offering pepper for steaks. Beanie Wells was pouring wine. Larry was running entrees. There’s an 8-minute video on YouTube highlighting the event.

This is a great example of a video that works on Facebook. Morton’s was able to get almost 3,000 views of its video because the video focuses on the event not the restaurant.

Facebook

You also promote events on Facebook.
Yes. For Valentine’s Day we asked guests on Facebook to send us photos of their Valentine’s Day experience at Morton’s. We got more than 50 photos. One couple has recently got engaged [in the restaurant]. That was a great way to bring our Facebook page to life.

Lots of photos seem a perfect way to show off the restaurant.
We are looking at doing more of that kind of thing with special occasions. Mothers Day is coming up, and we will take photos of groups. We will be saying, “Hey, go to Morton’s Facebook page, and you can post your favorite Mother’s Day Morton’s dinner photos if you like.”

Morton’s is building up its community on Facebook by not directly selling to fans. It is being part of the community. Morton’s is using social media to position itself as more than a steakhouse. It is where people go to get engaged, it is the place to take your mother for Mother’s Day.

Twitter and Blogging

Which social-media tool does the best job of providing feedback?
Probably Twitter. Just because it’s only 140 characters there’s more frequency on Twitter. You can engage in a conversation where there are a lot of exchanges back and forth. We are on our Twitter account on a daily basis. Facebook allows you to do that, too.

These are the people who follow you on Twitter, correct?
Yes. We offered them bar bites in our bar. We encouraged people to tweet from the event. It drove bar business. We have also done other events at other Morton’s. We call these events Burgers for Bloggers. We’ve served mini Prime Cheeseburgers.

How do you get the word out?
Through our Twitter account and sometimes on Facebook. We are not using the local PR firm channels for these events. It’s strictly through social media.

What type of bloggers show up?
Usually people who blog about restaurants, people doing travel information on a blog, or those who blog about activities and events in the city.

What a great way to reach out the blogging/twitter community. Again, Morton’s is not the story here. They are providing a destination for Tweetups and Bloggers to get together. I also like how they are reaching out to bloggers in their space; restaurant bloggers, travel bloggers and local bloggers.

Companies “brag” all the time about the number of followers or friends that they have on Facebook or Twitter. But what motivates someone to friend or follow a company?

A December 2009 survey from MarketingSherpa of 500 social network users showed that the top motivation of those who friended or followed a brand online was to learn about specials and sales, followed closely by learning about new products, features or services.

This data would seem to indicate that Facebook and Twitter is good for reaching people who already have an existing relationship with you, but not as good at attracting new customers.

The MarketingSherpa survey confirmed a study by Razorfish last fall which found that exclusive deals and offers was the #1 reason that users followed brands on Twitter.

Last week I looked at some of the marketing strategies that are working on Facebook according to the September 2009 MarketingProfs survey of business-to-business (B2B) and business-to-consumer (B2C) marketers.

Today it is time to turn that attention onto what is working on Twitter.

Most marketers are using Twitter to simply drive more traffic to their web site. The most common tactics are direct linking to web pages or promotional pages.

As with the Facebook results, what works in the B2B market does not necessarily work for B2C marketers and vice-versa.

In the B2B space, companies are successfully using Twitter as a brand monitoring tool (41%). What I found really interesting was that 36.7% of B2B marketers are contacting Twitter users who tweeting negatively about their brand.

Now since you need to monitor your brand (40.7%) before you can contact users who are trashing your brand (36.7%) that would mean that nearly everyone who is monitoring their brand via twitter is also engaging in the conversation.

The numbers are similar in the B2C space with 46.9% of marketers actively monitoring their brand on Twitter with 44% contacting the Twitter users who made the comments. Who knew that reputation management was such an integral part of the marketers toolkit in 2009?

I find it interesting that almost over 37% of marketers surveyed say that they are successful using Twitter invites for in-person events. I have seen this tactic used for meetups, but I am surprised that so many respondents are successfully this tactic in the B2B world.

Though some firms, such as Dell and Naked Pizza, have reported success in the area, the study found that driving sales was the least effective marketing tactic attempted by companies using Twitter.

I have been going over the September 2009 MarketingProfs survey of business-to-business (B2B) and business-to-consumer (B2C) marketers to see what are some of the more successful tactics that they are seeing work on Facebook.

One thing is quite apparent is that tactics that work for the B2B market will not necessarily work for those marketers who are targeting the B2C market.

For those in the B2B space, the most successful marketing tactics used on Facebook are creating a survey of “fans” and friending customers.

Creating a survey of “fans” was the one marketing tactic that appears to work in both the B2B and B2C markets.

On the consumer side the most successful tactic that marketers are seeing is creating a Facebook application around a brand.

The most surprisingly result to me was that marketers surveyed found that buying ads, even highly targeted ones, was the least effective type of social media marketing on Facebook.

This is very surprising to me in that I have seen data from a lot of marketing campaigns on Facebook and the results have been really good, especially for locally targeted campaigns. The results I have seen have been much better than other online efforts including Google Adwords.

What marketing tactics are you seeing work on Facebook?