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Facebook in Omaha: A Study in Interaction, Fans and Engagement.

Joseph Moore July 2013

Joseph A. Moore JosephAMoore2@gmail.com

Engagement and interaction with fans and followers has been the driving force in the social media era, and the push to move traditional marketing from print, radio and television to social is ever-growing. Rationalizing that social media provides the one to one, personal contact that other media does not.

Background
In January 2012, WARC published a study by Karen Nelson-Field, Ph.D., and Jennifer Taylor, Ph.D., of the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia in their monthly magazine Admap called Facebook fans: A fan for life, which took the social marketing industry for a ride. The team studied the top 200 Facebook Pages (by total follower count) and concluded that (parts summarized, for full report see: http://www.warc.com/):

In any given week, less than 0.5% of Facebook fans engage with the brand they are fans of. o Of the 200 brands analyzed, only one showed a level of engagement of more than 2%, and only 10% of brands reached the 1% mark. Product category type does not play a role in the degree of fan engagement. Passion brands dont differ Facebook fans are no more or less engaged. o Passion brands are those that reportedly transcend the typical consumer/brand relationship and demand the highest levels of love and respect from their consumers. These brands are considered to be inspirational, iconic and tap into dreams. Brand popularity doesnt affect the degree of fan engagement. o In a comparison of the highest ranking brands to the lowest ranking brands (within the top 200 Facebook Pages studied), the findings suggest that fans engage with a brand on Facebook on an ongoing basis, regardless of category or brand status.

Why Reanalyze? While the WARC study did a good job of demonstrating the small amount of interaction and engagement among the top pages, the group did not take into consideration local, small business or startups. None of the top-200 Pages that Nelson-Field and Taylor studied represented these types of Pages.

The Study I substituted the 200 top pages that WARC studied with the current top 100 Facebook pages. I also added in 400 pages from the Omaha metro and Lincoln, Nebraska areas.
I collected Facebooks publicly available People Talking About This number and each Pages total Lifetime Follower Count weekly for one year, then averaged each metric to determine an average weekly PTAT and average weekly LFC for each brand. This allowed me to uniformly calculate the ratio of PTAT to lifetime followers. Actions that influence the PTAT number at the time of this publishing are: - Liking a Page - Post on the Page wall
Joseph A. Moore JosephAMoore2@gmail.com

Like a post Share a post Answer a question RSVP to a Pages event Mention the Page in a post Tag the Page in a photo

Check in at a place Share a check-in deal Like a check-in deal Write a recommendation Claim an offer

It should be noted that because the PTAT number includes new likes to the Facebook Page, and thus is skewed higher, unless the new likes are removed. I will refer to the figure in which new likes are removed from the PTAT as the adjusted People Talking About This or aPTAT. This figure reveals the degree of actual interaction between a fan and the brand; or engagement with the Page; and as such, I use that in the figures as the engagement percentage. The PTAT number also tracks unique visitors over a seven-day period, but Facebook does not release information regarding the distribution of PTAT across users from week to week. Thus, without manual tracking, it is very difficult if not impossible, to tell if the same users are interacting every week or if there are new or different users interacting every week. Finally, I am primarily interested in social media marketing by brands. I have excluded fan Pages that werent official Pages being used to promote a product. Specifically, I have left our Pages that featured: - Celebrities, as well as TV shows and movies - Politicians - Musicians - Individual athletes (and sports teams on the top Pages level) - Comedians - Unbranded fan Pages - Facebook games or apps - Generic or unofficial product Pages - Pages in languages other than English

Results: - Of the total Pages studied, less than 1% of Facebook Fans engage with the brand they are fans of. Of the 500 total brands studied, only 0.9% of fans engage with the brand in a given week. Since PTAT is reported as a unique visitor, these fans could be engaging multiple times per week and would still be counted as a single PTAT number.

Fans of local pages are 567% more likely to engage with a local brand than fans of the top Pages. While engagement among national and international brands has waned, there has been a steady increase in local engagement. People are looking for deals, new products and news/information for stores they are most likely to frequent in their local area.

Fans of local small sized companies are 20% more likely to engage with a brand than fans of medium and large sized local companies. Recently, large local companies have begun to introduce job positions that specifically market and engage with the social audience, which has close the gap
Joseph A. Moore JosephAMoore2@gmail.com

between large companies and small; but local small companies are still generating more engagement.

B2B vs. B2C is a factor. There is a significant difference in engagement when comparing B2B companies to B2C companies of similar size. B2B companies averaged 2.1% engagement over the study compared to B2Cs 5.5% engagement. This has significantly changed since the first three months of the study, where the two were virtually identical.

Joseph A. Moore JosephAMoore2@gmail.com

On the local level, category type matters. The research shows that, within the local markets, there is a very large disparity between product categories engagement. The highest level of interaction occurs within the healthcare field and the lowest among start-ups. (Figure 1)

Page Category
Education Finance/Insurance/Real Estate Healthcare Other Food/Restaurants Entertainment/Sports Government Construction/Transportation Media Non-Profit Retail Hotel/Hospitality Start-Ups

n
17 16 16 18 97 84 18 9 24 19 47 8 27

Engagement %
5.8 4.4 90.4 1.9 2.1 3.8 5.1 3.9 29.2 6.6 2.4 3.4 3.0

Figure 1: Engagement by product category type

Joseph A. Moore JosephAMoore2@gmail.com

Passion brands As the WARC study noted, a common marketing mantra is that passion brands are different. Often a term incorrectly interchanged with niche, passion brands are those that reportedly transcend the typical consumer/brand relationship and demand the highest levels of love and respect from their consumers. These brands are considered to be inspirational, iconic and tap into dreams.
I have looked at passion brands on both the top Pages and local Pages level and found that local passion brands outperform national passion brands by 345%. In a comparison against companies on a similar scale, the average local brand out engages the local passion brand by 18.1%, but average 33.5% more fans. On a top Page level, passion brands outperform their peers by 27.0% and average 63.4% more fans. top passion brands perform significantly better than local brands as a whole, but there is little change between local passion brands and top brands as a whole. Top Passion Brand
BMW Disney Target Pepsi Coca-Cola Red Bull Google Starbucks Nike* McDonalds

Engagement %
1.9 1.7 1.2 50.6 0.9 0.9 0.6 0.8 0.3 0.5

Brand Page Rank


53 5 23 35 3 6 50 8 48 13

Figure 2.1: Engagement by top passion brands (sample)

In a comparison between the WARC study and mine, the top passion brands that Nelson-Field and Taylor used, that were also included in this study were: WARC Current Brand Rank Engagement % Brand Rank Engagement %
Facebook Louis Vuitton Nike* 93 75 53 0.3 1.0 0.4 1 51 48 0.6 1.8 0.3

Figure 2.2: Engagement comparison by top passion brands *It should be noted that Nike owns two pages in the top 100 brands, Nike, which is listed th above, and Nike Soccer, currently the 29 most popular brand on Facebook.

Joseph A. Moore JosephAMoore2@gmail.com

Local Passion Brands were identified through a survey of 10 people. Local Passion Brand
The Nebraska Medical Center Nebraska Humane Society Nebraska Huskers Creighton University Borsheims Fine Jewelry & Gifts Omaha Children's Museum Jones Bros Cupcakes Film Streams Omaha's Henry Doorly Zoo and Aquarium Whole Foods Market Omaha Nebraska Furniture Mart Omaha Farmers Market

Engagement %
11.2 12.9 5.4 6.0 4.5 3.1 3.3 2.5 2.9 1.5 1.1 2.1

Brand Page Rank*


59 29 1 72 152 88 34 102 6 37 10 53

Figure 2.3: Engagement by local passion brands (sample) *Brand Page Rank amongst local brands

Engagement vs. Fan count While many people stress the necessity of a large audience of fans, it only pays off if the fans are truly engaged with your brand. For this analysis, I wanted to see how different the brands were in attracting large amount of fans and keeping them engaged. For this analysis, I use the assumption that the average fan has 245 friends (Pew, 2012)

Top Brands Fan Count vs. Reach Brand Facebook YouTube Coca-Cola MTV Disney Red Bull Converse Starbucks Playstation Oreo Fan Count Rank 1 2 3 4 5 6 7 8 9 10 Engagement Rank 53 74 36 43 14 35 59 42 48 69 Reach Rank* 6 30 4 11 3 10 34 18 28 51

Figure 3: Top 10 Pages comparison in Fan Count, Engagement and Reach *Reach = Fan Count * Engagement * 245

Joseph A. Moore JosephAMoore2@gmail.com

Brand popularity I wanted to see if brands that had attracted large followings were able to maintain their level of engagement. As this analysis shows, there really is no correlation. It is my best guess that within the Top 50, there are a wealth of quality brand managers striving to maximize the most out of their network and fan base. However, within the Top 10, many of the brands have most likely done things to build their fan base and focused solely on increasing the number of fans, not increasing the loyalty of fans. In figures of fans, the Top 10 pages average 1.7 times more fans than to Top 25 and 2.9 times more fans than the Top 50 (Figure 4)
Pages Top 10 Top 25 Top 50 Bottom 50 Bottom 25 Bottom 10 Engagement % 1.6 6.3 12.7 4.2 4.5 6.2

Figure 4: Engagement by local brand fans

Fan Growth Several digital marketers have said that Facebook, as a marketing platform, is losing its luster and becoming saturated with marketing. While this may be true because the platform, as a whole, is not growing its user base as fast as in the past in the United States, it is not necessarily true of local companys use of the platform. As a proof of this theory, local pages grew 15% faster than the top Facebook pages.
Within the local Omaha market, there are two large differences in strategy and how fans are accumulated when you break down the statistics by company size: Large Companies have begun to hire more-seasoned social and digital managers that have begun to integrate social into their traditional marketing, making it more effective and have more impact, thus more fan growth. Many large companies have not taken a hard-sell approach to social, while many small companies have used Facebook more as a sales generation engine. Especially in the retail sector, where discounts, sales and new product releases are first announced on social and where companies may not have the marketing budget for larger productions. Category
Small Companies Medium Companies Large Companies

Fan Growth %
40.84 27.71 35.23

Figure 5.1: Fan growth, by company size

Joseph A. Moore JosephAMoore2@gmail.com

When the local data broken out by sector, there are no general trends to be aware of, as the sectors take vastly different approaches to social and fan engagement. For example, typically, Healthcare uses social as a story-telling platform, Retail as a product and sales announcement service, Construction/Transportation to share new products and recruit college students, and media is a mixed-bag of storytelling and breaking news. Some of the categories are extremely skewed by a small fraction of companies, which run campaigns targeted solely to increase their fan counts. However, after these campaigns conclude, there is typically a general contraction on fan numbers for these Pages. Category
Education Finance/Insurance/Real Estate Healthcare Other Food/Restaurants Entertainment/Sports Government Construction/Transportation Media Non-Profit Retail Hotel/Hospitality Start-Ups

Fan Growth %
32.1 611.4 162.4 31.0 37.7 23.7 26.4 111.2 41.5 43.3 26.7 19.1 20.2

Figure 5.2: Fan growth, by category type

Effects of Operation Unlike In September 2012, Facebook announced Operation Unlike, an attempt to purge fake accounts and Page likes. It greatly impacted local pages that had focused on like growth much more than the top pages. Operation Unlike hit 7.4% of the top pages tracked in this study and 16.6% of the local pages.
The average local Page lost 1.10% of its total fans, with the largest decrease being more than 11%. Small and medium-sized businesses were twice as likely to lose fans as big businesses.

Pages shut down or businesses closed It should be noted that through the course of the study, 8 Pages had been shut down, or the business had ceased operation. In this case, I stopped calculating their data the week that their last Page-update had been posted. The data should remain relatively unchanged by this information, as more than 6 months of data had been calculated prior to the first Page being shut down.

Conclusions:

Joseph A. Moore JosephAMoore2@gmail.com

While local Pages may not have the reach or the likes count that the top Pages have, they have a greater asset: influence. It is at the local level that interaction and engagement pulls weight and can truly be effective if the platform is used effectively. Social managers and the tech media argue back and forth over the effectiveness of Facebook, basing their research on the top pages. It is apparent that small businesses in the Greater Omaha metro area still find it a very effective mode of communication. It is impossible to tell why the top Pages have performed better on my study than on the study by WARC. However, Drs. Nelson-Field and Taylor studied the Pages for 6 weeks, less than 1/8th the time period that is included in this study. Also, the WARC study does not inform the reader of what is defined as a Page and what they have included, as was done on page 3.

Is engagement the end-all be-all? No, and most social managers will likely tell you the same. Many international brands that have virtually no social presence are still dominating social conversation with nearly no engagement. That being said, social and engagement both will help brands that do not have the design or product-loyalty that companies like this maintain.
Finally, PTAT and aPTAT are also not the sole influence of interaction or engagement. There are many more factors that will help determine the judge of any social effort. It is up to the individual social manager to determine what their company will strive to get out of social marketing.

Joseph A. Moore JosephAMoore2@gmail.com