Why Marketing on Facebook Requires Ad Spend

Using sales figures alone to calculate Facebook advertising ROI is just not accurate. Social media, like all other branches of a national brand’s marketing efforts, requires a paid advertising component. You will not find much support for the notion that organic social media will have monetary return (at least not in the first year of brand development). Brands must pay-to-play on certain social media channels, including Facebook, in order to be seen – even by those who have already ‘Liked’ a brand’s page. This is called Facebook EdgeRank. In short, it’s an algorithm developed by Facebook that governs what, where and how long promoted content is displayed on a user’s News Feed.

Typically, consumers go through 4 or 5 steps before they trust a brand enough to place an order. (This is the same premise with print – it takes an average of 6 times to see an ad before a reader begins to recognize it and potentially take an action.:

1. For initial engagement, Promoted Posts work to introduce people to a brand’s key messages via content development and distribution. Important to initial engagement are the voice, tone and sentiment of the brand, and above all, providing a need;

2. Once new community members see consistency in content and find the information valuable, they begin to develop trust;

3. Once they develop trust, the product or service messaging must be clear so they understand whether or not it meets their need;

4. Once it’s clear their needs will be met by your offer – and the consumer sees additional value – they will consider placing an order;

5. Once they place an order, true engagement begins on social media because platforms like Facebook become the vehicle for dialogue: comments, questions, recommendations, sharing, and more. It is at this point that the consumer becomes a brand enthusiast, so long as they have a positive experience. The value of your initial ad spend is thus immeasurable because you are able to leverage all of these public interactions. Vice versa, if they have a negative experience, responsive and real-time social media can help turn negative experiences around simply by listening and addressing the situation quickly and to the satisfaction of the customer.

When you allocate a budget for Promoted Posts on Facebook for a few months, you may achieve the very first step in the process – initial engagement – in the form of Likes. But much more effort is needed to reach a high conversion rate. And we’re not talking about a larger budget here – we’re talking about consistent content and dialogue to guide consumers through the steps of forming a relationship with the brand.

Think about real life friendships. You don’t meet someone at a party and become best friends within minutes. It takes time to learn about your new friend – their personality and values – spend time with them, see how they react in different situations, trust them with personal information, and so on. For brands, effective social media is essentially a digital version of cultivating real relationships.

The value of relationships that we create, by way of advertising dollars, provide a level of authenticity that has no established monetary value. As social media maven Gary Vaynerchuk infamously responded to being asked what’s the ROI of social media? – “what’s the ROI of your mother?”

There are statistics that say a Facebook Like is worth $174 in its lifetime, but depending on your brand, product or service, one customer may actually be worth 500x the initial cost to acquire. The decision to purchase online from a particular brand is very much based on recommendations from friends through social media, in person, via online reviews and ratings, organic search, and PPC, as well as traditional media. But no one can dispute that people trust authentic engagement, both in person and on social channels, much more than traditional advertising.

If there is no budget allocated toward promoting your brand’s content on Facebook, it can only reach 10% of the current community (Likes). If there is an optimized budget allocated, your brand’s content can potentially reach 100% of its current community, AND the thousands of people that meet the criteria you’ve defined to target.

Lastly, and more important, social media platforms simply cannot be used as a megaphone to promote a product or service. Period. If your brand happens to be new-to-market in a competitive space, and you expect consumers to place an order immediately from a self-promotional post on social media – you’re missing the mark. You might want to re-evaluate your expectations and completely rethink your online marketing strategy.