The Irony of Spending Money on a Facebook ‘Like’ When You can Acquire Visitors at Your Store

8th Nov 2017

Facebook ‘likes’ are often touted as a gold standard for measuring brand engagement. Global brands are known to spend millions of dollars annually on social media marketing, with a large portion of this going towards boosting the simplest social media metric: their number of Facebook likes. Surprisingly, even the U.S. State Department is known to have spent approximately $630,000 from 2011 to 2013 to acquire Facebook likes.

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With companies spending so many marketing dollars on Facebook marketing, perhaps it’s time to take a pause and ask oneself – what, really, is the value of a Facebook like? What is the ROI of Facebook marketing, especially for companies with physical businesses? Given the fact that so much money is being pumped into a single social media channel, one needs to know if it is fundamentally a good utilization of one’s overall marketing budget?

To Like, or Not to Like: That is the Question

Businesses which have a physical presence need to figure out whether these ‘likes’ are actually a true reflection of how well their brand is performing. While a lot of marketers justify their investment in Facebook marketing saying it eventually leads to increased sales, a series of experiments conducted by a group of academicians prove otherwise. It was observed that people who liked or followed a brand’s Facebook page did not necessarily buy from them, neither did their friends. Essentially, Facebook marketing has little to no effect on customer’s purchase behavior. Proximity marketing on the other hand, can significantly influence a customer’s buying decision.

If brands deploy a WiFi analytics solution to deliver personalized content to customers’ mobile devices at their point of purchase, it can create the ‘intent to buy’ (assuming it’s not already present). When a customer physically visits your venue, there’s already a good chance that they’re genuinely interested in your brand. And as they connect to your WiFi network, you can not only know their identity but also get a chance to understand their at-location behavior as they move through your venue. Based on this double deterministic data, you can build their location personas and engage them with contextually relevant messages and enhance the quality of their engagement.

Evidence Suggests a Higher Rate of Customer Acquisition and Engagement At-location

Only a very small proportion of strangers on the internet are really viable potential customers. At the same time, liking a brand’s Facebook page is not necessarily any kind of indication that they’re likely to convert. Customers in your physical space, by contrast, have already shown intent or at least interest, meaning that any money spent on serving them better and gaining their business is unlikely to be wasted.

The numbers bear this out: from an internal study we conducted with a shopping center, we looked and compared how many customers followed their Facebook page to how many connected to wifi in store. Looking at the same time frame, we found that the shopping center saw a 6x acquisition rate compared to acquisition rates on Facebook.

During this study we compared success metrics of marketing campaigns that were run simultaneously online and in store. With the same campaign, we saw a 10x engagement rate in store. By nature of the environment, people are much more inclined to interact with ads and offers while you’re in proximity to the store as opposed to seeing an ad on Facebook.

Add Proximity Marketing to the Overall Marketing Mix

All of the above isn’t to say that Facebook can’t be a valuable part of the marketing mix, but it also has to be seen in its proper perspective. You can’t use a screwdriver as a chisel and vice versa, and the proper way to employ social media is as an advertising channel in which interested users are automatically identified, whether through likes or third-party algorithms. When it comes to direct, immediate engagement in terms of physical businesses, though, proximity marketing is the shortest distance between two points.

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