CPC – Cost per click, CPM – Cost per thousand impressions, CPV – Cost per view, CPE – Cost per engagement, CPA – Cost per action, CPL? I thought that was what you got so you could carry your own handgun in your holster into public places. Cost per like? How does one go about establishing that, in fact, how much is a like worth?
With Facebook becoming one of the most prominent advertising arenas in digital advertising it is hard to establish the worth of a “like” or a “share” or a “comment” isn’t it? Years of research have gone into establishing exactly what the value of an impression is based on the type of media. Whether this is digitally, on a billboard, a taxi, or a television set. There are very set standards for these types of interactions. A click is worth less than an action, an impression less than an engagement with a rich media ad, a video view is more than a digital impression. But what is a like? How is this causing the consumer to interact with the brand? Is the consumer “liking” the company's page and therefore allowing themselves to see the brand posts and content? Or are they “liking” a status that the company has already posted that a friend had liked? And which one is worth more and by how much? If a consumer comments on a post does this mean they are immediately going to the webpage to see new offerings, make a purchase, or engage with their content, or does the company just have a witty social media intern that caused the consumer to giggle? Is there a way to target consumers that are more likely to leave a comment or share a status in a way that CPA campaigns target consumers who are “more likely to convert”?
All these questions are in such early stages of answering them that really we have no idea. We just throw status updates and funny, creative videos at people who happen to “like” a similar item on their Facebook page and hope that this is making a dent. I personally have noticed myself mindlessly clicking on an intriguing ad and going to their page because they so perfectly targeted me with something I was interested in. But I am one person, would you do that? Would you admit to it?
Facebook produces ads on the right side rail which seem to have induced advertising blindness in most people when they are on their desktop so Facebook had to adapt. In steps the news feed advertisement. These have the ability to show up in both your desktop newsfeed as well as your mobile newsfeed in which the ad takes up your full screen. Currently, to purchase right side ads on facebook through a demand side platform you are looking to spending $1 to $2 per thousand impressions, however, to get into the newsfeed you are looking at roughly $10 per thousand impressions and an extra dollar for every layer of third party data you are piling on top. Is the newsfeed ad really five times more valuable or relevant than a right side ad? It sure is more intrusive. And how many people are avoiding newsfeed ads solely because they are intruding on their newsfeed? At least with the right side ad people have the choice to look or not. Regardless of the cost per thousand impressions, how many people are using these ads to push to another facebook page in which they ultimately decide to “like” the company? What happens if they push to a third party site and make a purchase without ever liking the brand on facebook? Do you continue to target this consumer? Can you find them off of facebook and determine that they have made a purchase with your company? Probably not. A facebook “like” is a very intriguing action that is hard to put a value on. Just as a comment, or a share, these actions don’t bring any additional income to a company so how does one use this information to establish how much one is willing to pay to have a consumer “like” their page or comment on their photos or share a post?
So really, can we establish the value of a like? I don’t think we have enough information yet. We know a like means that a person is engaging with the page, they are seeing the content, and commenting or sharing it. They have established themselves as at least being interested in the brand. We may not be able to put an exact dollar on these actions, but just wait, these prices will be established and if Facebook can continue their trajectory into the internet heavyweight that they are heading towards, they may become one of the most simple ways to spend millions of dollars in advertising.
(All credits and accolade for this blog post belong to Andrew M. Kulaszewski who is the creator of this post!)