In recent years, social media has emerged as a viable marketing apparatus for Internet-savvy companies. Social media is an attractive medium for marketers particularly due to the fact that there is no up-front cost associated with running a business profile on sites like Facebook, Google+, and Twitter.
Even though time and effort must go into social media marketing – either on the part of an entrepreneur, an employee, or a social media marketing firm – the cost can theoretically be lower than other types of marketing.
One of the ways companies can measure the success of their social media marketing efforts is by looking at the number of “Likes” and other such signs of individual approval on various social networks. However, it is difficult to translate the value of these “Likes” and other social network-based indicators into a monetary value for the sake of judging cost-effectiveness.
Putting a Price on a “Like”
Estimations of the value of a Facebook “Like” abound – and they can be quite variegated. These signs of approval can be valued between $4 and $8. This value is measured by comparing the number of “Likes” attached to a product to the number of actual sales for that product.
Another way of judging the value of a “Like” is by looking at what companies pay for them. While it is against Facebook’s policy to buy and sell “Likes” outright, some companies give to charity according to the number of “Likes” they receive during a certain time frame. For instance, one company agreed to donate $10 per like (up to a maximum of $75,000).
Fluctuations in Value
One concern about “Likes” is that, like fiat currency, they can conceivably be manufactured in unlimited numbers – but doing so inevitably decreases their value. This is why Facebook tends to crack down on firms that find ways of selling “Likes” that are not attached to legitimate fans. While “Like” inflation is certainly a concern, Facebook and other social media platforms realize this, and they go to significant lengths to ensure that this virtual asset remains legitimate and valuable.
Some feel that “Likes” are often overvalued, pointing to studies that show that as many as 90% of the people who “Like” something never go to that business’s Web site again. Even if they do, they may not necessarily ever buy. However, those who take note of this statistic should bear in mind that, in marketing, even a 2% success rate can be considered to be very good. For instance, if a tanning salon puts less than an hour of effort into social media marketing, gets 1,000 “Likes”, and gains 20 new customers, that is well worth the effort. In fact, it would probably be well worth the effort to get just 5 new customers.
Worth the Effort
The value of a “Like” most likely varies heavily depending on the type of product or service the company provides, as both unit price and profit margins are important factors in this valuation. One thing to bear in mind, though, is that, whatever your business, the first “Likes” you get are usually worth the most. This is because of the snowball effect: you need a certain number of “Likes” before you can hit critical mass and develop the type of following that naturally continues growing on its own. It can actually look bad for a company to sit on less than 100 “Likes” for months or years, whereas having “Likes” in the five- or six-digit range is always a good thing.
The bottom line is that, regardless of how much a “Like” is worth, it is definitely worth something. Just as businesses ten years ago discovered that they needed to get on the Internet to survive, businesses now need to get on social media to survive – and take advantage of the huge marketing potential that it affords.