Social media numbers don’t add up…

Thanks to Frank Chamberlin who sent me this article by Mark Ritson in BRW magazine. Mark is an Associate Professor of Marketing at… Melbourne Business School and is recognised as one of the world’s leading experts on brand strategy. His clients have included McKinsey, PepsiCo, Donna Karan, Johnson & Johnson, Dom Perignon, Baxter, De Beers.

When you read it, remember eMarketer research revealed at least 25% of all people who “Like” a brand on FB disagree it means they are a fan or even like the brand. So the real numbers are even worse than those in the article. You might also want to view this video we created about 18 months ago – click here.


Your thoughts please…

Social media: get ready to be underwhelmed

Over the next three weeks I’d like to share some unfortunate truths about social media. Let’s begin with a simple statement: although social media presents us with wonderful new communication options, they are not as valuable a corporate tool as you might believe. That might surprise you, given 17 per cent of Australians use Twitter and 51 per cent patronise Facebook.

But delve a little deeper and it starts to get rocky, fast.

This week, I look at why Facebook and Twitter aren’t all they are cracked up to be. Next week, I will examine how social media has been over-represented and oversold to our nation’s executives. And finally, we will look at the tide turning against social media superiority and what marketers are doing to restore balance and sanity within their marketing mix.

If you take Interbrand’s recently published list of Australia’s top 10 retail brands and then add up all the followers on Twitter of these 10 brands, you get a grand total of 59,000 Australians – or significantly less than the attendance at the MCG last week for the season opener between Carlton and Richmond.

Not too impressive and it gets worse. Unlike Twitter users, the spectators at the G last week were paying attention. The average click-through rate for a branded Twitter page is only about 0.5 per cent. That means that even one of Australia’s biggest retail brands like Coles, which has 4600 followers on Twitter, will only get about 23 people to actually open its next tweet. That’s a slightly smaller audience than the actual number of players who were on the field last week for the Carlton Richmond game. Coles would literally be better off opening a window at their Hawthorn HQ and yelling at passers-by on the street than using Twitter.

Facebook, to be fair, has a much bigger reach than Twitter and if we again look at Australia’s 10 largest retail brands we do see much bigger audiences. Woolworths, for example, is typical with 489,000 likes on Facebook.

It’s an impressive figure until you appreciate that it’s less than 4 per cent of the 13 million people who shopped at Woolworths last week.

And even 4 per cent is over-generous. Consumers might have “Liked” a brand three years ago and never returned to that Facebook page. That’s why most brands look at engagement rate, the number of people who have more recently interacted with a brand’s Facebook site. This rate is indicated by the number of consumers listed on a Facebook page who are “talking about this” under the Likes number.

Once again, the numbers are underwhelming. The average engagement ratio for a big brand on Facebook is usually somewhere between 1 per cent and 5 per cent of total Likes. In Woolworths’ case 15,000 people, or about 3 per cent of their Facebook following, have recently engaged with the brand. That’s roughly the same number that will visit a single, big Woolworths store next weekend. Only another 749 stores to go . . .

This lack of interest in engaging with brands on social media means that despite gigantic potential audiences, Facebook’s value as an advertising medium is usually overstated. Its CPM in Australia (the cost to reach 1000 customers) is about 24¢ (8). Not bad, but no better than the CPM for a quarter page ad in BRW – so much for the death of print advertising. And this general apathy from consumers means that Facebook’s click-through rate for its advertising and its average cost per click are rarely superior to more standard search media options like Google Adwords.

These numbers are underwhelming because most Australians exclusively use social media to interact with each other, not brands. Of the total Australian population that use social media, 69 per cent don’t follow any brands or companies of any kind. The enormous dollar signs that sprang up in the eyes of marketers five years ago with the arrival of a billion people on social media has blinded them to a harsh reality. It’s called “social media” for a reason: most Australians use it to connect with people not companies.

How else do you explain the fact that a has-been Aussie pop star like Peter Andre has more likes and more engagement than any of the top 10 Australian brands? Or that a relatively unknown marketing professor like me can have more followers on Twitter than Bunnings, Big W, Target and K-Mart. Combined.

As we approach the end of round 1 you should be increasingly struck with two thoughts. First, neither Facebook nor Twitter should seem that amazing any more from a reach, value or impact perspective. Second, you might now be wondering why so many people believed they were so awesome for so long.

You can also see my previous posts on this topic here.

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  1. ooooh aw.

    You’re a brave man.

    In my experience when people write posts like this the social mafia gets nasty. They live by the mantra: “It’s not business it’s personal.”

    I keep pointing out that email is far more effective than social and I get called a Luddite.

    Numbers don’t lie.

  2. Thanks Mark

    They are already attacking the original author on the BRW site. I did an experiment whereby I posted negative research about Twitter on Twitter. Nobody retweeted it. But when I posted positive comments about Twitter it was retweeted. They’re a a self-fulfilling movement.

    I have so much spam followers on Twitter I no longer look at it.

    I like social media – it has a place in business, but it’s not the new Messiah!

    • Great blog Malcolm. What are your thoughts on social media for NFPs/charities from an awareness perspective? Say, hypothetically, a new integrated cancer centre opening in a few months’ time… I wouldn’t expect to suddenly start acquiring any donors through social but the increased awareness translates into engagement, which ultimately means more business (patients might push to be referred to a particular treatment centre)?

  3. This is a topic that Mark Ritson has convincingly discussed in Marketing Week on a few occasions, and he always supports his case with ‘overwhelmingly underwhelming’ data. That it remains a blind spot for so many in marketing is bewildering (self-interest aside), given the unambiguity of the data. Personally, I agree with your view of social media; I like it too, and it has its place, but I don’t subscribe to this idea that it’s somehow qualitatively different from every other marketing channel.

    On a semi-related note, what you think of the term ‘digital copywriter’? I’m seeing it everywhere now. Obviously copywriting requires nuances of style for different channels, but does good writing for digital media really require a ‘sub-specialist’?

  4. Thanks Ryan

    I wasn’t aware of Mark’s presentation, but cannot believe how the social zealots react when confronted with facts – they always argue using opinions and rarely use facts to back their ‘case’.

    Digital copywriters is an oxymoron. The skill you need, regardless of channel is ‘copywriting’. The best test is to ask if they have heard of the Flesch-Kincaid Reading Ease Score. Most haven’t a clue and, it’s usually a dead giveaway they are not a trained writer. Then ask them to show you examples of copy that has ‘sold’ successfully.

    it’s rare to find a digital writer who can write persuasively and get prospects to do what they want them to do when they want them to do it – that is, buy something.

    Want great copy go to John Hancock at

  5. “Digital copywriters is an oxymoron” ha love it, but I wonder how many digital copywriters even know what an oxymoron is?

    – an idiot with a blow torch?

  6. I think it comes down to what you are selling .. and as always those selling social media’s prowess are merely trying to feather their own.

    I have daily battles trying to make my board understand that likes or followers don’t translate to $ .. and with those that do the conversion rates don’t justify the effort an dollars spent.

    Social media (in its current form) is yet another tool in the arsenal and in B2B (where I play) its the least important at the moment.

  7. Dear S Masellio

    I have the same problem on a day-to-day basis trying to make my board understand that social media is at its best, to push our the awareness of the company and not to be taken as a platform to generate revenue. Am I right in saying this???

    It certainly is not the number of fans that one have on their FB, it’s the engagement rate that counts.

  8. Dear S Masiello

    Day in and out, I have the same problem as well…..trying to make not only my board understand but the Distribution Team and e-Commerce as well that likes or followers don’t translate to $… its best, it is purely a form of engagement and perhaps to radiate a brand.

  9. Hi Malcolm,

    Cleaning up my Facebook page and bumped into this article again. Sobering to say the least.
    I would love to read at one point your thoughts on Tripadvisor and the impact on consumers in terms of hotel choices.
    Curiously these days, Hotels seem Tripadvisor control obsessed instead of customer service obsessed.
    Thank you for such elegant and powerful advocacy for common sense. Such a refreshing read.


    • Hi Sebastian, good to hear from you. My personal opinion on TripAdvisor is to not trust anything on it, but I know people who swear by the reviews. If hotels just focused on their customer service, they would never need to even look at TripAdvisor, as the customers would return and also tell others about the hotel/service. Using customer testimonials on your website always helps, though most people argue that service companies only ever share the good ones. Another option is to put a warning about TA on your site – explaining the fake nature of the postings, while sharing real testimonials.

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