Social Media Channels

Public relations firms often encourage our clients to conduct market research as a way to contribute to the industry news cycle when there is no news coming out of the company. March‘s clients have seen a lot of success with this strategy and, across every industry, many companies will dedicate large portions of their annual marketing budgets to this type of content development. However, while companies typically want this research to come out in their favor – for example, framing their core competency as a must-have to remain competitive – research will fall flat if it isn’t conducted in a vendor-neutral manner and presented fairly.

Last month, Facebook released some research findings in a report titled, “The Power of Like 2: How Social Marketing Works,” which claims that Facebook advertising works! This was released just weeks after investors expressed anxiety that advertising revenue won’t keep up with Facebook’s user base, and seems to be a direct counter argument to investors in an attempt to dissolve these doubts and keep stock prices high.

However, there are some major holes in the logic of this report, casting doubts on whether Facebook advertising actually is effective after all. For example, one finding states that people who “Like” Amazon on Facebook spend, on average, twice as much as those who are not fans. Additionally, those who were fans of Starbucks and then saw an ad on Facebook for the coffee chain  made purchases 38% larger than those who don’t Like Starbucks; a similar stat was presented for Target.

At first glance, these stats seems to demonstrate Facebook’s strength as a purchase influencer. But look again – of course users who Like Amazon and Starbucks are going to shop there more! In a marketing class I took in college, we were encouraged to look at stats backwards – is it really true that those who Like Starbucks are more likely to spend money, or is the connection demonstrated here that those who shop at Starbucks are more apt to Like the company on Facebook?

Overall, I find it very important for consumers not only to be aware of these “backward” stats, but also for companies to remain honest when conducting research. Reports and surveys that back up your company’s messaging are almost always worthwhile pursuits – but only when conducted accurately and truthfully.

Also, see Goodhart’s law.


This post was first published by Sarah Love on March Communications’ blog, PR Nonsense.