A new study issued by comScore, in partnership with Facebook, says the social network's popular 'Like' button is an effective advertising tool.
According to a June 12 press release, the second white paper in a series entitled "The Power of Like", was published yesterday.
"The Power of Like 2: How Social Marketing Works" outlines how "exposure to earned and paid media on Facebook drives behavioral lifts in purchase behavior," the press release noted.
Key factors noted in the white paper included the benefits of businesses maximizing brand identity on Facebook's platform, moving from recognition to sales conversion. Findings showed users got most of the brand exposure through Facebook's News Feeds, noting these feeds are the key channel, reported MSNBC.
Starbucks was cited as an example. The report noted Facebook members that saw "unpaid marketing messages" on the network made a purchase at Starbucks within four weeks 38 percent more than those who had not. These figures included individuals and their friends who "Liked" Starbucks. Target was another company examined, and comScore said results showed people, and their friends, that "Like" Target bought more at the retailer's brick-and-mortar and online shops.
“This provides some strong evidence that Facebook can be an effective marketing channel,” Andrew Lipsman, vice president of industry analysis at ComScore said in an interview with Bloomberg. “These are strong results.”
However, Bloomberg reported General Motors had recently dropped Facebook as a marketing medium just prior to its IPO, and a recent Reuters/Ipsos poll indicated few Facebook users were influenced by the ads they see on Facebook. According to that poll, 4 out of 5 Facebook users have not bought a product or service as a result of comments or advertising viewed on Facebook.
In light of this, advertisers may not view Facebook as a valuable marketing effort. Now Facebook is trying to convince otherwise.
Since its lackluster IPO debut, Facebook is currently trying to provide value to investors, and also lure advertisers to the company's platform. With over 900 million members, there is a massively large consumer base to tap into, and the social network giant wants to provide evidence to advertisers the platform is an effective marketing channel.
Additionally, aside from advertisers, not all are convinced this joint study by Facebook/comScore is conclusive. Critics point out the fact this study is not objective; and Inc. states, "you have to dig into the report, because it doesn't actually seem to say what Facebook would like it to say."
“It doesn’t surprise me that people who like something are more likely to take action to buy that product,” Larry Chiagouris, a professor of marketing at the Lubin School of Business at Pace University in New York told MSNBC. “The question is how to get someone else to like it.”
As of today, Facebook's stock is hovering around $27.50 at time of publish; the initial price was $38 and the stock price has been struggling since its debut.