Kuliza, a tech studio that helps brands take on a mobile first world by creating data-driven immersive digital experiences, decided to run a check on the Indian brands social media effectiveness. The results were an eye-opener.
Leading brands across sectors like fashion retail, automobile, FMCG, hospitality, etc. are spending huge money on Facebook. But is it truly delivering?
Kaushal Sarda, CEO, Kuliza, answers this question, "Brands have made significant investments on Facebook page engagement but are clearly deriving very less value out of it. Brands currently measure their social media effectiveness based on their total number of fans or cost per fan. However most of these fans are dormant and are doing no activity on the page. If you try to calculate the cost of a fan actually engaging with you page - it is really high in most of the cases and to us that does not make business sense. We think brands can derive more marketing and branding dollar value by investing in creating their own consumer facing digital properties that are customized to their industry needs and more transparent in terms of data."
To analyze the social media effectiveness, Kuliza evaluated the 'real' activity of brand fans on their Facebook pages. To begin with, it is important to define who is an 'Alive Fan'. These are fans who have had any activity (likes, shares comments) on the brand's Facebook page during a period of six months. Once this data was collected, an analysis was done for the percentage of alive fans as opposed to the total number of fans on the page. But this was not all. Powered by Kuliza Proprietary tools, the information was dissected further by analyzing the average cost of a 'like' for every industry vertical to deduce the average cost of an 'alive fan'.
How much does a Facebook fan truly cost Indian Brands?
Kuliza developed a matrix to plot the total number of Facebook fans on a brand's page verses the percentage of alive fans. This effectively evaluates the co-relation and dynamics of total fans for a brand on the page as opposed to the actively engaged audience on Facebook. The research was done on 508 leading brands with India specific Facebook pages. The research was done across 7 industry verticals: FMCG, CD, BFSI, Hospitality, Automobile, Fashion Retail and food retail.
Key metrics and calculations
The average cost per fan has been taken as INR 3 for fashion and apparel and normalized for all other verticals based on Salesforce’s Facebook Ad Benchmark Report 2013.
Cost per alive fan (CPA) has been calculated as per the formula:
CPA = (Average cost per fan / percentage alive Facebook fans) *100
For example: If a brand is spending INR 4 as the average cost per Facebook fan and only 2% of their fans are alive, the cost per alive fan is (4/2)*100 = INR 200
The complete tool can be accessed here: http://www.kulizastudio.com/ranks/