The rate of engagement among a brand’s Facebook fans is seven in 10,000

A very thought provoking review of a book, How Brands Grow by Professor Byron Sharp. The review is How the Mad Men lost the plot by Ian Leslie.

In 2010, Pepsi embarked on an audacious new marketing strategy. Foregoing its slot in the Super Bowl, America’s annual showcase for lavish TV ads, it diverted its TV budget into a social media campaign: the “Pepsi Refresh Project”. Consumers were invited to propose ideas that would have a positive impact on society, and Pepsi promised to fund the ones that gained the most votes, via Twitter, Facebook and YouTube. “We wanted to explore how a brand could be integrated into the digital space,” Frank Cooper, then Pepsi’s “chief consumer engagement officer” explained.

The Refresh Project accomplished everything a social media campaign is supposed to accomplish: millions of Facebook likes and thousands of new Twitter followers. But it didn’t sell Pepsi. Pepsi Cola and Diet Pepsi both lost about 5 per cent of their market shares over the course of the year — a calamitous decline. The brand returned to TV. Bob Hoffman, a veteran American adman who blogs as the Ad Contrarian, has gained a large following for his savage critiques of digital hype. After Pepsi Refresh, he concluded, “only zealots and fools will continue to bow down to the gods of social media.”

The Pepsi debacle emboldened the ad industry’s other contrarians to point out that, despite the dazzling promises of digital, nearly all brands in mature categories still rely on conventional media. At the risk of being labelled Luddite, they suggested that although the internet has changed how the game is played, it has not changed its fundamental rules: mass marketing works; fame works; emotion works — and “legacy media”, especially TV, still do all of this better than the new

Sharp's incendiary observations are:

Sharp’s first law is that brands can’t get bigger on the back of loyal customers. Applying a statistical analysis to sales data, he demonstrates that the majority of any successful brand’s sales comes from “light buyers”: people who buy it relatively infrequently. Coca-Cola’s business is not built on a hardcore of Coke lovers who drink it daily, but on the millions of people who buy it once or twice a year. You, for instance, may not think of yourself as a Coke buyer, but if you’ve bought it once in the last 12 months, you’re actually a typical Coke consumer. This pattern recurs across brands, categories, countries and time. Whether it’s toothpaste or computers, French cars or Australian banks, brands depend on large numbers of people — that’s to say, the masses — who buy them only occasionally, leave long gaps between purchases and buy competing brands in between.

If you work for a brand owner, the implications are profound. First, you will never increase your brand’s market share by targeting existing users — the task that digital media performs so efficiently. The effort and expense marketers put into targeting their own customers with emails and web banners is largely wasted; loyalty programmes, says Sharp, “do practically nothing to drive growth”. What seems like a prudent use of funds — focusing on people who have already proved they like the brand — is actually just spinning wheels.

Second, and paradoxically, a successful brand needs to find a way of reaching people who are not in its target market, in the sense of people who are predisposed to buy it. The brand’s advertising must somehow gain the attention of people who are not interested in it, have never bought it, or who bought it so long ago they can’t remember — so that when they are ready to buy, it automatically springs to mind. In the wastage is the value.

Fascinating. That bears out some of my operating, but unproven, assumptions. I have steered well clear of investing in digital brand management owing to an absence of evident effectiveness. This despite frequent and numerous entreaties by marketing firms.

All of this makes “engagement” largely pointless. Light buyers aren’t fans of your brand. They don’t think of it as special or even unique. They aren’t much interested in whether your vodka is from Russia or Sweden, or how many times it has been distilled. No surprise, then, that they almost certainly don’t follow your brand on Twitter or visit its Facebook page, or that they can think of a thousand things they’d rather do than share a “digital experience”, let alone sign up to a “project”.

Even the people who do join brand pages on Facebook hardly ever click on them. The US company Forrester Research has found that the rate of engagement among a brand’s Facebook fans is seven in 10,000; for Twitter it is three in 10,000. People might watch ads on Facebook or YouTube, but that’s about all the interaction they want (Facebook itself recently conceded this point). A senior marketer at the drinks company Diageo, where Sharp’s book has been influential, put it to me bluntly. “After 10 or 15 years of f***ing around with digital we’ve realised that people don’t want to ‘engage’ with brands, because they don’t care about them.’

Interesting lessons learned.

Marketers consistently undervalue consistency. Diageo recently carried out an audit of all the endlines that it had attached to one of its biggest brands, Guinness, and were embarrassed to discover it had used more than 20 different slogans in 15 years. What’s more, when it asked people to recall an endline, the only one they remembered was “Good things come to those who wait”, which hadn’t run since 1999. Vast sums of money had been spent on campaigns which probably had short-term effects but barely left a trace in consumer memories.