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Facebook’s ‘like’ button does little as a marketing tool, says analyst

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Facebook is more than just a social network — it’s a gaming platform, a movie rental outlet and a major player in the 2012 US presidential elections. Because of the more than 500 million people worldwide that live in the Facebook world, it’s also become one of the prime marketing platforms for businesses seeking to connect with customers in new ways.

According to a new report from the Wall Street Journal, however, Facebook doesn’t have what it takes to become a major player in the e-commerce sphere.

A study titled, “Will Facebook Ever Drive eCommerce?” by Forrester Research analyst Sucharita Mulpuru reveals that retail outlets gain little by having a presence on Facebook and other social networks.

While an email marketing campaign boasts an 11 percent click-through rate and a 4 percent conversion rate, Mulpuru’s findings show that Facebook can only generate a 1 percent click-through rate, with only 2 percent of those people converting to actual customers.

The reason for this, says Mulpuru, is because people use Facebook for social reasons — not when they’re looking to buy things online.

“You go to Facebook to find other people,” she told WSJ in an interview, “not to find a product.”

Facebook, of course, disagrees. According to the Palo Alto, California-based social network, users respond better to Facebook’s personalized marketing functionalities, such as the “like” button, which companies can place on brand or product pages.

“When I raise my hand and say, I like Einstein (Bros.) bagels, and then one of my friends sees that ad, they’re going to see my name in that ad,” Facebook partnership and platform marketing VP Dan Rose told WSJ. Rose says that, according to Facebook-Nielsen market research, “we found that when my friend’s name is in an ad, I’m over 60% more likely to remember the ad, and I’m over four times more likely to purchase the product.”

“This is word of mouth,” he added. “This is word of mouth at scale. This is what, as marketers, we’ve always been trying to bottle up and find a way to take advantage of, and the social web is finally allowing us to do that.”

Forrester’s Mulpuru maintains that users only “like” a brand or a product page to receive a discount, and this public recommendation rarely spreads to other users in any type of viral way.

Regardless of Facebook’s effectiveness as a marketing platform, its vast and engaged user-base means companies aren’t going to stop trying to tap into its potential selling powers anytime soon.

Andrew Couts
Former Digital Trends Contributor
Features Editor for Digital Trends, Andrew Couts covers a wide swath of consumer technology topics, with particular focus on…
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