What's the Value of a Like?

Leslie  John; Daniel  Mochon; Oliver  Emrich; Janet   Schwartz

Article | Harvard Business Review | March–April 2017

What's the Value of a Like?: Social Media Endorsements Don't Work the Way You Might Think

by Leslie John, Daniel Mochon, Oliver Emrich and Janet Schwartz

Abstract

Brands spend billions of dollars a year on lavish efforts to establish and maintain a social media presence. But do those campaigns actually increase revenue? New research provides an answer to this question, which has vexed marketers ever since social media burst upon the scene. In a series of experiments, the researchers tested four increasingly interactive ways in which Facebook might affect customers’ behavior. First, they explored whether liking a brand—passively following it—makes people more likely to purchase it. Second, they examined whether people’s likes affect their friends’ purchasing. Third, they looked at whether liking affects things other than purchasing (for example, whether it can persuade people to engage in healthful behaviors). And fourth, they tested whether boosting likes by paying to have branded content displayed in followers’ news feeds increases the chances of meaningful behavior change. The results were clear: Merely liking a brand neither increases purchasing nor spurs friends to purchase more. Supporting likes with branded content, however, can prompt meaningful behavior change.

Keywords: social media; Social and Collaborative Networks; Consumer Behavior; Marketing Strategy; Online Advertising;

Format: Print

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Citation:

John, Leslie, Daniel Mochon, Oliver Emrich, and Janet Schwartz. "What's the Value of a Like? Social Media Endorsements Don't Work the Way You Might Think." Harvard Business Review 95, no. 2 (March–April 2017): 108–115.

Firms are increasingly giving consumers the vote. Eight studies demonstrate that when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers react negatively when violated: representation (Experiments 1A–1C); consistency (Experiment 2), and non-suppression (Experiment 3). However, when firms honor these implicit promises, voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks.

Email mking@hbs.edu for a courtesy copy.

Back to the Roots (BTTR) is a start-up with a social mission to “undo food”—to reconnect people to where their food comes from. In late 2017, Back to the Roots cofounders Nikhil Arora and Alex Velez were contemplating their next move. The company had an eclectic portfolio of products, including ready-to-grow products, which included gardens in a can, and ready-to-eat products, which included cereals, and was being courted by two major players in each category. With an award-winning cereal-based snack bar in their hands, the duo was debating whether they should delve further into the ready-to-eat category. But it was a competitive space. They wondered whether they were ready to launch yet another new product and, if so, what this move would mean for their ready-to-grow product line. Which path would enable them to best achieve their growth goals?

Case | HBS Case Collection | December 2018 (Revised September 2019)

Fishbowl: Scaling Up

Leslie K. John

Fishbowl is a social media app that allows professionals to connect with other relevant professionals both within their company and across industry. Unlike many other social media apps, on which users typically present idealized portraits of themselves, on Fishbowl, people get real. Fishbowl prides itself in being a "safe space" that allows users to feel comfortable interacting with candor - whether to ask difficult questions in order to give and get advice, or just to vent or crack jokes. A key part of the user experience is the ability to post anonymously. But to ensure relevance of posts, when a user signs up, Fishbowl verifies their identity by requiring them to provide their full name, employer email address, LinkedIn account and contact list. Fishbowl has several hundred thousand users and is now looking for ways to monetize the platform. As such, founders Loren Appin and Matt Sunbulli face a mission-critical decision: should they integrate employers into the platform? Although formally integrating employers would provide a much-needed revenue stream, at the same time Appin and Sunbulli worry that doing so could destroy the user experience. Is formalizing employer relationships antithetical to the safe space they have created?

Keywords: communication technologies; interpersonal communication; talent and talent management; customer value; value chain; entrepreneurship; business model; advertising; Growth and Development Strategy; Marketing Strategy; Product Marketing; Two-Sided Platforms; Consumer Behavior; Network Effects; Emotions; Motivation and Incentives; Trust; Software; Technology Adoption; Technology Platform; Communications Industry; Employment Industry; Media and Broadcasting Industry; Technology Industry; Telecommunications Industry; United States;

Citation:

John, Leslie K. "Fishbowl: Scaling Up." Harvard Business School Case 919-013, December 2018. (Revised September 2019.) (Email mking@hbs.edu for a courtesy copy.) View Details

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What's the Value of a Like?: Social Media Endorsements Don't Work the Way You Might Think

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