@NBAMemes Demonstrates The Value Of Social Media Engagement
BY ADAM GROSSMAN
One of the most common questions we receive is how social media and influencer marketing can translate into tangible business metrics. The company PlayLine’s acquisition of the @NBAMemes Instagram account and last week’s investment by Mark Cuban into the account demonstrate how value can be created.
PlayLine “has become a serious player in the sports betting space” by acquiring 250,000 registered users from social media. In addition, it has “cultivated a network featuring roughly 500 influencers and campaign managers to interact with their content through performance deals.”
The development of this network seems to have enabled PlayLine to become a “serious player” in large part because it significantly reduces the customer acquisition cost (CAC). PlayLine charges a user acquisition fee of $25 while the CAC for FanDuel and DraftKings is currently $68.
One key reason that PlayLine achieved this success is the company’s approach to finding valuable influencers. Traditionally, the focus on influencer marketing value has been to examine potential reach. More specifically, the larger the follower count an account has the more value it has for influencer marketing.
PlayLine takes a different approach in evaluating influencers. As PlayLine co-founder Aaron Avruskin states, “Oftentimes when people look at social media, they may get blinded simply by the follower count, but what truly matters — the most important metric in that space — is engagement.”
The @NBAMemes Instagram account is a good example of this approach. The account has 3.8 million followers on Instagram. That is a substantial number but still millions fewer than Barstool Sports and ESPN.
However, @NBAMemes has a 7.49% engagement rate and that is substantially higher than Barstool Sports (1.71%) and ESPN (1.35%). It was this engagement rate delta that appears to have been the driving factor in PlayLine’s decision to acquire @NBAMemes and in Cuban’s investment to become a partner in the account.
PlayLine’s and Avruskin’s analysis aligns with our research and analysis at the foundation of the Social Sentiment Analysis Platform (SAP) and the Influencer Analysis Platform (IAP). Our primary goal with these platforms is to examine brand metrics and determine their impact on revenue metrics. We have found that the specific way that Block Six Analytics (B6A) values engagement rates and sentiment scores has a strong and statistically significant correlation to revenue growth. In particular, a lift in engagement and / or sentiment causes a probabilistic lift in revenue growth.
The @NBAmemes account demonstrates how this can be applied in a real-world case study. More specifically, we can answer the question of how PlayLine is able to have success with only a $25 user acquisition fee while FanDuel and Draftkings are paying $68 per CAC.
PlayLine’s core insight appears to be that many companies pay primarily for follower counts rather than engagement rates with social media marketing. Yet, it is engagement rates that are a key driver of cost-efficient user acquisition in sports betting. Therefore, PlayLine can partner with more effective influencers (like @NBAMemes) but also pay less for these partnerships because of the emphasis on reach rather than follower counts.
To clarify, PlayLine does not just acquire influencers for their engagement and do nothing to increase these rates. PlayLine has invested in content quality within in its influencer network and appears to be doing the same with @NBAMemes, particularly after Cuban’s investment.
However, PlayLine’s core strategy seems to be building on concepts we explored in past posts for both social media and non-social media partnership opportunities: Reaching the right people at the right time with the right message that is most likely to drive business results. PlayLine and Cuban highlight how paying for quality content with high engagement rates rather than solely focusing on a large number of impressions or followers can be a more effective way to spend partnership dollars.