Every company can compare its brand value to that of its competitors based on a readily available scale: Facebook “likes,” adjusted for company revenue. (An excerpt from an article in Business + Strategy by Nicholas Hodson, Umut Aytekin and Jon Crawford).
Measuring brand value has always been something of a dark art. Marketers have experimented with many combinations of financial metrics, consumer research, and gut feel, seeking a scale. But the data is typically inconclusive, difficult and expensive to gather, and almost impossible to use in comparing one company to another. Fortunately, there is now a very easy way to track the number of consumers who value your brand, by using one of Facebook’s simplest features: “likes.”
What is brand value? To marketers, it is the proportion of consumers who are actively engaged with a group of products or services. Marketers continually seek to track the number of engaged consumers (sometimes known as brand zealots), because they are willing either to pay more for the brand (earning the company a price premium) or to go out of their way to get it (leading to more volume). The more zealots you have, the stronger your brand loyalty and the more valuable your brand.
A company’s (or brand’s) Facebook page is an Internet destination tailored for those zealots. It’s where people come to get information about the brand and to engage in dialogue with the producers and others who care. Social network statistics, particularly the number of Facebook “likes,” are thus indicators of brand engagement.
However, when considered on their own, these statistics are unreliable. Since larger firms with more customers almost inevitably attract more followers, the raw number of “likes” that a page has earned may simply reflect the size of the company behind it. Recently, we hypothesized that a true indication of brand value would be the popularity of the brand’s Facebook page indexed to the size of its revenue stream. If you could track your Facebook LPM — your likes per million dollars of revenue — you’d have a pretty good proxy for the way people feel about your products and services.
Most companies have a Facebook followership that correlates fairly closely with their brand’s presence in the outside world. A few brands land farther above the line, most notably Starbucks, Adidas, Zara, Yahoo, Burberry, and Heineken. This indicates a Facebook presence considerably in excess of their real-world brand engagement. These brands may well be poised to reap greater rewards as the Facebook generation moves into the mainstream of consumer demand. There were also some notable outliers below the line, including Louis Vuitton, Google, Microsoft, Amazon, and Toyota. Whether because they compete with Facebook in some way, because their customers are not likely to use Facebook, or for some other reason, these companies do not have a Facebook presence that mirrors their brand engagement elsewhere.
The Facebook LPM index offers companies at least two courses of action that they haven’t had before. First, they can gauge the success of their online activities. Some companies provide Facebook followers with special deals or other enticements; others have built communities of brand zealots through discussion forums and associated not-for-profit campaigns (for example, the collaboration between Starbucks and the Opportunity Finance Network on the Create Jobs for USA fund). If you use Facebook to create an engaging environment, where you monitor the market and shape the dialogue, your growth in likes per million can tell you how well you’re succeeding with the increasingly influential online audience — and whether your overall brand engagement, even if it seems strong, could be at risk.
Finally, unlike many other brand metrics, LPM can be collected as often as you wish. Facebook popularity changes rapidly, and although it’s unusual for people to remove themselves from a page (instead, they stop visiting), a sudden spike in “likes” (or a failure to spike after a promotion) can be a powerful real-time indicator, especially in comparison with competitors’ results. Your Facebook LPM could become one of the most valuable indicators you have of brand relevance: your own, and that of everyone else in your industry.
- Hey Groupon. Thanks for fucking up email (mumbrella.com.au)
- KFS of Web Contribution to Information Value, Branding and Engagement (thoseinmedia.com)
- Selling to the Facebook focus group (not a good idea) (richardstacy.com)
- Money can’t buy you love, but can buy you ‘Likes’ on Facebook! (marketing.yell.com)
- A Model for Evaluating Advertisers Facebook Presence (actionableinsights.covario.com)
- Facebook And Google + Up The Engagement Factor For Marketers (stargroup1.com)