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Brand value to marketers is the proportion of actively involved consumers with a group of product or services. These actively involved consumers go out of way to get the brand by paying a premium. In a nutshell, they are the reason for companies to create the brand in the first place.
Now, companies have digital assets like Facebook for these actively involved consumers to demonstrate their affection in a much more tangible way and hence, such digital statistics have become the pseudo indicators of brand management. On a stand-alone basis, these statistics may not make complete sense as the number of 'Likes' could be directly proportional to the size of the company. To remove the effect of scale, we hypothesised recently that Facebook 'Likes' per million of revenue can be a good proxy across companies to compare their brand.
To test this hypothesis, we collected Facebook 'Like' numbers for a range of leading companies in India. We also divided these by revenues (net sales) of the firm in order to understand the correlation between this and the brand value of the organisation (refer graph). The analysis shows a strong correlation between the brand value of the organisation and the Facebook 'Likes' per million (LPM), that is, most companies have a Facebook followership that correlates fairly closely with their brand's presence in the outside world. A few brands land above the line (for instance, Mahindra, Tata, Idea). This indicates a Facebook presence 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. These companies do not have a Facebook presence that mirrors the brand engagement elsewhere.
Finally, unlike many other brand metrics, LPM can be collected as often as you wish. 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 of brand relevance, especially in comparison with that of your competitor.
By Vikash Agarwalla, principal and co-leader, consumer & retail practice, & Kingshuk Sanyal, engagement manager and senior member of the consumer & retail practice, Strategy& India
