Does liking a brand on Facebook Impact brand performance?

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what is the impact of liking a brand on Facebook? This definitive analysis shows the conditions under which liking a brand has an impact and will change marketers' approach to Facebook marketing

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Does liking a brand on Facebook Impact brand performance?

  1. 1. Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing When and Why Does Facebook Liking Add Value to the Brand? Joel Rubinson President and Founder, Rubinson Partners, Inc. Mike Perlman Vice President, Compete, Inc.
  2. 2. Background on the value of Facebook liking for brands People on Facebook like brand pages (fans) which means that updates from those brands show up in people’s newsfeeds These “impressions” and the advocacy effect of declaring you like a brand supposedly add great value to brands. Often the greater sales value of fans is cited as evidence but there is potentially a bad assumption about causality as those who like a brand might already be much more loyal to it. We intend to sort all this out… Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 2
  3. 3. Key questions Predisposition: Are those who like a brand already much more loyal to it? Causality: Does liking a brand on Facebook make that consumer more valuable to the brand? Conditions: If yes, are there conditions under which value is added? Meaningfulness: Even if value is added, how big is the lift in brand performance as a result of this effect? Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 3
  4. 4. Sorting out causality The Data Source Compete’s multiple data sources create the industry’s largest panel with 2 million people in the US Ability to see historical clickstream behavior (sites visited, search terms used, etc.) for each panelist Utilize data to provide insights to marketers, agencies, and publishers in areas such as: – – – – Social Media Consumption Advertising effectiveness Consumer “path to purchase” analysis Site design effectiveness Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 4
  5. 5. Sorting out causality Our measure of value is “sessions”, defined as a visitor coming to a page in an owned media domain and exiting after some variable number of page views and minutes. – Especially when online purchasing is available on the site, sessions is like shopping trips and therefore is a good proxy for sales activity This allows us to look at the number of sessions for 30 days before they liked the brand and 30 days after. We analyzed 63 brands rolled up into 3 industry categories: (beauty, restaurant/food, retail) Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 5
  6. 6. Predisposition Yes, those who like a brand on Facebook are nearly 8 times more predisposed towards it. 1. 19 restaurant/food, retail brands, excluding Amazon 2. Sessions/user for all internet users Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 6
  7. 7. Causality Yes, those who like a brand on Facebook show an 85% increase in their sessions vs. baseline in the 30 days after liking. 63 restaurant/food, retail brands, beauty Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 7
  8. 8. Conditions Nearly all of the increase comes from the small number of new fans who revisit the brand page after liking Sessions in prior 30 days: fans who revisted vs. didn't revisit 13,934 revisited brand page likers didn't revisit 45,535 revisited brand page likers didn't revisit 63 restaurant/food, retail brands, beauty Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 8
  9. 9. Meaningfulness In February and March, there were over 1 BILLION sessions/month for the 63 brands analyzed. The percentage of sessions, 30 days post liking, accounted for by those who liked any of these brands in a given month was 1/100-th of a percent Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 9
  10. 10. Conclusions and generalizations Domain: national brands and retailers engaging in e-tailing practices Generalizations: – Facebook fans are much more predisposed to the brand before the act of liking the brand on Facebook – Liking a brand does, in fact, greatly increase brand value for a given user – The lift in owned media sessions, which reflects positive business activities, of liking almost exclusively comes from repeated visits to the fan page – Success at creating Facebook fans (likes) has a positive effect on overall brand performance but it is quite small even if the effect persists over time Implications: – Findings suggest that newsfeed impressions per se are of little value to brand performance but “time with the brand” on its page does have value – Begin monitoring time with brand and consider Facebook as only one way of increasing that metric. – Marketers should do whatever they can to get users to revisit the fan page and to go to owned media after such visits. Empirical Generalizations in Advertising II: What Works in the New Age of Advertising & Marketing 10

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