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

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. 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
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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
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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:
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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
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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
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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
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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
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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
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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
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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
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