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Published: December 19, 2011

 
 

What’s Your Company’s Facebook LPM (Likes per Million)?

As Exhibit 2 shows, 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 (the clothing line from Inditex), 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.

In general, however, the correlation makes us confident that metrics such as LPM are here to stay. To be sure, there is more analysis to come. For this round, we excluded some companies simply because of the complexity of their portfolio. For example, about 770,000 individuals are listed as “liking” Kraft Foods on Facebook — a paltry number compared to the 23 million who have “liked” the Kraft brand Oreo. (If you visit the Oreo page, you’ll see many of those fans swapping photos of their cookie-chomping offspring.) Since we didn’t have ready access to brand-by-brand revenues for Kraft and other large CPG companies, we excluded them. But with the right information, those companies could also be analyzed, one brand revenue stream at a time.

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.

Author Profiles:

  • Nicholas Hodson is a partner in Booz & Company’s retail practice based in San Francisco.
  • Umut Aytekin is a principal with Booz & Company’s retail and operations practices based in San Francisco.
  • Jon Crawford is a principal with Booz & Company’s retail practice based in San Francisco.

 

 
 
 
 
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