With more than 320 million people on Facebook around the world, companies are hoping to tap into more than numbers and actually quantify the value of corporate participation in the social media site. And two recent studies will help: They are proving that a brand’s Facebook fans as customers provide more value than non-fans to the bran and those fans also have higher brand awareness.
According to a study from digital consulting firm Syncapse, the average value a Facebook fan provides a brand is $136.38. In the best case scenario, it can swing up to $270.77, but – here’s the catch – the value can also sink to zero dollars in the worst case. (Click here to see the April 16, 2010, SNEWS story, “Facebook fans may have more business value than suspected,” looking at the monetary value of fans in terms of media impressions.)
The value is based on Syncapse’s analysis of five factors per fan: product spending, brand loyalty, propensity to recommend, brand affinity and earned media value. Syncapse partnered with Hotspex Market Research to collect data from more than 4,000 panelists across North America in June 2010.
The study found that a Facebook fan, on average, participates with a brand 10 times a year and will make one recommendation. It noted that value can differ significantly by individual brand, influenced by product price and purchase life cycle.
Syncapse said the results are a confirmation that Facebook fans are more valuable as customers than those who are not, thus could be validation of a company’s participation and investment in social media.
The study also found:
>> Facebook fans are 28 percent more likely than non-fans to continue using a brand, and are also 41 percent more likely than non-fans to recommend a fanned product to their friends.
>> 68 percent of Facebook fans indicated that they are very likely to recommend a product across the 20 top leading brands included in the survey versus 28 percent for non-fans. (Brands covered in the survey were Nokia, BlackBerry, Motorola, Secret, Gillette, Axe, Dove, Victoria’s Secret, Adidas, Nike, Coca-Cola, Oreo, Skittles, Nutella, Red Bull, Pringles, Playstation, Xbox, Starbucks and McDonald’s.)
>> 38 percent of respondents reported that they would likely become a fan of a brand if they saw a family member or close friend do so. It drops to 34 percent if it’s a person known through Facebook rather than a family member.
>> The likelihood of trying a product if somebody else became a fan is 44 percent if it was a close family member or friend, and drops to 36 percent for a Facebook friend.
>> 81 percent of fans said they feel connection/empathy with the brand, compared to 39 percent of non-fans. 87 percent said they felt warmth, gratitude, happy or satisfied, compared to 49 percent of non-fans.
In a separate study from The Nielsen Company and Facebook, research found that retailers seeking to increase brand recall, awareness and purchase intent should consider engaging consumers via online social networks.
Results from the study showed that consumers who were exposed to a standard homepage ad on Facebook had 10 percent higher ad recall, 4 percent higher brand awareness and 2 percent higher purchase intent than consumers who were not exposed.
And, those exposed to Facebook homepage ads with social context -- that is, the ad includes a list of people on the viewer’s “friend list” who are registered fans of the brand or product -- had 16 percent higher ad recall and 8 percent higher awareness and purchase intent than non-exposed consumers.