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Brand Equity is defined as the value (positive and negative) a brand adds to an organizations products and services.
How do you know that a product has brand equity?
A product with brand equity will:
1) Be able to charge a premium for it’s brand (i.e. the cost of Heinz ketchup versus generic)
2) Evoke long-term loyalty (I’ve eaten KD since I was a kid and it MUST be the real KD)
3) Have a significant market share (notice that McDonald’s has more market share than it’s next 3 competitors combined).
SOURCE: Ad Age (Jan. 1, 2007)
I personally have never been satisfied with traditional ways to measure Brand Equity. Hard numbers such as market share or ROI are great but these metrics are far too broad to attribute to just Brand Equity.
Models and methodologies like The BrandAsset® Valuator (Young & Rubicam) or Winning BrandsTM(ACNielsen) tend to be the current standard.
(source www.zibs.com)
(source www.zibs.com)
But these are soft metrics that are difficult to assign value to. And it’s difficult to separate from other influencers i.e. Does a brand have top market share because of it’s brand power or because it’s got the best packaging? Maybe you spent more on marketing than your competitors?
Jonathan Knowles (branding guru) suggests that “the focus needs to be on the metrics that capture and explain customer behaviour, not simply customer attitudes”.
So can we use social media to measure a product’s Brand Equity?
Most frequent users of social media will say YES!
A quick search on Digg shows 11 front page stories featuring Apple (iTunes, iPod, Mac) in the last week. Will Ferrel earned over 5000 diggs this week and he’s often a favorite with the Digg crowd.
Compare this to our “Brand Leaders” Heinz Ketchup has only been “hot” twice in the past year and Kraft Dinner not at all.
But McDonalds. Oh, yeah they’re hot! A quick search of Digg shows that they are firmly ingrained in our culture with 15 front page stories in the past month alone.
Does this mean that social media is just a barometer for what’s current?
No!
Social Media is more than just a ‘top of mind’ radar for Brands. Social Media can be used to build a brand (Will Ferrel) and to reinforce a brand (McDonalds).
Moreover, Social Media Monitoring provides Marketers with a very powerful Leading Indicator. When used in conjunction with Lagging Indicators such as ROI and market share, Social Media Monitoring provides Marketers with REAL metrics.
As posted in Social Media, Branding.
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8 Responses to “Using Social Media to Determine your Brand Power”
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February 27th, 2008 at 2:42 pm
Great analysis, J!
However, my feeling is, social media will really only ever work for the likes of Apple and W. Farrel. So these findings don’t surprise me.
It’s something I’ve discussed before — it’s the Apple’s, the Sony’s and the Nike’s of this world that are always going to succeed in build brand and deepen their brand penetration, while the other 99% of businesses just look on…
February 28th, 2008 at 2:32 pm
Interesting insights! I haven’t really thought of this before.
February 29th, 2008 at 7:14 am
I think you’re definitely onto something — but shouldn’t there be some sort of provision for negative mentions vs. positive mentions? The day of the Valdez oil spill, Exxon might have been the hottest story on Digg… but for the right reasons?
I know a company in Mountain View, CA who might have the engineering muscle to separate the positive from the negative.
February 29th, 2008 at 8:55 am
@Wayne - I agree that very broad social media sites like Digg are a better fit for Enterprise level companies whose client base is also very broad. But I do think that there is tremendous value for smaller companies to participate in niche social media with the same target market. i.e. Environmental.
@IMJ - thank you!
@ Paul - I agree negative versus positive mentions is a good point. Also are they always top of mind like McDonalds or is there a major news event that is making them top of mind like your Valdez example?
February 29th, 2008 at 12:07 pm
Jennifer, you seem to be implying that sites like Digg have increased the power of certain brands: “Social Media can be used to build a brand (Will Ferrel) and to reinforce a brand (McDonalds).”
Would you really attribute the success of Will Ferrel to his social media exposure, even some part of it? I struggle with that example.
Ironically, perhaps, Ron Paul might be a better example, although he really had nowhere to go but up at the start and he probably did get more exposure because of social media than he would have otherwise. Although it won’t make him president.
February 29th, 2008 at 2:24 pm
@ Mark - The focus of this article is more on using social media to measure a brands equity than to build a brand. Although I do believe that SMM can help build a brand too. However, like any marketing tactic I strongly believe that the value proposition has to already be there. I.e. social media wouldn’t help Will Ferrell if he wasn’t actually funny.
I do believe that the additional exposure that showing up (positively)on Digg et al, on a regular basis certainly does help to sell more movies which ultimately benefits his career.
I appreciate your comment! though I’m not touching the Ron Paul part