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.
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?
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.