How to Measure Brand Value: Likes, Followers, Influencers, Views? No, Social Currency

Do brands really create value? Will Old Spice's tornadic viral campaign and sudden "influence" improve Procter & Gamble's bottom line?

Actually a number of events and trends have conspired like a perfect storm over the last several years to put brands and their stewards on the hot seat. Recession has reduced marketing departments and dollars and undermined CMO confidence and stature. Toyota and Tiger have themselves punctured legendary brand infallibility and auras of trust. Famous Detroit name plates continue to die. The specter of a BP brand corpse now hovers. (Captain Old Spice may not be able to save the Gulf but can he restore our love and respect for brands?)

The explosion of social media channels and technologies has forced brands to play catch up with consumers and often into becoming awkward or unwanted "friends". If Edelman's trust index shows that we trust our friends less today, then we probably trust our brands and their leaders even less. The flowering of "personal branding" has also diluted the meaning and influence of corporate branding.

With brands and CMOs under stress, their roles called into question, companies (and even customers) now want more data, metrics and accountability. And there is no shortage of social media and brand buzz monitoring services and tools to gauge brand performance in the evolving space. There are rankings too, such as the Vitrue 100. Facebook and Twitter of course have worlds of real-time brand data and rankings to publish and they do.

A new confluence of market forces (including popular interest in charitable giving post-Haiti quake, the coming of age of the idealistic Millennials, public anger over Wall Street bonuses, the growing Sustainability movement and near universal hostility directed at BP—"Beyond Pollution") is requiring brands to be socially "good"—hence more rankings and metrics: Brandkarma.com; PSFK Good Brands.

Of course there are already rankings for brand financial value: Interbrand; Millward Brown BrandZ; Credit Suisse Great Brands; brand equity: Equitrend; and brand word-of-mouth buzz/promoting: McKinsey; Net Promoter Score — all of which try to correlate a brand's score with its bottom line.

Add to the rankings list now: Brand Social Currency. The inaugural study was completed earlier this year. "Building Social Currency is probably the most important investment companies can make to create value for themselves," says Erich Joachimsthaler, Founder and CEO of Vivaldi Partners, the author of the study. He views Social Currency as a new, strategic dashboard to help corporate leaders diagnose, build and monitor the long-term heath and value of their "brand assets" in the shifting marketplace.

The methodology was developed in conjunction with MIT Sloan statisticians and Lightspeed Research. Brand Social Currency is defined as the extent to which people share the brand and/or information about the brand as part of their everyday social lives at work or at home. It is made up of six key dimensions or "levers"—Utility; Affiliation; Identity; Conversation; Advocacy; and Information. The study surveyed 1000 respondents on more than 60 brands across a dozen categories. Questions for each lever were posed to brand users. Results then rolled up into a composite Social Currency score.

Some of the Brand Social Currency results mirror trends in other studies or in other data including financials; this lends credence to the new approach. For example, in the airline category, JetBlue, Virgin, and Southwest, which rated as the the top three brands in Social Currency, are consistently the leading performers in equity, performance and loyalty studies. Starbucks, boasting a high Social Currency score for the fast-food category, traces much of its 2009-2010 sales growth to a number of recent operational, brand and social media initiatives—this momentum appears to be captured by the study. Apple's stellar Social Currency number (no surprise) also synchs with findings from countless other studies—and recent financial results. Sunil Gupta, Professor of Marketing at Harvard Business School, says the Social Currency project "is thoughtful and provides interesting insights."

But the new study is far from perfect. Joachimsthaler concedes that Brand Social Currency has more applicability for certain types of brands. Also, the sample universe (1000 participants) could certainly be beefed up to gain a more accurate, deep and representative read on the brands. And why not include more brands and categories? Audi, Volkswagen, Nissan and Hyundai are conspicuously absent from the car grouping. Famous names from the grocery aisle are also missing. Where is Old Spice?? The study's viability for business-to-business markets has not been tested. And Social Currency may favor niche and premium brands (are consumers justifying their expensive purchases by giving high ratings in the survey?). Gupta argues that these brands "are likely to score higher on some components of social currency, such as affiliation and identity with the brand. It will be useful to show how mass market brands can overcome this inherent disadvantage."

One point Joachimsthaler emphatically wants to make on the study: "Brand Social Currency is not about social media, not about buzz, not about tactics. It is so much bigger. It gets to a brand's long-term sustainability. It's about how customers relate to one another in the context of brands and how those brands, companies, products and people relate to customers ... It's an experiential, holistic concept that we have deconstructed and reconstructed to map to brand value."

Philip Kotler, Professor of International Marketing at Northwestern's Kellogg School of Management, says "certain brands can gain a good return from investing in Social Currency; others would be wasting their money. Harley Davidson is at one extreme ... but Crest toothpaste would not profit from investing in building Social Currency."

It will be fascinating to see whether and to what extent Old Spice will smell stronger Social Currency and unit sales as a result of its recent brand investment.

Brands by the Numbers

Here are three bottom line findings you need to know on Brand Social Currency:

1. Social Currency significantly drives brand loyalty; brands with a high Social Currency command a price premium.

2. The importance of the six levers that make up Social Currency varies by brand category.

3. As expected, Toyota's Social Currency score dropped notably between December 2009 and February 2010 (the Toyota part of the survey was run twice).

Kevin RandallKevin Randall is Director of Brand Strategy & Research at Movéo Integrated Branding (krandall@moveo.com). His expertise is understanding, integrating, and applying research and brand strategy to create business and customer value. Kevin has been invited to speak on brand topics by Google, Harvard Business School, Wharton and Kellogg, and his articles have been published on six continents. His clients include Siemens, CareerBuilder, Cardinal Health, Molex, GOJO/Purell, and Cancer Treatment Centers of America.

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5 Comments

  • Ron Strauss

    Value is defined as Benefits less the Costs of acquiring and/or using those benefits. Value is a measure of economic worth, which is created when people assign perceptions of value (benefits less costs) to a good, service or company. Part of this perception of value is based on the tangible performance attributes of the product/service - which is relatively easy to replicate and offers little in the way of differentiation. Part of this perception of value is based on the intangible emotional, emotive attributes associated with the product/service offering - this is often based on meanings that the purchaser/user has ascribed to the brand. Finally, perceptions of value are also based on the price they must pay in order to get and use these attributes.

    Each individual has their own value equation or way of assigning value. The products/services that offer the best value in the opinion of each individual usually are chosen, bought, purchased, leased, etc. Critical to success, of course, is having a value equation in a product/service category (other choices) that leads to being chosen at a price and volume that enables the firm selling the product/service to make a profit.
     
    If you want to measure brand value, then measure how purchasers assign value to a branded product in a category compared to an unbranded/store brand product in a category. That will give you a good foundation for estimating a brand's value. Multiply the difference times the volume of the brand, and you have a market-based estimate for brand value in that category. The key words here are 'market based.'
     
    And remember: The Devil is in the Details.

  • HalfEmptyWallet

    By chance, how do you measure: "Utility; Affiliation; Identity; Conversation; Advocacy; and Information"? Similar to the understanding of Marc's calculation question of value with metrics.

    I've seen the usual in reporting 'likes', 'fans' and the usual but I feel your six key dimensions or "levers" are alot more tricky to measure, especially for smaller companies. Any suggestions?

    --@HalfEmptyWallet

  • Marc LeVine

    Hi Kevin:

    Very good post. Please forgive me, but I am of the belief that all such discussions regarding Social Media metrics are little more than intellectual exercises that expand the mind, but never clearly hit the mark. The verdict eludes us as the jury is hung.

    I have had the pleasure working in two other career fields - over the past 30 years - that have EACH struggled with their own metrics fiascos. The intelectual debates have never proven to anyone that there are accurate and reliable methods to calculate and/or measure relevent data that was hoped to justify the work being done. The two career fields I am speaking of are public relations and human resources.

    How does one measure the value of public relations? How does one precisely calculate and value cost per hire?

    I have read and listened to arguments all around these two topics for years and years. Decades later, there is still loads of confusion and nearly endless debate. Despite all of this ongoing controversy, public relations and human resources professionals still go to work every day and feel as though they are contributing to their company's well being and yes; their bottom-line.

    Marc LeVine
    Director of Social Media
    RiaEnjolie, Inc.
    www.RiaEnjolie.com
    Follow me on Twitter @RiaEnjolie

  • wileyccoyote

    Kevin, good post. Thanks for sharing. I especially like your six levers that make up Social Currency. In my experience, "Advocacy" and "Affiliation" are the Holy Grail for marketeers because this is when consumers become brand evangelists. For me, that's the sweet spot of any social currency.

  • Stephen Byrne

    My main question on this Kevin is to whether the measure of brand social currency is actually based on perception and recall or what? As it is these results are probably on par with any of the other measurement levers used by many of the other studies and are as much use or as useless as any other of the brand value studies both you and I have cited. Clearly, somewhere down the track we're going to need a more accurate brand measure not just another survey that contributes to the confusion that brand owners and consumers have about their brands. To say one or more survey can be made to suit your brand's purpose makes the whole measure of brand value and brand association the result of a yet another subjective and somewhat dubious set, without any definable or logical end goal. I think we're some way off any absolute measure and this feels like it just adds to the soup.

    Stephen Byrne
    Director Strategic Planning & Analytics
    Disperse New York