ComScore and Facebook partnered on research released today that, if applied by marketers, could help the social site grow its ad revenue. Among other things, the report suggests the way to boost likes on Facebook is to buy ads on the site, and the more fans a brand has the more it might sell.
“The Power of Like 2” report explores the concept of brand amplification. When applying the amplification ratio equation, top brands on Facebook like Disney, McDonald’s – and Facebook itself – lead the pack. The metric, which the report claims is “perhaps the most important, and least understood, element of achieving brand reach and resonance on Facebook” attempts to measure the influence and exposure people can generate for brand messages on Facebook.
The report defines the amplification ratio as “a metric that divides the number of Friends of Fans reached by the number of Fans reached with earned media, or the number of impressions reaching each of these segments.”
While Facebook achieves an amp ratio of over 2, on average the top 10 corporate brands come in at around 1.05, according to the report. McDonald’s does much better than average, achieving a ratio of around 1.5. Disney and Starbucks are also high on the meter compared to other brands like Converse, Red Bull, and Victoria’s Secret. Not considering celebrities and entertainment brands, the top 100 Facebook brands have an average ratio of .84, the report states.
Not surprising, as Facebook scrambles to attain revenue growth in the wake of its IPO debacle and subsequent plummeting stock price, the report suggests that getting to a high amp ratio is easier with paid advertising. The report states that “brands are often able to double the reach of their Page Posts through Friends of Fans,” and suggests companies buy Sponsored Stories ads to promote posts to friends of users.
Also facilitating likes for brands are their own display ads running on Facebook and elsewhere on the Web. According to comScore, 15.2 percent of U.S. display ads were socially enabled in March, nearly double the 8.2 percent mark reported in November 2011. Almost 41 percent of food and grocery CPG ads studied had a social feature such as a Facebook logo or “like us on Facebook” call to action.
Fans and their Facebook friends also have higher rates of purchase, the study found. Fans of Amazon, for instance, spent more than twice as much on the e-commerce site as the average Internet user, said comScore. The company measured amplification ratios during the week ending November 30, 2001 – which covered Black Friday and Cyber Monday, and compared it to an average week in October. Ratios rose by at least 2.2 times above the baseline during the holiday period, according to the report.