Ads, word of mouth boost brands on Facebook

22 April 2010

NEW YORK: A combination of display advertising and favourable word of mouth on Facebook can serve to drive up several key brand metrics.

Nielsen and Facebook first formed a partnership last year in an effort to provide detailed insights into the activities and preferences of the social network's audience.

Their new research covered 800,000 members of the social network and advertising campaigns run by 14 brands in the consumer packaged goods, retail and entertainment sectors.

More specifically, it aimed to assess how ads hosted on Facebook performed in terms of driving recall and awareness, and whether they had an impact on purchase intent.

Overall, campaigns that included homepage ads inviting people to become a "fan" of the product in question delivered a 10% uptick in brand recall.

Moreover, awareness scores jumped by 4% and purchase intent climbed by 2% among individuals that viewed these executions, Nielsen found.

Recall rates grew to 16% when marketers employed "social" display ads, which are shown to users if one of their contacts has signed up as a fan of a brand, and include the name of the friend concerned.

Awareness and purchase intent scores both stood at 8% when this tool was utilised by companies, thanks to what the Facebook/Nielsen report termed a "lightweight form of advocacy".

Word of mouth, taking the form of advertising-related comments posted by netizens on their Facebook newsfeeds, also played a key role in improving these key measures.

Indeed, when users of the social network were exposed both to ads and positive buzz among their peers, results across each of the areas analysed typically trebled.

This trend was further exaggerated when members viewed more than ten relevant pieces of feedback from their friends.

Jon Gibbs, vice president of media analytics at Nielsen, and co-author of the report, further argued that this "hybrid" of "paid" and "earned" media could prove the most profitable.

Brands that possessed a sizeable following on Facebook - such as Starbucks and Coca-Cola - also benefitted disproportionately from this process.

Despite the importance of word of mouth, the study suggested that creative ads were absolutely vital to achieving this goal.

"To maximise the reach of earned media, advertisers must start with interesting and engaging paid homepage impressions," it said.

"The number of organic impressions generated by a campaign can vary widely, but by its very nature as a relationship that must be initiated by the consumer, it's a relatively small percentage of a campaign's total reach."

Rex Briggs, ceo of Marketing Evolution, an analytics firm, said the figures delivered by Facebook's homepage ads were "unremarkable" compared with the industry average.

However, he added that the study served a broader purpose in attempting to prove the payback on marketing investments made on Facebook.

"It does what Facebook wanted to do, which is legitimise the advertising and business model of Facebook," Briggs said.

"What it doesn't do is give the cross-media understanding of how does this piece fit into overall marketing plans."

As previously reported, Facebook has announced plans to replace the word "fan", instead offering its members the chance to click a button confirming that they "like" a specific brand or company.

Vitrue, the consultancy, also recently released figures showing that each "fan" secured by a brand has a media value of $3.60 (€2.65; £3.17) a year.

Data sourced from Nielsen; additional content by Warc staff