Facebook boosts brand value in Europe

26 January 2012

LONDON: Facebook, the social network, boosted the value of brands in European Union member states by over €6bn in 2011, according to a new study.

Deloitte, the advisory firm, was commissioned by Facebook to analyse its economic impact across the 27 countries in the European Union during the last 12 months. It estimated that Facebook "enabled" €32bn in gross revenue throughout the EU in 2011.

This was driven by its own financial returns and staff, alongside the value and employment third parties derived from ads, apps, events, brand pages, and so on.

Within this, the social network encouraged economic activity – from the purchase of technology products to advertising sales – of €15.3bn, alongside supporting 232,000 jobs in a wide variety of industries.

The UK yielded €2.6bn from Facebook in 2011, matching the amount posted by Germany, and just ahead of the €2.5bn registered in Italy. Totals came in at €1.9bn in France and €1.4bn in Spain.

Businesses participating on Facebook secured an additional €7.3bn, of which €6.6bn was linked to increases in brand value. Paid advertising supplied a further €694m, and customer communication logged less than €100m.

"Whilst brand value represents a less tangible aspect of Facebook's contribution to companies and there is debate as to the scale of brand value created in Facebook's ecosystem, it is clearly critical to the role played by Facebook," Deloitte's study said.

Meanwhile, "platform effects" generated €2.2bn, with the economy emerging around applications worth €2bn, and wider social activities – like events, open innovation programmes and fundraising – on €20m.

Technology sales linked to Facebook were also afforded a net value of €5.5bn, with broadband purchases benefitting to the tune of €5.1bn and related gadget sales – such as those for web-enabled mobile phones – clocking up €400m.

"The online nature of Facebook's operation and its large user base combine to mean that the company's operations generate value added through increased demand by users for devices to access Facebook on the move and greater demand for the underlying broadband connections," the study said.

Elsewhere, in assessing the value of a single "fan" on the social network, Deloitte took an average of several previous studies, ultimately putting this figure at €4.69 as a result.

Looking to smartphones, 33.4m people in the EU27 interacted with Facebook through an Apple iPhone in 2011, standing at 21m for HTC/Android phones, 14.9m for Samsung handsets and 11.5m for the BlackBerry.

Data sourced from Deloitte; additional content by Warc staff