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What is the value of a Facebook fan?

Speakers from the Ehrenberg Bass Institute for Marketing Science deliver insights from their research.

With the explosion of social media, marketers are clamouring to capitalise on the plethora of opportunities these platforms offer. These include customer engagement, loyalty and influence.

Yet how effective is social media at driving brand loyalty?

Last night, Jenni Romaniuk, International Director at the Ehrenberg Bass Institute of Marketing Science spoke to a busy auditorium at Cass Business School. She demonstrated how this question can be answered, drawing on research by one of the Institute's Research Fellows Dr Karen Nelson Field.

The result? True engagement on social media is very rare. Using data readily available from Facebook, The Ehrenberg-Bass Institute found that less than half of one per cent (0.45%) of fans of brands engage with the brand on Facebook in any week. Even niche brands, such as Harley Davidson, Nike or Tiffany don't drive significantly more activity from their followers in terms of engagement.

In this instance 'engagement' refers to the act of 'liking', 'commenting' or 'sharing' content on a brand's Facebook page.

The reason? Users are too busy being social with real friends to spend a lot of time with brands in the Facebook space. The science states that users are exposed to up to 22 brands in a ten minute visit to Facebook and yet they recall less than one.

In the second half of the presentation, John Scriven explained that brand loyalty is predictable and simply a reflection of the number of consumers the brand has at all. The biggest empirical difference between large and small market share brands is that large share brands have many more customers. Loyalty hardly varies. If you want to be bigger, the weight of empirical evidence is that getting more customers is the best strategic path.

Using many sets of empirical data, Scriven went on to explode the traditional marketing ideology of differentiate or die. Scriven argued that distinctiveness, where brands have distinct identities that made them easy to spot, was more important.

He demonstrated that advertising should be aimed at refreshing and reinforcing existing brand associations to counter erosion and keep the brand salience. Rather than the traditional view of advertising as trying to persuade consumers that it had a specific property or is better than other brands.

The Ehrenberg Bass Institute is a marketing research institute within the School of Marketing at the University of South Australia in Adelaide. It is an independent, not-for-profit institute. It is the first university institute devoted to marketing science. To signal the Institute's research philosophy it was named after two marketing academics, Professor Andrew Ehrenberg and Professor Frank Bass. Both Ehrenberg and Bass have championed the development of simple generalised laws that can be described mathematically and can be widely applied.

Watch the evening's presentations:

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