“Social media is a challenge no business can ignore,” insisted Joseph Wan, CEO of Harvey Nichols, speaking before a large assembly of top international managers during the FT Business of Luxury Summit 2011 in Lausanne. This theme is more important than ever when you consider that Facebook is the most visited website in the world, with 600 million members who spend 20 minutes a day, on average, on the site. This is more than Google and Yahoo combined. For some people, Facebook has become an Internet within the Internet.
This is nothing really ‘new’ for watch brands, since nearly all of them have an official presence on the web. Their ‘fans’ now number in the tens and hundreds of thousands. In all, more than 1.5 million people follow the events posted by some 25 of the most prestigious brands, according to the study WorldWatchReport 2011. As of June 1, 2011, the most popular among them are two brands belonging to the LVMH group, Hublot and TAG Heuer, which each have more than 200,000 fans. Next are four members of the Richemont group—Cartier (150,000), IWC (140,000), Baume & Mercier (135,000), and Piaget (120,000). Only the two big independent brands Rolex and Patek Philippe have not given in to the Facebook phenomenon, at least for the time being.
It is no longer surprising to hear brand managers talk about the changes in the number of fans or followers each month in relation to sales figures, with classifications often distributed inside the groups. The frantic race is on to attract the greatest number of fans, but is this really a valid indicator to measure the success of a brand’s efforts in social media?
The measurability of social media
Digital marketing is known for its measurability. In online advertising, for example, many international standards have been put into place in order to determine with precision the results of business campaigns. The domain of social media is, however, at its debut and there is no real standard yet for measuring its benefits. This is a real challenge for any enterprise, especially those in the luxury industry where quality is seen to be more important than quantity.
Social media can be distinguished because of its personal and individual character. The users find themselves in a circle of friends and current topics that centre on different interests. By signing up on a Fan Page, a person publicly shows his or her attachment to a brand and enters into its daily existence. “For young consumers, social media is a form of life. It gives brands a realness,” explained Marigay McKee, fashion and beauty director at Harrods in London, during a meeting organized by the Financial Times. The main challenge then resides in the ability of brands to post original content that is relevant to the brand’s universe and differentiates it from the competition. The main goal is to stimulate quality interactions—notably in the form of ‘Like’ and ‘Comments’—that favour spreading the message by word of mouth to strengthen the feelings of preference for the brand. In other words, the fans only have value when that they begin interacting with the brand.
One indicator: the level of engagement
The number of fans or followers represents only one quantitative measure of the success of social media. In analyzing the audience for an industry such as luxury, in particular, attention must be given to qualitative indicators, such as the level of engagement, which offer an answer to the key question: Does the quality of the content generate interest by the community?
The initial classification of the five most popular brands on Facebook is quite different in terms of engagement. During the month of May, IWC took the lead with 0.38 per cent, followed by Cartier (0.30 per cent), TAG Heuer (0.21 per cent), Baume & Mercier (0.14 per cent), and Hublot, which was in last place with 0.06 per cent, even though it held the pole position in terms of quantity with 220,000 fans. This is a weak result for Hublot, a brand known for its dynamism in terms of marketing, compared to the average watch industry benchmark of 0.30 per cent during the same period, again according to the WorldWatchReport.
In analyzing the level of engagement generated by each of the publications, it would be easy to determine the themes that generate powerful tools for engagement with the community. At TAG Heuer, for example, the peaks of fan interactions could be observed throughout 2010, and they centred on the brand’s products and its ambassadors, according to a presentation by Pablo Mauron, search & display business unit manager at DLG, during the Luxury Interactive Conference in London last May.
Other qualitative dimensions can also be used to measure the success of the social media efforts by luxury brands. These include brand endorsements, word of mouth, share of voice, or even the brand footprint. These are notions that can be presented in more detail in the future. One thing to keep in mind, however, is that once the success indicators are chosen, it is important to follow them over time to observe changes, make comparisons with the competition, and gain insights, while avoiding falling into the trap of individual ‘quantitative’ measurements that can be simplistic or even misleading.
Source: Europa Star June - July 2011 Magazine Issue