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Why Facebook.com has been able to build a strong brand
Brief description of how Facebook has been able to build their brand by using themselves as a viral marketing tool.
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Why Facebook.com has been able to build a strong brand
Facebook, a four-year-old private company managed by 23-year-old Mark Zuckerberg, is an
example of a great online services brand. Facebook has invested very little in media promotion.
Instead, customer experience and loyalty has built its brand. Facebook's brand awareness among
undergraduate students and its consistent brand meaning have created enormous brand equity,
reflected in its huge customer base of 69 million active users (as of January 2008).
Facebook Brand Awareness among Students: Second after the iPod
Brand awareness among undergraduate students is very strong: in a 2006 study by Student
Monitor, a student research marketing company, undergraduates ranked Facebook's popularity second
after the iPod. The main reason behind its popularity among students is likely its portfolio of reliable
and free specialized service features that allow users to publish and keep track of friends, groups,
events, and messages.
The customer experience with Facebook through the use of these services positively affects
Facebook's external brand communications, which are mainly word-of-mouth advertisement; many
Facebook users invite new users to join. Satisfied, real users become the company's best advertisers. It
is unlikely that media advertisement could ever substitute for the advertisement effectiveness of
evangelistic users. The effectiveness of word-of-mouth communication is what has helped create
Facebook's brand awareness.
Facebook Brand Meaning: Get to Know Each Other
Facebook's name itself hints at its brand meaning: get to know each other and connect with
people. The word "[paper] facebook" conveys a collegiate environment because it is used in colleges
and schools. Facebook has many features that allow former and present classmates to find each other
through names, groups (i.e., networks), and shared friends. Facebook's presented brand (collegiate
social network) and the offered customer experience (i.e. to find and to communicate with classmates
and friends) reinforce its brand meaning.
Even from the first service interaction, which is probably an invitation sent by a current user, its
external brand communications indicate that a friend or acquaintance wants to "connect." This helps
build Facebook's brand meaning from the beginning.
Facebook Brand Equity: Talent Employee, Valuation, and Social Network AdvantagesFacebook users' service experiences and word-of-mouth advertisement indirectly built
Facebook's brand equity. Because Facebook's brand equity is intangible, the easiest way to grasp its size
is by looking at the effects of its advantage over other brands: first, according to The Wall Street Journal,
Sheryl Sandberg, Google's former Vice President of Online sales and Operations, has recently joined
Facebook as a Chief Operating Officer. This suggests that Facebook's great brand could attract a top
executive from one of the most valued companies in the world.
Second, in October 2007, Microsoft paid $246 million for 1.6% of Facebook, which suggests that
Facebook's equity is worth $15 billion. In contrast, MySpace.com was purchased for only $580 million.
Third, Facebook's social network efficiently provides a service that customers cannot get from
another source; if your friend invited you to join, most likely your classmates' and friends' networks are
already part of Facebook, and you are unlikely to be able to connect with such network somewhere else.
In summary, Facebook is a great services brand because the company has a competitive
advantage by providing unique services without incurring in the high cost of traditional media
advertisement, and its integrated services have increased its brand equity to an unprecedented level for
a four-year old company managed by a 23-year-old CEO.
Facebook, a four-year-old private company managed by 23-year-old Mark Zuckerberg, is an
example of a great online services brand. Facebook has invested very little in media promotion.
Instead, customer experience and loyalty has built its brand. Facebook's brand awareness among
undergraduate students and its consistent brand meaning have created enormous brand equity,
reflected in its huge customer base of 69 million active users (as of January 2008).
Facebook Brand Awareness among Students: Second after the iPod
Brand awareness among undergraduate students is very strong: in a 2006 study by Student
Monitor, a student research marketing company, undergraduates ranked Facebook's popularity second
after the iPod. The main reason behind its popularity among students is likely its portfolio of reliable
and free specialized service features that allow users to publish and keep track of friends, groups,
events, and messages.
The customer experience with Facebook through the use of these services positively affects
Facebook's external brand communications, which are mainly word-of-mouth advertisement; many
Facebook users invite new users to join. Satisfied, real users become the company's best advertisers. It
is unlikely that media advertisement could ever substitute for the advertisement effectiveness of
evangelistic users. The effectiveness of word-of-mouth communication is what has helped create
Facebook's brand awareness.
Facebook Brand Meaning: Get to Know Each Other
Facebook's name itself hints at its brand meaning: get to know each other and connect with
people. The word "[paper] facebook" conveys a collegiate environment because it is used in colleges
and schools. Facebook has many features that allow former and present classmates to find each other
through names, groups (i.e., networks), and shared friends. Facebook's presented brand (collegiate
social network) and the offered customer experience (i.e. to find and to communicate with classmates
and friends) reinforce its brand meaning.
Even from the first service interaction, which is probably an invitation sent by a current user, its
external brand communications indicate that a friend or acquaintance wants to "connect." This helps
build Facebook's brand meaning from the beginning.
Facebook Brand Equity: Talent Employee, Valuation, and Social Network AdvantagesFacebook users' service experiences and word-of-mouth advertisement indirectly built
Facebook's brand equity. Because Facebook's brand equity is intangible, the easiest way to grasp its size
is by looking at the effects of its advantage over other brands: first, according to The Wall Street Journal,
Sheryl Sandberg, Google's former Vice President of Online sales and Operations, has recently joined
Facebook as a Chief Operating Officer. This suggests that Facebook's great brand could attract a top
executive from one of the most valued companies in the world.
Second, in October 2007, Microsoft paid $246 million for 1.6% of Facebook, which suggests that
Facebook's equity is worth $15 billion. In contrast, MySpace.com was purchased for only $580 million.
Third, Facebook's social network efficiently provides a service that customers cannot get from
another source; if your friend invited you to join, most likely your classmates' and friends' networks are
already part of Facebook, and you are unlikely to be able to connect with such network somewhere else.
In summary, Facebook is a great services brand because the company has a competitive
advantage by providing unique services without incurring in the high cost of traditional media
advertisement, and its integrated services have increased its brand equity to an unprecedented level for
a four-year old company managed by a 23-year-old CEO.
