Business Science UK win BRONZE in the Econometrics Media Week Awards in 2011 for our work on Skittles

In today’s explosion of social media activity, there is one question that is on every marketer’s lips, “What is the actual product sales value of Facebook fans and content activity?” Given the complexity of such activity, no research so far has managed to provide a robust answer. However, for Skittles, using sophisticated econometrics techniques we have been the first to prove that engaged Facebook fans actually drive significant incremental sales revenue and contribute to the growth of a brand.

Skittles commenced a digital only branded content strategy, driving the teen target consumer to use their Facebook page and interact with a bespoke game. Through innovative use of econometrics, we were able to not only pull apart the impact of the overall strategy but specifically to measure the impact that becoming a Facebook fan had on the business via incremental sales. This cutting edge piece of work is the first of its kind to put some hard numbers against social media activity.

Making It Happen

We had two problems to overcome; stripping out the different elements of the campaign and working out how to measure the impact of Facebook. Our solution was to use two-stage bespoke econometric modelling, which enabled us to isolate the impact of the branded content campaign as a whole, from the game to the display ads to Facebook on sales and then dig deeper to understand exactly the role that each element played.
One of the key elements that we had to tackle was to understand how to measure Facebook within the models. Our hypothesis was that fans that interact, (e.g. post comments, ”like” status updates, load their own content) would be more likely to increase their rate of purchase over fans whose only activity was to sign up to the page. Modelling this would be fundamental to our analysis. Luckily, the wealth of data available from the Facebook page allowed us to create variables that looked at the relative weight of each type of activity and using diagnostic tests key to robust econometric analysis, allowed us to isolate the impact that was statistically the strongest.


Results


Our analysis was fundamental to future planning. It proved that online branded content activity overall was at least as effective in terms of ROI as previous TV campaigns. Even more importantly, it proved that the Facebook element of the campaign was the most cost effective and that fans that interacted were 4 times more valuable than fans that didn’t. This has guided our on-going use of Facebook and our investment into branded content for Skittles, helping ensure that growth in 2010 vs. 2009 outperformed the category by 35% and continues to grow even faster in 2011.

MediaCom’s analysis of our digital content activity and particularly Facebook has provided us with the answers we needed to justify the investment in these channels as well as focus our strategy so that we are ensuring that we maximise the engagement we have with our target audience and fans
— Elena Iborra Brand Manager, Skittles