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Companies Still Love to Be 'Liked'

8 November 2013 in Trading Ideas

In some ways, it almost seems quaint: liking a company on Facebook – the Web 2.0 version of sending an email that now seems soooo 2010.

But if Facebook ‘likes’ no longer matter, why do companies still seem to want them?

At Motif, we made a motif out of them. Our Lots of Likes motif contains the stocks of companies that represent the most “liked” publicly traded brands, as tracked by Facebook.

The motif is up 4.3% in the last month, 28.4% in 2013, and it has gained 35.1% since its inception in March 2012.

The S&P 500 has increased 3.5% in the last 30 days, 23.1% this year, and has risen 30.7% since the motif’s inception.

Nobody has covered the most-liked companies more consistently than Ignite Social Media’s Jim Tobin, who recently noted that the Top 50 brands have become incredibly consistent in their refusal to budge.1

lots of likesThe current top 5 brands — Facebook, YouTube, Coca-Cola, MTV, and Disney – have held those positions all year and have about 330,000 likes acquired among them. It’s unlikely some upstart company is going to crack this quintupling any time in the near future.

On the other hand, the movements within the larger rankings offer, at the very least, food for investing thought, and possibly insight into how companies are leveraging Facebook as part of marketing campaigns.

Take Microsoft, for example, which, as Tobin explains, doesn’t have a brand in the Top 50 but just saw a 140% jump in Facebook likes for its Internet Explorer browser. Tobin suggests this could be a result of the company’s rebranding strategy, which has included creating a website, ironically titled www.browseryoulovedtohate.com, that details why Microsoft’s IE10 may be the pivotal moment when consumers choose it over other browsers. This has been combined with a Facebook campaign which refers to the website which plays on this theme with images and humor.

Oh, and isn’t it curious that rival Google Chrome turns out to be one of Tobin’s “biggest losers” this past quarter in terms of relative additions of Facebook likes, dropping three spots?

Many of the other movers on Tobin’s list seem to offer more opaque readings. What, for example, does it mean that American Express and Michael Kors saw their Facebook likes rise 68% and 62%, respectively, in the year’s third quarter? Or that Dr. Pepper has dropped four spots within the Top 50?

One safe assumption is that it there isn’t much downside to increased popularity.

1Jim Tobin, “Top 50 Facebook Branded Pages for Q3, 2013,” ignitesocialmedia.com, Oct. 2, 2013, http://www.ignitesocialmedia.com/facebook-marketing/top-50-facebook-brand-pages/, (accessed Nov. 6, 2013).