Thursday, February 14, 2013

Using Twitter Followers as a Gauge for Brand Loyalty

The other day, I read this post on Seeking Alpha about Ford (F).  What really caught my attention was a discussion about the number of Twitter followers to gauge brand loyalty between Ford and General Motors (GM).  So, I decided to check for myself, and sure enough, Ford, with 191,028 followers easily topped GM with 84,588 followers.  There’s even an Experian Automotive press release that appears to back this up.

Of course, there’s just one, okay more than one, problem with this whole comparison.  Ford is actually a brand, whereas GM (or General Motors) isn’t.  So, in looking at these two we’re comparing apples to oranges.  Chevrolet is, though, and with 172,851 followers, it doesn’t appear that Ford has that much of an edge.  But wait, there’s more.

Chevrolet sold 4.95 million vehicles in 2012, while Ford sold 5.7 million.  Dividing unit sales by the number of followers results in 28.6 sales per follower for Chevrolet and 29.8 sales per follower for Ford.  The fact that these two numbers are fairly close makes me think there could be some kind of use for Twitter data. 

After a while, I realized that I was going to wind up being the victim of my own confirmation bias, since I was trying too hard to find a use for the Twitter data.  So, I looked at some other brands.  Walmart has only 310,463 followers, while Target has 527,185.  And perhaps most surprising, is Pepsi has 1,088,584 followers compared to Coca Cola with 673,177.

To make a long story short, the number of followers doesn’t really seem to be related to much of anything at all to do with the brands.  I think it’s just that people follow those companies from whose tweets they get the most utility.  I know this is what I do, and it doesn’t affect my brand loyalty at all.  Here’s an example, although it isn’t Twitter based.

I used to love watching those Mac versus PC commercials on television.  But the truth is, no matter how good I thought those commercials were, they never changed my mind about whether I would own a Mac or PC.  I had no interest in Macs, only in their commercials.  Incidentally, Apple doesn’t have an actual Apple Inc. Twitter account, so I couldn’t compare it to, say Samsung.  They do have some iTunes related accounts though.

So, it appears that there’s not really some easy way to use Twitter followers as a gauge for brand loyalty or much of anything else.  In the case of Walmart versus Target, it could be that Target has greater brand loyalty, but it doesn’t mean anything if more people shop at Walmart, at least so long as Walmart is cheaper.  It could mean that if Target could compete with Walmart pricing that Target would win more customers.  Or, it still could mean nothing.

In the case of Pepsi versus Coca Cola, I think it’s an indication of the marketing strategy that Pepsi has always used: an effort to appeal to the next generation of soft drink consumers.  Last time I looked, Twitter’s user base was skewed toward the young side.  Unfortunately, the strategy of winning over youth, in my opinion, can lead to alienation of the previous “Pepsi generation,” who will then decide that they want to “teach the world to sing.”

So, maybe someday we’ll find a use for Twitter data.  Until then, it seems that the only way to even be able to place much meaning in the data is by already knowing something about the business.  It turns out that stock and business analysis isn’t as easy as looking at a single number.

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