By M. Isi Eromosele

Facebook’s business market value, at $100 billion at the time of its recent IPO is mostly based on speculation. What is it delivering now? And even more importantly, what is its brand worth?

While Facebook’s market value may be quite high, its brand value is another story, something many are beginning to realize, with the company’s recent disastrous IPO outing, with reports of Facebook investors looking for exits.

Brand value takes three things into account: financial performance, role of brand and brand strength.

The financial performance piece looks at the ongoing investment and management of the brand as a business asset. This is then multiplied against the role of the brand, in other words, the portion of customers’ decision to purchase as a result of the brand’s influence.

Next, brand strength is examined. This looks at how likely it is that the brand will secure these valued future earnings.

In many ways, Facebook’s brand is as strong as they come. It is consistent, simple and clean, it’s design is instantly recognizable. It knows its users, what they need and what they don’t even before they do, enabling it to deliver a keenly relevant experience that, so far has been unassailable in the market.

And maybe most importantly, it is literally everywhere, all over the world and all over the web, a presence unrivaled by any other social brand. However, compared to Coca-Cola, Facebook has a long way to go.

To put it into perspective, Coca-Cola not only surpasses Facebook astronomically when it comes to financial performance with revenues of $35 billion (Facebook’s revenue is estimated at $4 billion last year) but also earns about half of its value from the role the brand itself plays at the time of conversion.

For now, not only does Facebook fall short when it comes to revenue, but it also could benefit from more focus on its brand.

In the history of branding and marketing, Coca-Cola and Facebook need to be evaluated differently. Coca-Cola’s value is built through beverages. Facebook’s is built through you and I, on our data, our demographics and our behavioral patterns. Today, Facebook makes its money on ads, virtual goods and Facebook credits alone.

The Fragility of The Facebook Brand

Facebook’s value is in facilitating new behaviors that makes our lives better. It is not that Facebook is a technology trailblazer, simply making what we already do easier, but it is that it creates new possibilities, whether this is through Facebook Connect or the latest Facebook Apps. While this is where its value lies, it is also the brand’s Achilles’ heel.

This creation of new behaviors should reflectively drive loyalty, and to a some extent it does, but not to Facebook as a brand. Rather, it drives loyalty to the utility Facebook provides. This event is tremendous.

The Facebook brand is not getting credit for what it does. It acts like and is treated like a third party in its own sphere, even while it facilitates our connections and uploads and as well as our portal to the world.

In effect, why are we taking the Facebook brand for granted? This is because it is our social network that we’re emotionally loyal to, not Facebook itself. Facebook is not building its brand around any of the benefits it provides, like discovering new ways to connect or exploring the world around us.

In many ways, this is the exact opposite of most brands, which output a message, campaign, and tagline, then endeavor to deliver on what they promise. While Facebook may have taken care of and own the idea of connection more than anyone, it has to start owning, outputting, and messaging around “connecting” and what that means for its audience. Otherwise, it will remain a utility, not a sustained brand in the minds of its users.

Facebook owns a function, not the brand concept behind it. The company is like previous category leaders who died because, in the minds of consumers, they represent specific product or service rather than a specific, ownable, higher-level message that consumers are drawn to and passionate about.

Moving Forward

A great example of a company for Facebook to emulate in its branding strategy is Virgin, whose brand is built around the idea of entertainment, on innovation with a fun, fresh spin. This positioning gives the company the capability to enter new categories from airlines to comic books to sustainability and turn it on its heads under the promise that you will have fun any time you experience an element of the Virgin brand.

This brand promise gives it flexibility to stretch its brand, all the while gaining equity because no one else in its space can own this idea. It’s not easy, but when strategically implemented, it pays off handsomely, in huge profits.

The challenge for Facebook is to credibly own its brand message by outputting it itself so it gets credit for it. Right now, the only time the company controls its own message is through blog posts, the occasional Mark Zuckerberg interview and on its website homepage. This is woefully not good enough.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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