Prestige 100®:Facebook IQ

06.07.11

A Think Tank for Digital Innovation

RESEARCH

ADVISORY SERVICES

EDUCATION

CLINIC:

Mobile & GeolocalTopics include:

• MOBILE APPS iPhone, iPad, Android, Blackberry• MOBILE ADVERTISING• GEOLOCAL• MOBILE SITES

REGISTER NOW: http://L2MobileClinic.eventbrite.com/

06.24.11 | NYU Stern

CLINIC:

Video & CelebrityTopics include:

• HOW TO USE VIDEO ONLINE• HOW TO LEVERAGE CELEBRITY ONLINE

REGISTER NOW: http://L2MobileClinic.eventbrite.com/

07.28.11 | NYU Stern

OTHER UPCOMING EVENTS:

FORUM:

Innovation November

CLINIC:

Brands As MediaCompanies January 2012

DIGITAL IQ® RELEASE LUNCHES: 3 Lunches to Preview Releases of L2’s core

Digital IQ® Studies (October):

Fashion & Leather Goods

Watches & Jewelry

Beauty

CLINIC:

China September

MEMBERS-ONLY LUNCHES:

EXPANSION:

NYCPARIS

SHANGHAI

Introduction:

Facebook is the Internet.

662 million users

50% log in daily

40% follow a brand

53% HHI > $50k

Facebook: The New O.S.

RUSSIA: 85%

CHINA: 70%

INDIA: 78%

BRAZIL: 69%

UK: 64%SOUTH KOREA: 64%

SPAIN: 59%US: 59% FRANCE: 50%

Source: Universal McCann, July 2009

% of Internet Users in Select Countries with a Social Network Profile(2009)

Global Social Media Engagement

Source: Mary Meeker, Internet Trends, April 10, 2010

2007 2008 2009 20100.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Facebook

YouTube

Google

MSN

Yahoo

Share of Global Online Time Spent(2007-2010)

“The top 10 Web sites accounted for 31% of US page views in 2001, 40% in 2006, and about 75% in 2010”

—Wired Magazine, August 2010

Web Dead, Facebook Thriving

China

1.34 Billion

600 Million

70% Outside of U.S.

53% HHI >$50k

50% College Educated

41% Log-in Everyday

40% Follow a Brand

China –or– Facebook?

Source: Digital Surgeons, October 2010

Assessing the Opportunity?

Most Popular Fashion Facebook Pages

(Number of likes)

Most Popular Fashion Magazines

(Global Circulation)

Burberry: 6.5 M

Gucci: 4.7 M

Chanel: 3.9 M

Dolce & Gabbana: 2.9 M

Ralph Lauren: 3.3 M

Louis Vuitton: 2.7 M

Cosmopolitan: 3.0 M

Glamour: 2.4 M

In Style: 1.8 M

Vogue: 1.3 M

Vanity Fair: 1.2 M

Allure: 1.1 M

Elle: 1.1 M

361% YOY GROWTH

1.1% YOY GROWTH

Excising the Publisher’s Tax

Giorgio Armani: 1.3 M

-30%

4%11%

40%

Cost Trends: Online Advertising Platforms(Q1 2011 vs. Q1 2010)

Facebook(CPC)

Google(CPC)

Bing-Yahoo(CPC)

Display(CPM)

Source: Global Digital Marketing Performance Report, Efficient Frontier, Q1 2011

The Salad Days

Conclusion:

Facebook IQ is a primary driver of shareholder value.

• First of its kind study

• Measures Facebook aptitude of 100 iconic brands across:

• Automobiles• Beauty & Skincare• Champagnes & Spirits• Fashion• Watches & Jewelry

• Ranks brands on the following dimensions:

• Size & Velocity• Programming• Engagement• Integration

The only audit that benchmarks the Facebook performance of prestige brands

L2 Prestige 100®: Facebook IQ

Dimension: Size and Velocity (35%)

• Number of likes

• Growth Rate

• Global Community

• Frequency of Brand Posts

• Fan Posts and Uploads

Methodology

Methodology

Dimension: Engagement (25%)

• Percentage of Community “likes” or Comments on Brand Posts

• Number of Fan Posts

• Uploaded Fan Photos & Videos

Methodology

Dimension: Programming (25%)

• Content Variety

• Customized Tabs & Interactive Apps

• Response Frequency & Speed

• Landing Pages & Gated Tabs

• Brand Photos & Videos

• Utilization of “like” and “share” buttons

• E-commerce Integration

Methodology

Dimension: Integration (15%)

• Links from other Digital Properties

• Search Engine Visibility

• Incorporation of other Social Media Properties

• Utilization of “like” and “share” buttons

• Customer Service Accessbility

Brands parsed into five categories based on Digital IQ score:

140+

110-139

90-109

70-89

>70

Genius:

Gifted:

Average:

Challenged:

Feeble:

Facebook is a point of competitive differentiation

Engaging and brand-enhancing; takes risk

Predictable, few innovation leaps

Limited innovation, experimentation and engagement

Nascent Facebook footprint, not committing appropriate resources

Categorizing Results

The Rankings

Rank Brand Category Digital IQ

79 Rolls-Royce Automobiles 68

80 Bottega Veneta Fashion 67

81 Baccarat Watches & Jewelry 66

81 Hermès Fashion 66

83 SK-II Beauty & Skincare 63

84 Balenciaga Fashion 62

84 Yves Saint Laurent Fashion 62

84 Fresh Beauty & Skincare 62

87 Alexander McQueen Fashion 60

87 Givenchy Fashion 60

89 Salvatore Ferragamo Fashion 59

89 Moët & Chandon Spirits & Champagne 59

91 Harry Winston Watches & Jewelry 57

92 Glenmorangie Spirits & Champagne 54

92 Audemars Piguet Watches & Jewelry 54

94 Rolex Watches & Jewelry 47

95 Krug Spirits & Champagne 44

96 Prada Fashion 43

97 Glenfiddich Spirits & Champagne 36

98 Patek Philippe Watches & Jewelry 30

99 De Beers Watches & Jewelry 28

100 Dom Pérignon Spirits & Champagne 24

L2 Prestige 100®: Facebook IQ

RANKING: Feeble

Rank Brand Category Digital IQ

67 Christian Dior Fashion 89

68 Patron Spirits & Champagne 88

69 Chloé Fashion 86

69 Ballantine’s Spirits & Champagne 86

71 Jaeger-LeCoultre Watches & Jewelry 85

72 Van Cleef & Arpels Watches & Jewelry 84

72 Movado Watches & Jewelry 84

74 Bulgari Watches & Jewelry 83

75 Chopard Watches & Jewelry 80

76 Chivas Regal Spirits & Champagne 78

77 Louis Roederer Spirits & Champagne 77

78 Cartier Watches & Jewelry 71

L2 Prestige 100®: Facebook IQ

RANKING: Challenged

Rank Brand Category Digital IQ40 Acura Automobiles 10941 Kiehl's Beauty & Skincare 10842 Cîroc Spirits & Champagne 10742 Versace Fashion 10744 Montblanc Watches & Jewelry 10645 Smashbox Beauty & Skincare 10546 Dolce & Gabbana Fashion 10446 Piaget Watches & Jewelry 10448 Aston Martin Automobiles 10249 Burberry Fashion 10049 Jaguar Automobiles 10049 Oscar de la Renta Fashion 10052 Land Rover Automobiles 9953 Gucci Fashion 9854 Hublot Genève Watches & Jewelry 9755 Valentino Fashion 9656 Giorgio Armani Fashion 9556 Maserati Automobiles 9556 Macallan Spirits & Champagne 9559 Chanel Fashion 9460 Roberto Cavalli Fashion 9360 Shiseido Beauty & Skincare 9362 David Yurman Watches & Jewelry 9162 Dewar's Spirits & Champagne 9162 Korbel Spirits & Champagne 9165 Vacheron Constantin Watches & Jewelry 9065 Raymond Weil Watches & Jewelry 90

L2 Prestige 100®: Facebook IQ

RANKING: Average

Rank Brand Category Digital IQ14 Clarins Beauty & Skincare 13715 Swarovski Watches & Jewelry 13515 MAC Beauty & Skincare 13517 Coach Fashion 13418 Hugo Boss Fashion 13218 Mercedes-Benz Automobiles 13220 NARS Beauty & Skincare 13121 Hennessy Spirits & Champagne 13022 Marc Jacobs Fashion 12722 Cadillac Automobiles 12724 Omega Watches & Jewelry 12624 Estée Lauder Beauty & Skincare 12624 Ralph Lauren Fashion 12627 Diane von Furstenberg Fashion 12628 IWC Schaffhausen Watches & Jewelry 12328 Aveda Beauty & Skincare 12330 Pandora Watches & Jewelry 12230 Rémy Martin Spirits & Champagne 12232 L'Occitane Beauty & Skincare 11833 Louis Vuitton Fashion 11734 Fendi Fashion 11534 TAG Heuer Watches & Jewelry 11534 Veuve Clicquot Spirits & Champagne 11537 Tiffany & Co. Watches & Jewelry 11338 Porsche Automobiles 11239 Philosophy Beauty & Skincare 110

L2 Prestige 100®: Facebook IQ

RANKING: Gifted

Rank Brand Category Digital IQ

1 BMW Automobiles 175

2 Clinique Beauty & Skincare 165

3 Audi Automobiles 156

4 Lexus Automobiles 154

5 Bare Escentuals Beauty & Skincare 149

5 Benefit Beauty & Skincare 149

7 Bobbi Brown Beauty & Skincare 148

8 Johnnie Walker Spirits & Champagne 147

9 Belvedere Spirits & Champagne 142

10 Tory Burch Fashion 141

10 Ferrari Automobiles 141

12 Lancôme Beauty & Skincare 140

12 Infiniti Automobiles 140

L2 Prestige 100®: Facebook IQ

RANKING: Genius

Key Findings

Size vs. Engagement

Global Google Searches vs. Predicted Facebook Fans

(May 2011)

Fan Count Overachievers

Global Google Searches vs. Predicted Facebook Fans

(May 2011)

Fan Count Underachievers

Bigger Can Be Better

#2: Like Count

28,000+

Fan photos

400+ fan videosPERSONA

L SERVICE #1 ENGAGEMENT

Fans Should be Seen but Not Heard

Broadcast MediaSocial

Media

The Effect of Two-Way Communication

Can Fan’s Post?

692 Weekly Fan posts

(BMW = 563)

97% Fan-2-Fan Engagement

Encouragement

The Most Social of Them All

Product Highlights

.21%

Highest Interaction Rate:

Company Info

.15%

Questions

.14%

Special Events

.13%

Customer Education

.12%

Contests

.08%

Promotions

.07%

Product vs. Promotion

Glocal

Interaction Rate by Page Type:

Lancôme Goes Glocal

Facebook is not an Island

Facebook Integration:(% of Brands)

The New, New Thing

Size vs. Engagement:

Success on Facebook is no longer limited to the size of a brand’s fan base

Facebook is Social Media:

Two-way communication is essential to maximize marketing activation

Endgame = Commerce:

Facebook sales are the next, next thing in prestige

Facebook IQ® = Shareholder Value

Success/Failure in the prestige industry will largely be determined by aptitude on the world’s fastest growing marketing platform

Conclusions