A few years ago there were still a lot of folks who thought social media was just another silly tech fad. But the rise of Facebook and Twitter as marketing tools and revenue streams has soundly squashed such talk. Instead, it has been replaced by rumors of Google (NASDAQ: GOOG) floating a $4 billion bid for Twitter, or hints of Groupon going public with a value north of $10 billion.
Social media has become serious business.
But one angle that I don’t see getting a lot of attention is the power of the consumer in this new world order. Yes, it’s partly about how we live in an age where a bad customer experience can go viral with one Tweet or text, and about how companies can no longer afford to thumb their nose at the unsatisfied. But it’s more about the other side — finding loyal customers to be your brand advocate. Instead of just buying a product, they become a free marketing division and tell all their friends all over the world how great your business really is.
Take the Facebook page for Coca Cola (NYSE: KO), built by two “Coke heads” (in a good way) named Dusty and Michael. They just loved Coke so darn much they had to build a comprehensive Facebook page about it. On their own time. For free.
The pair now run the Facebook site full-time for the corporate Coke overlords. But before they got Coca-Cola’s endorsement, these two were the embodiment of the power of social media. They loved a product, and they wanted to share it and get others to love it too.
Such advocacy can’t be underestimated, even if it can’t be quantified on a balance sheet. But I tried to do the next best thing – quantifying the brands with the biggest power on Facebook based on “likes.” It’s not a universal measure of popularity or social media power, but it’s a good place to start.
So here they are – my list of the top 5 “Facebook famous” stocks:
5. Starbucks (SBUX)
Most of the companies on this list win their rank due to a group of wildly successful products. However, Starbucks (NASDAQ: SBUX) is both the company and the brand that consumers know and love. Coming in at #6 on the list of Facebook likes according to allfacebook.com, Starbucks has a piping hot 19.7 million fans. Considering that it’s cheaper to brew a cup of coffee at home or run to your local 7-Eleven, this kind of loyalty is crucial for SBUX to succeed. When you’re selling quality and not value, as Starbucks does with its coffee, you have to be popular to succeed — because the price argument is clearly not on your side. Thankfully for Starbucks, the public is soundly in the Seattle-based coffee shop’s court.
4. Viacom (VNV)
Viacom (NYSE: VIA-A, VIA-B) isn’t exactly a brand people love. Or, frankly, that most people even know about. But its individual products are a smash hit with consumers. Take Comedy Central cartoon South Park, with 22.4 million likes. That’s #4 in the Facebook universe, as of this writing. Then SpongeBob Squarepants comes in at #9 with 17.7 million. Viacom’s MTV channel is just a bit farther down the list with 16.1 million likes and the Nickelodeon channel has over 1 million likes. This shows Viacom has a wide viewership base, from kids to teens to young adults, and a very loyal one.
3. Coca Cola (KO)
As mentioned before, the site built by Dusty Sorg and Michael Jedrzejewski is near the top of all Facebook pages – as of this writing, in the #3 spot with a whopping 25.9 million fans. If you want to add in the other incarnations of Coca Cola (NYSE: KO) products – including hundreds of thousands of likes each for Coke Zero, Coke Australia and Diet Coke, among others – you have one heck of a fan base. That’s brand loyalty any investor can be proud of. And like Starbucks, Coke has the added benefit of being both the company and the product that consumers love.
2. Google (GOOG)
Google (NASDAQ: GOOG) itself has “only” about 2.5 million likes. But its Google Chrome browser has 5.5 million as of this writing, and its flagship video site YouTube has the #1 spot on the Facebook list with 27.4 million likes. Maybe YouTube is having trouble generating substantial profits, and maybe Chrome is having trouble breaking into the internet browser marketplace. But a loyal fan base is something Google investors shouldn’t shortchange. Finding a way to make a popular product profitable is a heck of a lot easier then finding a way to make high-margin but unpopular product catch on.
1. News Corp. (NWS)
No surprise that pop culture fanatics have flocked to Facebook. But it’s worth noting that as of this writing, News Corp. (NASDAQ: NWS) television shows garner three of the top seven spots – Family Guy is #2 with 25.9 million likes, The Simpsons is #5 with 20.8 million likes and House is #7 with 18.7 million likes. And let’s not forget American Idol with “only” 4.6 million likes. Say what you want about the quality or tone of Fox programming… the studio sure knows how to connect with the American public. For investors, that’s worth tuning in to.
Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.
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