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L2's Facebook IQ Index attempts to quantify the Facebook competence of 100 iconic brands across Beauty, Fashion, Specialty Retail and Watches & Jewelry. Key finding from that report are highlighted here.

L2 Facebook IQ Index 2012 - Ranking 100 Luxury & Prestige Brands on the Facebook Platform

L2's 2012 Facebook IQ Index measures 100 prestige brands across 350 data points, assessing the brand's competence on the world's largest digital platform. Our thesis is that competence on Facebook is linked to shareholder growth and a proxy for innovation within an organization.

Prestige communities grew more than 200 percent year over year as brands began investing in Facebook advertising. However, the industry is still struggling to embrace the "social" in social media. More than 20 percent of prestige brands still do not engage in any two-way conversation and one third of prestige brands prohibit fan from posting on their Facebook walls. The fan-base growth coupled with limited responses has led to a decline in engagement rates of almost 50 percent since our first Facebook IQ Index in June 2011.

A bright spot for prestige brands on Facebook is growth and engagement in emerging markets, mimicking some of the macro growth trends in the Industry. 40 percent of brands now maintain at least one local country page. These local Facebook pages have grown at double the rates of Global and U.S. prestige communities and register 50 percent higher engagement. Facebook's most popular city data provides further evidence that the center of gravity is shifting in the industry. More than 44 percent of prestige brands, including many icons, register an emerging market city (e.g., Taipai, Tblisi, Tunis, etc.) as the top city people are talking about the brand on Facebook.

A lot has changed since the first Facebook IQ Index a year ago. Some of the prestige industry's iconic brands are this year's biggest winners including Bulgari, Dior and Cartier which all catapulted from Challenged to Gifted on the backs of massive community growth, innovative programming and stronger integration. Notorious digital laggard Prada finally joined the Facebook party in January 2012, moving from Feeble to Average. However, the Facebook IQ top 10 remains dominated by retailers and beauty brands that have been deft at facilitating higher rates of engagement via user generated content and local pages and posts.

On the date of its IPO, Facebook was worth more than LVMH, PPR and Richmond, combined. Ten days on, FB stock had lost a third of its value. The culprit? Facebook investors have shifted the measurement stick: from promise to performance. Similarly, the marketing and digital professionals at prestige organizations charged with building and engaging communities on the world's biggest platform ,will face heightened expectations and scrutiny. As tomorrow becomes today for prestige execs, the issue of what, and how, return is achieved on Facebook takes center stage.

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