New Study Indicates Social Media Pays; Wetpaint and Altimeter Group Find Correlation Between Brands’ Social Media Efforts and Financial Performance
A new study from Wetpaint and the Altimeter Group confirms that deep engagement with consumers through social media channels correlates to better financial performance. The ENGAGEMENTdb study showed significant positive financial results for the companies who measured as having the greatest breadth and depth of social media engagement. These “Social Media Mavens” on average grew company revenues by 18 percent over the last 12 months, while the least engaged companies saw revenues sink 6 percent on average over the same time period.
The ENGAGEMENTdb study reviewed more than 10 discrete social media channels, including blogs, Facebook, Twitter, wikis, and discussion forums for each of the 100 most valuable brands as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking. Activity in each channel was ranked for depth of interaction on measures that corresponded to that specific channel. Scores for overall brand engagement ranged from a high of 127 to a low of 1. The top 10 ENGAGEMENTdb brands with their scores are:
Thomson Reuters (101)
Tie – Yahoo!/Intel (85)
Qualities of Success
Companies that scored well in the study generally have dedicated teams, however small, active in the social media channels they utilize. The study found that the most successful teams evangelize social media across the entire organization to pull in a broad range of stakeholders. These companies view social media as an indispensable tool to help them achieve results, and their approach is conversational. This mode of operation differs from the approach of traditional communications and early corporate blog experimentation, which emphasizes messaging and talking points.
“This is the first study of this depth on the top global brands and we think the results provide a good guide for corporations and brand marketers in every industry,” said Charlene Li, Founder, Altimeter Group. “The success stories we have uncovered provide a blueprint for companies making decisions about how to best apply their marketing and consumer relations resources.”
“The ENGAGEMENTdb study goes a long way towards validating the importance of social media for business,” said Ben Elowitz, CEO of Wetpaint. “The closer any company is to its customers, the better, and it’s hard to argue with the ability for social media to create such proximity. In this day and age, companies should feel much more comfortable investing in social media — the correlation to results is so clear.”
Four Quadrants of Engagement
While each company in the study received a quantitative score, the ENGAGEMENTdb study revealed that companies fell into four specific categories in terms of their breadth and depth of investment in social media channels — Mavens, Butterflies, Selectives, and Wallflowers.
Mavens — brands that have made social media a core part of their go-to-market strategies and are very active in many channels; usually driven by dedicated teams assisted by company-wide awareness and participation.
Butterflies — brands that recognize the need to be in many channels but have only met with real success in a subset of their activities; these companies are usually spread a bit too thin.
Selectives — brands that focus on just a few channels and excel in those; these efforts are usually initiated by an internal evangelist.
Wallflowers — brands present in only a few channels and very lightly in those; these brands are sitting on the sidelines and are wary of the risks. They are still trying to figure out the best next steps and investments in social media.