A new study released today from Wetpaint and the Altimeter Group confirms that deep engagement with consumers through social media channels correlates to better financial performance.
So much for the naysayers who bleat that you can't measure the value of social media: the ENGAGEMENTdb study shows that, on average, companies with the greatest breadth and depth of social media engagement 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.
That's a result the C-suite can really understand. And one they'd allocate budget to.
The 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.
Why does broad engagement drive business? It's about touch points. More touch points can present a ripple effect, inducing viral marketing, boosting brand recognition and driving sales volume.
However, the findings also suggest deep engagement in a few channels can be a rewarding and effective social media strategy. Focusing on depth over breadth present an opportunity to better understand the customer, react quickly to customer demand, and improve satisfaction – which in turn generates pricing power and drives business.
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:
1. Starbucks (127)
2. Dell (123)
3. eBay (115)
4. Google (105)
5. Microsoft (103)
6. Thomson Reuters (101)
7. Nike (100)
8. Amazon (88)
9. SAP (86)
10. Tie - Yahoo!/Intel (85)
The study provides some very useful PR info, namely how four brands: Starbucks, Toyota, SAP, and Dell, manage to engage broadly and deeply with,in some cases, very limited dedicated staff.
One recurring theme throughout these case studies is that engagement cannot remain the sole province of a few social media experts, but instead must be embraced by the entire organization.
The case studies provide insights and best practices to help any business move towards deep engagement - and an improved bottom line.
Reader comments (2)
1:28PM on 23rd July 2009
Deep social media strategy does pay dividends. How you engage with the customer using number of channels plays a significant role to determine your social media reach. Having the same tone of voice as business in most of your channels is also important. The SCIENCE Model of Social Media covers very well the approach a business should take in launching its social media strategy.
Owner at Digital Juggler
11:23AM on 24th July 2009
I agree with the sentiment that engagement can/does drive finanical performance but this article does not provide evidence. I'll be interested to learn from the study itself how they are measuring the imapct of social media on financial performance, how they qualify the 18% figure.
How much of the 18% growth is down to the social media activity and what growth would they have achieved without it?
It would be good in these articles to have a specific example of how the use of a social media channel such as Facebook has increased site traffic, engagement, referrals and ultimately revenue and how this has been measured. Also to include the data and numbers to validate the point. Can this be provided or is the data restricted?
I hope this is in the report, just need to find the time to read it!
Will also check out your blog Jon.
thanks
james
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