Thursday, July 30, 2009

Social Media Engagement = Big Bucks? One Study Shares Findings

Posted by Amanda Walsh

This review of a study featured on TechCrunch.com piqued my interest. The article by Erick Schonfeld, entitled “The Most Engaged Brands On The Web,” discusses a study, ENGAGEMENT db, conducted by Charlene Li of Altimeter Group and Wetpaint on the top 100 brands by social media engagement.

The report was based on brands highlighted in BusinessWeek’s “Best Global Brands 2008.” Basically Li’s study ranks engagement on social media – blogs, Facebook, Twitter and so on – of 100 brands and discovered a “correlation between top financial performance and deep social media engagement.”

Companies were rated and given a number based on custom criteria for each particular type of social media. In the study number of channels engaged or “breadth” was considered as well as depth of engagement. Depth refers to the number of times an account was updated or how often feedback is given to users.

The study identifies four “engagement profiles” which are outlined below:

“Mavens” (Starbucks)

  • Engage in seven or more channels. Not only do they engage but they are deeply invested in many of the channels. Giving constant feedback to fans or followers.
  • Usually have dedicated teams specifically for social media.

“Butterflies” (American Express)

  • Engaged in seven or more channels but are not as actively engaged as the “mavens.”
  • Typically, these companies are stretched too thin, focusing on too many channels and not delving into any particular channel.

Selectives” (H&M)

  • Engaged in six or fewer channels but have high engagement scores meaning they have a strong presence in a few channels.
  • Interact with customers “when and where it matters most.”

“Wallflowers” (McDonalds)

  • Engaged in six or fewer channels and have below-average scores for engagement.
  • Testing very few channels. Normally cautious of risks in approach and unsure of the benefits of social media.

The study claims a correlation between social media engagement and revenue growth. I agree with the author, Erick Schonfeld, when he expresses doubt in this connection, but it does seem to be an interesting find. I also think the report may have lacked some details in terms of how each social media channel was engaged and how depth of engagement was measured.

Other things to consider about this study are the amount of money put into the PR and Marketing departments at each of these companies. Does more money equal higher engagement and therefore higher revenue growth? Also, are there specific teams of people dedicated to social media outreach and engagement?

The final list from the report of top brands includes:

  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)

I really enjoyed this article and study and think it brings up some great ideas and points to ponder for those big companies who are still reluctant to engage in social media.

To check out the study and read the case studies of the most influential and engaged brands, click here.

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