I’m releasing today a new research report that I wrote in conjunction with Wetpaint called “ENGAGEMENTdb“. The study looked at how the 100 most valuable brands — as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking — engaged in 11 different online social media channels.
We critiqued the brands on not only their breadth of engagement across these channels, but also their depth, such as whether they reply to comments made on blog posts. Each brand was given a numerical score. The top 10 ENGAGEMENTdb brands with their scores are:
- Starbucks (127)
- Dell (123)
- eBay (115)
- Google (105)
- Microsoft (103)
- Thomson Reuters (101)
- Nike (100)
- Amazon (88)
- SAP (86)
- Tie – Yahoo!/Intel (85)
The report is available at http://bit.ly/KRGNt and the main site is at engagementdb.com (includes ways for you to do a quick ranking of your engagement). A very neat interactive feature of the site is the ability to see the rankings in different ways, from highest to lowest scores, alphabetical, etc.
Engagement Correlates To financial Performance
But even more interesting is that we also looked at the financial performance of the brands, grouping the companies with the greatest depth and breadth into a group called “Social Media Mavens”. These Mavens on average grew 18% in revenues over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period. The same holds true for two other financial metrics, gross margin and net profit.
Note that we are not claiming a causal relationship — but there is clearly a correlation and connection. For example, a company mindset that allows a company to be broadly engage with customers on the whole probably performs better because the company is more focused on companies than the competition.
The study also looks at the engagement best practices of four companies: Starbucks, Dell, SAP, and Toyota. Some of the key findings include:
- Emphasize quality, not just quantity. Engagement is more than just setting up a blog and letting viewers post comments; it’s more than just having a Facebook profile and having others write on your wall. It’s also about keeping your blog content fresh and replying to comments; it’s building your friends network and updating your profile status. Don’t just check the box; engage with your customer audience.
- To scale engagement, make social media part of everyone’s job.
The best practice interviews have a common theme — social media is no longer the responsibility of a few people in the organization. Instead, it’s important for everyone across the organization to engage with customers in the channels that make sense — a few minutes each day spent by every employee adds up to a wealth of customer touch points. - Doing it all may not be for you — but you must do something.
The optimal social media marketing strategy will depend on a variety of factors, including your industry. If your most valuable customers do not depend on or trust social media as a communication medium, or if your organization is resistant to engagement in some channels, you will have to start smaller and slower. But start you must, or risk falling far behind other brands, not only in your industry, but across your customers’ general online experience. - Find your sweet spot.
Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest. Thus, choose carefully and advocate strongly to acquire the resources and support you will need to succeed. If you are resource-constrained, it is better to be consistent and participate in fewer channels than to spread yourself too thin.
Disclosure/Acknowledgements: The research report was done in conjunction with Wetpaint as a partnership – neither Altimeter Group nor I were paid to write the report. I designed the study, created the criteria, developed the engagement scoring, and wrote the report. Wetpaint provided the people-power to conduct and execute the evaluations, helped with the data collection and analysis (thank you Jean Lee!), developed the Web site and handled public relations. All in all, this was a model of partnership and I am grateful to Wetpaint’s Kevin Flaherty and Ben Elowitz for their support.
Press Release
A press release is also available – it is copied below in full. I encourage you to read the study, engage with us and with each other at engagementdb.com, and to give us you feedback on how we can improve the research going forward.
New Study Indicates Social Media Pays; Wetpaint and Altimeter Group Find Correlation Between Brands’ Social Media Efforts and Financial Performance
ENGAGEMENTdb Report Ranks Who Is Succeeding and Who Isn’t With Social Media; Starbucks, Nike, SAP, Thomson Reuters Hit the Top Ten; Website Launching Today Lets Anyone Evaluate Their Own Social Media Efforts
SEATTLE, July 20 /PRNewswire/ — 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. The ENGAGEMENTdb study (www.engagementdb.com) 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:
- Starbucks (127)
- Dell (123)
- eBay (115)
- Google (105)
- Microsoft (103)
- Thomson Reuters (101)
- Nike (100)
- Amazon (88)
- SAP (86)
- 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.
Rank Your Company Against the ENGAGEMENTdb Top 100
Launching today, the ENGAGEMENTdb website (www.engagementdb.com) makes it possible for companies and brand managers to quickly find out how their social media efforts rank as compared to those of the world’s most valuable brands. After taking a quick survey, respondents will receive an email evaluation of their social media efforts compared to the companies in the ENGAGEMENTdb report. Additionally, companies can detail their social media efforts for inclusion in the ENGAGEMENTdb through the website. This data will be used in future research and study of the benefits of social media.
The Wetpaint/Altimeter ENGAGEMENTdb Report can be found at www.ENGAGEMENTdb.com
About Wetpaint
Wetpaint provides the leading platform for fans and brands to easily create and participate in online communities around the topics they care about most. Wetpaint offers businesses a turnkey solution for creating and fostering passionate communities that drive traffic and increase loyalty. Consumers flock to http://www.wetpaint.com to create sites around topics they love. For more company information, visit http://press.wetpaint.com
About Altimeter Group
Altimeter Group provides advice and consulting on digital strategies, with a focus on how organizations can leverage social and emerging technologies to achieve results. It is led by Charlene Li, the co-author of the best selling book, “Groundswell”. For more information, please visit http://www.altimetergroup.com.
Charlene — this is an awesome report and has solidified the need for companies to take consumer engagement more seriously.
Michael
Hi! Great study! But the last page – methodology – is missing. Just wondered when you did this, and how you came to your conclusions. Thanks!
My bad, found it.
Hi Charlene.
Great Study!
Really interesting to link engagement levels with financial performance. I’m confident that it is at least partly causal, although I also think that companies who are making profits may feel more comfortable “experimenting” with activities even without that elusive ROI…
I work for Nokia on our social media strategies – we’ve recently put together a more consolidated view of what we are doing at http://blogs.nokia.com so hope that helps in updates to the info
Cheers!
Charlene, very intriguing, but I suspect correlation may outweigh causation. 9 of the 11 companies mentioned as mavens are technology-driven companies, prone to engaging with customers online. To use them as exemplary case studies may bias the findings.
It would be interesting to assess SM performance ranges within non-tech-driven industries, such as financial services. The recent Razorfish Fluent report noted that consumers are much less likely to want to “engage” with brands in certain industries, including finance and banking.
Does SM really correlate to higher performance in sectors unrelated to technology? That would be a truer test.
Tx for the research.
@Ben – good question on correlation with non-technology companies. Unfortunately, we don’t have enough data points in this 100 company sample to do that. My hope is that we can get more data points in the future.
I applaud the methodology and effort but question whether there is really anything “breakthrough” here. Well-managed companies generally manage EVERYTHING well, so it is no surprise that the best financial performers are also doing a great job at social media.
In fact, I could make a far different conclusion from your correlation: The most profitable companies have the most money to put into social media, which is why they have the luxury to be deeply engaged. Which causes which?
As you state yourself, there is still no cause-and-effect proof of anything here. Let’s keep looking!
I’ve sent this to all my clients. Exactly the kind of proof points they are looking for…what those of us in the business understand from a gut feel can now be justified for those who need the real numbers to back it up.
interesting & most important study- I `ve translated the basics into Hebrew
http://gilagideon.co.il/?p=604
Regards
Gila Gideon
very nice
Thank you Charlene and WetPaint for conducting this very important study. The industry has been compiling reports of usage, but there have been few studies estimating engagement levels.
Debbie Weils list of blogs, Peter Kim’s like of companies using social media and the social text f500 wiki come to mind.
Using social media is not the same as level of engagement, its how you connect with your audience that’s important. This study will really help the industry review the leaders in the industry and think about best practices as a result.
I compare the chart to the Advertising Age Power 150, people look to that chart for who are the leaders in the industry and as a result attempt to emulate the leaders. I hope your chart will motivate the industry in the same way.
Did you see the critique by zdnet, any comments on their views?
Great to see your first research at Altimeter, Charlene! I saw this report today on the United Airlines Breaks Guitars YouTube video and immediately thought of your study. What a great counter-case to confirm your research! http://www.seoptimise.com/blog/2009/07/united-airlines-lose-millions-youtube.html
Interesting research. Engagement is fine, but with what? I examine Is the “social media” really “social” or “media”? here:
http://paulseaman.eu/2009/07/is-the-social-media-really-social-or-media/
The basic statistics and assumptions of this study have been repeatedly misinterpreted by the media. Has no one thought that these companies were already doing well even before social media, and maybe it is a third factor, like innovation, that has caused them to make higher earnings? Saying that “social media marketing boost[s] the bottom line” cannot be assumed to be true because of a correlational study.
Thanks for such an important and provocative report.
Can you share with us the specifics of how you measured “engagement” in each environment? What counts as engagement in Facebook? On a blog? On Twitter? etc.
I am also interested in knowing how yu measured engagement. Could you please share at a general level.
Such a detailed and helpful report – great to see someone has drawn attention to not only the power of social media, or even the types of social media out there, but how best to spread resources over a variety of appropriate channels.
Great research, this is just the type of back-up and foundation I’m looking for as I write on social media monetization from a marketing perspective for Pearson. Thanks.
Thanks for the mentions I’m glad this research is helpful for business perspective.
Featured this article on our show..Great Stuff!
Great information. I agree that if you are on a small budget, it’s better to concentrate in a few areas rather then spreading yourself thin in several different social media avenues.
It would be interesting to assess SM performance ranges within non-tech-driven industries, such as financial services. The recent Razorfish Fluent report noted that consumers are much less likely to want to “engage” with brands in certain industries, including finance and banking.
hi good resarch this is an awesome report and has solidified the need for companies to take consumer engagement more seriously
Charlene, Great report! Just working on a study about social media in the Netherlands. Hope this will help the dutch to embrace social media even more!
It very good for my Media work.
very nice post
Nice work.
Charlene — this is an awesome report and has solidified the need for companies to take consumer engagement more seriously.
Thank’s so much!
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.
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The Finance Firm
Nice work.
A just released study by Wetpaint and the Altimeter Group reported that social media pays off for business. The greater the breadth and depth of social media engagement, the greater the payback.
Altimeter Blog: New study. Deep brand engagement correlates with financial
Social Marketing Study Links Deep Engagement to Financial Performance
Really interesting to link engagement levels with financial performance. I’m confident that it is at least partly causal, although I also think that companies who are making profits may feel more comfortable “experimenting” with activities even without that elusive ROI…
Interesting that Apple are now one of the worlds biggest brands, yet when the original post was made they were nowhere to be seen!
Very interesting to see some of these brand names here. I did really expect to see Google at #1 though! Kind regards.
Type your comment here.I work for Nokia on our social media strategies – we’ve recently put together a more consolidated view of what we are doing at hso hope that helps in updates to the info
Thanks for such an important and provocative report.
This is a great report and I’ve been referring people to it and referencing it in my blog for a long time.
BUT the links seem to no longer work for http://www.ENGAGEMENTdb.com
Where is it? I think its an important resource.
Thank you.
very intresting and good tips. ill try the hebrew translation.
I wonder who are the 100 most valuable brands in Israel, and how they engaged in the 11 different online social media channels
Really useful report thanks a lot.
That is a great point to bring up. Thanks for the post.
Interesting study, I’d be interested to see some more up to date results!
Is the report still accessible? engagementdb.com doesn’t seem to connect to the report.