Engagement = $$
Here is ENGAGEMENTdb, a study of the top 100 global brands (as rated by Business Week/Interbrand) and their use of social media, done by two firms that specialize in the space, Wetpaint and Altimeter Group.
I’ll jump right to the conclusion:
"… the most valuable brands in the world are experiencing a direct correlation between financial performance and deep social media engagement. The relationship is apparent and significant: socially engaged companies are in fact more financially successful."
Note that the study was comparing the best brands … so no overall marketing slouchs here to muddy the water. And still the conclusion holds.
I’m impressed with the detail shared in this report. The researchers looked at each company’s use of the following social media channels:
- Blogs
- Branded social network/community
- Content distribution to other sites
- Discussion forums
- External social net presence (Facebook, MySpace)
- Flickr/Photobucket
- Innovation hubs (e.g., centralized customer community to create innovation)
- Wikis
- Ratings and reviews
- YouTube
While the firms don’t reveal their scoring "black box," it’s clear that this wasn’t a casual or cursory exercise. The #1 ranking goes to Starbucks, which has a presence in each of these channels. The report includes four very instructive "best practice" case studies — Starbucks, Toyota, SAP and Dell.
The authors note that their methodology awards points for depth of involvement in each channel, so mere presence isn’t enough to earn a high place in the rankings. "We found that not only could we quantifiably measure engagement, we could also understand how more engaged companies tap an engagement mindset to perform better."
Indeed, companies were sorted into four interesting "engagement profiles" — Mavens, Butterflies, Selectives, and Wallflowers. Any nonprofit could recognize itself in one of these categories!
Mavens, for example, are engaged in seven or more social channels and have above-average level of engagement … "Mavens not only have a robust strategy and dedicated teams focused on social media, but also make it a core part of their go-to-market strategy."
I can’t prove it at the moment (at DonorTrends, we’re working on it), but I suspect that a nonprofit "Maven" that scores high in "social engagement" will be — pound for pound — more financially successful than its "Wallflower" cousins.
If your nonprofit is messing around with social media, take a break and read this report. You can find more detail at www.engagementdb.com
Wetpaint and Altimeter, you deserve a raise!
Tom
P.S. Thanks to Joe Marchese writing in Online Spin for the heads-up.
One response to “Engagement = $$”
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Of course, the question is which came first: the brand recognition, the $$$, and then social media or social media, brand recognition, then $$$? I think the former.
The notion that social media is making these companies financial powerhouses is, likely, silly. Most of their financial success is due to good products, traditional marketing, and long-term–pre-social media–brand recognition. This report is post hoc fallacy at its worst.
Here’s a thought. If a non-profit had $500,000 to spend on acquiring new supporters, how much would an experienced, prudent fundraiser allocate to various media including new, new social media? I suggest $25,000 to make sure the website would serve as a good response device, and $475,000 in mail, phone, and earned media. Amount to Facebook et al, $0.
In fact, if you want the best return on investment with $500,000, put the money into reactivating lapsed donors and upgrading current ones, if that has not already been maximized.
For most organizations, social media is fundraising snake oil.