Social Media Engagement Builds Business… Or it Doesn’t
Finally, some hard data to justify the time and money devoted to social media marketing.
Well, sort of. Digital media consulting firm Altimeter Group and social-media platform WetPaint recently published a study attempting to discover, once and for all, whether engaging in social media pays off at the register. The EngagementDB study provides some evidence that suggests it does.
The Proof
The study looked at the top 100 global Brands and bucketed them into one of four groups based on their level of social engagement. Each grouping reflected a different breadth (how many channels) and depth of engagement (content, replies, activity, etc.).
High presence = 7+ channels
Low presence = < 6 channels
The researches graphed the buckets against their reported revenue growth over the last 12 months. They found a strong correlation between the companies most engaged in the social space and those that exhibited the strongest revenue growth.
So although we can’t directly quantify the value of engaging in the social space, we can finally agree that it’s a valuable form of marketing that helps brands build their bottom line. Can’t we?
While I wish I could definitively say that the EngagementDB study proves the bottom line value of social media engagement, I don’t know that we can. Correlations are often misleading, any number of factors could (and did) affect the revenue of the companies studied. It would be presumptuous to say that social engagement actually caused or hindered actual business performance.
The Bottom Line
What I am comfortable concluding is that social media forges a new relationship between brand and consumer. Social media engagement forces a brand to undergo a radical shift in perspective, one where they must consider how their messages and platforms add value to the consumer’s daily experience, not just distract from it. They are plunged into a world where they must earn consumer’s attention, and not rely on buying it.
Companies that are able to successfully engage in social media are forced to transform their perspective of the consumer landscape, to adapt to a modern media landscape where they are but one voice in a million. And once a Brand goes there, it starts to permeate everything they do.
It’s brand building 2.0 and it’s driving the bottom line.
Follow the author: @brianchiger
Follow AgencyNet: @agencynet
Follow the author: @brianchiger Follow AgencyNet: @agencynet
Jason…
From AgencyNet, what are successful marketing channels aside from social media that AgencyNet suggests pursuing? Is print or online advertising even important anymore?
Brian…
@Jason: I don’t subscribe to the theory that traditional marketing channels are obsolete. What IS obsolete is silo’ing your efforts in traditional channels or treating digital as though it was just another media channel.
The most powerful advertising out there is word of mouth. Unfortunatley for advertisers, this isn’t something you can buy, it’s something you earn. Still, it’s something you can invest in. Things like killer customer service, a relationship building approach to consumer touchpoints, marketing that adds value and excitement to consumers’ lives, engagement in the social space. All of these things suggest a consumer-centric approach that has proved very effective. It isn’t easy and it isn’t cheap, but companies who reorient their approach seem to see a return on investment.
Sometimes, a consumer-driven approach doesn’t take all that much. For example, I recently placed an order with Alice.com. Unfortunately, I was not home to accept the package. Alice.com used this as an opportunity to engage with me, emailing me about what happened (from a person) and explaining what I could do to ensure proper delivery. Added some really nice humanity to the brand and turned a routine delivery failure into another opportunity to engage. A similar mentality is what drives efforts like JetBlue’s twitter feed or Zappos.
That said, your question was whether traditional advertising is important. I believe traditional advertising still has a role to play. It is a critical driver of awareness and is a nice way for brands to put a stake in the ground about what they believe. I do believe that they are less important than they used to be, however, and should live as part of a larger customer engagement strategy — not just a messaging strategy.
So online, mobile, TV, event, print, experiential and OOH all have their roles to play — companies just need to pay more attention to the bigger marketing picture. Sometimes tough to do in companies that have an isolated “marketing department.”
Jason…
We are struggling with this question as we speak — as things are rapidly changing, it’s difficult to judge which advertising channel we will benefit the most results from? It’s indeed an interesting subject that many companies I believe are now facing in fear of “Do or Die.”
Do we stop investing in print ads since there is no accurate way of measuring real results? Do we end our online banner advertising since our analytics software is showing great month-by-month decreases in traffic? We noticed that the websites (mostly forums that involve social discussion) that we have been advertising on are substantially dropping in activity. Do we blame the poor ecomony and hope this is temporary or are we watching the internet pave a new path in terms of how users seek information? I can’t imagine relying on social destinations such as Twitter or Facebook as our only online marketing tool.
With all the spam and millions of premium domain names that are mass registered by large organizations every year with only the intention of assisting their existing spam programs — should we continue to value search engine marketing (SEO/SEM) as a beneficial online marketing channel?
There is a lot of hype that mobile advertising is the future — but are we actually ready to begin that step? I realize the device that people are connected to the most is their mobile phones, but how can a small or medium size company prepare themselves for that channel, or can we expect mobile advertising to be available to only brands with large budgets?
Brian…
Totally fair reaction. There isn’t going to be a magic bullet. Mobile advertising and accessibility will definately be key. Already 40% of iPhone/iTouch users are accessing the web more via their mobile devices than the desktop. That’s huge. Brands will absolutely need to cater to that reality. Can brands rely solely on the mobile channel? No, probably not, but they can’t ignore it either, it’s not going away its only going to grow.
Given the prevalence of spam, SEO/SEM is probably even MORE critical than ever before. A consumer who is searching for your brand or product absolutely needs to be able to find it. Content syndication and engagement across channels is also key.
As far as any traditional advertising medium goes (TV, Print, Digital), there was never an accurate way to measure them. That doesn’t mean they don’t work, but consider using them in a different way. Instead of display advertising, run campaigns that accent the value proposition of a property.
Lexus did a nice integration with Urban Daddy, creating a website and iPhone application that deployed Urban Daddy’s value proposition in a new context. (http://thenextmove.urbandaddy.com/) Our OwnYourC campaign (www.ownyourc.com) didn’t lecture kids to stop smoking, but it did give them a forum to think about it and express themselves.
Ultimately, marketing can’t only be about message dissemination anymore. But it doesn’t mean you write off dissemination channels entirely.
Establish KPI’s and run tests to see where your brand sees the best ROI. Track the social space closely and see what generates buzz and how that ties to product sales. Work to establish consumer relationships, is your company set up to manage and maintain them? Track online advocacy — what are people saying about your product… are they saying anything? Are you giving people things to talk about?
The increasing challenge of succeeding in each medium isn’t a reason to drop out of the race. Not seeing an ROI from a channel, however, is. If you’d like us to take a look at your specific case, feel free to give us a call and we can set up a meeting.
anne-Marie O'Sullivan…
Brian
Your point on the brand shift in perspective – as a result of using social media – is really insightful I think. To be a successful and respected brand in cyberspace means getting a lot of the rather mundane and tedious things right – like understanding your consumers, listening to them and asking them how to improve, building a relationship with them and getting them to tell everyone, crafting a brand story – oh and brilliant product performance. Digital means authentic brand values and reputations are harder to build and be bought.
The notion of brands ‘earning’ reputation – like they once did when brands first emerged – is the revolution in brand management culture that we’re seeing. Brands have to be good to be be seen as such. Welcome: The great digital brand meritocracy.
AMOS
Brian…
Anne-marie, I think you hit the nail on the head. I don’t know if “mundane” and “tedious” are the words I would choose, but the fact is, digital brand building requires a lot of “non-sexy” effort.
Reminds me quite a bit of Gladwell’s “How David Beats Goliath” essay.
“We tell ourselves that skill is the precious resource and effort is the commodity. It’s the other way around.”