Social Media Marketing Makes More Money
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Social Media Marketing Makes More Money

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Deep engagement with consumers through social media channels correlates to better financial performance, says new study.

Deep engagement with consumers through social media channels correlates to better financial performance, says new study.

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Social Media Marketing Makes More Money Social Media Marketing Makes More Money Document Transcript

  • SOCIAL MEDIA MARKETING MAKES MORE MONEY Deep engagement with consumers through social media channels correlates to better financial performance, says new study. July 22, 2009 By Michelle Megna Social Media Marketing Makes More Money Deep engagement with consumers through social media channels correlates to better financial performance, says new study. July 22, 2009 By Michelle Megna: More stories by this author: Does social media marketing boost the bottom line? The answer is a resounding "yes," according to a recent study that cites a correlation between brands with social media campaigns and higher earnings. Companies that had the highest levels of social media activity -- and engagement -- increased revenues by as much as 18 percent on average over the past year, while the least active realized a six percent dip in sales, according to research from social media platform Wetpaint and digital consulting firm Altimeter Group. The report comes at a time when recession-strapped brands are increasingly looking to social media marketing as a more affordable alternative to traditional forms of both online and offline advertising. Interactive marketing, however, is expected to reach $55 billion and represent 21 percent of all marketing dollars spent in 2014 as advertisers shift money away from traditional media to search marketing, display advertising, e-mail marketing, social media and mobile promotions, according to a recent Forrester study. The study, titled "Engagementdb," reviewed more than 10 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. The study found that social media efforts are self-perpetuating. "There is an exponential growth in the depth of engagement as the brand extends itself into more and more channels," according to the report. 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 collaboration and support. Another characteristic for success -- content tone. These companies have a conversational style, in contrast to the "approach of traditional communications and early corporate blog experimentation, which emphasizes messaging and talking points," the study says. --------------- The Starbucks example
  • The report outlines best-practice examples from successful companies, and, for instance, describes how Starbucks last year launched MyStarbucksidea.com, a community site allowing customers to submit, discuss and vote on their favorite notions of what would improve the company. Integral in the launch was the ability to take risks. "We had to accept that there were some unknowns. If you try to mitigate every piece of risk, you will be either inauthentic or fail," Chris Bruzzo, vice president of brand, content and online, told the authors of the report. Other ingredients for Starbuck's success include understanding how social media channels differ, deputizing people throughout the organization and centralizing coordination for consistent messaging. "As Starbucks became more comfortable with social technologies, the company realized that each channel is different and required developing different facets of the relationship with their audience," says the report. For example, when Starbucks started engaging on Facebook in October 2008, the company approached and took over the ownership of user-created communities -- with the blessing of the original page administrators. At that time, the page had about 200,000 fans, but Starbucks- generated content combined with customers sharing their enthusiasm for the brand boosted the number to nearly 3.5 million members, representing one of the largest groups on Facebook, according to the report. The announcement of the mini-Starbucks card on Facebook drew 1,406 comments and 12,382 people 'liking' the post so that it showed up in their news feed. "Facebook is not only about messaging to the 3.5 million fans, but also allowing the fans to talk with each other about their love for the product and experience," says the report. Bruzzo says of the growth: "Recently, we found that for every four people that interacted with a particular news item, another three people are added virally as friends of those people." Contrast that to Twitter.com/starbucks where one person responds to inquiries, such as replacement blades for coffee grinders, or even questions from baristas about changes in the menu. With 250,000 followers, the study says Starbucks uses Twitter as an "in the moment" channel to deliver timely customer support and spread word about the latest breaking news and contests. While Starbucks encourages designated employees to have a sense of ownership in customer engagement as experts on specific topics, the company is not yet endorsing a free-for-all in social channels. The reason: Starbucks wants to make sure that there is consistency in the approach and customer experience. "For every single piece of content that we put online and do right, we also do a lot of shutting down. We are protective of these channels and want to make sure that we are using them in the right way," says Alexandra Wheeler, director of digital strategy. To help ensure this consistency, the Starbucks interactive team is fully integrated into overall marketing. This means all traditional forms of marketing are integrated with e-mail, paid search and social channels to maximize impact, making centralized consistency and coordination all the more important. For those who are new to social marketing, the report advises brands to be selective in how they approach social marketing, but emphasizes that they do need to have a presence in some form.
  • "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," says the study. "If you are resource-constrained, it is better to be consistent and participate in fewer channels than to spread yourself too thin."