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EngagmentDB Report, July 2009

This the original EngagementDB report that I wrote with WebPaint in 2009, that correlated social media engagement with financial performance.

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EngagmentDB Report, July 2009

  1. 1. The world’s most valuable brands.Who’s most engaged?ENGAGEMENTdbRanking the Top 100 Global BrandsPrepared by: July 2009
  2. 2. TABLE OF CONTENTS INTRODUCTION Historically, economic hardship motivates companies to take a good, hard look at their marketing Introduction ......................................................................................... 1 budgets and try to compute each investment’s financial value. This recession is no different, with one exception: social media has become perceived as an indispensible marketing tool — one getting increased investment — despite a historical inability to quantify its worth. Key Findings .........................................................................................2 There is little left to debate about whether or not one should participate in social media — virtually all companies, big and small, have acknowledged social media’s presence, and firms who do not have a Depth of engagement can be measured. .............................................2 blog, Facebook page, or Twitter account now find themselves in the scarce minority. Many, however, Brands fall into one of four engagement profiles. .................................5 appear to be blindly hopping on the bandwagon — people are creating company profile pages and Financial performance correlates with engagement. ............................6 sending updates without knowing how much they should invest in these distribution channels or what success even looks like. This brings us back to Economics 101: how can a company effectively allocate limited marketing resources if they cannot define the investment’s value? Best practices........................................................................................8 For the first time ever, Wetpaint/Altimeter Group have gone beyond surface case studies to measure the true financial value of social media. We conducted our research not just on a small scale, but based Starbucks ............................................................................................8 on the world’s 100 most valuable brands – these are brands that are widely acknowledged for setting Toyota ...............................................................................................12 the standards in marketing as measured by BusinessWeek / Interbrand “Best Global Brands 2008” SAP ....................................................................................................14 rankings. And now, we evaluate how well they are engaging their consumers using social media and, Dell ....................................................................................................16 even more importantly, how that engagement correlates with their most important financial metrics: revenue and profit. A surprising conclusion: While much has been written questioning the value of social media, this landmark study has found that the most valuable brands in the world are experiencing a direct Key Takeaways .................................................................................. 18 correlation between top financial performance and deep social media engagement. The relationship is apparent and significant: socially engaged companies are in fact more financially successful. So now we know it pays to be social, but it is important to note that by “social,” we’re talking about Methodology .....................................................................................20 deep engagement, not merely having a presence. And what exactly do we mean by deep social engagement? Resembling any in-person exchange, socializing requires more than just being there — you have to interact with others, instigate discussions, and respond during conversations. Our study implies value in social engagement on top of social presence — it pays to actively and continually Appendices participate and invest in your networks. Appendix A: Engagement Scores for the Top 100 Global Brands .........23 This report also contains case studies highlighting our interviews with four unique companies Appendix B: Engagement Scores by Industry ......................................26 – Starbucks, Toyota, SAP, and Dell – all of which scored top quartile engagement rankings. By going Appendix C: Engagement Profiles .......................................................31 beyond just the statistics, we introduce a playbook for how the best are succeeding in social media so that you, too, can engage and succeed. Our hope is that the data and best practices in the ENGAGEMENTdb Report provide a new way to think Endnotes .............................................................................................32 about how to use these powerful tools and how companies should invest their marketing resources. The right level of social media engagement could be the key to propelling you into tomorrow’s ranking of the top 100 global brands. Ben Elowitz Charlene Li CEO, Wetpaint Partner, Altimeter Group2 1
  3. 3. KEY FINDINGS There exist thousands of social media channels, each with a slightly different value proposition. It is therefore a daunting task to figure how to objectively evaluate various marketing efforts across all social mediums. The Wetpaint/Altimeter Group ENGAGEMENTdb Report introduces a single criterion: engagement. The goals of the study were to measure departments and executives were in Figure 1: all 100 brands Figure 1: Engagement Scores of Top 100 Global Brands how deeply engaged the top 100 these channels. Thus, we looked at not global brands are in a variety of social only at the breadth, but also the depth media channels and, more importantly, of engagement. 140 High Engagement understand if higher engagement is  correlated with financial performance. Adding all channel sub-scores together 120   We found that not only could we gives the brand’s overall engagement quantifiably measure engagement, score. Understandably, the more 100 we could also understand how more channels a brand leverages, the higher engaged companies tap an engagement its overall engagement score will be. 80 mindset to perform better. Below are All of the engagement scores for the 60 some of our key findings. brands are listed in Appendix A. The top engagement score of 127 was earned Low Engagement 40 by Starbucks, which has presence in 11 Depth of engagement can be channels. 20 measured. Charting the companies’ engagement 0 We evaluated and scored each brand’s scores against the number of channels 0One Channel 2 1 3 4 5 6 7 8 9 Many Channels 10 11 12 engagement in various channels they are in yields another insight — the using criteria customized for that average depth of engagement as particular type of social media. We also represented by two regression lines (see examined how deeply involved different Figure 1). 1 1 2 462 3 6 5
  4. 4. KEY FINDINGS KEY FINDINGS Two regression lines are used — one for depth of engagement as the brand contrast, apparel, consumer products, their go-to-market strategy. Companies brands engaged in six or fewer channels extends itself into more and more food & beverage, and financial brands like these could not imagine operating and one for brands engaged in seven channels. Sometimes this is due to in general don’t engage as much without a strong presence in social or more channels.1 Brands that appear brands learning from their experiences — which is to be expected given that media. above the line are more engaged on in other channels, making it easier to companies in these industries are just • Butterflies. These brands are engaged average than other brands engaged in the same number of channels, and engage deeply in new channels like Twitter. This effect is also a reflection beginning to experiment with social media. in seven or more channels but have 2 those appearing below the lines are on of the brands’ commitment to social lower than average engagement average less engaged across all of their media — once they are invested in But even within industries, there is scores. Butterflies like American channels. We also found that: multiple channels, they are more likely a wide spectrum of engagement. Express and Hyundai have initiatives in to engage deeply in each of them. In the auto sector, some brands like many different channels, but tend to • As the number of channels increase, Toyota are highly engaged in many spread themselves too thin, investing overall engagement increases at a • Engagement differs by industry. channels, especially around the Prius. in a few channels while letting others faster rate. There’s a reason why we It’s no surprise that engagement In contrast, luxury brands Mercedes- languish. Their ambition is to be a decided to use two regression lines to tends to differ by industry (see Figure Benz and Porsche are in just two Maven and they may get there — but show the trend — brands that were 2). Not only are some industries on channels each. In other words, distinct they still struggle with getting the in seven or more channels engaged average present in more channels, they target audiences can influence the full buy-in from their organizations deeply across all channels where they also engage with them more deeply. appropriate level of social media to embrace the full multi-way were present, as compared to brands For example, media and technology engagement even within specified conversation that deep engagement that were present in fewer channels. companies tend to be in more channels industries. Appendix B provides entails. There is an exponential growth in the and engage deeply within them. In additional details on select industries. • Selectives. These brands are engaged Figure 2: engagement by industry (with labels) in six or fewer channels and have 3 Brands fall into one of four higher than average engagement Figure 2: Engagement Varies by Industry engagement profiles. scores. Selectives like H&M and Philips Depending on the number of channels have a very strong presence in just 90 and how deeply they are engaged a few channels where they focus on High Engagement 80 in them, brands took on one of four engaging customers deeply when Media (6) specific profiles (see Figure 3): and where it matters most. The social 70 Technology (12) media initiatives at these brands tend • Mavens. These brands are engaged to be lightly staffed — if they are at 60 1 in seven or more channels and have all, meaning that by default, they 50 Retail (8) Leisure (5) an above-average engagement score. have to focus their efforts. These are Consumer 40 Bus Services (3) Electronics (7) Brands like Starbucks and Dell are able beachheads, started by an impassioned 30 Consumer Auto (12) to sustain a high level of engagement evangelist with a shoestring budget. Low Engagement Products (12) across multiple social media channels. • Wallflowers. These brands are 4 Food & Bev (11) Manufacturing (4) 20 Apparel (7) Mavens not only have a robust strategy Financial (13) and dedicated teams focused on social engaged in six or fewer channels and 10 media, but also make it a core part of have below-average engagement 0 scores. Wallflowers like McDonalds 0One Channel 2 1 3 4 5 6 7 8 9 Many Channels 10 11 124 5
  5. 5. KEY FINDINGS KEY FINDINGS and BP are slow to or are just getting few channels. They are also cautious about We also found that social media reach success. This insight relates back to our started, dipping their toes into social the risks, uncertain about the benefits, alone may have a positive impact: industry-specific findings: the optimal media waters. They are still trying to and therefore engage only lightly in the Butterflies enjoyed significantly stronger level of presence and engagement figure out social media by testing just a channels where they are present. revenue returns than Selectives or depends on a variety of factors. It’s not Wallflowers. Why is this so? Our about doing it all, but doing it right. hypothesis centers around touch Figure 3: Brands Fall Into One of Four Engagement Profiles While these findings do not necessarily points: More touch points can present a ripple effect, inducing viral marketing, imply a causal relationship, they still boosting brand recognition and driving hold powerful implications. Social sales volume. media engagement and financial success work together to perpetuate On the other hand, it is interesting a healthy business cycle: a customer- to note that compared to Butterflies, oriented mindset stemming from deep Selectives delivered higher gross and social interaction allows a company to net margins, suggesting that deep identify and meet customer needs in engagement in a few channels can be the marketplace, generating superior a rewarding and effective social media profits. The financial success of the strategy. Focusing on depth over company, in turn, allows further breadth present an opportunity to better investment in engagement to build even understand the customer, react quickly better customer knowledge, thereby to customer demand, and improve creating even more profits — and the satisfaction – which in turn generates cycle continues. pricing power and drives business �������������������������������������������� Financial performance – industries are well represented across ����������� Figure 4: Engagement Correlates to Financial Performance correlates with engagement. the spectrum of engagement profiles (see Appendix C). Revenue Growth % (Last twelve months) Gross Margin Growth % (Last twelve months) Net Margin Growth % (Last twelve months) Back to the million-dollar question: Why do social media? We finally have a good To be specific, companies that are both ����� ����� ����� answer: Because it pays off. While no deeply and widely engaged in social one yet has the data to determine direct media surpass their peers in terms of cause and effect, what we do find is both revenue and profit performance ����� ����� ����� a financial correlation between those by a significant difference. In fact, who are deeply engaged and those who these Mavens have sustained strong outperform their peers (see Figure 4). revenue and margin growth in spite of ���� ���� ���� Moreover, this correlation reflects more the current economy. Coincidence? than just the state of various industries Perhaps, but we’re looking at statistical given the current economic conditions significance among the world’s most ������ ������ ������ valuable brands. ����� ������� ������� ����� ������� ������� ����� ������� ������� ������ ������ ������ ������� ���� ����� ������� ���� ����� ������� ���� �����6 7
  6. 6. BEST PRACTICES In addition to the statistical data, we also qualitatively examined how four brands manage to engage broadly and deeply — in some cases, with very limited dedicated staff. One recurring theme throughout these case studies is that engagement cannot remain the sole province of a few social media experts, but instead must be embraced by the entire organization. We now take a deeper look at the strategies, processes, and technologies that allow Starbucks, Toyota, SAP, and Dell to engage both broadly and deeply, with the goal of illuminating what has fueled their success and to provide insights and best practices to help any business move towards deep engagement. Starbucks Industry Leisure Top 100 Rank 1 Score 127 Channels 11 Social Media Team 6 people Wheeler acknowledges that the physical, distributed nature of Starbucks is also their biggest challenge, with people changing all the time while others are eager to engage directly through channels like Twitter. “We need to be marching through Starbucks has a small social media team with only six people, and yet this in the right way,” stated Wheeler. “We need to build our social strategy up with Starbucks obtained the highest engagement score – 127 in 11 channels integrity so that we are not compromising the relationships with customers.” Here are some of the ways they balance distribution and centralized control: – among the top 100 brands. This is all the more impressive because as a bricks-and-mortar store with thousands of physical outlets, Starbucks beat out advanced media and technology brands. We spoke with Chris Deputize people throughout the organization. Bruzzo, VP of Brand, Content and Online, and Alexandra Wheeler, Director The first channel Starbucks launched was that was suggested by a customer in of Digital Strategy, at Starbucks to understand how Starbucks engages, where people August 2008. As the person in charge of so successfully. Wheeler explained, “We live in the physical world with submit , comment on, and vote for their innovation in that department, Davidson favorite ideas. But rather than just put tracked the comments, developed the thousands of natural touch points, so when we laid out the vision for our up the technology, Starbucks set out to product, and launched it with a blog social strategy, it felt like home for the brand. It’s about the relationships we ensure the departments impacted by post on the site.2 form with our customers, not marketing.” the site (which includes practically every department) had a representative who It may appear easy and obvious now, was responsible for being the liaison. but Wheeler said that the days prior For example, Chuck Davidson on the to the launch of MyStarbucksIdea. Starbucks Card team championed the com were the hardest. “Getting the idea of offering a mini-Starbucks card operational readiness in place, getting8 9
  7. 7. BEST PRACTICES BEST PRACTICES people onboard was tough. We had on the new site would eventually come Centralize coordination. to take a leap of faith together.” naturally, because they would be The key was making the case to the operating in areas where they already While Starbucks encourages designated the experience for customers. “We are 50 representatives from all around had responsibility and knowledge. employees to have a sense of ownership protective of these channels and want Starbucks that engaging with people in customer engagement as experts on to make sure that we are using them specific topics, the company is not yet in the right way,” explained Wheeler. endorsing a widespread engagement There are plans to engage more broadly, in social channels. This can sometimes but again, coordination will be centrally Understand how each channel provides a different dimension be difficult as many of the employees — managed. of engagement. especially those who work in stores and are avid users of social media channels Moreover, the interactive team is like Facebook and Twitter — chomp at fully integrated into overall marketing As Starbucks became more comfortable people are added virally as friends under the Bruzzo’s oversight so that the bit to engage. Wheeler admitted, with social technologies, they realized of those people.” Just to put it in all traditional forms of marketing are “For every single piece of content that that each channel is different and perspective, the announcement of the integrated with email, paid search, and we put online and do right, we also do required developing different facets of mini-Starbucks card on Facebook drew social channels to maximize impact, a lot of shutting down.” The reason: the relationship with their audience. 1,406 comments and 12,382 people rendering centralized consistency and Starbucks wants to make sure that there For example, when Starbucks started “liking” the post so that it showed up coordination all the more important. is consistency in the approach and in engaging on Facebook in October in their news feed. Facebook is not only 2008 at, about messaging to the 3.5 million they approached and took over the fans, but also allowing the fans to talk ownership of user-created communities with each other about their love for the (with the blessing of the original page product and experience. Find champions who can explain and mitigate risk. administrators). At that time, the page had about 200,000 fans, but a Contrast that to Starbucks had one major advantage in In addition to CEO Schultz, there was combination of Starbucks generating where one person responds to inquiries, its entry into social media — CEO Howard also an “everyday” champion. Bruzzo content and customers sharing their such as replacement blades for coffee Schultz personally introduced and added, “There needs to be someone enthusiasm for the brand has built that grinders, or even questions from baristas championed from who not only gets social media but can fan base to nearly 3.5 million members about changes in the menu. With the start. A core belief in the importance also translate it for the organization. — representing one of the largest groups 250,000+ followers, Starbucks uses of customer engagement allowed the Alex (Wheeler) is a key part of that.” on Facebook. Twitter as an “in the moment” channel company to take risks and try new things Having Wheeler was essential, as she to deliver timely customer support and as a matter of faith. Bruzzo emphasized, was the person who cajoled, prodded, Bruzzo explained the source of the spread word about the latest breaking “We had to accept that there were and convinced everyone to take that first growth: “Recently, we found that for news and contests. some unknowns. If you try to mitigate step into social media. every four people that interacted with every piece of risk, you will be either a particular news item, another three inauthentic or fail.”10 11
  8. 8. BEST PRACTICES BEST PRACTICES Toyota Industry Auto Top 100 Rank 21 Score 54 Channels 7 Social Media Team 3 people because it leveraged the corporate affiliated with Toyota — by providing communications work that DeYager’s access, information, and support. But team was already doing. They reasoned they have no plans in the near term to Toyota is relatively new to the social media arena, having started in earnest that it would be hard to get in trouble launch a blog — their limited resources just two years ago — Toyota launched its YouTube channel in March 2008 with 140-character postings and key and organization barriers make blogging and established a Twitter profile in April 2008. Yet with a team of just three stakeholders viewed channels like difficult. To extend their reach further, Twitter and YouTube as less threatening. they recently launched Facebook pages people, Toyota was able to achieve an engagement score of 54 across for the Prius ( The team works closely with outside and Lexus ( in 7 channels. We spoke with Scott DeYager, Social Media Supervisor, and blogs like — which is not conjunction with their outside agency.3 Denise Morrissey, Online Community Manager, about how they engage with Toyota customers. Spread engagement to employees beyond the social media team. Be in it for the long haul. As they were only three people, DeYager bodies here to engage 24/7,” explained and his team from the start reached Morrissey. “Together with our agency, Morrissey stressed that a key to a plan and make sure that resources are out to people around the company to we put together guidelines and best successful engagement is to commit to available. Because you can’t gracefully provide the content to fill the channels practices on customer engagement, a relationship with customers in new exit — once you’re in, you’re in. The days where they engage with customers. then communicated and shared the channels and convince your customers of walking away from a campaign are Take a look at the Twitter account and responsibilities with the functional that you will be there for them. “If you over — once we engage, we have to you’ll see that in addition to DeYager, groups who could respond to, for are going to engage, you have to have commit to it.” three public relations specialists from example, environmental news.” sales, environment/safety, and public affairs/community outreach contribute The team also pulls content such as posts. The Toyota Twitter team uses video from around the organization. monitoring software to identify tweets Morrissey commented, “It was never an Pick channels carefully. argument inside the organization to get mentioning Toyota, then responds from a respective area of expertise using content — people are excited to give us From the start, the social media channel ( content, such as dealer training videos, technology from CoTweet to manage team realized that there would be a that showcased video content that because it serves the public as well. A multiple authors on the single Twitter lot of resistance to having a Toyota Toyota already had handy — it was lot of the departments are coming to us account.4 This same mode is utilized on blog. “We had to choose the path of simply a matter of uploading the with content.” DeYager’s team created Toyota’s Facebook pages — response least resistance,” shared DeYager. content to YouTube. Twitter came a social media governance board to requests are sent out and come back So they started with a YouTube next (, primarily develop loose guidelines on how content from around the company, depending on the topic. would be shared between the Toyota, Lexus, and Scion divisions, making it Not only does this put the real experts much easier for the social media team to front and center, but the social media go freely around the organization and team couldn’t manage the efforts request content. any other way. “There aren’t enough12 13
  9. 9. BEST PRACTICES BEST PRACTICES Industry Top 100 Rank Score Channels Social Media Team SAP Technology 9 86 10 35 people Encourage employees to tap into social media to get work done. With 1500 employee bloggers and 400 about concepts like “open cloud As one of the largest technology companies in the world, SAP has the employees actively publishing content in computing” and “timeless software” daunting challenge of engaging its extended developer community. The other forms, SAP clearly has few control in order to float the idea and get issues about allowing employees to feedback. Yolton explained, “Product SAP Community Network (SCN) is now six years old, 1.7 million users strong, engage. That’s because the company managers are using the social tools to and run by 35 people. The social media team manages the web site as well realizes that real work gets done in these communicate information about their as multiple in-person events around the world, each with attendance well social channels. It goes all the way to the new products and to get feedback — top — CTO Vishal Sikka recently blogged even down to product documentation.” into the thousands.5 Mark Yolton, Senior VP of SCN, remarked that while SCN has a relatively large team compared to other companies, “There’s no way that I and my team of 35 people could ‘manage’ the 1.7 million Engage in new channels where people already are. members of the community.” But engage they do, with an engagement score of 86 across 10 channels (ranked 9th out of the top 100 brands). Here SCN started with blogs, wikis, and partners like mentors, and analysts/ discussion forums, but recently branched bloggers.7 Yolton supported the role are some of their best practices. out to new channels like Twitter as well. of individuals on Twitter, saying, “A “We think about the ecosystem more corporate presence doesn’t speak well broadly than just customer management in Twitter. It’s better to have individual — it’s a symbiotic relationship voices in Twitter where they can engage between the members of our broader as people.” So while there is at best a Open the platform to anyone and everyone. ecosystem.” So while there are roughly light tie between the SCN site activities eight “official” Twitter accounts, there and Twitter, the philosophy of deep and Anyone can contribute to the blogs, To encourage activity and engagement, are many more “personal” accounts wide engagement carries through even discussion forums, and wikis on the SCN SAP has a reward point Contributor managed by SAP employees, related on non-SAP SCN sites. site — and 5,000 bloggers do. Two-thirds Recognition Program that awards points of contributors represent customers, for specific activities, such as maintaining thought leaders, analysts, and partners a blog, responding to forum questions, from the broader SAP ecosystem. Yolton or adding to a wiki page.6 Why would Support engagement as an extension of the company culture. explained, “Five thousand people have anyone care about the points? Because the keys to the blogging system on SCN. to the system communicates the One of the newest channels SAP is financial performance, he believes there That’s one way to scale — by involving reputation of each developer, vendor, using is, a is a correlation. “It’s more like branding the community very actively.” partner, or thought leader as an expert channel where SAP invites consumers — our activities reflect an attitude of — and can help secure a job, contract, to “Talk with us. We want to learn.” the company that is more engaged, a and sale. Yolton emphasized that this reflects the company that values the opinions and overall culture of the company, one that viewpoints of the many different voices values the ability to listen well. While of customers and suppliers. If we can Yolton can’t yet prove a measurable make our customers more successful, causal relationship between customer then they will buy more products and engagement and the company’s services.”14 15
  10. 10. BEST PRACTICES BEST PRACTICES Industry Top 100 Rank Score Channels Social Media Team Dell Technology 2 123 11 n/a Make social media part of the job, just like email. There are several examples of how Dell times a week and also has a personal Dell’s social media engagement was initially forged by crisis — from the “Dell employees are leveraging social media to blog on which he engages fellow Linux Hell” summer of 2005 to the flaming laptops in 2006. But from these trials, get their jobs done, engaging for 15-20 enthusiasts.9 Binhammer explains, “Max minutes a day as part of their routine. doesn’t have to get on a plane and go to Dell emerged as one of the most engaged and active companies in social For example, Max Weston, an education a Linux conference to bring that outside media, with an engagement score of 123 in 11 channels. Their best practices strategist at Dell, tweets regularly, perspective into his job every day. For pertain primarily to how to extend and sustain engagement across the sharing his thoughts on education and people like Max, this is just another technology with 3,000+ followers.8 channel for communicating. It’s an add- organization. Matt Domsch, a technology strategist in on, not a replacement, and is like using the office of the CTO, is a Linux expert your phone or email.” who pops in and out of Twitter several Be conversational from the start. Modularize and synchronize content across channels When Dell started engaging in social hub that was the inspiration for While Dell recognizes that each channel the Dell Mini development team who media, they started small with a blogger, to multiple is unique, it also understands that respond to the Netbook idea threads relations program designed to reach Twitter accounts. Richard Binhammer, engagement frequently jumps between directly. out to bloggers writing about Dell. This a senior manager in corporate affairs at channels. Dell recently facilitated cross- channel engagement with a post on the In the future, Dell could create what simple start — focused on a dialogue Dell, observed, “When we moved into Direct2Dell blog asking for feedback on Lionel Menchaca, Chief Blogger at Dell, with bloggers — set the tone for all other channels, we learned our lesson the future of Dell Mini Netbooks while calls “activity streams” to incorporate future engagement, now ranging from and adopted a conversational approach directing people to share their thoughts not only Dell-generated content, but a blog (IdeaStorm, an idea generation culturally.” on IdeaStorm as well.10 Dell also used also Dell community and industry news the opportunity to launch a Twitter around Netbooks for Mini owners.11 That account at The information could be pushed into blogs, engagement across all of these channels tweets, video, photos, etc. so that Mini is being driven by three members of owners can consume content in the channel of their choice.16 17
  11. 11. KEY TAKEAWAYS Engagement via social media IS important — and we CAN To scale engagement, make social media part of everyone’s job. quantify it. The best practice interviews have a common theme — social media is no Many different social media channels exist, each with a slightly longer the responsibility of a few people in the organization. Instead, different value proposition. Rather than try to understand just the it’s important for everyone across the organization to engage with individual value of each channel, the ENGAGEMENTdb looks across customers in the channels that make sense — a few minutes each day main channels and categorizes not only breadth but also depth of spent by every employee adds up to a wealth of customer touch points. brand engagement in social media. Doing it all may not be for you — but you must do something. What’s in it for me? The optimal social media marketing strategy will depend on a variety The ENGAGEMENTdb quantitatively demonstrates a statistically of factors, including your industry. If your most valuable customers do significant correlation between social media engagement and the two not depend on or trust social media as a communication medium, or most meaningful financial performance metrics – revenue and profit. if your organization is resistant to engagement in some channels, you Money talks, and it’s declaring that it pays to engage meaningfully in will have to start smaller and slower. But start you must, or risk falling social media. far behind other brands, not only in your industry, but across your customers’ general online experience. Emphasize quality, not just quantity. The ENGAGEMENTdb Report shows that engagement is more than just Find your sweet spot. setting up a blog and letting viewers post comments; it’s more than Engagement can’t be skin-deep, nor is it a campaign that can be turned just having a Facebook profile and having others write on your wall. on and off. True engagement means ful engagement in the channels Rather, it’s keeping your blog content fresh and replying to comments; where you choose to invest. Thus, choose carefully and advocate it’s building your friends network and updating your profile status. strongly to acquire the resources and support you will need to succeed. Don’t just check the box; engage with your customer audience. If you are resource-constrained, it is better to be consistent and participate in fewer channels than to spread yourself too thin.18 19
  12. 12. METHODOLOGY Have a plan of how you will ramp engagement.that thislook atwas some All data is based on availability during the time Took a study how companies are managing to engage deeply – the strategies, processes, conducted (March – May, 2009). and technologies they use to engage both deeply and widely. What we looked at • Innovation hubs (e.g. centralized How we scored engagement latest business results and tested our customer community to create hypothesis that engagement goes hand The Top 100 brands based on Over 40 attributes for each of the 100 innovation) in hand with financial success. First, we BusinessWeek / Interbrand “Best Global companies were evaluated – in general, • Wikis collected publically available financial Brands 2008” publication. the number of channels in which a performance metrics for companies • Ratings and reviews company participates was evaluated in traded in US markets. In order to • Twitter conjunction with its respective level of What social media channels engagement in each channel. maintain data consistency as a basis did we examine? • YouTube for fair comparison, private companies For most evaluation metrics, companies and/or companies that are only traded in We recognize that each social media Note: Corporate/Executive involvement received credit for channels or foreign markets were not included in our tool is unique and functions differently was also weighted on par with other engagement only if it was evident that analysis. Revenue, gross margin, and to deepen the consumer relationship. channels rather than as an engagement corporate sponsored/encouraged net margin performance was evaluated Applying our industry expertise in the sub-score within each channel. Why? resources were responsible for creating on a “last twelve months” basis (LTM). most prevalent social media networks, A company that makes social media the presence and/or responsible for In other words, the most recent publicly we narrowed the scope of our study to tools such a priority that the executive consistent participation within the available quarterly data (Q4 ‘08 or the following social media channels: leadership team regularly participates channel. Companies received partial Q1 ‘09 in some cases) was used as a represents a meaningful, on-going • Blogs credit in cases where strong corporate starting point. The three immediately investment that merits credit beyond presence in channels created by external preceding quarters of data (i.e. Q1 ’08 to • Branded social network/community a “bonus point” within specific tool parties (e.g. consumers, third party Q3 ’08 if starting with Q4 ’08) was then • Content distribution to other sites (e.g. buckets. Treating organizational affiliates) was clear and discernible. incorporated to comprise the 12 month Facebook Connect, ShareThis, etc) participation in this manner furthers period for analysis. All data was collected • Discussion forums our goal of rewarding companies that from Marketwatch and/or Yahoo! make material investments in social How we incorporated financial • External social network presence Finance. engagement. performance (e.g. Facebook, MySpace) Next, we segregated the companies • Flickr / Photobucket After scoring each company’s social into those that scored above and below media engagement, we reviewed their their peer set’s average, analyzed their20 21
  13. 13. METHODOLOGY respective revenues/margins, and compared the two groups’ aggregate How we uncovered best practices APPENDIX A: averages for each financial metric. The current economic conditions ascertained We identified several brands that are ENGAGEMENT INDEX SCORES FOR THE engaging in unique ways and conducted the appropriateness of a relative phone interviews to understand TOP 100 GLOBAL BRANDS comparison as opposed to an absolute how they crafted their social media standard of a good vs. bad financial Below is a chart with the names of the top 100 worldwide brands according to engagement strategy. outcome. BusinessWeek / Interbrand (see Figure 5). The list of brands is available here. Included in the table is the engagement score of each brand and the number of A significant and representative sample channels where they were present. The results are plotted in Figure 1 of the report. (66 of the top 100 brands) was used in For a detailed accounting of each score, please visit the financial analysis. Figure 5: Engagement Scores for the World’s Top 100 Brands Rank Company Industry Channel Score Engagement Profile 1 Starbucks Leisure 11 127 Maven 2 Dell Technology 11 123 Maven 3 eBay Retail 9 115 Maven 4 Google Media 11 105 Maven 5 Microsoft Technology 10 103 Maven 6 Thomson Reuters Media 8 101 Maven 7 Nike Consumer products 9 100 Maven 8 Amazon Retail 9 88 Maven 9 SAP Technology 10 86 Maven 10 Intel Technology 10 85 Maven 10 Yahoo Media 9 85 Maven 12 BlackBerry Technology 9 85 Maven 13 Accenture Business services 8 76 Maven 14 Oracle Technology 10 73 Butterfly 15 Cisco Technology 11 72 Butterfly 16 Pepsi Food & Beverage 7 71 Maven 17 MTV Media 10 66 Butterfly 18 Sony Consumer electronics 9 63 Butterfly 19 Disney Media 7 58 Maven 20 Adidas Consumer products 7 56 Maven 21 Toyota Auto 7 54 Maven 22 Ferrari Auto 9 53 Butterfly 23 H&M Retail 5 53 Selective 24 HP Technology 8 50 Butterfly Continued on next page22 23
  14. 14. APPENDIX A: ENGAGEMENT INDEX SCORES APPENDIX A: ENGAGEMENT INDEX SCORES Rank Company Industry Channel Score Engagement Profile Rank Company Industry Channel Score Engagement Profile 24 Nokia Consumer electronics 10 50 Butterfly 62 UPS Business services 3 18 Selective 26 Samsung Technology 10 49 Butterfly 64 BMW Auto 5 17 Wallflower 27 Honda Auto 7 47 Maven 64 Canon Consumer electronics 5 17 Wallflower 28 GE Media 6 46 Selective 64 JP Morgan Financial 6 17 Wallflower 28 IBM Technology 9 46 Butterfly 64 Shell manufacturing 5 17 Wallflower 30 Nescafe Food & Beverage 8 46 Butterfly 64 Smirnoff Food & Beverage 2 17 Selective 31 Gucci Apparel 6 44 Selective 69 BP manufacturing 6 16 Wallflower 31 Xerox Technology 8 44 Butterfly 69 Hermes Apparel 5 16 Wallflower 33 Apple Consumer electronics 6 43 Selective 69 HSBC Financial 5 16 Wallflower 34 Ford Auto 7 41 Butterfly 69 Johnson & Johnson Consumer products 5 16 Wallflower 34 Lexus Auto 9 41 Butterfly 69 L›Oreal Consumer products 4 16 Wallflower 36 Philips Consumer electronics 4 39 Selective 69 Tiffany & Co. Retail 3 16 Selective 37 Colgate Consumer products 6 38 Selective 75 Chanel Apparel 4 14 Wallflower 37 Marriott Leisure 5 38 Selective 75 Merrill Lynch Financial 3 14 Selective 39 Nintendo Consumer electronics 8 37 Butterfly 77 McDonalds Leisure 6 12 Wallflower 39 Panasonic Consumer electronics 9 37 Butterfly 78 Cartier Apparel 3 11 Wallflower 41 Harley-Davidson Auto 6 34 Selective 78 Heinz Consumer products 4 11 Wallflower 42 KFC Leisure 6 32 Selective 80 Giorgio Armani Apparel 2 10 Selective 43 Visa Financial 4 32 Selective 80 Louis Vutton Consumer products 4 10 Wallflower 44 Audi Auto 8 29 Butterfly 80 Moet & Chandon Food & Beverage 2 10 Selective 44 Hyundai Auto 8 29 Butterfly 80 Porche Auto 2 10 Selective 44 ING Financial 6 29 Selective 84 Morgan Stanley Financial 3 9 Wallflower 44 Pizza Hut Leisure 5 29 Selective 85 Klennex Consumer products 2 8 Wallflower 48 American Express Financial 9 27 Butterfly 85 Nivea Consumer products 1 8 Selective 48 Avon Retail 5 27 Selective 87 Gillette Consumer products 2 7 Wallflower 48 Siemens manufacturing 5 27 Selective 87 Marlboro Consumer products 2 7 Wallflower 51 Coca Cola Food & Beverage 6 27 Wallflower 87 Zara Retail 2 7 Wallflower 51 FedEx Business services 6 27 Wallflower 90 Citi Financial 2 6 Wallflower 53 Motorola Technology 5 24 Selective 90 Goldman Sachs Financial 3 6 Wallflower 53 Prada Apparel 5 24 Selective 90 Kellogg’s Food & Beverage 4 6 Wallflower 55 Gap Retail 3 23 Selective 93 Danone Food & Beverage 2 5 Wallflower 55 Nestle Food & Beverage 5 23 Wallflower 93 Duracell Consumer products 2 5 Wallflower 57 Caterpillar manufacturing 6 22 Wallflower 95 AXA Financial 3 4 Wallflower 57 Ikea Retail 5 22 Wallflower 95 Hennessy Food & Beverage 1 4 Selective 59 Rolex Apparel 4 21 Selective 95 Mercedes-Benz Auto 2 4 Wallflower 60 Budweiser Food & Beverage 3 20 Selective 98 Wrigley Food & Beverage 2 3 Wallflower 61 VW Auto 5 19 Wallflower 99 AIG Financial 1 1 Wallflower 62 UBS Financial 4 18 Wallflower 99 Allianz Financial 1 1 Wallflower Continued on next page24 25