July 26, 2009
Social media engagement = Financial success?
For those of us that are encouraging our clients, co-workers, and management teams to become more engaged with social media in an effort to increase business, we’ve all struggled with the same question — how does engaging in social media impact the bottom line?
While there are several ways to measure the ROI of social media, it is notoriously difficult to show how social media actually impacts the bottom line.
But, a new study released today by Charlene Li of The Altimeter Group may be the answer we’ve been looking for. Researchers found a strong correlation between brands that engaged heavily in social media and financial success. Brands that were considered by the study to be “Social Media Mavens” (those brands that had the greatest depth and breadth of engagement in social media) 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 study critiqued the world’s top 100 brands as ranked by BusinessWeek/Interband on their social media engagement including not only what channels they were active in but how engaged they were. It also examined the brands’ financial performance in comparison to its social media engagement.
As we continue to try and make the case for why businesses must make social media a part of its integrated marketing strategy, this study will be an incredibly helpful tool. Check out the entire study here. You can even see how your company ranks in social media engagement.