A new study looked at the BusinessWeek/Interbrand top 100 global brands, audited and catalogued their social media activity, ranked their activities and compared the brand's financial performance to create what they are calling an "engagement database."
It's a cleaver exercise, a good PR move for Charlene Li, who left Forrester to establish herself at Altimeter, and an blogable way to point out the relative penetration of social media among the planet's top brands. The data was weighted so that those who use more of the 40 identified social channels got a higher rank -- kind of putting a thumb on the scale.
As you might guess early adopters and tech-forward giants like Dell, Starbucks, Google and eBay top the list while embattled and security-conscious financial services giants like AIG, Goldman Sachs, AXA, Allianz and Citi bring up therear.
The premise is "resembling any in-person exchange, socializing requires more than just being there -- you have to interact with others, instigate discussions, and respond during conversations." The study "implies value in social engagement on top of social presence -- it pays to actively and continually participate and invest in your networks."
The authors claim a "direct correlation" between top financial performance and deep social media engagement." But this is hyperbole not mathematics. It turns out that the most active social brands do well financially, but, as the authors and Lance Whitney at CNET point out, "the findings don't necessarily indicate a direct cause-and-effect relationship between social media and sales." Its a lucky coincidence that makes a nice headline.
This happy coincidence -- the fact that the most active social media brands do well financially -- is probably a better indication of a company's culture and openness to innovation, according to Steve Rubel than a new financial KPI. And I agree.
What's both interesting and hard to sort out are the applicable "lessons" from this exercise.
The HubSpot Blog argues that social engagement is self-perpetuating. That when a brand uses social channels, it "exponentially increases in engagement." This feels tautological and obvious. Hubspot also thinks that social media is like marketing hamburger-helper; extending touch points, extending reach and frequency, opening up the prospects for viral communications and starting an adjunct process for monitoring and handling customer service issues.
Directionally this study is an interesting barometer of the risk and investment appetite of well known brands in a media world gone topsy-turvy. It suggests that media, technology and select consumer and retail brands are willing to take a modest flyer on emerging media and that other categories are happy to wait-and-see. It also might be a rough indicator of who desperately or practically needs to better engage customers and who needs to reconnoiter the markets to extend their share lead or to save their skins.
Get the complete study here.