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EngagmentDB Report, July 2009

Jan 20, 2015

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Business

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

  • 1. The worlds most valuable brands.Whos most engaged?ENGAGEMENTdbRanking the Top 100 Global BrandsPrepared by: www.ENGAGEMENTdb.com July 2009

2. TABLE OF CONTENTSINTRODUCTION Historically, economic hardship motivates companies to take a good, hard look at their marketingIntroduction ......................................................................................... 1 budgets and try to compute each investments nancial 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 .........................................................................................2There is little left to debate about whether or not one should participate in social media virtually all companies, big and small, have acknowledged social medias presence, and rms who do not have a Depth of engagement can be measured. .............................................2 blog, Facebook page, or Twitter account now nd themselves in the scarce minority. Many, however, Brands fall into one of four engagement proles. .................................5 appear to be blindly hopping on the bandwagon people are creating company prole 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 dene the investments value?Best practices........................................................................................8For the rst time ever, Wetpaint/Altimeter Group have gone beyond surface case studies to measure the true nancial value of social media. We conducted our research not just on a small scale, but based Starbucks ............................................................................................8 on the worlds 100 most valuable brands these are brands that are widely acknowledged for setting Toyota ...............................................................................................12the standards in marketing as measured by BusinessWeek / Interbrand Best Global Brands 2008 SAP ....................................................................................................14rankings. 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 nancial metrics: revenue and prot. 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 directKey Takeaways .................................................................................. 18correlation between top nancial performance and deep social media engagement. The relationship is apparent and signicant: socially engaged companies are in fact more nancially successful. So now we know it pays to be social, but it is important to note that by social, were talking aboutMethodology .....................................................................................20deep 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 continuallyAppendices 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 Proles .......................................................31beyond 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 thinkEndnotes .............................................................................................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 tomorrows ranking of the top 100 global brands. Ben ElowitzCharlene Li CEO, WetpaintPartner, Altimeter Group2 1 3. KEY FINDINGSThere exist thousands of social media channels, each with a slightlydifferent value proposition. It is therefore a daunting task to gurehow to objectively evaluate various marketing efforts across all socialmediums. The Wetpaint/Altimeter Group ENGAGEMENTdb Reportintroduces a single criterion: engagement.The goals of the study were to measure departments and executives were in Figure 1: all 100 brandsFigure 1: Engagement Scores of Top 100 Global Brandshow deeply engaged the top 100 these channels. Thus, we looked at notglobal brands are in a variety of social only at the breadth, but also the depthmedia channels and, more importantly,of engagement.140High Engagementunderstand if higher engagement is correlated with nancial performance.Adding all channel sub-scores together120 We found that not only could wegives the brands overall engagementquantiably measure engagement,score. Understandably, the more 100we could also understand how morechannels a brand leverages, the higherengaged companies tap an engagementits overall engagement score will be.80mindset to perform better. Below are All of the engagement scores for the60some of our key ndings. brands are listed in Appendix A. The top engagement score of 127 was earnedLow Engagement40 by Starbucks, which has presence in 11Depth of engagement can be channels.20measured. Charting the companies engagement 0We evaluated and scored each brands scores against the number of channels0One Channel 213 4 5 6 7 8 9Many Channels101112engagement in various channels they are in yields another insight theusing criteria customized for that average depth of engagement asparticular type of social media. We also represented by two regression lines (seeexamined how deeply involved different Figure 1). 1 1 2 46236 5 4. KEY FINDINGSKEY 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 morefood & beverage, and nancial brandslike these could not imagine operating and one for brands engaged in seven channels. Sometimes this is due to in general dont 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 thatmedia. above the line are more engaged onin other channels, making it easier to companies in these industries are just Butteries. 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 reectionbeginning to experiment with socialmedia. in seven or more channels but have2 those appearing below the lines are onof the brands commitment to social lower than average engagement average less engaged across all of theirmedia once they are invested inBut even within industries, there is scores. Butteries like American channels. We also found that: multiple channels, they are more likelya 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 manyspread 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. Theres a reason why weIts no surprise that engagement In contrast, luxury brands Mercedes- languish. Their ambition is to be a decided to use two regression lines totends to differ by industry (see FigureBenz 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 onchannels each. In other words, distinctthey still struggle with getting the in seven or more channels engaged average present in more channels, they target audiences can inuence thefull buy-in from their organizations deeply across all channels where they also engage with them more deeply. appropriate level of social mediato embrace the full multi-way were present, as compared to brands For example, media and technologyengagement even within speciedconversation that deep engagement that were present in fewer channels.companies tend to be in more channelsindustries. Appendix B providesentails. There is an exponential growth in the and engage deeply within them. Inadditional 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 fourhigher than average engagement Figure 2: Engagement Varies by Industry engagement proles. 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 80in them, brands