Thursday, July 23, 2009

Social Media = Financial Return - or does it?

‘Earn money from your Twitter followers’. Whilst this statement reads like yet another piece of rogue marketing spam, cynics that suggest there is no money to be made from Twitter (a doctrine media mogul Murdoch himself subscribes to) may now be in for a surprise.

A study released this week by enterprise wiki provider Wetpaint and the Altimeter Group shows that brands most engaged with social media are experiencing higher financial success rates than less digitally-savvy peers.

The study focused on 100 top global brands and the social media platforms on which they engage their consumers. Unsurprisingly, no surprises are thrown up in the top ten, with Starbucks, Dell, eBay, Google and Microsoft all flying, predictably, high.

But what does this study actually tell us? The brands listed above are hardly likely to be troubled by cuts to marketing budgets (especially those under the employ of Bill Gates). These corporate marketing departments are also likely to employ dedicated teams of social media specialists, pretty much guaranteeing that their strategy pays off.

As well as all this, these corporate behemoths are hardly likely to suffer financially in a recession. They are all established international brands that turn over millions in global profits every single year; so can any of this actually be attributed to social media usage? After all, the study itself admits that it's “difficult to prove for certain that … involvement in social media has led to … increased revenue…”

In the case of computer giant Dell, this is one example where this claim is justified; the company stating that it has generated over $3 million in revenue from exclusive offers and publicity on its Twitter platform, @DellOutlet – financial success indeed.

This however, is an example of social media engagement that’s been marketed purely as a sales tool. Although this clearly serves its purpose, for many companies, social media engagement is a branding exercise, which by its inherent nature, cannot be linked directly to financial success.

Sure, companies that brand themselves effectively and reach consumers through a variety of different channels will inevitably achieve success. This financial success however is part of an infinitely wider marketing strategy – social media alone is not enough to generate revenue for your business.

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