Spanning all age ranges, economic sectors, and walks of life, social media has easily been one the most talked about subjects of 2010. And few people really get it. How does one measure the “social-ness” of a brand when a new social network arises everyday? Is there even a measurable ROI? We know that social media drives sales growth; sales increase by 18% at companies with the highest levels of social media activity and decrease by 6% at companies with the least social media activity (Source: Erik Qualman, Social Media ROI Socialnomics). But we wanted to see if there was a direct correlation between social media and brand value. We conducted some research using Interbrand’s list of Best Global Brands of 2010. We originally hypothesized that in order to make the top of this annual list, the companies must have a solid grasp on how to best utilize/popularize their social media platforms.
We were so wrong. We ran a regression analysis and it turns out that brand valuation and social media activity are not directly related. For example, the number 1 best global brand of 2010, Coca Cola, is worth $70,452 million this year and has over 12 million Facebook fans, over 122,000 Twitter followers and over 13,000 YouTube channel subscribers. These numbers are strongly correlated, however the number 2 brand, IBM, looks completely disproportionate. Worth $64,727 million, one would expect a more active social media presence than 13,000 Facebook fans, 11,500 Twitter followers and 1,000 YouTube subscribers.
Since there is no evident correlation between the level of activity of social media on a brand and the overall success on the brand, is it even worth it? Through our research, we have come to three conclusions.
Social media may not be appropriate for all brands. For example, the impact of social media on a B2C company (like Coca Cola) will be vastly different from the impact that it has on a B2B company (like IBM).
Social media is not everything and brand need to take a holistic approach to this phenomenon by focusing as well on advertising and communications.
Social media is not a push strategy. Brands need to engage in a relevant conversation with their customers because they are the influencers. Ultimately, these will be the people shaping the brand presence.
(Jean-Yves Minet) @acebrandage Photo courtesy of LA Hall
Brand Value + Social Media + Corporate Responsibility
CSR reports have become the vehicle by which organizations put a moral and ethical face on their existence. At its core, it is a reporting exercise. It is usually reflective and without standards — but is that about to change? In autumn of this year, ISO (International Organization for Standardization) will release ISO 10668 – Monetary Brand Valuation. What does brand valuation have to do with CSR? Well, the back of this ISO offer has an interesting hook, SAM Group – the guys who produce the Dow Jones Sustainability Index (DJSI) – intend to upweight businesses in the DJSI if they adopt ISO 10668. Suddenly, the criteria for exacting value on brands is directly linked to their sustainability ranking.
The upweighting is based on three key factors: Legal, behavioral, and financial analyses. Taking a look at behavior analysis, the brand must understand the size of the market and trends. What are the stakeholder attitudes? What are the economic benefits bestowed on the business by the brand? In many cases media is still used as a platform to talk at instead of enabling conversation with constituents and customers.
Here’s the reason why social media, brand strategy and CSR folks should start meeting by the water cooler more often. If we’re entering a new paradigm of evaluating brand behavior as well as CSR reporting methodologies representing the practice toward improved corporate citizenship, and if we agree that social media is the most relevant way to start and maintain conversations with people to share a brands values, how might we use this brain trust to help shape business strategy?
The following are 5 key challenges that, if addressed correctly, will differentiate leading brands and lead to greater customer loyalty.
1. Create value with Values- gain trust through responsible and transparent actions.
2. Visualize brand value (and risks) across the complete brand eco-system: the offer, culture, business model, and communications.
3. Stop approving obvious solutions; overcome incrementalism as the hallmark of efficiency engineering, and make change that people want and need.
4. Bring back experimentation and invention as business values, and open them up to collaborators.
5. Constantly challenge, inform and refresh people’s exposure with the brand over their entire experience- not as market segments with prescribed preferences.
Zappos’ innovative approach to customer service, Target’s social giving platform, Patagonia’s footprint chronicles, Proctor & Gamble’s the brandery, Interface Carpet, and Seventh Generation are just a few of the increasingly inspiring examples where brands have embraced the system of social communication, and embracing some or all of these challenges in a way that builds brand loyalty and value, while mitigating risk, reducing costs, and positioning the business for a new era of growth.
Is your brand fit for the future?
(Eric Wilmot)
photo courtesy of Victoria Garcia, Creative Commons
