Branding - The Social Media Way : Part 1

With the advent of the Social Media, marketers have come to believe that it is the 'IT' tool for reaching their target audience in the future. With over 800 million active users on Facebook and 380 million users on Twitter, the marketers believe that Social Media as a platform provides a high Return on Marketing Investment when compared with other traditional mediums.

A report by Forrester Research indicates that by 2016, Social Media spends will grow to 26% of all advertising spends. A study by Nielsen called 'State of the media: The social media report' (Q3 2011) found out that nearly 4 in 5 active internet users visit social networks and blogs. Also, 53% of active adult social networkers follow a brand. Another finding was that Social Networking apps are ranked no. 3 on the most used list for U.S. smartphone users.

Another study done by Charlene Li and Ben Elowitz (in July 2009) analyzed various brands based on their presence on different social media channels including Blogs, Branded Communities, Discussion forums and External social networks like Facebook, Twitter etc. This was followed my measuring the engagement levels of customers across these social media channels and find the engagement levels of these brands per fan. Based on their research they found that Starbucks was the best global brand in Social Media followed by Dell. These researchers also developed a framework for profiling these brands based on customer engagement and no. of channels used.

Engagement profiles of Brands

The four profiles are classified as follows:

1. Mavens: Above average engagement score. Present on seven or more channels. Robust strategy and dedicated teams for social media.
2. Butterflies: Lower than average engagement scores. Present on seven or more channels. Tend to invest in few channels while ignoring other channels (being inactive).
3. Selectives: Higher than average engagement scores. Present on six or fewer channels. Lightly staffed social media initiatives.
4. Wallflowers: Below average engagement scores. Present on six or fewer channels. Have ventured recently in this area and are testing things through a few channels.

Another thing done by these researchers was looking at the financial performance of the brands observed  in Q4 ’08, Q1 ’09, Q2 ’09 and Q3 ’09. The conclusion was that the higher the engagement of the brands were, the higher the financial performance was. Mavens were found to have sustained strong revenue and margin growth despite the economic slowdown. It was also found out that social media reach alone caused a positive impact for a brand as more touch points caused a ripple effect for the brand. The authors also suggested that deep engagement in less number of channels could also prove to be an effective and successful strategy.

Financial returns for the brands with the above profiles

 The above results are indicative and not conclusive, but this surely tells that every brand should operate with a concrete strategy and not lie in the south-west portion of the brand profile map.

According to The Virtue, McDonald's has slipped from 32 to 62 to 66 from 2008 to 2010 on the list of Top Social Brands. In the next post on this topic, we'll talk about McDonald's current engagement strategies to help it jump back to a higher stead on the Top Social Brands index.