When Business Week Top 100 Best Brands go Social !

When social marketing impacts brand value!

WetPaint, a community site, and the Altimeter Group, a strategy consulting firm, conducted an extremely interesting (and downloadable) study using the online social media brand database Engagement db, which measures the online engagement of brands.

They created a ranking that takes into account the different brand intervention types, in social and community media.

  

Top 40 extracted from Engagement db

This ranking is taken from the “Best Global Brands 2008”, an annual list of the top 100 rated brands by BusinessWeek/Interbrand.

Media and social tools considered were:

• Blogs
• Social and community brand networks
• External social networks (Facebook, Linked’in, MySpace….)
• Twitter
• Discussion forums
• Photo and video community sites (Flickr, YouTube…..)
• Wikis
• Rating and tagging sites

 The ranking is done by taking into account the number of media used, as well as the level of media participation, by using criteria specific to each media.

This allows to identify 4 types of social media intervention:

• The “Mavens” who rank among more than 6 types of highly influential social media.   Typical brands in this category are, notably, Starbucks, Google, Dell, even SAP and Accenture.  They dominate the list.
• The “Butterflies” who also have a very diversified presence, but their implication is, at the moment, weaker, like American Express or Hyundai.
• The “Selectives” such as H&M or Philips are very involved in a limited number of social media.
• The “Wallflowers”, like McDonalds or BP, who are globally behind.

It is not surprising to find that Starbucks ranks number one on this list, figures at the top of Facebook brand fan pages, and has a high influence and presence on Twitter as well.  Starbucks, a real “living place” in the real world is also a social relation network on the Internet.

The study done by Wetpaint and the Altimeter Group is also very interesting in that it finds a correlation between the level of intervention in social marketing and the financial performance of the companies studied, as published by Yahoo Finance or Marketwatch.

The authors of the study, Ben Elowitz, CEO of Wetpaint and Charlene Li, partner of the Altimeter Group, indicate that:

“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 direct correlation between top financial performance and deep social media engagement.  The relationship is apparent and significant; socially engaged companies are in fact more financially successful”.

Even though no quantifying data exists to determine the cause and effect relationship between social media engagement and financial results, it is still possible for the authors of the study to explain this relationship:

“Social media engagement and financial success work together to perpetuate a healthy business cycle:  a customer oriented mindset stemming from deep social interaction allows a company to identify and meet customer needs in the marketplace, generating superior profits.  The financial success of the company, in turn, allows further investment in engagement to build even better customer knowledge, thereby creating even more profits – and the cycle continues”.

Social marketing, therefore, would be the new way of applying the proven concept of a business oriented towards its customers, or customer centric.

As social marketing becomes more and more important due to the growth of social media, the brands involved in these media should, in time, replace the brands that don’t get involved.

Is social media going to overturn the hierarchy of brands?  There is definitely indication of movement, as illustrated in the graph below made by Sherpad by relating the Engagement db ranking of the study with the BusinessWeek/Interbrand “Best Global Brands 2008” list.

Shown above, the top 25 Engagement db (vertical yellow line), horizontal axis (growth or loss of position compared to the BusinessWeek list).

This section is dominated by technology companies. We even note the presence of B2B companies like SAP, Accenture, and Oracle, next to Google, Amazon, Ebay, Dell, and Blackberry.  However, Starbucks surpasses all of them. Toyota also still figures as the top brand in cars, even though it shows no progression.

Shown above, the top 26-50 Engagement db (vertical yellow line), horizontal axis (growth or loss of position compared to the BusinessWeek list)

This section regroups the consumer goods companies most engaged in social marketing; Nintendo for games, Panasonic for electronics, and Gucci for fashion.

Pizza Hut subscribes to the logic of Starbucks and as for cars, even with Lexus, Toyota is the most engaged.

Coca-Cola, top ranking brand on the BusinessWeek list moves down 49 places in the Engagement db ranking, despite an effort of Facebook and Twitter who will end up reversing this trend.

Shown above, the top 51-100 Engagement db (vertical yellow line), horizontal axis (growth or loss of position compared to the BusinessWeek list)

This last part of this list is divided into two sections:

Brands that show an increase: Several fall into the fashion category, Prada, Hermès, Rolex, Cartier, Armani, Tiffany.  This category is very much at the forefront on Facebook.  Equally present are wines and spirits, Moet & Chandon, Smirnoff, which illustrate the festive and social nature of….social networks!

Brands that show a decrease:  These are numerous, and with an economically weak year, the fact that they are banks is not surprising, Morgan Stanley, HSBC, Goldman Sachs, Merril Lynch, and JP Morgan.

German made cars, Mercedes Benz, BMW, Porsche, and VW show a negative spiral, the opposite of Japanese cars.

Among everyday goods and food items like Marlboro, Budweiser, Gillette, Kellogg’s, Heinz, Wrigley’s, and Dannon, these are still far from the positions of Nestlé, Nescafé, and Nivéa.

Finally, Louis Vuitton drops considerably, but, undoubtedly, turning radical, LV renewed himself  recently by organizing his Paris fashion show exclusively for his Facebook fans. 

The Brands are their Fans

If "media is the message" according to the well known Marshall McLuhan equation, on Facebook the "brands are their fans".

Fan pages are one of the most widely used mediums of expression and association on the network.  A very significant part of these, around 1 out of 4, concern brands.


Whether it be the official page created by the brand itself, the one initiated by the fans, which the brand subsequently joins forces with or not, or even the pages dedicated to products.
Here are the top 30 on Facebook:

 


This ranking of products is very revealing:

It reflects more than 54 million pieces of fan feedback and brand support. This number accounts for 1/6 of Facebook. Of course, numerous fans supported many brands.


Starbucks, “a hang our place for real”, is in the lead as first place in the virtual world.  This is not an accident!

Neither is the strong presence of candies and various “junk food” brands, such as Nutella, Pringles, Kinder, Ferrero Rocher, Krispy Kreme, Reese’s, Skittles, and the ever essential Toblerone.
What are they all doing on Facebook?

They are expressing an identity, even an attitude.  Red Bull is the only beverage present in the top 30 besides Coca-Cola.  Unthinkable, without this “attitude” component, the red beverage has achieved a third of the “fan level” of the black liquid.


It is similar with “fashion” brands, whether it is clothing, shoes, accessories, or boutiques, which compete with food.  Adidas and Victoria Secret are in the lead, followed by Nike, Converse, Zara, Puma, Lacoste and H&M. 


Is a brand not showing in the top 500 in danger?  Without a doubt, even if they don’t know it yet!

This virtual use of brands on Facebook is usually doubly passive, meaning that the fans are proud to belong, but are not very active, and that the brands themselves, in many cases, are often left alone due to not being very active, even on their official fan pages.

This is not at all the case with Coca-Cola who uses its fan page as an active tool and shows the way.

McLuhan would say that fan pages are mild, neither cold like the television, neither hot like the radio. 
Social networks are a media all their own.  Here the media is you!  When a user declares him or her to be a fan, brand and user mutually assert themselves.  

How Do You “Metric” Word of Mouth? The Twitalyzer case

How do you measure word of mouth?

The Twitalyzer case!

While more and more brands are looking to establish a presence on social networks, there is an intrinsic difficulty in measuring the return on investment (ROI) obtained by marketing on social networks.

In any case, when it comes to analyzing more than click performance of ads on Facebook, for example, by measuring the impact of a fan page, of a Twitter account, or of word of mouth, the “metrics” still need to be defined.

Firstly, is it necessary to measure word of mouth?

Elaine Gantz Wright, who’s blog is specifically geared toward fund-raising activities on social networks and how they can help transforming society,  just published an interesting post on the subject, “The ROI that would be King” .

She mentions a comment made by new special media journalist, Clay Shirky that can be applied perfectly to marketing problems encountered in social networks.

“A revolution does not happen when a society adopts new tools.  It happens when society adopts new behaviors.”

 

Elaine Ganz Wright adds,

“And I think that quote sums up the core conundrum.  At the end of the day, social media is really not “a program” at all.  It is a fundamental shift in the way customers, donors, constituents, and employees consume and produce information.  Its behavior- a change in the way we are in the world.”

As is happens, the effect of marketing in social networks can be evaluated much like banner ads of the internet are or buying keywords though Google.

It’s not the R.O.I that we need to talk about for judging the impact conversations have on brands, fan pages with blogs or word of mouth in general; any of these marketing tools or situations that allow an “engagement “or, translated, an “implication” around brands to develop.

Elaine Ganz Wright talks about replacing the R.O.I with R.O.E (return on engagement).

Evaluating is of utmost importance!

This is where Twitalyzer comes into play and analyzes the impact of personal or brand accounts on Twitter.

The idea behind Twitalyzer comes from the development of several different metrics to calculate the impact of an account on the micro-blogging network, not only by its popularity (the number of followers).

What are the criteria?

• Impact, or the number of “followers”
• Authority, or the number of times you are “retweeted” by others (RT)
• Generosity, or the number of times that you “retweet” (RT) others
• Rapidity, the number of tweets that you publish within a 7 day period
• Clout, or the number of times that your account is referenced by others
• Signal to noise ratio which calculates the number of tweets that include URL’s, number of tags, RT’s and web addresses, meaning all the tweets that create socialization and information compared to those that are only anecdotes.
• Influence, which balances the different aforementioned measures

Twitalyzer has developed new metrics adapted to the presence on Twitter.  Indeed they only calculate the impact of your account and not free word of mouth that mentions a brand or a person independent of their account.

But at least these tactics go beyond the number of followers and separate the “influential” tweets form those that are purely anecdotal.

Let’s take for example the two brands Starbucks and Coca-Cola who took full advantage of the turn around of social networking and use the most influential Facebook fan brand pages, resulting in respectively, 3,850,000 fans and 3,706,000 fans (Sept 09).

Starbucks is ahead of Coca-Cola again on Twitter!

Here are the score boards developed by Twitalyzer:

Starbucks has a profound influence and a very high signal to noise ratio, referring to, in some way, the quality of its tweets, which also shows its weight (clout) to be at a maximum level. 

Coca-Cola doesn't score badly either on its signal to noise ratio, but its authority is much weaker.  It is also less generous than Starbucks, meaning less active in retweets (RT) than other accounts.  Is Coca-Cola more egocentric than Starbucks? 

Should we think that the Twitter audience likes Coca-Cola less than the Facebook audience, or is the black liquid just missing 140 characters of savoir-faire?