Can Social Media Boost Your Bottom Line?

One recent study suggests it can.

by Auctiva.com staff writer
- Jul 21, 2009

If you've been meaning to incorporate tweeting and blogging into your marketing plan, now's a good time to start. A recent study indicates using social media can help improve sales.

The study, released by Wetpaint and the Altimeter Group, revealed that companies with the greatest activity on social media channels (e.g. blogs, Facebook, Twitter, etc.) saw an increase in revenue of 18 percent over the past year. Those with the least activity saw a drop of 6 percent.

While the study focused on leading brands, the results could have value for companies of any size.

"The ENGAGEMENTdb study goes a long way towards validating the importance of social media for business," notes Ben Elowitz, CEO of Wetpaint. "The closer any company is to its customers, the better. And it's hard to argue with the ability for social media to create such proximity.

"Companies should feel much more comfortable investing in social media—the correlation to results is so clear," he says.

The study compared 100 of the top companies as identified by BusinessWeek. Starbucks was the most engaged in social media, followed by Dell, eBay and Google. Amazon was eighth on the list.

Wetpaint and the Altimeter Group report the companies that did well in the study have "dedicated teams" that "evangelize social media across the entire organization." These groups also see social media as an indispensible tool.

"To be specific, companies that are both deeply and widely engaged in social media surpass their peers in terms of both revenue and profit performance by a significant difference," according to a report documenting results of the study. "In fact, these mavens have sustained strong revenue and margin growth in spite of the current economy."

Still, some question the large-scale impact of social media on businesses' bottom lines.

For example, McDonalds did better financially than Starbucks in the past year but didn't make the top 10 in the study. Other companies, such as Apple also had a good year.

"Apple is selective with its [social media] engagement, but it's hard to argue with [its] financial performance," contends Larry Dignan of ZDNet. "IBM also fails to make the maven cut but has stellar results in the last 12 months."

For information about how to make social media work for you, read this post on the Auctiva Commerce Blog.


About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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