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Study finds connection between firms’ social media use and profits

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A new study conducted by Altimeter Group for social publishing platform Wetpaint has looked in detail at how the 100 most valuable brands in the US work with 11 different social media channels and has discovered a correlation between social media use and financial performance.

When the researchers sorted the brands into groups with similar profiles, the ‘social media mavens’ (those with the most social media breadth and depth) on average grew 18% in revenues over the last year. The least engaged companies saw an average decline in revenue of 6% over the same period.

The report’s author, Charlene Li, is quick to point out that “We are not claiming a causal relationship — but there is clearly a correlation and connection. For example”, she continues, “a company mindset that allows a company to be broadly engaged with customers on the whole probably performs better because the company is more focused on customers than the competition.”

The research looked into the breadth of the brands’ engagement across the channels as well as the depth — such as whether they reply to comments made on blog posts. Each was given a numerical score, with the top 10 being:

  1. Starbucks (127)

  2. Dell (123)

  3. eBay (115)

  4. Google (105)

  5. Microsoft (103)

  6. Thomson Reuters (101)

  7. Nike (100)

  8. Amazon (88)

  9. SAP (86)

  10. Yahoo! and Intel (85)

The study found that companies that scored well generally have dedicated teams, however small, active in the social media channels they utilise, and that the most successful teams evangelise social media across the entire organisation to pull in a broad range of stakeholders. These companies view social media as an indispensable tool to help them achieve results, and their approach is conversational. This differs from the approach of traditional communications and early corporate blog experimentation, says the report, which emphasises messaging and talking points.

The report also divides the 100 brands studied into four groups: Social media mavens (very active in many channels, usually with a dedicated team); Butterflies (recognise the need to be active in many channels, but are spread too thinly, thus giving limited results), and Wallflowers (present in only a few channels, and very lightly in those; sitting on the sidelines trying to figure out the best next steps.). A final category, the Selectives, is more interesting in that they focus on just a few channels and generally excel in them and get good results. The report suggests that the efforts of Selectives are usually initiated by an internal evangelist.

The EngagementDB report can be downloaded free of charge at

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