Most business people are social networking “wallflowers”. They sit on the sidelines looking in, but don’t take part. Indeed, in spite of all the buzz about Facebook, for instance, 80% of the world’s Internet users haven’t even signed up for it. And of the 300m people who have joined, most are inactive.
It’s just the same in the world of blogging. Most people who start a blog give up within the month. And on Twitter too. Most tweets are sent by a minority of people. The vast majority of people who sign up for social networks rarely use them. And for businesses that’s a financial problem.
New research which looked at the world’s Top 100 Brands showed that the companies which were most active on social networks and used social media significantly were also the ones which made most money. The study (PDF file) by EngagementDB showed that in the last 12 months the greatest revenue increases in those top 100 brands were in the companies which were most active on social networks and used social media the most. Indeed, the people who sit on the sidelines of social networks, the wallflowers, had actually seen a revenue decrease.
Furthermore, the research also showed that the companies that used social networks and social media also saw increases in gross profits and net profits, whereas the brands which did not use social media in any way actually saw profits fall over the last year.
At first sight this might suggest that social networking is the only way to make profits these days. And the social networking gurus are all busy telling us that if you aren’t involved in social media, your business is in the doldrums. These figures appear to confirm that. They don’t.
What they really show us is attitude. The companies that are top of the EngagementDB list include Starbucks, Dell, Ebay, Google, Nike and Amazon. True, these companies all use social networks and social media a great deal. But they do more than this; not only do they use social media, they use traditional media. You can hardly move for stories about Google, Starbucks, Dell and their ilk in the newspapers and magazines you read.
What this reveals is that these companies are media focused – public relations focused, if you like. They appreciate that in order to make money, they need to be “in front” of their audiences, wherever their audiences hang out. That might be in The Times, or it might on Facebook, but companies like Starbucks know that unless you are constantly, almost mercilessly in the face of your audience you won’t make money.
The companies at the bottom of the Top 100 are those that do less public relations and promotion. The study confirms that your business needs to “be everywhere” – and that includes social networking and using social media, because that’s where a sizable proportion of your audience now hangs out. If we can learn anything from this valuable study it’s the fact that – especially in a recession – promotion of all kinds is the number one way to make more money.