context analytics» Media Engagement http://context-analytics.com Just another WordPress weblog Mon, 30 Aug 2010 17:04:40 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 The World’s Most Engaged Brands and How to Interpret Correlational Data http://context-analytics.com/2009/07/21/the-world%e2%80%99s-most-engaged-brands-and-how-to-interpret-correlational-data/ http://context-analytics.com/2009/07/21/the-world%e2%80%99s-most-engaged-brands-and-how-to-interpret-correlational-data/#comments Wed, 22 Jul 2009 02:30:37 +0000 Nils Mork-Ulnes http://localhost/xampp/eclipsework/contextanalytics/?p=58 We were curious to read the recently published study correlating social media engagement and financial performance for the world’s 100 most valuable brands (per Interbrand), published by the Altimeter Group and WetPaint, since it covers an issue we are particularly interested in: how do you link a brand’s social media activities to bottom-line results? To add to our interest, the study used very similar methodology to the one we used in a study we released earlier this year, where we looked at Interbrand’s list of the world’s 100 most valuable brands, but focused on correlating overall media prominence and the relationship it had with brand value.

There is an old saying in statistics – “correlation does not imply causation” – and we would have to respectfully disagree with the conclusions of the report on the grounds of that saying. The report goes a long way in implying that social media engagement is the cause of the financial out-performance that successful brands display relative to others. In our opinion, the correlation is more likely a result of the fact that the most financially successful brands have attributes that make them more apt to be an early successful adapter of social media (they have more resources, are better attuned to the market, they’ve hired better marketers, or whatever other reasons you might think of), than it is that social media engagement is such a big driver of financial success. The correlation is real – or at least appears to be so from the graphics, though the report doesn’t actually state any numbers around the strength of the correlation.

But the question is what the direction of the causality is – or to put it in the plain words of TechCrunch: “I really doubt that their level of social media engagement had anything to do with their revenue growth, it is just that the strongest brands are the most engaged.” This is not to say that successful social media marketing strategies can’t add value to a brand. To the contrary, the report could have simply stated that successful companies are more likely to be engaged in social media, and that laggards ought to try to catch up to keep up with successful brands.


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