There’s value in investing in social media. This certainly was made evident through Twitter’s recent initial public offering; the company’s share value soared 73 percent above offering price in its first day of trading. But the broader value of Web 2.0 platforms is emphasized even more so through the investments individual companies make in their social media marketing.
In the time since “tweet” became a verb and “status update” became part of the vernacular, whole social media industries have arisen. According to recent data, said Kartik Hosanagar, associate professor of Internet commerce in Wharton’s Operations and Information Management Department, social media marketing will grow from 8.4 percent of firms’ total marketing budgets to about 22 percent in the next five years.
But how do companies know—really know—if their investment is yielding returns? (After all, Twitter has yet to turn a profit.)
Hosanagar explored this topic during a webinar titled, “The Effect of Social Media Content on Consumer Engagement: Evidence from Facebook,” which examined how firms can best leverage social media to share information about promotions, new products and the like without turning off their audience.
Prof. Kartik Hosanagar
“Clearly, firms are already spending a lot on social media marketing, and that’s expected to grow,” Hosanagar said. “Given the amount of resources we spend on social media marketing, one of the big questions is: What is the value of a social media following? What is the value of getting a new Facebook fan?”
Industry by industry, this number is hard to define, particularly on Facebook, where just 0.2 percent of total status updates actually reach users for whom that content is relevant, and 1 percent of that teeny minority actually engages.
That’s where Hosanagar’s recent research becomes a valuable resource.
Hosanagar and his team collected all Facebook content posted by 782 of the largest consumer-focused brands from September 2011 to July 2012, then analyzed these messages based on responses, likes and comments from fans.
He found persuasive content—status updates that share an interesting fact, tap into the reader’s emotions, highlight philanthropy or are just plain funny—are better received by users than informative content—such as brand mentions, promotions, price comparisons, product availability and locations.
In fact, his data show that the more product information included in a post, the more of a negative impact it has on likes and comments. However, he added, if you combine persuasive and informative messaging—blending product messaging with a funny story or image—you hit the sweet spot of brand visibility and relationship-building and engagement increases.
So what’s a company to do if it wishes to get those much-coveted likes and comments? Hosanagar’s research findings showed the following:
1. Of all content, photos and videos generate the most number of likes and impressions and are important in generating comments.
2. If a brand posts a question, that post will elicit more comments, but fewer likes; conversely, if the brand asks the user to like a post, the post will receive more likes and fewer comments.
3. Timing matters. Users are most active between 9 a.m. and 10 a.m., and then at 2 p.m., and on Friday, Saturday, Sunday and Monday.
4. Social media is an ideal venue through which to highlight the organization’s social initiatives, as philanthropic posts generate high levels of engagement with fans.
Editor’s note: Watch Hosanagar’s “The Effect of Social Media Content on Consumer Engagement” by following this link to the Wharton Webinar series sign-in page. The webinar, part of Lifelong Learning, is exclusive to Wharton alumni, students and staff.
