Case the Accident
The Power of Evil
The Damage of Negative Social Media Strongly outweigh Positive Contributions
MARCEL CoRSTJENS InsEAD marcel.corstjens@ insead.edu ANDRIS uMBLIJS Mckinsey andris_umblijs@ mckinsey.com
Media activities generated by consumers or communities that are neither paid for nor induced by brand owners are claimed to have a potentially game-changing impact on communication and brand building. In this study, the authors propose a rigorous methodology to assess the impact of this type of social media activities on the actual performance of brands in the market. The article begins by developing a four-step process to condense the complex reality of micro-social-media events for a brand into a manageable set of social media indicators (sMI). These sMI subsequently are used as a subset of the drivers, together with more traditional marketing-mix elements—in a general market-response model—to estimate their relative impact on brand performance in the market. This methodology is illustrated with two real-world examples—one in the market for flat-screen-television market and the other in the set of Internet broadband-service providers.
INTRoDuCTIoN Social media are a game-changing technology with a major impact on business. Early adopters who integrated social media into their strategy and operations are well placed to capture new opportunities. Based on a survey of more than 3,000 senior executives across industries, geographies, and functions, a recent McKinsey report indicated that companies qualified as “networked” (those that used collaborative Web 2.0 technologies intensively to connect the internal efforts of employees and extend the organization’s reach to customers, partners, and suppliers) outperformed other companies in terms of market share, profitability, and market leadership (Bughin and Chui, 2010; Shearman, 2011). The impact of social media has been widely reported in the lay press, trade journals, and academic research. In fact, the growth of
The Damage of Negative Social Media Strongly outweigh Positive Contributions
MARCEL CoRSTJENS InsEAD marcel.corstjens@ insead.edu ANDRIS uMBLIJS Mckinsey andris_umblijs@ mckinsey.com
Media activities generated by consumers or communities that are neither paid for nor induced by brand owners are claimed to have a potentially game-changing impact on communication and brand building. In this study, the authors propose a rigorous methodology to assess the impact of this type of social media activities on the actual performance of brands in the market. The article begins by developing a four-step process to condense the complex reality of micro-social-media events for a brand into a manageable set of social media indicators (sMI). These sMI subsequently are used as a subset of the drivers, together with more traditional marketing-mix elements—in a general market-response model—to estimate their relative impact on brand performance in the market. This methodology is illustrated with two real-world examples—one in the market for flat-screen-television market and the other in the set of Internet broadband-service providers.
INTRoDuCTIoN Social media are a game-changing technology with a major impact on business. Early adopters who integrated social media into their strategy and operations are well placed to capture new opportunities. Based on a survey of more than 3,000 senior executives across industries, geographies, and functions, a recent McKinsey report indicated that companies qualified as “networked” (those that used collaborative Web 2.0 technologies intensively to connect the internal efforts of employees and extend the organization’s reach to customers, partners, and suppliers) outperformed other companies in terms of market share, profitability, and market leadership (Bughin and Chui, 2010; Shearman, 2011). The impact of social media has been widely reported in the lay press, trade journals, and academic research. In fact, the growth of