The ROI of Real-Time Engagement

Jan 28, 2011


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In the emerging real-time business environment, where public discourse is no longer dictated by the mass media, size is no longer a decisive advantage. Speed and agility win.

Are some companies too big to fail? That's been a hot question in recent years. But when talking about the revolution in real time, we need to turn this question around: Are some companies too big to succeed? With epochal changes underway, are the largest enterprises, like dinosaurs, too unwieldy to evolve? It's a scary question that needs to be asked.

After mulling this over, it occurred to me that the top 100 U.S. companies constituted as good a focus group as any. So I used the Fortune 500, the annual list from Fortune magazine that ranks America's top 500 public corporations by gross revenue.

I sent an inquiry via email to the media relations department of each of the top 100 companies on the list. I asked each company to tell me how it had adapted to the new realities of the real-time web. I asked: "In the last year or two, has the structure of your corporate communications team and/or communications processes changed to embrace the real-time digital era? If so, how?" I included my email signature with a link to my site, blog, and Twitter ID in case people wanted to find out more about me right away.

I heard back from only 28 of the Fortune 100 companies.

In itself, that top-line result is not encouraging evidence that the lights are on in corporate America. Even more discouraging was that I could not even reach 11 companies because there was no way to contact them online. And I received tone-deaf canned auto-responses from many that did reply, such as Massachusetts Mutual Life Insurance Co., Amazon.com, and Walgreens.

On the other hand, it was very encouraging to find that a few companies are already very much on the ball. That leads me to hope the others will be able to catch up once they focus on the right questions. Boeing, Chevron, Coca-Cola, Ford, Intel, Prudential Financial, State Farm Insurance, UPS, Verizon Communications, Wells FargoD; and others that answered my questions deserve to be recognized as leaders. So let me say this to any senior managers from those companies who might read this: "Your real-time communications team is doing a great job; please give them a pat on the back from me."

Question my methodology all you like. Okay, so I'm not Thomas Friedman of The New York Times. And I'm not a statistician. But I write for a bunch of publications such as EContent and The Huffington Post, and between these and my blog, I have a whole lot of readers.

So if I can't find a way to contact your company's media relations team, and I can't get an intelligent response from them-or any response at all-I don't think it's a stretch to say something is badly out of whack in your real-time communications infrastructure.

Why is it that only a quarter of the Fortune 100 companies respond in real time to media inquiries? The fastest were the five companies that responded in less than 1 hour. Twelve of the companies responded the same day I sent the inquiry, and another 11 responded the next day.

A comparison of 2010 stock prices reveals that on average the publicly traded Fortune 100 companies that engaged in real-time communications beat the S&P 500 stock index, while the others on average underperformed the index.

During the period-closing price on Dec. 31, 2009, through closing price on Sept. 3, 2010 (when my book Real-Time Marketing & PR: How to Instantly Engage Your Market, Connect with Customers, and Create Products that Grow Your Business Now book went to print)-the S&P 500 stock index was down just under 1%. During that period, the average of the publicly traded companies that responded to my inquiry was up 3% while the average of the companies that did not respond was down more than 2%. In addition, the stock prices of more than half of the companies that engage in real time (67%) were up during the
8-month period I measured while only 42% of those that do not engage in real time were up during the period I measured.

My analysis provides us with evidence that there is a positive ROI (return on investment) for investing in real-time marketing and public relations. These companies, which have developed a real-time mindset, are leaders in more ways than one.