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Measuring the Impact of Social Media on Business Profit & Success

A Fortune 500 Perspective

Cong Li and Don Stacks

An organization can have a high number of «likes» on its Facebook page and lots of «followers» on its Twitter account, but does that mean anything from a financial perspective? Is it worth the organization’s effort to maintain an active presence on social media in order to generate more revenue? Is it possible to use social media metrics such as the number of «likes» and the number of «followers» to predict an organization’s «success» even though those metrics are nonfinancial indicators? Prior research studies have looked at how organizations should utilize social media, but few studies have provided strong empirical evidence to support how the outcome of using social media should be measured and why. Focusing on Facebook, Twitter, Google+, and YouTube, this book examines how Fortune 500 companies use social media. Collected over a five-year period, the authors assess the companies’ social media activities and their business performance data, such as stock return, total revenue, net income, and earnings per share. These data, both financial and nonfinancial, are matched and statistically analyzed to see whether a company’s social media activities are significantly associated with its business performance.
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Chapter 6. YouTube


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Chapter Six


Chapter Overview

This chapter is focused on the video messages that the Fortune 500 companies delivered to their publics via YouTube from January 2009 to December 2013. We collected the raw data from the companies’ YouTube accounts and other sources. By analyzing those data, we aimed to answer the following questions:

• What kinds of videos do the Fortune 500 companies put on YouTube?

• How does the public respond to the Fortune 500 companies’ videos on YouTube, in general?

• What is the best way to measure a company’s activeness on YouTube?

• Does a company’s YouTube nonfinancial activeness influence its business performance from a finance perspective, measured in its monthly stock return?

• Does a company’s YouTube nonfinancial activeness impact its business performance from an accounting perspective, measured ← 75 | 76 → in its quarterly total revenue, net income (or loss), earnings per share, profit margin, return on assets, and return on equity?

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