Blogs and the bottom line

We have established that, as individuals, we need to be familiar with various social media tools, including blogging. But what about the wider impact of all this digital activity? What is the value for firms or, indeed, society at large?

Well… I don’t have the answer myself; but I came across two fascinating articles that might interest you. These pieces discuss the value created by blogging, from two very different perspectives.

The financial value of blogs
Research published in the Journal of Business Research, an esteemed academic journal, found a positive relationship between blogging activity and market valuation. That is, (blog) publicity is good publicity, as far as the firms’ valuation in the stock market is concerned.

The study was conducted by researchers Nan Hu, Ling Liu , Arindam Tripathy and Lee J. Yao and the study is available here.

The authors monitored blog discussions about selected companies, their products and brands. Then, they measured the visibility of the blog – that is, the traffic to the blog – where the companies, brands or products were discussed. The study did not investigate the content of the blogs or the reputation of the blogger. Finally, they checked the capital market value of those firms.

The study concluded that blog visibility increased the capital markets’ valuation (i.e., the value of the shares) of the companies mentioned in the blogs. The authors speculate that the blogs are particularly important sources of information about firms not traditionally covered by analyst reports.

The social value of blogs
The second article was posted on the ‘Impact of Social Science’ blog, hosted by the London School of Economics. In this article, Patrick Dunleavy and Chris Gilson defend that blogs play a critical role in disseminating knowledge to a broad audience.

With reference to academic research, the authors note that knowledge is traditionally disseminated through paid-for formats (books, journals, conferences…). Not only that, but it tends to be done in fairly formal or technical language, and be filled with data. Moreover, there is, usually, a long gap between the generation of the knowledge and its dissemination.

Blogging, on the other hand, is free, done in simple language and focused on the results, and happens in real time. (Want an example – see what I just did earlier, with that Journal of Business Research article).

That is, academic blogging is absolutely essential to make research available – and accessible – to society.

In summary, blogging not only feeds the authors’ narcissistic needs and helps with Search Engine Optimisation. It also adds to firms’ bottom line and (most importantly) to society’s pool of knowledge. That has to be good news, right?!

Can you recommend other interesting articles looking at the outcomes of blogging, social media or other digital marketing initiatives?

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