DMN3 Blog

A number of recent surveys have assessed how organizations are using Social Media. See how you measure up…

It’s no secret that social media is where you want to be if you are a marketer these days. That’s the easy part. The hard part is how to effectively use social networking, media sharing, blogging, review, news and other social media sites to make your organization more successful.

Think about this:

“Conventional marketing wisdom long held that a dissatisfied customer tells ten people. But…in the new age of social media, he or she has the tools to tell ten million.” (Paul Gillin, author of "The New Influencers")

Unlike a year or two ago, businesses today do understand the importance of social media. According to Harvard Business Review Analytic Services Study, nearly two-thirds of the 2,100 companies surveyed reported that they are either using social media channels or are planning to do so.

Nevertheless, companies are struggling to get a handle on social media. Most of the organizations are using social media as a vehicle to promote their products, services, brands, news, etc. It is not a conversation, but instead one-way channels to broadcast their message.

The value of social media is the opportunity to engage customers and potential customers in a two-way conversation. The insight provided by listening and analyzing consumer conversations can provide a positive impact to the bottom line.

The vast majority of organizations have little knowledge about the impact of social media on sales and their social media ROI. What little metrics they use often measure such things as the number of “likes”, “followers” and “fans” of their brand. There is no direct correlation of these soft measures to the business’ sales or profits.

Part of the equation is the use of social media analytics to help you determine what is working. More and more businesses are looking to assess the impact of social media to their bottom line. They want to measure the return on investment (ROI) for the resources expended.

Recent studies released by Harvard Business Review and Bazaarvoice look at how organizations are using social media today and the changes they anticipate within the next year or two. According to the Harvard Study:

• Seventy-five prevent of the companies said they did not know where their most valuable customers were talking about them
• Thirty-one percent do not measure the effectiveness of social media
• Only twenty three percent are using social media analytic tools
• Only seven percent of those reporting were able to integrate social media with their other marketing programs
• Only twelve percent felt they were effective users of social media. We will look at how these twelve percent are using social media in my next blog post

In October, 2010, Bazaarvoice and the CMO Club, in their second annual study, surveyed 175 CMOs about social media. While their study was much smaller the results were still telling. Their survey found:

• CMOs clearly want to close the gap in their ability to measure the impact of social media on sales and revenue. Linking revenue and ROI to social media marketing is a top priority. Only forty percent of those who responded to the survey said they had actually achieved tying some portion of their company revenue back to their social media efforts. Eighty percent said they hoped to do so during 2011
• CMOs plan on using social media user-generated content as part of their decision making process. In 2011, 93% plan on using user-generated content to inform product and service decisions
• It’s clear that CMOs recognize the need to be part of the social media space, while they are not as clear on the ROI that social media marketing drives
• The social media activities that had the most participation across B2B and B2C sites include company blogs (87%), brand communities (86%) and Facebook (79%)
• Business-to-consumer (B2C) company CMOs reported that customer review or ratings and other community tools drove the most value. Business-to-business (B2B) CMOs reported that, in addition to those named above, corporate blogs also contributed to larger returns

What both studies reveal to us is that organizations are participating in social media to a large degree. That participation will increase dramatically in the coming year as well. What companies are still struggling with is how to effectively measure use of social media and its impact on the bottom line.

Many organizations today are focused on using social media to blast information outward. Those that understand and participate in two-way, on-going conversations with consumers will have the greatest chance for successful use of social media.

In my next post, I will examine in more detail the activities of the twelve percent in the Harvard Study who indicated that they were using social media effectively. Stay tuned…