The Impact of Social Media

Harvard Business Review Analytics Services has released a study on the impact of social media. Facebook, Twitter, Linkedin, blogs etc. offers organizations the chance to join conversation with millions of customers around the globe every day.

But even though social media has great potential, many organizations do not properly integrate social media in their marketing and communication efforts, or only use it as a one-way communication channel instead of listening, analysing, and driving conversations.

The survey was conducted among HBR magazine and newsletter subscribers during July 2010. The participating organizations were mainly based in the US and in Asia.

These are some of the main results from the survey:

• Three-quarters (75%) of the companies in the survey said they did not know where their most valuable customers were talking about them.

• Nearly one-third (31%) do not measure effectiveness of social media.

• Less than one-quarter (23%) are using social media analytic tools.

• A fraction (7%) of participating companies are able to integrate social media into their marketing activities.

The following is the conclusion to the survey which in my opinion makes much sense.

HBR’s Conclusion:

“Social media is rapidly becoming a new force in organizations around the world, allowing them to reach out to and understand consumers as never before. In many companies, it will move from a ‘one-off initiative’ to be an important, integrated tool in marketing and communications strategies.

Use of social media will clearly expand in the coming years. Two-thirds of the companies in the survey predicted their use of social media would grow significantly over the next few years, as the awareness of the power of social media has grown in their companies. Among organizations that already have a budget for social media, spending was expected to increase by 30% or more over the next 12 months, even as overall dollars for marketing and advertising have dropped for many companies during the recession.

But as social media creates new opportunity, it also demands a shift in thinking about marketing and the measures of success. Those companies who are most effective in social media now are not only experimenting with multiple channels, but also creating metrics to measure impact and using new tools to understand how to enter into a new conversation with their customers. In the future, effective use of social media will be led by these organizations that are able to enter into this new relationship with customers, employees, and partners.”

You can download the whole report from HBR here.