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Many companies are enthusiastic about social media but are struggling to get real value, according to Econsultancy research published this week.
The good news for companies is that investment in time and resources can pay dividends ... provided that the strategies and tactics employed are closely aligned with business objectives.
The results of Econsultancy's Social Media and Online PR Report, sponsored by bigmouthmedia, show that only a quarter of companies are getting "real, tangible value" from social media activity, while the majority (60%) say they have gained "some value but nothing concrete".
The report findings were unveiled this week at bigmouthmedia's Social Media Summit held in London.
The large turn-out for the event is testament to the fact that many companies are keen to learn how social media impact their businesses. What came through strongly in the presentations is that there are some broad, high level rules of engagement but, on a much deeper level, effective social media and online PR activity is about adapting your approach in a way which reflects your type of business, audience and specific product or service.
One of the most engaging presentations was a small business perspective from Lesley Eccles, the co-founder of Hubdub.com, a site which enables people to predict the outcome of news stories for virtual money. It was clear from her presentation that a lot of experimentation and hard graft on social networking and social news sites was necessary before it started to pay dividends.
It is also clear that effective social media activity is not just about the tools, it's about the approach. This very much depends on a company's business objectives and an understanding of where your influencers and customers are, how to reach them, and ultimately what you want to achieve.
So, in order to be successful, marketers need to understand their objectives. What is it that you want to get out of social media marketing? Is it about more traffic, more sales or is it about more favourability towards your brand? Is it something specific such as recruiting a new employee? Selecting the appropriate tools and tactics should happen further along the process.
While the tools themselves may be "free", successful social media requires investment in time, resources, and ultimately, people. Media costs associated with other channels such as PPC may not even be relevant. The elephant in the room is that social media activity is very labour-intensive - it takes time to build followers, friends and an actively engaged audience.
“More than obvious from the report is the hidden cost that no one is accounting for. No P&L spend, but internally, teams are being stretched and stretched. The break point will come and the cost that will need to be budgeted will be in the resource. After all it is people that connect with people. Whether internal or external, there will be a requirement for people to manage the conversation.”
Companies must employ a strategic approach and ensure that these channels fit into a wider marketing strategy. Engagement is important, but it's also equally crucial to invest in the right tools and people to monitor and measure success.
Beyond just investment in resources and people, additional costs can also come from measurement. Staggeringly, 46% of respondents to our survey are not yet using any reputation or buzz monitoring tools, but this may boil down to a lack of understanding of the tools available, or what constitutes a tool.
Buzz monitoring tools are not limited to enterprise-level software (such as Radian 6, Brandwatch and BrandsEye to name a few). Twitter Search, Google Alerts, and Technorati are just some of the free online reputation monitoring tools available to marketers.
Despite the high cost in terms of time and resources, it's clear that companies who do get heavily involved are the ones reaping the most benefit from the channel. Of the companies who are "heavily involved", around half say they have gained "real, tangible value" from social media.
The report also shows that it's smaller companies who are most involved in social media and most likely to be deriving real value from the channel. Small organisations are inherently more flexible, and with their flatter structures, are more able to effectively adapt to the social media marketing landscape.
The report paints an intriguing picture of the industry; whilst it is encouraging that more companies are getting involved, it's clear that organisations need to invest in the time, resource and people power to make it work. A positive finding for the industry is that 86% of companies are planning to increase their social media budgets next year.
In order to be successful, companies need to employ a well-thought-out approach to social media, by planning out their objectives and what they hope to achieve prior to starting a new campaign. Finally, measuring and benchmarking success - using appropriate metrics - is simply crucial for understanding what works and what doesn't. It's only through experimenting and trialling social media that marketers will be able to better optimise their social media activities.
For more commentary on our Social Media and Online PR Report, please see the following links. Thanks to everyone who took the time to blog and promote the research.
Many businesses still failing to embrace social media - wearesocial.net
Econsultancy social media and online PR report finds industry grappling with issues of engagement, monitoring and measurement - Wadds' PR Blog
Social media and online PR report 2009 – UK - Stuart Bruce