It’s estimated there are 1.5bn users of social networks worldwide but can businesses harness their power or is there still much to tame?
Social media is now an all-pervasive presence in our lives, with 87% of UK internet users alone owning a social media account and 40% of businesses in the country using it regularly**. A report by McKinsey & Company estimates that potential revenues of $900bn – 1.3 trillion could be unlocked by social technologies across four major sectors – certainly enough to motivate a keener interest*.
Social tools allow businesses to achieve a number of key business objectives, including driving sales and leads. As well as helping to meet harder financial goals, companies are using social media marketing to achieve softer objectives such as improved brand awareness and reputation.
It’s also having an acute impact in-house, with McKinsey estimating a 20-25% improvement in knowledge worker productivity thanks to time saved searching for information and collaborating internally. In fact, IT research firm Gartner predicts that by 2016, 50% of large organisations will have internal Facebook-like social networks, and that 30% of these will be considered as essential as email and telephones are today.
Tools before rules
It all sounds like good news, but in the rush to tap into the new capabilities, companies are still some way short of capturing the full benefits these technologies have to offer. This is evident in E-consultancy’s finding that the majority of companies still have difficulty measuring the return on investment – almost two-thirds (61%) of respondents in their Value of Social Media survey said their organisations were poor or very poor at measuring ROI.
It seems a focus on the tools themselves and a lack of strategy around their implementation is holding back progress. This is borne out by Gartner’s forecast that by 2015 80% of social business efforts will not achieve the intended benefits due to inadequate leadership and an overemphasis on technology.
While the tools and capabilities are moving at lightning speed, management understanding and mastery of them is not – and therein lies the issue.
The organisations that are successful in the social space in the long-term will be those who are able to marry the technological know-how of the digital natives in its workforce, with the strategic insight of management – in essence a non-hierarchical culture of knowledge-sharing. In some instances this would necessitate a fundamental shift in organisational structure, and this is what will ultimately separate the successful commercial competitors from those left outside the social space.
Moreover, social technologies should be used to complement the existing marketing mix rather than existing in a silo. Customer insights and behavioural data obtained there can offer massive benefits for campaign planning in other mediums, provided management teams know how to access and analyse the data.
In the future, there will be a greater imperative to accurately measure and use the data from social media to feed into business intelligence in a broader sense.