The Social Media Buzz

February | 2010

What’s It All About?

The Social Media Buzz I What’s It All About?

The proliferation of online communities in the form of social media is one of the most noticeable trends on the web over the past several years. Not only has it redefined what the internet means in terms of its value offering, but has also become an indispensible element of a given person’s daily activities.

According to a recent study, time spent on social networks is growing at 3 times a faster rate than the overall time spent on the internet. Over 400 million Facebook users are spending 8 billion minutes on the website each day, with 50% of them logged on at any given time. The number of tweets per day on Twitter has reached 3 million, with its most popular character (Ashton Kutcher) having over 4.5 million followers – more than the population of Ireland, Croatia or New Zealand.

The content of social media is also growing at a rapid pace – 13 hours of video are uploaded to Youtube every minute – with the length of time it would take to view all of it standing at over 412 years! 13 million articles are available on Wikipedia, with 3.6 billion photos available in Flickr’s archive.

Companies not realizing the potential social media has to offer stand to lose out significantly, as the bandwagon is about to takeoff globally. In the US, for example, 86% of companies already are using some form of social media, a quarter of which started in 2009. Annual spending on social media is growing steadily as well. According to the same study, social media will see a steep annual growth of 34% in the next five years in the US. Spending on integrated campaigns on social networks will be $295 million at the end of 2009 and agency fees will reach $421 million.

Among companies using one or more social media initiatives, the highest percentage of the activities is maintaining company-related accounts or profiles on social media sites. Other popular activities include monitoring company related mentions on social media sites, maintaining one or more company blogs, participating in micro-blogging, monitoring and supporting user ratings and reviews, monitoring competitor mentions on social media sites, advertising on social media sites, participating in Q&A sites, participating in discussions on 3rd party sites and recruiting employees via social media.

Some of the more noticeable best practices in using social media over the past years include:

Dell Outlet – With more than 1 million followers on its Twitter account, the company attributes more than $3 million in revenue to its Twitter page since 2007. Coca-Cola – Created by two fans at the beginning, the company has one of the richest pages on Facebook in terms of content, with over 5 million people listed as friends. Nike – Managing possibly the greatest number of channels on Youtube, the company has a variety of branded channels available on the social media outlet to provide content to different audiences for each of their product lines.

Kodak – The company’s “1000 Words” blog is an example of a successful company blog, focusing not just on its own products, but on the also on the end results – photographs Comcast – The company’s director of digital care personally interacts with the 38,000 followers of its Twitter page, responding to their questions and complaints on a frequent basis Jet Blue Airways – One of the first companies to use Twitter for the purpose of customer care, the company has a half dozen staff who are responsible for directly managing all things Twitter, on a soon to be 24-7 basis.

Seeing the full picture

Defining social media as a group of technologies and channels used at creating and enabling a massive community of participants to collaborate productively, several different categories arise, differentiated by the nature or the mechanism of how it works. We categorize: social media under 9 categories:

1. Social Networking

The most popular online platforms are in this category. People gather in and around social networking websites to connect with their friends & family, to interact with new people and to share interests, activities and other personal content such as videos or photos. This large variety of possible activities makes this category include properties of other platforms such as multimedia sharing, micro blogging and instant messaging sometimes. The most popular members of this category are Facebook, Myspace and Friendster. Companies traditionally use this social media to interact with their customers via company profile pages, and to advertise to target market segments.

2. Multimedia Sharing

This category hosts the platforms in which multimedia content (video, presentation or photos) are the main focus. Multimedia sharing sites also act as a complementary channel used by bloggers to host images and videos they attach in blogs and other social media. Youtube and Flickr are two popular websites in

this category. Companies traditionally use this channel to upload commercials (both old and the new ones), product information clips, how-to videos, product & service expert opinions, and recommendations. Companies today are even producing commercials tailored for these social media platforms.

3. Business Networking

This category’s members are solely focused on the corporate environment. Business networking websites are mainly used by professionals. Entrepreneurs looking for new partnerships, executives searching for subject matter experts, HR specialists looking for new recruits, company alumnus sharing company experiences, and companies displaying a company profile are among some of the common usage methods of such sites. Linkedin, with more than 55 million users, is the most popular member of this category, along with XING.

4. Blogs

Blog is a contraction of “web log,” defining an online journal where individuals or companies post regular entries about a particular subject or use it as a dairy. A blog may contain images, videos or text and may have elements from other categories. Readers can leave a comment on a blog, and as such, blogging facilitates two-way interaction. 113 million blogs have been indexed by Technorati since 2002. Companies own blogs as well, where they usually share content about products, services or business news. Professional individual’s blogs, such as CEO Blogs, are also starting to become more common. A few examples of successful blogs are Mashable, TechCrunch and Media Decoder of the New York Times.

5. Forums

Online discussion forums where people discuss and share information about anything can be grouped under this category. Companies are usually monitoring and facilitating forums to review what people are thinking about their products and services. Easy access to forums to read a review about a product makes it vital for companies to carefully follow such forums to reduce negative word-of-mouth, and, inversely, to leverage positive feedback.

6. Micro blogging

Micro blogging is very similar to blogging; however, its content is much smaller than the blogs. It also differs from blogging by the nature of its use or frequency of blogging. Micro bloggers usually only post a sentence or more in their blogs, sometimes a video or link instead. Twitter dominates this category. Dell, Zappos and Comcast’s Twitter pages are very popular, especially in the US, thanks to their effective use of Twitter to communicate with customers.

7. Instant Messaging

Text based communication in real time is the core feature of instant messaging, and is used primarily as a social media tool. Windows Live Messenger have 330 million active users, followed by Yahoo Messenger and AIM. Instant messaging is

usually applied in customer services actions by companies seeking to increase satisfaction and loyalty in the long term.

8. Experience Sharing

Sharing experiences (complaints or appreciation) about a product with other people is an easy and direct expression of satisfaction or dissatisfaction for a customer, hence there are many websites created for publishing such experiences. Companies usually follow social media platforms to reach customer feedback easily and take actions accordingly. Complaints Board is a popular platform, where the latest complaints about products and news about customer service failures or successes of companies are published. Registered users in the platform are both customers and companies.

9. E-Mail Based Networks

Sending an e-mail is the most common means for communicating digitally, and as such, using e-mail in a collaborative way is possible by using e-mail based networks. Each e-mail is distributed to all members gathered in that online community. Yahoo Groups is the most popular e-mail based network, with 113 million users and 9 million groups available in 22 languages.

What Social Media promises

Effective use of social media platforms, governed by a concrete strategy with well orchestrated operations can provide several benefits to companies. These include:

1. Serving as a Customer Service Platform 2. Serving as a Customer Insight Platform 3. Serving as a Sales Platform 4. Increasing Awareness, Loyalty and Advocacy 5. Increasing Wallet Share of Current Customers 6. Enabling Targeted and Cost Effective Advertising 7. Recruiting Resources 8. Testing Concepts 9. Gathering Customer Ideas and Innovative Practices 10. Motivating Employees and Business Partners

Ultimately, no company should ignore the social media phenomenon – as much as brick-and-mortar stores, call centers, and company websites are core channels for interacting with existing and potential customers, so too are social media websites. The upside appears endless for now, and as such, companies need to act quickly to benefit from it.

References:

Nielsen, Global Faces & Networked Places, 2009

Facebook.com, Press Room/Statistics

Wikipedia.org

Blog.flickr.com

Forrester US Interactive Marketing Forecast, 2009

Business.com - Business Social Media Benchmarking Study, 2009

New York Times

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