The Business Side Of Social Media

November 3, 2007

Business

Since I started working at Pop Labs, I have really gotten into the idea and facts behind social media.  I’ve learned that much of the hype has been centered around the adoption of blogging as a business tool for communicating with customers and staff.  Beyond blogs, are the use of video sharing, podcasts, RSS/webfeeds, and social networks.

Business are now encouraging staff and customers to get involved and build communities around their brands, because know they can get better results from the online communication engagement, and better monitor customer retention and acquisition.  Though, this brings in the negative impact as well.  Business reputations are often criticized, and recently social media is being used as a tool to gain quicker and more publicized results.

The risk to reputation needs to be properly managed.  I found some interesting statistics regarding social media and business reputations.  While there is global excitement for social media in the corporate world, 45% of respondents to a social media corporate survey agreed that employees discussing their organization online posed a significant risk to its reputation. And yet, 70% admitted that they had no guidelines or policies relating to blogging or other social-media tools.  Even more worrying, was that only 26% were sure how to monitor what was being said about their organizations, industry or products online.

This is of course hard to translate to business.  I have searched and searched, but it’s really hard to put a a dollar figure on social media to prove your return on investment.  You’ll have a hard time showing what the revenue increases were from your blogging or other social media efforts. The medium has not advanced far enough for that. I also don’t think that the medium is wide-spread enough that you can justify ROI with only subscriber count and number of comments. Many senior executives wouldn’t know what an RSS subscriber even means.

In a few years, there will be measurements in place that prove ROI from businesses engaging in social media. This method of conversing with your audience is growing by the day. But right now we need to focus on social media as a tool in our marketing toolbox that supports all the other tools we’re using in our marketing plans.

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