Social networking is a fast-growing online trend that is changing the media landscape, particularly in the way in which consumers and companies interact with each other. These sites enable community participation and include blogs, discussion forums, social network sites such as Facebook and Twitter, as well as consumer review sites. No editor is required, which means the content is not controlled and publishing costs are always near zero.
Word-of-mouth has always influenced how consumers behave and what they think about brands but now that social media are facilitating the spread of word-of-mouth in a very easy and rapid manner, this is even more important, says INSEAD Assistant Professor of Marketing Andrew Stephen.
What this means for companies
Companies are trying hard to tap this huge database of opinions and thoughts to track customer satisfaction, pick up on trends and ideas, and identify negative comments or problems that customers have with their products and services.
Stephen, whose research focuses on understanding the causes, types and consequences of complex social interactions in marketplaces, told INSEAD Knowledge that the way social media hand over control to consumers means risking the spread of misinformation, but he feels that the benefits of social media far outweigh this risk and potential cost.
Companies such as Brussels-based Attentio is using text mining technologies to interpret and summarise these opinions across various languages and geographies. Attentio's co-founder and chief of communications, Simon McDermott, says companies can now listen more effectively to the social media. Companies can, among other things, measure the impact of their own marketing campaigns in ways never possible before. It is a new way to understand customers, and communicate and sell more effectively. It is a major opportunity, but without proper listening tools and response strategies, it's also a threat to the company's image and brand value.
Most senior managers now understand the importance of search engines. However, the social media introduce an entirely new paradigm when dealing with consumer opinions and companies need to have a plan or strategy for dealing with this, argues McDermott.
Social media analysis
According to McDermott, all Fortune 1000 companies are now engaging in social media activities. Some may not know this yet but at some level in the organisation, social media campaigns have begun, (such as) having a Twitter presence, creating a Facebook page, publishing blogs, etc. These campaigns will get more targeted and companies will need to analyse results.
It is possible to analyse social media conversations as the information is in the public domain. As a 'critical mass' has been achieved, there would be sufficient conversations to analyse, on a daily basis, to form statistically significant results.
McDermott told INSEAD Knowledge that companies want to analyse what people are saying about them because they want to protect and enhance their reputation. He alludes to Dell Hell, initiated by journalist blogger Jeff Jarvis complaining of terrible service, which becomes the fulcrum of debate for other disenfranchised customers. It goes full circle as Dell listens and gets involved in social media exchanges.
Companies also want to know who is influential in their industry and seek to evaluate campaign effectiveness (did our new campaign create conversations?). They also listen to what people are saying about their competitors in order to benchmark their brands.
Tools and dashboards
As companies value what is said and discussed in the social media, companies like Attentio, Trendrr and Nielsen BuzzMetrics use tools to monitor and analyse the social media to give them the information they need, says Stephen.
Trendrr, for instance, has a free account with limited features and allows 10 elements to be tracked for free. For more features, companies have to subscribe.
Attentio aggregates information across a variety of sources in a single 'dashboard' that is easy to understand and flexible enough to allow different types of filtering and analyses to be done by brand managers.
The award-winning patent-pending platform called the Attentio Dashboard is an online, on-demand service. Millions of messages are indexed as they are published from a variety of sources across multiple countries.
We deploy advanced text analysis algorithms to extract salient features such as 'buzz,' 'sentiment' and 'topics' related to a given brand or product and we currently deliver global coverage of social media in 19 languages, says Attentio's brand manager Marc Rousseau based at their headquarters in Brussels. Each quarter the Dashboard is upgraded with new features. The source data are indexed and archived, and historical data can be used for client projects.
Attentio offers clients social media services around brand reputation, campaign measurement, market analysis, social media strategies, new product launches, and PR effectiveness measurement.
Clients include Microsoft, Skype, Toyota, Johnson & Johnson and Nokia.
When Attentio began five years ago, social media hardly existed and companies paid little or no attention to online conversations. Building a tool from scratch with few, or no, reference points was difficult, says McDermott. The process has been iterative and we've had four major dashboard revisions in as many years.
They have used continuous client feedback to change the tool - new graphs, better illustration of data, longer time periods, etc. The feedback has been to simplify usage and improve data quality.
As there's no editor, social media conversations include a lot of 'dirty' text which affects quality, says McDermott. The technology has to be good to find real text from human beings and that has been a major challenge in the last four years.
As social media become increasingly mainstream, the industry will continue to innovate. On the tracking side, Stephen says there are not many established 'metrics' that can be used to figure out return on investment in social media, so developing more sophisticated tracking systems and good metrics that can be used to evaluate campaigns and to predict campaign success early on, such as in terms of leading indicators, is where things will head.
As social networking is a relatively new phenomenon, clients need to know how to use the data to make new and better decisions.
With so much information from social media, McDermott says companies need to know which conversations are relevant, what to take seriously and what to ignore. As social media tools are new, there is also the issue of determining which department should handle these: PR, marketing, brand teams, or all of them.
Terms such as 'brand monitoring', 'social media analysis', or simply 'listening' are used to describe the industry. The world we are in is maturing, says McDermott. Major companies like Nielsen, JD Power, and WPP have companies that track and monitor social media activity.
The industry is growing rapidly. Last year Attentio saw a 70 per cent increase in turnover. We expect to see double bookings this year. The majority of our sales are connected to technology licences, not consultancy (work), says McDermott. Client engagements start at 10,000 euros, rising to 200,000 euros for larger accounts.
In the next two to three years, these tools and methodologies will be commonplace, he adds.