Rejecting Social Media Marketing May Be Costly in the Long-Run
This is what Anthony Cooper, MD of business intelligence company Pearlfinders, set out to explore in a blog post based on this curious finding from the Q2 2012 Pearlfinders Index.
Financial services firms certainly have unique challenges in social and several incidents over the past year point to the reality that they just don’t understand how to effectively manage those challenges yet. Barclays, NatWest, and HSBC all had their feet held to the fire recently over their respective handling of controversies.
There is great potential for negative sentiment towards banks, investment companies, and other financial services firms, given events such as bonuses for executives, accusations of impropriety, allegations of money laundering, and more.
Cooper explains what he found in a recent experiment: “Running six of the major high-street banks through social media monitoring software (Lloyds TSB, Barclays, RBS, HSBC, Co-operative and NatWest) reveals over 170,000 mentions on Twitter alone in the past 30 days. However, negative posts were twice as common as positive ones.”
Social media marketing will continue as a delicate subject for financial services firms, though Cooper expects to see the downward trend in investment in social turn around by the end of the year. He believes firms are holding out until they understand the platforms better, but haven’t rejected social media marketing entirely.
It could be a great opportunity for agencies and marketers who understand the risks and nuances inherent to the financial services industry. Cooper notes, “It will be about convincing traditional financial services companies that openness with the public will help build the trust that is lacking in the sector.”
Banks need to lead the social media conversation, he explains; they just haven’t quite figured out how to do so yet."
Today, Ryan Holmes reports in an article posted on the Fast Company website entitled "The $1.3 Trillion Price Of Not Tweeting At Work" that, as a whole, the C-suite at the Fortune 500 firms have been slow to adopt the technology.
In his article, Ryan shares how "on June 6, Larry Ellison--CEO of Oracle, one of the largest and most advanced computer technology corporations in the world--tweeted for the very first time. In doing so, he joined a club that remains surprisingly elite. Among CEOs of the world’s Fortune 500 companies, a mere 20 have Twitter accounts. Ellison, by the way, hasn’t tweeted since.
As social media spreads around the globe, one enclave has proven stubbornly resistant: the boardroom. Within the C-suite, perceptions remain that social media is at best a soft PR tool and at worst a time sink for already distracted employees. Without a push from the top, many of the biggest companies have been slow to take the social media plunge.
A new report from McKinsey Global Institute, however, makes the business case for social media a little easier to sell. According to an analysis of 4,200 companies by the business consulting giant, social technologies stand to unlock from $900 billion to $1.3 trillion in value. At the high end, that approaches Australia’s annual GDP. How’s that for a bottom line?
Savings comes from some unexpected places. Two-thirds of the value unlocked by social media rests in “improved communications and collaboration within and across enterprises,” according to the report. Far from a distraction, in other words, social media proves a surprising boon to productivity.
Companies are embracing social tools--including internal networks, wikis, and real-time chat--for functions that go way beyond marketing and community building. R&D teams brainstorm products, HR vets applicants, sales fosters leads, and operations and distribution forecasts and monitors supply chains.
Behind this laundry list is a more hefty benefit. Social technologies have the potential to free up expertise trapped in departmental silos. High-skill workers can now be tapped company-wide. Managers can find out “which employees have the deepest knowledge in certain subjects, or who last contributed to a project and how to get in touch with them quickly,” says New York Times tech reporter Quentin Hardy. Just cutting email out of the picture in favor of social sharing translates to a productivity windfall as “more enterprise information becomes accessible and searchable, rather than locked up as ‘dark matter’ in inboxes.”
Among the most promising (and heretofore least hyped) new social technologies are tools like Yammer (recently snapped up by Microsoft for $1.2 billion), which bring Facebook-like functionality into the office. Social-savvy employees post queries and comments to internal conversation threads and coworkers offer feedback, crowdsourcing solutions. Content can be shared and searched, so the same issues don’t resurface. Meanwhile, virtual groups offer a more interactive alternative than email or phones.
Interestingly, the report suggest that tools like Yammer are the tip of the iceberg. Right now, only five percent of all communications and content use in the U.S. happens on social networks, mainly in the form of content sharing and online socializing. But McKinsey analysts point out that almost any human interaction in the workplace can be "socialized"--endowed with the speed, scale, and disruptive economics of the Internet.
It seems noteworthy that the report’s conclusions have been echoed of late from the most authoritative of places: Wall Street. In the last year, the world’s largest enterprise software companies--Google, Microsoft, Salesforce, Adobe, and even Ellison’s own Oracle--have spent upward of $2.5 billion snatching up social media tools to add to their enterprise suites. Even Twitter-phobic CEOs may have a hard time ignoring that business case."
So Bankers should take note, as should all folks working in the C-Suite, that social media marketing is eventually going to be their main stream of marketing and needs to be taken seriously... big dollars are at stake.
Ryan Holmes is the CEO of HootSuite, a social media management system with 4 million users, including 79 of the Fortune 100 companies.
Miranda Miller does consulting for companies and NPOs looking to increase their visibility online.
As social media spreads around the globe, one enclave has proven stubbornly resistant: the boardroom. Within the C-suite, perceptions remain that social media is at best a soft PR tool and at worst a time sink for already distracted employees. Without a push from the top, many of the biggest companies have been slow to take the social media plunge.
A new report from McKinsey Global Institute, however, makes the business case for social media a little easier to sell. According to an analysis of 4,200 companies by the business consulting giant, social technologies stand to unlock from $900 billion to $1.3 trillion in value. At the high end, that approaches Australia’s annual GDP. How’s that for a bottom line?
Savings comes from some unexpected places. Two-thirds of the value unlocked by social media rests in “improved communications and collaboration within and across enterprises,” according to the report. Far from a distraction, in other words, social media proves a surprising boon to productivity.
Companies are embracing social tools--including internal networks, wikis, and real-time chat--for functions that go way beyond marketing and community building. R&D teams brainstorm products, HR vets applicants, sales fosters leads, and operations and distribution forecasts and monitors supply chains.
Behind this laundry list is a more hefty benefit. Social technologies have the potential to free up expertise trapped in departmental silos. High-skill workers can now be tapped company-wide. Managers can find out “which employees have the deepest knowledge in certain subjects, or who last contributed to a project and how to get in touch with them quickly,” says New York Times tech reporter Quentin Hardy. Just cutting email out of the picture in favor of social sharing translates to a productivity windfall as “more enterprise information becomes accessible and searchable, rather than locked up as ‘dark matter’ in inboxes.”
Among the most promising (and heretofore least hyped) new social technologies are tools like Yammer (recently snapped up by Microsoft for $1.2 billion), which bring Facebook-like functionality into the office. Social-savvy employees post queries and comments to internal conversation threads and coworkers offer feedback, crowdsourcing solutions. Content can be shared and searched, so the same issues don’t resurface. Meanwhile, virtual groups offer a more interactive alternative than email or phones.
Interestingly, the report suggest that tools like Yammer are the tip of the iceberg. Right now, only five percent of all communications and content use in the U.S. happens on social networks, mainly in the form of content sharing and online socializing. But McKinsey analysts point out that almost any human interaction in the workplace can be "socialized"--endowed with the speed, scale, and disruptive economics of the Internet.
It seems noteworthy that the report’s conclusions have been echoed of late from the most authoritative of places: Wall Street. In the last year, the world’s largest enterprise software companies--Google, Microsoft, Salesforce, Adobe, and even Ellison’s own Oracle--have spent upward of $2.5 billion snatching up social media tools to add to their enterprise suites. Even Twitter-phobic CEOs may have a hard time ignoring that business case."
So Bankers should take note, as should all folks working in the C-Suite, that social media marketing is eventually going to be their main stream of marketing and needs to be taken seriously... big dollars are at stake.
Ryan Holmes is the CEO of HootSuite, a social media management system with 4 million users, including 79 of the Fortune 100 companies.
Miranda Miller does consulting for companies and NPOs looking to increase their visibility online.
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