• by Karlene Lukovitz  @KLmarketdaily, July 13, 2010

What do senior management executives at CPG companies and retailers think about corporate social media strategies?

Top executives were probed on this topic, along with many others, as part of the research for a just-released 2010 Grocery Manufacturers Association/PricewaterhouseCoopers financial performance report -- and the insights gleaned are more specific and practical than marketers might imagine.

The executives are clearly giving serious thought to social media and its implications. Many expressed keen awareness of the pressing need for a well-honed social media strategy that harnesses the positive power of social media, effectively addresses/turns around potential negatives, and includes ROI measurement.

"If you're going to tell your [brand] story in a world of blogs and streaming video, you better be able to communicate digitally," summed up Hershey CFO Bert Alfonso.

The many companies working on social media strategies, including Hershey, Sunny Delight and Best Buy, reflect management's understanding that "sitting on the sidelines too long while developing plans could pose a far larger risk than the occasional messaging fumble" and that social media are evolving at breakneck speed, according to the report.

"It's going to be radically different five years from now than it is today, which is radically different from what it was five years ago," observed Steven M. Neil, EVP, chief financial and administrative officer of Diamond Foods.

Some of the experiences/insights shared about finding the right social media approach and right level of investment:

• Accept that privacy is dead, and plan for it. Rather than make futile attempts to control dissemination of internal memos and other information, management should operate from the assumption that anything written will end up on digital channels within minutes, pointed out Best Buy chief ethics officer Kathleen Edmond. (Blocking access to social media at work doesn't stop employees from using phones to access these media, texting, or sending emails, she noted.)

• Succeeding requires engaging consumers with respect and providing real value (no strings attached). "This is not about us pouring our messaging down," stressed Bonin Bough, PepsiCo's global director of digital and social media. "It's about releasing control. The center of culture has evolved to the point where people own brands." Case in point: PepsiCo's Refresh Project will distribute $20 million this year to charities, causes and businesses selected by voters on RefreshEverything.com.

  "Social media is a conversation," added Doug Chavez, senior manager of digital marketing at Del Monte Foods. "We listened for a while, and then when there was an opportunity for us to add value to that conversation, we have done that -- and we've been rewarded for that."  

• Companies need to create structures that support social media over the long haul.  Del Monte, which combines large platforms like Facebook and Twitter with niche social media sites that attract highly engaged participants (like FoodBuzz), shares social media responsibilities among marketing, consumer affairs, corporate communications and public relations, according to Chavez. Farming out social media to agencies makes it obvious that responses "are coming from the brand and not an individual with a stake in the conversation," he said.

  More companies are hiring directors of digital media. For instance, McDonald's decided that it was time to have a person dedicated to these media 100% of the time, "rather than someone who's got a day job on top of a day job," said director of external communications/public relations Heather Oldani.

• Figure out the ROI. Social media are not free. Creating branded content and posting take time, and if a company chooses to apply resources to social media, it must in turn take resources out of its mass-media advertising budget, stressed Bush Brothers CFO Al Williams.

  Del Monte measures ROI by focusing on metrics such as the engagement quality/ "richness" of posted comments and numbers of people clicking from its Facebook page to a brand's Web site, rather than raw fan counts, noted Chavez.

• Realize that the big challenge -- and greatest ROI opportunity -- lies in using consumer and employee feedback to drive innovation. Economic downturns offer excellent opportunities to draw on these insights and launch successful products, noted General Mills EVP/COO of U.S. retail Ian Friendly. Unilever reported launching custom online communities to engage customers throughout product development. 

• Have an effective crisis management plan. Social media gaffes (like threatening to take down posts) reveal a lack of training and consistent involvement in the digital dialogue, said Del Monte's Chavez. "We have a policy in place that provides freedom within a framework for our cross-functional stakeholders to respond quickly," he explained.

  Also realize that most people just want to be heard. A simple apology and online coupon in response to a complaint frequently turns a poster's or tweeter's tone around completely, Chavez noted.