Social Media Mania Captures Consumer Companies
But, says the report, in the last three years, the majority of large consumer companies have incorporated social media in their strategies and operations. Since 2010, 64% of the companies surveyed in 2013 (average revenue of $15.6 billion; a median of $4.9 billion) had assigned at least one full-time equivalent to use public social sites such as Facebook, Twitter and LinkedIn regularly to monitor what consumers say, communicate with them and understand their needs. The companies surveyed will spend an average of about $19 million on social media activities this year and, on average, employ 56 people to plot their social strategy, listen and respond to consumer comments on public sites, and handle other tasks to stay in tune with social media discussions about their brands, products and practices.
Now, according to eMarketer says the report, the average U.S. adult is online for an average of more than five hours daily, more time than they’ll spend watching TV. And, Pew Research reports that 72% of American adults who use the Internet, as of May, were members of social networking sites from the 8% in 2005, while the number of social media users is nearly 150 million.
The report points out that American social media users comprise only 10% of the 1.7 billion total worldwide using online social networking. Asia-Pacific is predicted to have more than four times as many social media users by the end of this year as North America, some 777 million people, and the number is predicted to reach 1 billion by 2015.
This TATA research focuses on large consumer companies and their use of public social networking sites to determine how large consumer companies were (or were not) using public social media in every aspect of their business that affects consumers: marketing, sales, customer service, R&D/product development, production, logistics, finance and more.
The report says that the core finding is that only 10% of consumer companies today have organized their social media activities in a way that has generated significant improvements in significant areas of their business. And, these consumer companies view social media as a game-changer, one that allows them to shift from a world of cursory and episodic consumer feedback, to one of broad, deep and continuous consumer interaction.
While this report sheds critical light on a broad number of issues related to social media in consumer companies, says the report, it lists 10 that are more important than the rest, opines the report.
1. 38% of consumer companies report a positive return on their social media investments – more than double the number of companies with a negative ROI –but 44% haven’t measured the return.
2. Companies with broader benefits from social media are more likely to have a large internal ‘social circle’ with multiple functions working closely together on social media. In contrast, companies with fewer benefits from social media (the ’followers’) were much more likely to have a smaller number of functions collaborating on social media, or functions managing social media independent of one another.
3. Industries with greater benefits from social media are more likely to sell products and services that consumers are passionate about.
4. Leaders at social media go far beyond creating company pages on public social networks. Approximately 81% have corporate blogs, 77% have mobile apps for consumers who use social media, and 61% have online video channels. No more than half the followers had blogs, mobile apps or video channels.
5. The majority of the companies with the greatest gains to date from social media have cultures that value consumer opinions and encourage internal transparency and knowledge-sharing.
6. The best consumer companies at social media on an average spend double of what the worst companies do, and nearly four times more likely to get a positive return on their social media investment. Leaders will spend a median of $7 million this year on social media as compared to $1 million for the followers. But 62% of leaders say their ROI on social media to date is positive, compared with only 17% of followers.
7. Only three business functions are actively involved in monitoring what consumers say about their firm through social media: marketing, customer service and sales.
8. Only 27% of R&D/product development and 37% of product management departments regularly view social media comments from consumers.
9. In about one-third of companies, marketing controls social media activities, a much higher percentage than any other function. However, only 42% of respondents view their organizational structure for social media activities as effective or highly effective.
10. Based on median spending this year on social media of $2.7 million per respondent, these companies will invest about a fourth of what they spent in 2012 on Big Data (median of $10 million), and about 37% less than what they spent last year on responding to consumers who want to do business with them through mobile devices.
The complete report in PDF format may be downloaded from TATA Consulting Services here.