The emergence of social media continues to have a transformative effect on society. In publishing, advertising or broadcasting, the old order has been shaken up by hand-held technologies and digital sharing. Initial public offerings for social media networks and applications have raised billions of dollars.
This quarter’s C-Suite Survey measured the advance of social media among Canadian businesses. From one perspective, they have come a long way. The fact that half of Canada’s top companies are tweeting would have been unimaginable five years ago. But business has embraced social media differently from average Canadians. Executives are more likely to be on Twitter and LinkedIn, than Facebook. That may be a comment on personalities: Facebook is about community, whereas Twitter is more of a megaphone.
The survey findings also show that relatively few see social media as a transformational force. Only a minority of companies have shifted resources from traditional, paid media or communications. Those that have done so have reassigned only 20 per cent of their media budgets .
Nearly half of executives said they do not know how online media can help them, and almost half of those engaged in social media doubt that it helps their company’s bottom line.
Social media will not perfectly align with everyone’s business model. Yet it is surprising that so many of companies and smaller firms avoid using such an inexpensive complement to their investor relations or communications.
More than anything, executives agreed that social media opens up companies to reputational concerns. They are more likely to be put off by the downside of social media than they are to embrace the opportunities.
Corporate reputation is too important to ignore. But social media play a pivotal role here. Facebook is an opportunity to build supporters. Twitter offers the opportunity for quick reaction. If a company requires social licence to operate, it needs to see the conversation, if not take part in it.
For companies that deal with consumer markets and audiences, social media have so much potential because they leverage the age-old power of word of mouth. Endorsements or recommendations from within a consumer’s circle of friends are more persuasive than most advertising.
That is the opportunity companies can realize, if they develop the right approach.
David Herle is principal of Gandalf Group.