Social media channels such as Twitter, YouTube, and Facebook are humming with commentary about companies, products, and services. How to respond to and tap into the “wisdom of crowds” is one of the most fluid and often-discussed issues in the retail and other industries today.
This is no longer the kids’ domain, as every generation is participating in the creation and consumption of content over the web. People in their 20s to 40s tend to produce more content, such as blogs and videos, while those in their 40s to 60s spend a proportionally larger amount of their time consuming content produced by others.56 Roughly 67% of global Internet users visit social networks, making them more popular than personal e-mail.57 Worldwide, Facebook membership alone has climbed above 400 million.58
How Much Activity?
All of this activity is producing massive amounts of data. More than 1.5 trillion text messages were reported on carriers’ networks during 009.59 Every minute, 24 hours of video is uploaded to YouTube.60 Every month, 25 billion pieces of content are uploaded to Facebook.61 And there’s no letup in sight.
The volume of data generated by social media represents a massive opportunity for consumer businesses—as long as they can figure out how to discern useful patterns in the noise and minethis sea of sentiment and ideas. Indeed, never before have businesses had instant visibility into consumer opinions and needs.It used to take weeks, if not months, to gather consumer data through formal channels, meaning the information was outdated long before decisions were made. Today, companies can take their customers’ virtual pulse in real time, one on one.
Any Risk Involved?
However, the risk associated with billions of mobilized and communicative consumers is as outsized as the opportunity. Intellectual property can leak around the globe in seconds, as can news of previously veiled corporate actions. Complaints—for instance, about a supplier allegedly using environmentally destructive practices or showing poor taste in an advertisement—can spawn thousands of commentaries within hours.
Clearly, companies need a well-honed strategy for participating in social media, and that strategy must include a way to measure ROI. Best Buy, Hershey, Sunny Delight, and others are actively working on such strategies while also engaging with their consumers in the here and now. They realize that sitting on the sidelines too long while developing plans could pose a far larger risk than the occasional messaging fumble.
Being Out There
After all, companies have to be “out there” to communicate their point of view. As Hershey CFO Bert Alfonso says, “Many consumers are now using digital media to get their information. You need a way to tell your story. And if you are going to tell your story in a world of blogs and streaming video, you better be able to communicate digitally.”
Furthermore, social media is evolving at breakneck speed. “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,” says Steve Neil of Diamond Foods. Companies that learn how to reach consumers efficiently and cost-effectively are, at the same time, building entry barriers to competitors.
The experiences of leading consumer firms to date suggest several themes that are useful to executives trying to find the right approach, and the right level of investment, for their own companies.