In a world filled with countless information, who do we find data that matters?
We live in a world that is inundated with information coming at us from all screens. How do we as individuals or organizations derive value from social media? It’s an important question because according to a recent CMO survey, only 15% of executives can quantitatively say the impact of social media on their bottom line.
It means 85% of them do not, and 45% of them do not have any clue both quantitatively or qualitatively what the value of social media data is to their business. That is an even bigger problem as social media spending is projected to double in the next three to five years.
Therefore, understanding how companies derive value from social media data is becoming a really important question. Social media studies used to only target marketing related activities.
This was a question asked by Lynn Wu, a Wharton professor who studies I.T. and productivity . In her paper, Data Analytics Skills and the Corporate Value of Social Media, she analyzed how businesses got value from social media.
After collecting the largest possible sample, she looked at all of the companies who had a social media presence. In this study, she looked at company Facebook pages. Her team mapped all of the companies’ stock market value into the model to see whether there was an increase, decrease or no change when they started using Facebook.
“What we found is that on average it is a positive relationship, not when they adopt but when they actually start using social media,” she said. It was interesting that the return on social media use by companies was varied. Some companies gained a lot of value, some didn’t and some even had a negative impact after they started using Facebook.
If you want to understand why the results were mixed, you’d have to expand the scope of understand to more than just looking at the marketing department. A good way to incorporate bigger picture thinking would be enlisting project managers in a leading SAFe 4.0 training course.
What Wu found when she was trying to understand her survey results was that if she looked at it from the point of view of the entire organization and not just their marketing arm, she found that it was really the data analytic skills that the employees did or didn’t have that ultimately drove their returns on social media use.
People who have data analytic skills can help companies maximize value from social media. Wu discovered that data mining and analytic skills cannot simply be employed entirely in the marketing department alone.
“At first, we thought since marketers use advanced analytics, maybe the value came from there. We found exactly the opposite, that it’s really data skill across the entire spectrum of functions within the firm that matters the most,” Wu added.
That means deploying employing data analytics and data mining skills in finance, Human Resources, product development and Research and Development as well. The only way for companies to derive greater value from social media is if data skills are used in all aspects of the company’s operations.
If you consider it, it kind of makes sense because Facebook data for example, isn’t just data for marketers alone. It has consumer sentiment, feedback and preferences can actually be widely applied to every stage of a company’s operation.
For example, a clothing company could track customer preferences and use it to introduce new products that people would actually buy. Social media savvy companies can also turn their biggest fans and followers on social media into model employees.
There are tons of social media data that can be used to your benefit if you are properly educated in the field. It can really be used in all aspects of a company’s operation from concept to finish line. You could use Google Ad Words to come up with a perfect book name or blog post title that would get the most click through, for example.
When someone in the Human Resources department can look at employee data for example, they can make a better call on who would be a better investment for the company. If the finance, operations or product development department could do the same with their processes, it would bring greater value to the organization.
The factor that makes all the difference here is not merely adopting social media, it’s not just getting a Facebook, Instagram or LinkedIn page, but knowing how to use them in an intelligent way.
If your company is consumer-facing and it has products, you need to know what your customers are doing. Social media use is a no brainer in this case. However, non-consumer facing companies can also create more value if they apply data analytics to all aspects of their firm besides only marketing.
“That gots us thinking maybe the social media data is really impacting every aspect of the firm’s operation. The marketing outcome may be just the tip of the iceberg,” Wu concluded.