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Social-Media Frenzy

Amid the chatter, companies are beginning to achieve tangible benefits.

The collection of Web capabilities and practices grouped under the rubric of “Social Media” has quickly morphed from a cutting-edge way to foster brand awareness to a mainstream business practice. In fact, given its growing popularity, companies that don’t get their arms around social media may risk tumbling into a competitive abyss.

The technology still poses risks; giving consumers a platform from which they can shape a brand’s message is a scary proposition, and there have been plenty of stories about employees blogging or tweeting everything from confidential company information to racist rhetoric. But companies are increasingly deciding that the benefits win out.

A 2010 study by communications firm Burson-Marsteller found that 65% of the largest global companies had Twitter accounts, 54% had Facebook fan pages, and 50% had YouTube video channels. And research firm Gartner predicts that by 2014, social media will have surpassed e-mail as the primary communication vehicle for a fifth of business users.

“Unscripted and Unedited”

When Ford Motor was preparing last year’s North American launch of the Fiesta, it didn’t just make social media part of its strategy: its initial marketing push relied solely on social media. The automaker supplied Fiestas to a mere 100 people to drive for six months. But they were the right 100 people, so-called digital influencers (bloggers, podcasters, YouTube celebrities, and automotive journalists) who cranked out videos, tweets, blog posts, photos, and other media relating to the car. Ford aggregated all this output onto a single Web page where fans could watch this collective test drive unfold in real time. It was all “unscripted, unedited, and undeleted by Ford,” says Scott Monty, the company’s head of social media.

The results show why companies can’t afford to ignore social media. The digital influencers’ YouTube videos garnered 7 million views, while 40 million Twitter impressions contained the campaign’s name (“Fiesta Movement”). Most tellingly, 130,000 people — 83% of whom had never owned a Ford — registered online to receive more information when the vehicle was shipped to dealers. Surveys showed that U.S. brand awareness of the model shot from near zero to 58%, about equal to some Ford vehicles that have been on the market for years, Monty notes.

All that buzz wasn’t mere chatter. For the Fiesta, Ford converted 10 times more prelaunch purchase reservations into actual orders than it did for previous model rollouts. “People trust corporations less than ever,” Monty says, “but they trust people like themselves. If they see that people are enthused about what we’re doing, that’s a more authentic and trustworthy reference.”

One of the most successful advertising campaigns of 2010, Old Spice’s “Smell Like a Man, Man,” became a viral video sensation after being posted on YouTube and Facebook, racking up more than 100 million views in five months. Subsequently, Old Spice invited consumers to submit questions to Isaiah Mustafa, the actor who played the campaign’s central character.

Thousands poured in, asking about nearly everything, including “how to save the universe,” says Michael Norton, a spokesman for brand owner Procter & Gamble. The company then created video responses to 186 of those questions, which generated an additional 46 million media views for Old Spice.

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