• Technology
  • CFO Magazine

Social-Media Frenzy

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

More-modest efforts can still deliver value, sometimes at a startlingly low cost. Nissan North America took an exceptionally grassroots tack last fall when it hired iwearyourshirt.com for a day. Every day, the site’s founder, Jason Sadler, wears the shirt of a different company that he promotes all day through social media, including videos on YouTube and a one-hour live video stream on ustream.tv. The service, which generated about 100,000 impressions for Nissan across various social-media channels, cost the company only $800.

We Hear You

Just as important as attracting followers to a brand is listening to what they say. Kodak, which recently created a “chief listener” position, regularly incorporates ideas from its social-media community into new products. For example, after noticing critical comments about the inscrutable names of its pocket video cameras, like Zi8 and Zx1, the company threw the matter back to its fans, soliciting submissions for the name of the next product. The winners — there were two, who separately proposed Play and Sport, which Kodak combined into PlaySport — got a trip to Las Vegas for the product’s launch at the Consumer Electronics Show.

Keeping conversations going with personal outreach helps melt impressions of companies as cold and impersonal. Jennifer Cisney, Kodak’s chief blogger and social-media manager, says that her daily activity consists mostly of listening to what people are saying about the company and then talking with them. “Before, if someone wanted to talk to the company, they could write a letter or try to call, but now people feel they know me,” she says.

Finding new ways to listen to people can be something of a sport. During Dell’s November earnings call, the computer giant tweeted what the presenting executives were saying through its @dellshares investor-relations channel. Manish Mehta, Dell’s vice president of social media and community, says the tactic exponentially expanded the call’s reach to several million people, whose own tweets were displayed on a big screen in the room where the presentation was taking place. IR personnel responded to questions and comments as they came in, providing a richer audience experience.

Small companies are also jumping on the bandwagon. Used-car company Auction Direct created a minicampaign based on a viral Facebook posting in which a woman purportedly quit her job by writing notes on a whiteboard. Eric Miltsch, the company’s IT and Internet director, used Photoshop to strip out the original words and insert his own, making the woman appear to be talking about her recent car-buying experience. After he posted the doctored slide show, traffic poured in. That spurred sales, but the real goal, Miltsch says, was to offer something auto-related that is entertaining or informative so that “people remember that it came from us.”

Bang vs. Bucks

When it comes to assessing the ROI of social media, companies generally have to be content with identifying a positive impact on customer engagement. It’s difficult to correlate engagement to the bottom line, which is why some senior executives still aren’t sure whether they want to make the investment, says Jeremiah Owyang, a social-business analyst with Altimeter Group.

But investments don’t break the bank. In an October 2010 Altimeter survey of 140 firms with more than 1,000 employees, those that identified themselves as beginner or experimental users of social media spent an average of $66,000 a year. Those that made the transition to a formal program with dedicated head count spent $1 million — still typically less than 1% of their overall marketing spend, says Owyang.

“The promise of social media is that if you do it well, your customers do the work of spreading the word for you, so we should always expect these dollar amounts to be small,” Owyang says. “And if you do it well, you’ll get more return than from traditional media.”

David McCann is senior editor for human capital and careers at CFO.

One thought on “Social-Media Frenzy

Discuss

Your email address will not be published. Required fields are marked *