A new frontier
Social media offers rich veins of data for organizations to mine.
Excitement abounds over the growing array of social networking services on the Internet. Global online communities with millions of members have been forged around sites such as Facebook, Twitter and LinkedIn. In addition, many organizations are developing their own internal communities through blogs, wikis and online forums. Companies are recognizing the value of social media to attain greater visibility and new sources of feedback. The next phase will be to uncover new insights by sifting through the mounds of data being generated and collected.
While social networking is in its infancy, consumers have embraced this phenomenon. So far, companies’ efforts have typically been informal, ad hoc activities by individual managers and professionals. Many have begun to “listen” to online conversations, and a few are actively reaching out to social networking channels. But most organizations are still attempting to understand the impact of social media. In one survey, McCann Erickson discovered that two-thirds of marketing professionals don’t understand how to use social networking for business objectives.
How can business benefit from social media? A McKinsey and Co. survey finds that most early adopters see more value in knowledge management, in which expertise is captured and digitized across the enterprise, than any other single benefit. Many also see value in collaboration among employees. Increased marketing effectiveness and enhanced customer satisfaction also rank as key drivers.
Along with enhanced knowledge management and collaboration, the potential advantages of social media strategies include:
- Improved communication and productivity
- Greater feedback for product development
- Low-cost research opportunities
- Targeted recruiting
- The ability to reach new markets
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Social networks provide more than just a way for people to connect—they offer a rich source of new data. Facebook alone has more than 200 million active users. More than 1 billion pieces of content—links, blog posts, comments, photos, etc.—are shared each week on the site, according to a presentation by Roddy Lindsay, data scientist with Facebook. That translates into petabytes of data.
There’s significant business value to be mined from tracking and participating in online communities. Not only does social networking improve communication and reach new markets, but the data being generated by these encounters also provides a wealth of information that was previously inconceivable. This data can be identified, monitored and elevated into actionable information for decision makers.
The result is a new role for enterprise data management—reaching out to data from outside the organization. Social networking metrics offer a way to monitor demand or supply chains. The data being generated then can be measured, both in qualitative and quantitative ways, allowing companies to answer myriad questions:
- How often is a topic—such as a particular product or brand—mentioned?
- How many comments does the topic receive?
- Are these mentions positive or negative?
- What do people think about suppliers and partners?
- What are people saying about competitors?
Critical to understanding and leveraging social media information will be the enterprise data warehouse (EDW). Historically, data warehouses have focused on customer information. Social networking allows organizations to track and analyze non-customer activity as well as customer sales trends. And, as the questions asked of this data evolve, the EDW will continue to provide an essential mix of operational and historical analysis.
Traditional data analysis and business intelligence (BI) tools also have a key role to play, as they can cut through the background noise to establish a baseline and then monitor changes. This is important, because organizations will now be dealing with petabytes of new data generated weekly.
But new tool sets are also emerging that analyze text, profiles and sentiment. These analytic applications help capture the participation and tone around specific topics. Of particular interest is how this new breed of tools can rate sentiment—usually as positive, negative or neutral. As data from tweets, blogs, forums and wikis is analyzed, creative analytics must be applied to gauge sentiment. Drawing meaningful insights by monitoring text is still an emerging field with some limitations. For example, a blogger’s attempt at sarcasm could be erroneously construed as positive by an automated data-collection application.
Another key strategy for leveraging social media data is to identify and track patterns among influencers—those individuals who are outspoken about a company, product or service. Again, this is a source of information unavailable to traditional BI systems, because the views of many influencers do not show up in internal databases.
Many new software offerings also enable organizations to search, monitor and participate in social-media-based conversations about their companies, services and products. These tools add relevant information to their corporate knowledge base.
Data-streaming information that can be tracked from social media sources includes customer interest, attitudes, preferences, grievances, consumer awareness of products and services, and overall market trends. Social media tools can also track competitors’ efforts, as well as what supply- and demand-chain partners are doing.
Perceptions about partners that surface within social media can provide key intelligence to help manage processes. For example, when a manufacturer’s customers complain about after-sales service provided by a partner, that issue can reflect poorly on the manufacturer as well. So it’s imperative to monitor and respond to such issues to protect or enhance the company’s reputation.
By generating feedback independent of an organization, social media channels provide new intelligence for smarter decisions. When making product design or marketing decisions, companies too often operate within a bubble shaped by experience and their most visible constituencies: employees and large customers. Social networks open up these processes to a greater range of participants.
Some companies that have delved into social media discover uses for their products not previously conceived by their engineering or marketing departments. This kind of information has not been available until now.
By actively engaging in social networking, companies can communicate with constituencies and build brand loyalty within online communities. These channels deliver an abundant supply of data. Insights gained from social networks provide collaborative intelligence that can help guide corporate decision making. In fact, the amount of knowledge available from these sites may eventually dwarf that which is captured and stored internally.