Does Social Media Really Pay Off for Big Companies?

As part of the new normal, we're seeing increased need for ROI. That's a challenge with social media because the right metrics may well be different for each company.

In "Turning tweets into sales: Twitter’s allure is tough to translate into dollars, though Dunkin’ Donuts is tracking results," The Boston Business Journal wrote an interesting story that provided some details about how Dunkin' Donuts, Staples and other companies approach social media.

Here are some interesting facts:

• 35 percent or 173 of Fortune 500 companies have active Twitter accounts, according to a recent study about corporate Twitter usage in 2009 from the University of Massachusetts Dartmouth Center for Marketing Research. The study called company growth on Twitter “explosive.”
• Still, the majority of companies are somewhat clueless about Twitter’s business impact. Corporate Twitter strategies are “all over the map” ranging from hyper-engaged companies skilled at building trust with followers, down to firms that play it safe, sending out lackluster tidbits of information, said Emily Riley, analyst and research director at Cambridge-based Forrester Research Inc.
• Staples Inc. (Nasdaq: SPLS), which has a “Tweet team” of five staffers and has amassed more than 31,000 followers, are passionate about mastering the art of micro blogging. The company started using the site late last year and tweets mainly about deals and customer service. Even at a sophisticated company, figuring out the ROI of social media “is the million dollar question,” said Michelle Ormes, Staples’ director of corporate branding. “Right now...we value the number of our followers and how engaged they are.”
• Business-to-business firms are also placing increased importance on social media and Twitter. Forrester predicts that B-to-B firms will increase spending on social media from a total of $11 million in 2009 to $54 million in 2014.
• Not all companies are convinced that tweeting is a necessity, even ones that believe in social media. Boston-based car-sharing firm Zipcar has some 30,000 fans on Facebook, but does not actively tweet, although company spokeswoman Nancy Scott says the company “listens” on Twitter. Zipcar’s inactive Twitter page has close to 1,000 followers.

Some interesting anecdotes for companies considering how to approach social media in 2010. Ultimately, the decision whether and how to embrace social media still comes down to this: each organization will have to do some experimentation before finding what's right for their brand, goals and capabilities. The need to experiment in social media is a tougher sell in 2010, even with the explosion of users on social media, especially when organizations need to report ROI metrics for all their initiatives.