Mixing business with pleasure – Strictly Business Article Spring 2008

 In Press Releases

Nike’s doing it, Nuttela’s doing it, Dell almost didn’t do it, but is now making up for it. Dove’s done it and done it well. These companies are social networking for business-the new, hot (and sometimes tricky) online trend. By Bianca Wright

Social Networking sites allow users to generate and share content. Most people associate sites such as Facebook and MySpace with social networking, but the term can be more broadly applied to blogs, photo-sharing sites such as Flickr, and cellphone  social media sites like MXit.

“Facebook and Linkedln are just examples of an entire online movement that is encouraging dialogue – from telling people about products on websites to opening discussions about things that matter to us all,” says MWEB’s Product Development Manager, Kelly Ledger.

The application of social media in business runs the gamut from recruitment to marketing and has the potential to be a vital component of business strategy.  Internationally, businesses are certainly taking note: 59% of respondents to a Prospero Technologies survey in 2007 indicated that social media performance that year met or exceeded their marketing objectives. This boosted their future spending expectations: 31% of the respondents planned to spend significantly more on social media  applications this year.

The benefits can be significant. According to Ramon Thomas, a South African social networking and online behaviour expert at NETucation, the chief benefit is that the real-world social connections between people in the business can become visible. “Unless we know each other very well and spend time with each other’s friends, we may never know who else we know or, indeed, whom we have in common as business associates or connections,” Thomas says.

Online brand guru and founder of Cosmedia, Gino Cosme says that, from a research perspective, organisations can use social sites to collect detailed information about users, monitoring what they do even with competitive brands, in a much more  cost effective way than in traditional media.

Cosme highlights the importance of using social networking as an early warning system, monitoring anything that could become an issue. Eliciting feedback and tapping into conversations about a brand are also important – both from a positive and negative point of view. He warns that organizations that network online must be aware that they are opening themselves up to a lot of negative criticism. “The question is how do we tap into that and engage with it? Call it online reputation management or social media monitoring,it’s about tapping into the power of the social media voice,” Cosme says.

The social networking trend has highlighted an important shift in thinking, from telling customers what they want and attracting interest through emotional appeal, to engaging and involving customers in decision-making. “Blogging is an essential part of social networking and offers the benefit of opening discourse between supplier and consumer,” says Ledger.

She cites the example of Springleap, a South African T-shirt manufacturer which  encourages the public to design T-shirts and vote for those they would like printed. “It’s great to know the demand, and, therefore, how many of your products you need and have basically sold before you even get to printing,” Ledger says. “It allows real-time feedback from your customer base before you start selling.”

But the model is not new. Car manufacturers Peugeot and SEAT have used social  networking to allow aspiring car designers to propose new designs. Social networking  takes this level of engagement possible and enables businesses to adopt a twoway communication model with their customers, suppliers, investors and other stakeholders.

The problem is that not all businesses are ready. Traditional corporates bring their huge  bureaucracies with them into social media, which are very dynamic and flexible. “If [companies] are not prepared for it, how do we manage that process?” asks Cosme.

“They want to have control and approach the conversations online in a very traditional PR manner. Users notice conversations that are not genuine. It’s no use approaching it as a PR exercise. Be realistic and imagine talking to your consumers as though they were sitting across the desk from you.”

One of the biggest advantages of social networking is that it allows businesses to listen- whether they want to or not. “The pitfall for businesses is that they ignore the conversations their clients are having,” says Thomas. “They are also ignorant of the feedback from existing clients, who directly influence potential clients with their honest and sometimes exaggerated claims. So it is vital that businesses keep their finger on the pulse.”

Businesses are often also concerned about other potential pitfalls of social networking  use – both by themselves as organisations and by their individual employees. Decreased productivity as a result of increased social media use, privacy, security, attacks on reputation and the lack of a way to measure return on investment, rank high on the list of concerns.

Employees can also fall foul of the negatives of social networking because more and more employers are using Google, Facebook and MySpace to track down the history of potential employees. “You only have to ask graduate students in the US how damaging social networking can be when searching for employment. Advice? Keep your personal networks dosed to your friends and it doesn’t matter how rough you’re feeling after those martinis and canapes at a social function last night, don’t tell your Linkedln group about it,” says Ledger.

Another issue, according to Cosme, is that businesses do not often associate any results or metrics to their social networking efforts. “Companies need to start looking at return, whether it be financial or branding, and measure that.”

Social networking users can be fickle, too. And online interest may not necessarily translate into offline results. Thomas knows this from personal experience. “1 failed trying to organise a breast cancer fund raiser in 2007 because nobody who booked on Facebook came to the actual event or bothered to apologise for not arriving,” he says.

Some companies get it right, though, and reap the benefits. Thomas cites two South African examples. Local lad’s mag, FHM, has a Facebook group with more than 3 400 members who actively discuss every photo shoot, and many of their articles and letters are published in the magazine.

“The benefit here for FHM? Free testimonials from readers and the magazine can attract  new readers – and, better yet, subscribers – who can sign-up without the publishers doing any kind of traditional advertising,” says Thomas. “This is the way word of mouth is created – in an open environment that can be risky because there are very few controls that exist.”

Another excellent example, Thomas says, is Ivok Studios, which has more than 3 200  members. Owners Matt Raven and Chanti Oosthuizen are very active on the Web through their website. When they moved their focus to Facebook, however, their business exploded. “One of the reasons is that Facebook has the biggest photo-hosting website in the world, bigger than Flickr or anything else. So this environment is particularly conducive to their industry.”

Choosing the right social networking tool is important. Mark Gray, head of HR recruitment and technology company, Graylink, says that companies have to look at social networks on a market tomarket basis, per country, as each country has its own preferred tools. “For example, Beebo is huge in France but not that well known in South Africa.

“A lot of the success of a social network has to do with hype,” Gray says. “MySpace has grown very effectively across many markets, especially in the US. It’s also about critical mass. If all your friends are on one platform, if s pretty hard to move them.”

Recruitment objectives require different functionalities to, for example, marketing objectives, and this is important. While Facebook may be the largest globally, it may not always be the right choice. Businesses should ask what makes one social network more popular than another. As Ledger points out, “It’s all about appeal, usability and support. Social networks are either designed to be small and localised like www.ning.com where you can set up your own network in minutes or large and addictive like Facebook. All are successful to a larger or smaller degree depending on intent. But finding a way, like Facebook, to become a multimillion dollar online social space is a mixture of technical knowhow and viruslike pervasiveness.”

And many businesses tend towards what Cosme calls the ‘copycat syndrome’. “Corporates tend to sit on the sidelines, watch what their competitors are doing, then adapt it and do it. Never say because that company has a blog, I need a blog.”

The examples of those who failed to heed this advice are numerous. Retail giant Walmart has just launched its third attempt at a blog. One of their first ones was on MySpace and they ended up closing the group after just three months.

Cosme says there are two reasons they failed miserably. Firstly, they tried to control the message of that campaign, which backfired because bloggers took notice of that and the result was numerous negative wallpost comments. Secondly, they did not tap into peertopeer contact. “They were tapping into the medium, but weren’t engaging with the way consumers wanted to use it. They were screening all content,” he says.

Another example is Xerox, which launched a campaign around how Xerox helps with daytoday business processes. They used viral marketing and social media, and created viral ads, but the problem, says Cosme, is they lost sight of the core of the medium and never allowed consumers to tap into that and upload their own videos.

Despite these negatives, it is clear that social networking is a business tool that cannot be ignored. And the future is set to yield even more possibilities. Thomas predicts that the future of social networking and the Web 3.0 will be a superlocal, superniche and superfocused user experience. “Personalisation is the key ingredient to this wedding cake we are calling online social networking,” he says.

See you on Linkedln / Facebook / MySpace!

Recommended Posts

Leave a Comment