Bring It on Home

Many brands are utilizing social media to enhance consumer engagement and the overall brand experience, which adds value in terms of building trusted relationships. However, a new social media application has the potential to be much more powerful: consumer understanding. Julia Chen Davidson, global consumer products lead, IBM Institute for Business Value, explains how consumer goods (CG) companies can take hold of this opportunity.

How are CG leaders building social media capabilities to create business value?

DAVIDSON: Leaders are beginning to leverage deep consumer, shopper and competitive insights to make faster, more informed business decisions, from product innovation to marketing outreach. For example, a major beverage company launching a new product in a new market was able to gain a 90 percent faster time-to-insight compared to traditional market research methods by using social media analytics to identify key competitors and brand influencers. Yet the approach to building these capabilities is still in flux. Several years ago, social media was still an unknown currency, its value not fully understood. Brands didn’t have the internal capabilities required to manage and execute a social media strategy, so a majority of firms outsourced these activities to external agencies. As social media has gained traction in recent years, brands have organically built marketing roles and functions to effectively manage the consumer-via-agency relationship. Now, companies are beginning to explore the idea of bringing social media in-house, particularly as they realize that it brings much more to the table than just a consumer engagement mechanism. Brands, like Nike, Campbell Soup and Ford, have all recently revealed a move in this direction.

What are the pros and cons of bringing social media capabilities in-house?

DAVIDSON: There are several benefits to executing social media internally, most notably is the fact that brands will own their data. Having full control over how and when to analyze data can be invaluable, particularly as the application of advanced analytics becomes a realistic competency for brands. In addition, more control can lead to greater understanding, agility and seamlessness in terms of the overall consumer experience. The key tradeoffs to bringing social in-house are the costs and complexity of building an entirely new competency. The net new technology, skills and resources required to create a well-oiled social media machine can be a significant investment This doesn’t have to be an all-or-nothing decision. Firms need to assess which model makes the most sense for their business. For example, companies may choose to internally manage capabilities that require a high degree of brand specialist knowledge, while outsourcing more tactical activities that may benefit from agency expertise.

In terms of social media analytics, where do companies start?

DAVIDSON: Proof-of-concept pilot exercises can help validate capabilities and obtain stakeholder buy-in prior to making a larger investment. Scope factors to consider include complexity of target use cases (e.g. trend prediction, brand affinity analysis), number of brands and categories, number of geographies and languages, as well as the amount and quality of data available.