Social Media Invades Inc. 500: Researchers Find "The Hype is Real"
According to a new survey, published by The University of Massachusetts Dartmouth, “the hype” around social media “is real.” In November and December or 2006, U Mass Dartmouth’s Center for Marketing Research, under the direction of blogging researchers Eric Mattson and Nora Ganim Barnes, completed a telephone survey of “Inc. 500” list to find out if and how they’re using social media. The “Inc. 500,” published every September by Inc. Magazine, is a list of the fastest-growing private companies in the United States. According to the executive summary, existing research shows that 8% of Fortune 500 companies have a public blog, and the U Mass team set out to find out whether the use of social media was the same in companies that were “selected by growth rate rather than revenue.” What they found was encouraging. Fast growing companies are utilizing social media at much higher rates than earlier research indicates for Fortune 500 companies. In the executive summary, the researchers write:
“As one of, if not the, first studies of social media adoption with statistical significance, this research proves conclusively that social media is coming to the business world and sooner than many anticipated.”
The full results of the study will be published throughout 2007 in a variety of journals. Keep your eyes peeled for an article in The Journal of New Communications Research coming this March. The researchers from U Mass have promised to send me a link the the article soon as it is available. When they do, I'll post it in this blog. In the meantime, the executive summary is well worth a read.
Included in the summary are several interesting graphs. The highlights include:
- When asked how important social media was to a company's business/ marketing strategy, most respondents felt that it was important:
- 26%= Very important
- 40%= Somewhat important
- When asked what type of social media companies used, responses were as follows:
- 33%= Message/Bulletin Boards
- 27%= Social Networking
- 24%= Online Video
- 19%= Blogging
- 17%= Wikis
- 11%= Podcasting
I can’t help but wonder: Did social media help propel the responding companies into the Inc. 500, or is it just coincidence? Then again, I’m still wondering, "Which came first, the chicken or the egg?"
Comments
Your final question seem easy to answer. There is no obvious chicken-egg-relation between fast growing companies and use of social media at all. Well, in some particular field of business there might be, but there is nothing like a general rule for it.
Modern social media solutions have just recently reached a degree of functionality and usability, that turns - when introduced properly - into increased productivity.
But their introduction and integration in an organisation's business processes takes time and has to accompanied with a - often radical - change of a corporation's IT culture. Therefore IMHO, a company that is investing in social media now, will experience improved productivity and growth a couple of months or even years later. The growth, experienced by the Inc. 500 now is probably not exactly attributable to their current use of social media.
Organizations use social media to enable viral marketing/ propel word of mouth campaigns and engage with prospective and existing customers in new ways. Viral marketing - especially the kind that involves social networking and blogging - is a very low cost investment and if successful, can be used to reach millions of new customers more quickly than traditional marketing mediums. The beauty of social media is that it can ignite WOM transmission faster than many other mediums. This is what made me wonder what, if any impact social media is making on helping the fast-growing companies on the Inc. 500 grow more quickly than their counterparts.
With regard to social media requiring a change in IT culture - I would argue that the change of culture is more driven from the marketing angle, which is usually quicker to respond than IT. Implementing a social media strategy doesn't necessarily require a change in IT infrastructure... Creating a corporate blog, getting involved in social networking sites like MySpace, or posting video profiles on YouTube are things that marketing departments can do independently of their company's IT organization.