Companies leverage Social Media to drive Marketing Improvement.

With the rise of social media, the speed and reach of word of mouth with respect to consumer products and services is increasing by orders of magnitude. At the same time, a growing number of companies are deploying technology solutions to harness the power of word of mouth to raise brand awareness, drive marketing improvement and, ultimately, increase shareholder value.

Between June and July 2008, Aberdeen, a Harte-Hanks Company, examined the use, the experiences, and the intentions of more than 300 diverse enterprises to create a roadmap for companies that aim to leverage social media to drive marketing improvement. The new benchmark report, entitled “Social Media Marketing: The Latest Buzz on Word of Mouth,” places particular emphasis on how Best-in-Class companies launch successful viral campaigns, form and participate in niche communities, and spur brand advocacy through various other approaches to social media marketing all the while gleaning valuable customer insights from consumer-generated content to inform future marketing actions.

The report reveals striking performance disparities between Best-in-Class organizations and Industry Average and Laggard companies. For example, Best-in-Class organizations are nearly 18 times more likely than Laggards to gain visibility into consumer-generated content, resulting in greater breadth and depth of customer insights. They are also 19 times more likely than Laggards to increase marketing effectiveness and 80 times more likely than Laggards to increase return on marketing investment (ROMI). Given the declining effectiveness of traditional marketing programs due to channel proliferation, audience fragmentation, advertising fatigue, and a host of other factors, any opportunity to drive incremental improvement in ROMI is cause for celebration in the corporate boardroom.

“Companies are enamored with the possibilities of social media marketing as the foundation for consumer-driven referrals and brand advocacy,” said Jeff Zabin, Research Fellow at Aberdeen Group. “The challenge lies in identifying key influencers, engaging them as brand evangelists, and then tracking the impact of their words and actions over time. Social media marketing can also mean extending the reach of a brand through viral videos or by joining the conversation. To that end, companies need to understand peoples’ motivations for having a conversation and then contextually engage with that audience. Making marketing programs conversational and contextualized to niche audiences that naturally gravitate around a specific theme or shared passion is the essence of social media marketing, and perhaps the future of marketing itself.”

A complimentary copy of this report is available at:
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