Social Media & Business Adoption 2011 – Big US Companies hold back adoption

According to a report by Center for Marketing Research at the University of Massachusetts Dartmouth, Forbes magazine Fortune 500 companies (Top 500 companies in United States) are using social media for their employee communications, but public-facing social media presence is lacking the attention of the company managements. The report says the adoption of blogs has slowed down as evident form data that 23% (114) have corporate public-facing blogs compared to 23% (116) in 2010. There has been a slight increase in both Twitter use (60% in 2010, 62% in 2011) and use of Facebook (56% in 2010, 58% in 2011). Moreover in the past 4 years, the F500 has lagged behind the Inc. 500 (fastest growing private companies), charities, and higher education in social media adoption. The bottom 200 companies are slowing down the adoption and highlight the fact that those ranked higher in the Fortune 500 are more likely to adopt social media aggressively. The Fortune 500 companies are known to adopt new technologies, innovate and provide their consumers the best products and services and are often called as Titans of the business world.

Some of the companies in the Fortune 500 companies are the Business to Business companies who do not deal with the consumers directly and the Business to consumer companies directly interacts with the consumers. B2C companies have already adopted social media as it is one of the critical ways to communicate with the consumers and understand their needs and opinions. B2C companies are forced into adoption as their consumers are voicing their opinions on various social media platforms and they can’t ignore them as it will affect their brand and organizational reputations.B2B companies on the other hand are more regulated and they have been slow in adopting social media. They are slowly realizing the utility of social media interaction but they are not expected to invest significant amounts of resources like the B2C companies. Fortune 500 companies are huge hierarchical organizations, are bureaucratic in nature and adoption of new technologies have to go through lot of approvals and time consuming as decision making involves multiple departments. These organizations look for more proof of utility of the technology and wait to see the results of adoption in other large organizations before they adopt unlike the smaller and medium organizations that easily adopt the social media and are more willing to experiment with new technologies.    

Fortune 500 companies are also not sure about how to integrate the social media technologies into their organizational IT infrastructure, what are the inherent risks involved in using such technologies, how to effectively control and monitor their social presence, which of the tools that are available are the best tools. Another major issue is that of the content in social media like who should develop and maintain the content, intellectual property rights of the content and how to share the content, etc. Encouraging participating and engaging the consumers is also critical and when consumers voice negative opinions or highlight the issues, companies have to tackle it in appropriate manner as it has significant impact on the organization reputation. These companies have thousands of employees spread across the world in various countries and they have to be trained about the social media policy and how to use the social media platforms according to the rules and policy. Setting up a monitoring mechanism is also costly. Employees have to be motivated to participate in the social media and also maintain their engagement and do not stop suddenly.

Some of the companies are of the opinion that the traditional media presence and communication is better than social media. These companies have already invested heavily on the traditional media channels like, TV, Print, etc. Adoption of Social media needs the companies listen to their customer’s voice in various social media and then develop an appropriate social media engagement strategy.  Policy development and implementation involves monetary resources and time which some companies are not ready to invest in. Some of the companies that adopted social media since the past five years are evaluating the social media engagement impact and the ROI from social media presence and are using various social media analytics to assess. The social media analytics has seen significant improvements in terms of the technologies in 2011and many large technology players are acquiring smaller players to integrate these technologies into their core offerings. It seems the initial euphoria of social media adoption has died down and the companies are becoming more pragmatic in terms of returns and impact.

Some of the Fortune 500 companies do not see social media as an effective means and they do not have any social media presence or strategy particularly the B2B companies. Some 156 companies (31%) in the Fortune 500 have neither a Twitter account nor a Facebook presence and there has been little or no change in the number of companies using corporate blogs, Facebook (2%) and Twitter (2%) in the last year, according to University of Massachusetts Dartmouth report. But the fact remains that the social media adoption in the small and medium companies is increasing and this maintain the rate of social media adoption in US businesses to normal levels as the large business organizations slowdown their adoption. With the tightening of the budgets for 2012 due to the Euro Debt crisis and US economic slowdown, the social media business adoption may stagnate or decline. Social and mobile are going dominate in future and consumers are more aggressively voicing their opinions both positive and negative and are looking to engage more with the business organizations and social media tools and platforms provide the best platform for the two way communication process.

Source: The 2011 Fortune 500 and Social Media Adoption- Center for Marketing Research, University of Massachusetts Dartmouth