Social Media Monitoring – 3 reasons why companies should do it Part 1

Written by Marco Fröhlke

Speech is silver, LISTENING is gold

With almost three billion users in 2013, the number of people using the internet is enormous (ICC, n.d.). But what are all these people doing while they are online? Of course, the answer to this question depends on demographic characteristics, such as age and gender, but Social Media is certainly among the top online destinations.  A research conducted by in 2014 showed that in the beginning of that year, European internet user spend on average 40% of their total online time on Social Media, which accounts for up to two hours per day in some countries (Kemp, 2014).

The term Social Media often creates confusion among academic researchers and managers as they are unsure what kind of websites are included under this term (Kaplan & Haenlein, 2010). Therefore, in a Social Media landscape consisting of many different platforms, it is crucial to clearly define the term before discussing it. A frequently used definition is stated by Kaplan and Haenlein, who describe Social Media as “Internet-based applications that help consumers share opinions, insights, experiences, and perspectives”(2009, p.565). Moreover Kaplan and Haenlein also differentiate between various forms of Social Media, such as “content communities (e.g., YouTube), social networking sites or blogs (e.g., Facebook), and collaborative projects (e.g., Wikipedia)” (Kaplan & Haenlein, 2009, p.565). For this blog post I will stick to this definition, as it stresses the fact that Social Media is all about user generated content, which in my view is the characteristic that differentiates it from other websites.

Due to the important role that Social Media plays in many people’s lives, managers and researchers agree that it is inevitable for brands to establish an online presence on these platforms. In fact, 95% of the users even expect a company to be present on Social Media (Hubspot, 2014). However, businesses should not perceive Social Media as a burden that is forced upon them by the customer, but rather as a great opportunity to interact with their customers. During my research about Social Media I frequently came across the benefits it entails: An incredible reach, authentic communication, lower advertising cost compared to the traditional media and personal interaction with the customer (e.g. Armelli & Villanueva, 2011). Clearly, all these advantages imply that the company has a rather active role, associated with great advertising opportunities. But then the phrase “The marketer in peer-to-peer environments is an interloper, more talked-about than talking” (Deighton & Kornfeld, 2009, p.4) caught my attention and I identified a few authors mentioning the benefits of simply observing what is being said about a brand in this interactive online environment. This practice, referred to as Social Media Monitoring, has only slowly attracted researchers' interest, (Zhang & Vos, 2014), and in my view it has not gained the attention it deserves.

According to Zhang & Vos Social Media Monitoring “includes listening, interpreting and taking action on what people are saying or otherwise conveying” (2014, p.372). And as we can see in an infographic created by the business intelligence company DOMO, people are saying a lot on Social Media. Every minute (!) Facebook users share 684.478 posts, tumblr-bloggers publish 27.778 new articles, and 48 hours of video material is uploaded on YouTube (DOMO, 2013). Not all of this data is relevant for businesses, but considering that 19% of all tweets are about products (Jansen et al., 2009) and 46% of web users gather information on Facebook, Twitter & Co. before making a purchase (Go-Gulf, 2014), it seems like Social Media data is more relevant for companies than one might think.

In this post I want to explore the question “What are the benefits of monitoring Social Media data?”. I will provide three reasons that explain how Social Media Monitoring can help a business to establish a strong online presence and enforce my arguments with company best-practices.

Reason 1: Social Media Monitoring is the first step to brand engagement

In recent publications about brand performance, the concept of customer brand engagement has gained momentum, as it entails many positive effects “including sales growth, cost reductions, […] and brand referrals” (Hollebeek et al., 2014, p.150). One major factor that increases the level of brand engagement is the interaction between the customer and the brand, for which Social Media has proven to be a great platform (Fournier & Avery, 2011): Customers are able to ask questions and express their opinion about products and services, while receiving latest product information or even special offers in return. It is a two-way street!

But have you ever followed a brand on Social Media, tried to interact with it and did not get any response? It is frustrating, isn’t it? What I have concluded from my research,, there are two main reasons why a company might not interact with its customers in the way they are expecting it: 1. The company uses Social Media merely as an additional advertising channel, and 2. The company is simply overwhelmed by the size of its community and does not know what is being said or asked.  Considering the second reason, it is obvious that monitoring what customers are saying is a prerequisite for customer interaction and consequently customer brand engagement. It provides insights about customers’ comments, questions and complains or their sentiment in general, thus enables the company to react appropriately.

Reason 2: Social Media Monitoring facilitates brand protection

While in the past companies were able to manage what information was being published about them through the strategic use of press announcements, they are now facing a different situations. On Social Media, companies are merely participating as a guest, who does not have the rights nor the possibility to alter the content that is being made accessible to millions of people (Kaplan & Haenlein, 2010). Moreover, we all know of examples where people used Social Media to express their anger about a brand or where they mocked a company for their shortcomings, for the mere purpose of entertainment (Fournier & Avery, 2011).

Apple fake advertisement created by an internet user in the context of the Iphone6 #bendgate crisis.

Picture 1: Mocking Apple: A user published this fake advertisement related to the iPhone 6 #Bendgate crisis, which resulted from a YouTube video that demonstrated how easily the device bends.

On top of the hostile attitude some users have towards companies on Social Media, a brand’s reputation is threatened because the smallest mistakes can spread like wildfire within only a few hours. For example, when a photographer discovered that DKNY used his photographs in their window display without his permission, he published a post in which he addressed the violation and asked the company to donate USD100.000 to charity as an apology. This specific post has “been shared 36.000 times, received 34.000 likes and nearly 4.000 comments” (Cohen, 2013).

The internet is full of different sources that suggest how a marketer should react in a Social Media crisis like this. However, before a company is even able to react it has to know where a crisis emerges, why it emerges, and so on. This is where Social Media Monitoring becomes relevant, as it provides answers to these questions. It enables companies to react quickly in order to protect the reputation of their brand (Zhang & Vos, 2014).

Reason 3: Social Media Monitoring gathers insights for product development

A large part of the online content relates to companies’ products and services and is created in discussions on Social Networks or in detailed reviews and evaluations on other Social Media platforms (Berthon et al., 2012). This information is relevant for a company’s research, because obtained insights can be highly useful for customer-service improvements, product adaptations or the development of new products (Kenly & Poston, n.d). Despite the vast amount of information that is accessible, Social Media Monitoring also requires less time and money compared to traditional research methods used in many R&D departments (Hofmann & Fodor, 2010).

A survey conducted by the consulting firm Kalypso has shown that companies can confirm the benefits of Social Media Monitoring in the product development process. For instance, 43% of the surveyed companies stated they obtained new product ideas that were better than the ideas their R&D had gathered before. Moreover, some of the companies even reported more financially noticeable benefits, such as a faster time to market (16%), a faster product adaption (20%) or lower product development cost (15%) (Kenly & Poston, n.d.).

As you can see, tons of information is already out there - created by customers in comments, blog posts, products reviews, and so on. If the reasons I described above have still not convinced you, that Social Media Monitoring is valuable, let me give you some more practical evidence. In the second part of the blog post I will present three impressive best practices how companies leveraged their networks through Social Media Monitoring.