Leverage Matters: Social Media

Based on a 2009 Deloitte survey of 500 executives, it seems like US companies aren’t sold on social media. Upwards of 30% of respondents said the CEO is on Facebook, social networking is part of business and operations strategy, and social networking is utilized to manage and build the brand. That means fully 70% of US companies aren’t investing in social media. And then participation drops from there when it comes to using social media for internal communications (23%), recruiting (23%), engaging employees (21%), participating on Facebook and Twitter (18%), and posting videos on YouTube (13%).

Without digging too deep into the 500 organizations that were surveyed, my intuition is that there are three types of companies in general: 1) those that embrace nearly every form of social media and build a strong community, 2) those that create a strategy for social media but don’t succeed, and 3) those that prefer to wait until the dust settles.

I’ve been looking a lot at Etsy.com throughout the semester. This is an example of a company that utilizes a broad variety of social media tactics as a means to free advertising and succeeds in generating traffic and participation.

Here’s a quick list of Etsy’s key free marketing efforts:

Company Blog - http://www.etsy.com/storque/
Facebook Fan Page (105,000 fans) - http://www.facebook.com/Etsy
Twitter account (1,200,000 followers) - http://twitter.com/etsy
MySpace page (19,000 friends) - http://www.myspace.com/etsy
YouTube Channel (1,500,000 total upload views) - http://www.youtube.com/etsy
Flickr photostream (2,200 contacts) - http://www.flickr.com/photos/etsylabs
iTunes podcasts (48 episodes) - http://itunes.apple.com/podcast/etsy/id274681115

Etsy is establishing significant traction. In addition, I’d be surprised if a number of employees were personally committed to Facebook, Twitter, and YouTube as an effective communications channel.

Since the numbers above aren’t quite relevant without a comparison, here’s a snapshot of two other companies:

Bonanzle – online marketplace to buy and sell “everything but the ordinary”
Twitter account (1,100 followers) - http://twitter.com/bonanzle
Facebook Fan Page (900 fans) - http://www.facebook.com/pages/Bonanzle/17353411807

In this comparison, Bonanzle has been less than 1% as effective as Etsy. However, you may have never heard of Bonanzle and thus this doesn’t surprise you. We can look at a more successful competitor.

Zazzle – online marketplace to buy and sell clothes, posters, etc.
Twitter account (12,000 followers) - http://twitter.com/zazzle
Facebook Fan page (7,200 fans) - http://www.facebook.com/zazzle

In this comparison, Zazzle is nearly 7% as effective as Etsy, which is still incredibly small.

Overall, it’s clear that Etsy has a vision for social media and allocates resources to maintain several high profile accounts. In many instances, Etsy is harnessing user-generated content to create videos, discussions, and photos.

If I had to guess (and this unfortunately isn’t very credible), I’d say that Etsy allocations three full-time employees to social media as a component of its marketing group. These employees are in charge of seeding content, participating in the community, and measuring return on investment for various marketing tactics.