social media inc. 500 practices, social media monitoring Inc. 500

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The fastest-growing companies in the US understand the importance of social media marketing for business success, but many risk dire consequences due to their lack of media monitoring, new research reveals.

The Center for Marketing Research at the University of Massachusetts Dartmouth analyzed social media practices of Inc. Magazine’s top 500 companies, a list that represents the fastest-growing, privately owned companies in the US.

Forty percent of the Inc. 500 executives interviewed indicated that they are tracking online conversations about their brands, products, or industry with a monitoring tool. That’s a 16% decline from 2018 and a 4% decline from 2017.

“Inc. 500 companies understand how important it is to be aware of the opinions and perceptions their customers share online,” the research paper states. “Their brand identity, and potentially their sales, are dependent on having a positive online presence. A lack of monitoring could have consequences for companies given the potential for viral communications possible through social media.”

Citing the growing importance of big data, the UMass researchers urge companies to invest more in media monitoring and measurement.

Top Concerns: Social Media ROI and Privacy

Inc. 500 executives named social media return on investment (ROI) as their top concern. However, concerns over social media ROI have declined since 2016 when 59% of executives cited it as a top challenge, indicating improvements in social media analytics tools and practices.

“Social media deserves a seat at the table, but ROI can only be realized if businesses invest in what works and move away from what does not,” the report states.

In addition, 40% said they’re concerned with resources devoted to social media and privacy issues. The change reflects the spotlight on online privacy issues and social media following high-profile data breaches and trend to tougher privacy regulations, such as the California Consumer Privacy Act (CCPA).

Companies are more fearful of legal and reputational damages if they are accused of privacy violations or suffer a security breach that exposes customers’ sensitive financial information.

The Search for Social Media Benefits

Almost all believe social media is effective for building brand awareness and creating relationships with consumers. In addition, 84% said social media is effective for generating leads and sales, up from 78% in 2016.

However, nearly half report that the value of free social media has leveled off and many are seeking paid alternatives.

Asked what they might spend more on, 53% of companies chose paid ads on social media, an increase from the previous year. The finding confirms the opinions of marketing experts who say Facebook has become mainly a channel for paid promotions.

Website improvements (67%), email marketing (51%) and public relations (47%) also received strong interest.

Bottom Line: Executives at the fastest-growing companies understand that social media is an effective tool for building brand awareness and developing relationships with customers. However, many don’t use monitoring tools to track mentions of their companies and products, a shortcoming that exposes them to reputational risks. In addition, many remain concerned about social media marketing’s ROI.

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