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UPDATE: I wonder if McKinsey’s survey respondents were thinking about social media ROI in the way Olivier Blanchard depicts it here? 

Is business really benefiting from the use of social media?

It’s now a perennial question coming from companies who want to be in on the action, but also need assurance that it’s not the latest magic potion that promises everlasting life, but - in fact - has been made by boiling potatoes in a back-alley flop house.

Last week’s post by Todd Defren at PR Squared suggested a dual “eagerness” and “wariness” among big companies to get involved in social media activities.

But the September report by McKinsey management consultants - How Companies are Benefiting from Web 2.0 - may begin to allay some of those fears.

Conducted among 1,700 company executives worldwide, this comparative study (taking in changes in business’ social media experience during the past two years) suggests that 69% have gained measurable business benefits from web 2.0.

In the spirit of interactivity, McKinsey has come up with a nifty tool which neatly summarises the findings across web 2.0 used internally with staff and externally with customers and suppliers.

And the results make for interesting reading: McKinsey’s research claims that use of web 2.0 means ”a different type of company may be emerging…a networked organisation…using interactive technology” that makes it “more resilient and adaptive”. And the commitment to investing in these techologies is apparently on the rise, with 53% forecasting an increase in spend plus 26% promising to maintain previous levels.

But is it for every company? The research reveals that those benefiting most from web 2.0 fit into the $1bn-plus revenue bracket (and, unexpectedly, B2B organisations) as opposed to smaller or consumer-focused companies.

Uptake of social media for business seems to be developing from the inside out, with 65% of users adopting it first for internal purposes, against 58% using it for customer interaction. However, sales and marketing teams are beginning to outstrip other departments in using web 2.0, with a corresponding decline in users in IT and R&D. And the use of company blogs is becoming focused thoroughly on acquiring new customers versus the needs of customer service, product development and inter-customer discussions.

Does this mean that the early adopters’ fear that marketing would eventually abuse social media by shoe-horning traditional, one-way messaging into social networks, has been unfounded? 

With blogs, wikis and podcasts the most heavily used tools according to the research, users cite the principal commercial benefits to be ideas sharing, access to knowledge, reduced costs and improved employee satisfaction when used internally, while external use has “increased customers’ awareness and consideration of companies’ products” alongside “measureable increases in revenue”.

So, is it time for business’ “baby steps” into social media - that Defren rightly feels we should “applaud” - to become giant strides?

Tags: companies benefiting from web 2.0, McKinsey, PR Squared, Social Media, social media marketing, Todd Defren

This entry was posted on Tuesday, September 8th, 2009 at 10:31 am and is filed under General PR, Social Media, Social Network. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.