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Taking the pulse of social media marketing: A leader’s guide

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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities

Social media platforms seem to be everywhere all at once, to borrow from the title of a popular movie. With an estimated 4.9 billion users around the world and younger generations using it as their shopping channel of choice, social media can be a critical growth and marketing tool for companies. Leaders who use social media are viewed favorably by employees and external stakeholders alike. Yet fewer than half of top CEOs have a strong digital presence, and despite investing heavily in social media marketing, executives are not fully convinced of its positive impact. This week, let’s explore how social media can—and cannot—benefit your organization.

AN IDEA

An image linking to the web page “What is social media?” on McKinsey.com.

Know what’s important for businesses

About 92 percent of US companies use social media for marketing. But given a burgeoning number of social media platforms and users, organizations may find it difficult to develop a cohesive social media strategy. We find that four primary functions of social media are vital for businesses: monitor, respond, amplify, and lead consumer behavior. For example, 40 percent of consumers who make a complaint expect brands to respond within an hour. That may seem unrealistic, but companies meeting that high standard—currently, only about 50 percent of enterprises—stand a better chance of affecting consumer behavior positively. It may also be possible to lead long-term changes in consumer behavior through product launches, targeted deals and offers, and input from customers on social media.

A BIG NUMBER

That’s the number of new users signing up to their first social media account every second. Can your customer service organization handle that kind of volume? Challenges you may encounter include varying customer expectations across different platforms, unpredictable service demands, and skill gaps among staff. “The quality of servicing on social media can have a significant impact on brand perception,” caution McKinsey senior partner Renny Thomas and colleagues. “Social content can go viral quickly, potentially turning small or isolated customer service issues into PR disasters.” Best practices for social media servicing include developing an end-to-end service strategy, defining workflows clearly, and deploying the appropriate technologies.

A QUOTE

“Many CEOs and other senior executives don’t feel comfortable when their companies go beyond mere ‘experiments’ with social media strategy.”

That’s an observation from McKinsey researchers in 2012, when they noted that the reason for the leaders’ discomfort may have been the perception that social media initiatives lacked a clear return on investment. In the years since then, social media marketing has gone well beyond the experimental stage, but organizations remain unsure of its impact—possibly because “many brands entered the social media front lines without a clear strategy,” according to the author of a Harvard Business Review article. To ensure that social media objectives align with broader marketing strategies, companies need to “coordinate data, tools, technology, and talent across multiple functions,” suggest the McKinsey experts.

A SPOTLIGHT INTERVIEW

An image linking to the web page “Discussions in digital: Influencer marketing is ready for its close-up” on McKinsey.com.

Companies spend millions on celebrity product endorsements, which appear to influence customer choices. Influencer marketing does something similar by enabling consumers to collaborate with brands to promote products to their followers on social media. “It used to be the case that you had to be a big celebrity, or you had to have a big name behind you to get one of these deals,” says Katie Freiberg, head of growth marketing at lingerie manufacturer ThirdLove, in a discussion with McKinsey partners Dianne Esber and Jane Wong. “But now anyone can be an influencer. It’s really all about having that following.” Larger companies that form influencer partnerships may find it hard to create the authenticity that smaller brands often do more easily, but managed properly, these arrangements can “supplement and sometimes overshadow traditional marketing campaigns,” according to Esber and Wong.

‘BORING’

An image linking to the web page “Managing a cyber risk event: ‘Be a student of a crisis’” on McKinsey.com.

Negative social media content—whether the result of hacking, customer comments, or reactions to your own organization’s posts—can destroy a brand’s reputation. A strong culture of security and risk management can help counter serious cyberthreats, says Julia Houston, chief strategy and marketing officer at credit bureau Equifax, in a conversation with McKinsey senior partner Ida Kristensen. “Culture is the thing that separates good security from great security,” Houston says. On a lighter note, brands can harm themselves all on their own: beware of “boring” posts, warns the author of an Entrepreneur magazine article. “Giving a fresh perspective on an old topic or going against the status quo is what gets noticed. The last thing you want to be is forgettable.”

Lead socially.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 02:24 - 7 Aug 2023

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Taking the pulse of social media marketing: A leader’s guide

Know what’s important for businesses

“Many CEOs and other senior executives don’t feel comfortable when their companies go beyond mere ‘experiments’ with social media strategy.”

Out now: New issue of McKinsey Quarterly