Now that most C-level executives basically understand why social media is necessary, they have more interest in how their company’s social media efforts compare to their competitors.

How Does Social Media Work?

At conferences, as soon as it’s revealed that I am a social media strategist, the conversation focuses on best practices and recommended approaches for engaging users, customers and employees. I appreciate the eagerness and sincere interest in trying to figure out just how social media works and doesn’t work. Yet, most tips and tricks are most always anecdotal.

Thanks to a new report by the folks at Useful Social Media, a UK-based company, which produces business intelligence products aimed at helping big businesses use social media better, executives and strategists alike have some metrics on which to address social media in the corporate space.

Social Media is Customizable, Not One Size Fits All

When companies decide to embrace social media, it’s not as if there is a one-size-fits-all solution that they can choose. They must make many decisions, most of which are not made strategically. For example, they may decide to create a presence on specific platforms on Facebook or Twitter without researching where their audience is. Or they may decide to isolate social media engagement to a specific department without specifying policies, procedures or process.

Of course, the beauty of social media is that companies can evolve their role as they learn more about their customers, their brand and their outreach. In the report, The State of Corporate Social Media in 2011: Results from the First Corporate Social Media Survey, we gain a better understanding of how companies execute a social media strategy.

Who, What, Impact of Social Media

  • While 86% of companies have two or more people working on social media (32% have six or more), half of US companies and 36% of European companies don’t have anyone who is exclusively managing social media.

This is exactly the kind of thing that complicates social media management. While social media should not be left to one person to handle, it does help to have someone who oversees its efforts. For the 86% that have two or more employees engaged in social media, the assumption is that social media is just part of their job responsibility. For this reason, the researchers ask, “Is one able to therefore assume that the role of ‘social media manager’ is more entrenched in Europe than the USA?”

  • Overall, 46% of companies say that the most senior member of staff working directly with social media is at the manager level. Eight percent of companies have CEOs who work directly with social media, while only 14% have social media practitioners stopping at "executive" level.
  • Among those engaged in social media, 43% sit within the marketing department. Thirty-six percent are not a part of a specific department or team.

The strong showing for “scattering social media expertise across a variety of departments” might suggest that organizations are starting to appreciate that social media can be of use for more than simply branding and marketing.

So what are they using social media for?

  • The vast majority (90%) of companies currently use social media for marketing and communications. A significant proportion of US respondents are already using social media for customer service (50%), employee engagement (54%) and product development (38%).

The report suggests that companies expect customer service to be the next big social media growth area, with the US expecting a 25% growth, and a forecast that 75% of companies will be using social media for customer service by the end of the year. In Europe the increase is even more dramatic -- from 34% using social media for customer service now to 70% by year’s end.

Perhaps the most interesting finding is that companies are finally realizing the impact of social media on employee engagement and indicate that they plan use social media for this by the end of 2011.

Is Social Media Working?

Though we have covered how, why and for what companies are using social media, it only adds fuel to the conversation. What companies really want to know is “does it work”? If a company spreads social media across departments, or expands focus onto customer service, is it working? Have companies noticed an impact in engagement, and, most important, revenue?

Fortunately, the report lends some insight. It accurately sums up the insecurity most companies have when it comes to social media measurement. Only 40% feel confident that they are accurately measuring the impact of their social media marketing. Yet, it could be because only 45% of them are actually measuring the social media’s ROI.

While the report doesn’t say for sure if companies are reaping the rewards of social media as they expected they would, even if it did, it wouldn’t do much to provide a definitive social media road map. Social media can’t be applied evenly across companies. Successful social media is more a reflection of company culture than it is innovative marketing strategies. Companies that are positively affected by social media realize that it’s about cultivation and engagement, rather than a direct equation of revenue.