CEOs take on Social Media

Posted by: Nanette Byrnes on November 14, 2008

Many CEOs use social media sites like Facebook, MySpace, YouTube and Twitter personally, but few use them to communicate with stakeholders. And while 29% say social media can be a very or extremely effective way for companies to communicate, just as many find it ineffective. These are some of the findings of a September survey of 200 chief executives by public relations firm Burson-Marsteller and PRWeek.

So while CEOs are on these sites a lot (43% of the CEOs said they are on them often, including 19% who visit daily) it’s not for business. Only 18% say they use them to communicate with customers and other stakeholders.

Why not?
48% say they lack relevance to the target stakeholder groups
37% voice concern about losing control of their message
28% worry about return on the investment
and
23% blame a lack of knowledge and capability within the company

Another reason may be that they’re not convinced of the payoff. While 62% see social media as having an impact on a company’s reputation, only 48% say it can change sales.

They seem much more convinced of the power of Word of Mouth and viral campaigns. 60% say those have more influence today than they did three years ago. Also rising in influence: trade media, blogs covering their industry, and traditional media including the Wall Street Journal (44% say its sway has grown) and BusinessWeek (24%). 67% of those surveyed will increase their spending on digital marketing in 2009.

Facebook’s the site most often used for public relations, but 71% of CEOs said their company web site is the best way to communicate with consumers during a crisis.

Burson-Marsteller thinks CEOs should be more social. In the press release on the findings, Mark J. Penn President & CEO says “CEOs should understand that many of their stakeholders are active users of social media and that it can be an extremely effective means for communicating a message. I would argue that companies that are not engaging in social media are taking a bigger risk than the companies that are.”

He’s on Facebook.

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Reader Comments

Jay Deragon

November 15, 2008 02:31 PM

Reports such as these reflect a sentiment of “mixed feelings” by CEO’s relative to PR, Marketing and Social Media. The sentiments may change as the economy continues to put pressure on capital, resources and revenue growth. The current market dynamics may in fact shift significantly as the rippling effect of the economic downturn forces CEO’s to look for more effective alternative to reach their markets at lower cost.

The challenge is when CEO's move more towards social media which company will do it right. Many will fail because they simply do not understand the dynamics

jermaine

November 17, 2008 04:14 AM

A QUESTION TO BURSON-MARSTELLER:
What is the success of Social Media in the context of impacting a companies reputation in developing countries, such as South Africa?

Although i agree, and share the very same sentiments as Burson-Marsteller, many ae sceptical and this makes it tougher for newer brands in South Africa to succeed, without major ad-spend.
People in South Africa for example, are very affraid of exploring this medium as a pivotal key to engage stakeholders. You'll always see them grasping for the conventional mediums.

jermaine

November 17, 2008 05:36 AM

In response to Jay D's comment:
I agree completely with your closing statement.
Howe if companies like your own (presumed you're A CEO) make a positive decision to follow marketing trends and adopt such pivotal tools such as Social Media, and do so in cooperation with the right media partner, you can only succeed. The result of which will be to become the market leader in the process, and enjoy the long-term benefits of staying in-tune with key networks.

arenak

November 17, 2008 09:30 PM

Ask the folks at Motrin today what they think of the power of social networking sites....

Nanette Byrnes

November 18, 2008 10:28 AM

Motrin maker J&J pulled an ad that set off an angry Twitter and YouTube firestorm from its very target -- moms carrying babies in slings.
Here's the ad:
http://www.youtube.com/watch?v=BmykFKjNpdY
And one of many responses.
http://www.youtube.com/watch?v=LhR-y1N6R8Q&feature=related
It seems a classic social marketing face off. The snarky tone that often sends ads into the viral marketing stratosphere versus a very committed (and sympathetic) user group, moms.
Didn't any of this come up in the focus group? Ads can often miss the mark, but making the mark this angry is quite an achievement.

Stephanie Diamond

November 18, 2008 12:12 PM

Social media marketing needs to reflect an integrated strategy. In working with CEOs and other executives I find that they want to do what's comfortable, not necessarily what's effective. Ignoring it and hoping it goes away is not a great strategy.

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About

How can you manage smarter? BusinessWeek writers Nanette Byrnes, Patricia O’Connell, Emily Thornton, Matthew Boyle, Michelle Conlin and Diane Brady synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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