Social networking gets down to business

There is opportunity for enterprises to take advantage of the emerging Web 2.0 platform to market products and services and better tap into consumer needs, according to an IDC Canada analyst.

This is especially relevant considering that a recent survey by the Toronto-based research firm found that 51 per cent of online Canadians have a profile on some sort of social networking forum.

“If enterprises can use that quality time to reach those individuals, that’s one angle to take,” said Tony Olvet, vice-president of analyst firm IDC Canada’s communications practice.

These days, there is an abundance of specialized interest sites for consumers, he said, which can also help organizations better target market segments relevant to their business.

The IDC survey identified five types of social networking sites: friend, group general interest, dating, blogging, and media sharing. Olvet said businesses should make the distinction in order to understand what drives consumers to these sites. “To assume they are all the same is the first mistake.”

Marketing products and services in the social networking space should be approached with great caution, said Michael O’Connor Clarke, vice-president at Thornley Fallis Communications Inc., a Toronto-based public relations firm.

Most sites prize transparency, authenticity and integrity, he said. And rules of conduct are “softly defined” and therefore, make measuring ones strategy in the space difficult.

Stephen Lau, president and co-founder of Ottawa-based search engine marketing firm SalientMarketing Inc., agreed that enterprises should take an indirect marketing approach in Web 2.0. “You can’t look like you want to sell your product, [instead] create an advocacy or support group for that problem in the industry.”

That way, a business can attract those who have the problem, and in turn, they could be potential customers, said Lau.

But there is the ability for organizations to leverage the information that people are publishing about themselves on social networking sites, in particular, for recruiting purposes, said Clarke.

Business-oriented networking tool LinkedIn, is great for sourcing and researching candidates, and making connections, said Clarke. This approach to business, however, is not yet prevalent, but will be, he added, especially given how quickly such forums are gaining in popularity.

In fact, customer relationship management vendors, like Siebel,, and NetSuite, are keeping a close eye on the social networking space. They’re observing instances of people applying social networking in sales and business development, he said.

This is evident, said Clarke, when observing how NetSuite Inc.’s user profiling functionality has evolved to include recognizable elements of social networking. “It’s not just about who you are or what you do, but there are points of explicit meta data that describe your expertise, interests, etc.”

There are vendor offerings designed to facilitate Web 2.0 entry for enterprises, such as BEA Systems Inc’s AquaLogic product line, which boasts it can “two-dot-oh your company’s Web.”

But according to Lau, an organization may have the nifty tool, however without quality marketing content, the strategy could be detrimental. “At the enterprise level, they have to understand it from an overall perspective of Web, and how this fits into your overall marketing mix.”

But there may be issues with using social networking forums as an extension to business, said Warren Shiau, lead analyst for IT research with Toronto-based research firm The Strategic Counsel. Often, he said, organizations will not condone using social networking sites because, like Instant Messenger, they are difficult to control.

“Properly managed, any one of them has the potential to be useful [for the enterprise].”

LinkedIn, he said, is a good example of a networking tool that has so far remained primarily business-oriented. But overall, Shiau doesn’t foresee IT managers creating official policies of use for such forums within the enterprise.

Clarke said there are difficulties associated with Web 2.0 from a business perspective, but it’s still worth trying because there are instances of companies who have reaped benefit from internal and external social networking.

“When you’re trying to figure out ROI, you’ve got to keep the “I” lower case, because the investment is so small, it doesn’t hurt for companies to jump in and start experimenting.”

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