Which would you prefer -- to invest in social media software that can help you connect (or induce damage control) in the realm of social networks, or to possess Big Data facilities that may help improve profitability and analysis capabilities?
The case for social media contains many facets. If used effectively, it can be a means to connect with your customers, digitally market your business and increase your brand's presence. If something goes wrong or the company receives bad press, it can be a way to launch immediate damage control.
However, as social networking is generally in the public domain and allows for instantaneous communication between its members, it can also become a recipe for disaster. A poorly-written tweet or inappropriate response to a complaint on Facebook, and it can be re-tweeted, made into a screenshot and potentially go viral.
Without doubt, social media is a double-edged sword, which can improve customer relations or seriously damage a company's reputation.
Big Data, however, does not have these particular pitfalls. Every day, we produce 2.5 quintillion bytes of data -- 90 percent which exists today having been created in the last two years alone. From sensors to social media, images, video and purchases, it takes very powerful software to analyze and retain these records -- and that is where Big Data software steps in.
These types of software can be used in a number of ways, including:
- Analyzing power supplies in order to optimize meter systems;
- Detecting the best times to tweet or post on a businesses' Facebook page;
- To create reports on security and transactions to prevent fraud;
- It can also be used for monitoring live feeds and surveillance in a less labour-intensive manner.
A new study (.pdf) provided by McKinsey & Company suggests that the less risky and potentially more beneficial realm of Big Data software is a higher priority today than social media integration. For the survey, 1,500 CEOs, CFOs and CIOs contributed between April 3 and April 12 this year.
Almost half of respondents stated that they are currently using Big Data to "understand their customers better", whereas 32 percent said they are using social media for interaction and promotion purposes. The survey also found:
- 13 percent did not consider Big Data a priority, so far as stating it was "not on the agenda".
- Flexible delivery platforms are a priority for the next 1-2 business years for 23 percent;
- 19 percent of respondents have deployed digital marketing practices across the enterprise;
- 4 percent have used location-based software to target customer promotions.
Big Data and social media do not ave to be mutually exclusive. A number of businesses are beginning to integrate the two -- using Big Data software to analyze business content based on their social media activity.
The Wall Street Journal reports that Ramon Baez, CIO for global manufacturer Kimberly-Clark, says he uses Big Data software to predict consumer demand and gain insight into his customer base, whereas social media allows the company to better understand customer opinion on their brands.
Baez also agreed the two can become a powerful, merged identity, saying that it would "not only help us become more effective and efficient, it will enable us to drive the top-line with our key customers."
However, in the study, less than half of respondents believed that their companies were allocating enough funds to harness these technologies. A number of CEOs expected the investment required would be 3 percent of their entire cost base, but only 12 percent thought they would receive the necessary funds.
For long-term profitability, it would be wise for more CEOs to consider investing in these technologies. It does not all have to be completed at once, but if companies choose to ignore either of them, then they may be missing a chance to exploit their consumer markets to full potential -- as well as understand them properly.
Image credit: Mark Smith