Has Social Media Really Stalled Among the Fortune 500?

Has Social Media Really Stalled Among the Fortune 500?:

Last week, the Center for Marketing Research at the University of Massachusetts Dartmouth issued its annual report looking at how Fortune 500 companies are using social media.

In looking at how these companies use blogs, Facebook and Twitter, the report suggests that activity has plateaued. Of the Fortune 500 for 2011, 23% had corporate blogs compared with 23% in 2010 and 22% in 2009. The number of companies with Twitter accounts climbed slightly to 62% from 60% in 2010, while those using Facebook rose to 58% to 56%.

“These results may signal a levelling off and possibly retrenchment when it comes to the adoption of social media among the 2011 F500,” the report concluded. “There is also evidence of change in the adoption of these tools by industry and a clear sign from some companies that these are not part of their communications strategy. Given that the F500 are the titans of American business, we may be seeing the slowdown in business adoption of social media. At the very least, this group appears to have slowed or stopped its adoption of the three most prominent tools – blogging, Facebook and Twitter.”

Not surprisingly, there were a flurry of reports and blog posts suggesting social media had stalled because there hadn’t been a significant increase in adoption after several years of strong growth.

For people who look at the glass as being half-empty, it is an easy, if not simplistic, conclusion to make. But for those of us who are more bullish about social media, the report can be interpreted differently.

First, it is important to drill down into the make-up of the Fortune 500 to discover the different types of companies. For consumer-facing companies such as Wal-Mart, Ford and Disney, social media is a no-brainer as a way to engage and build relationships.

But there are many companies within the Fortune 500 such Marathon Oil and Northrup Grumman that aren’t consumer-facing and, as a result, may not have as much or any interest in using social media as a communications, marketing or sales medium. This could explain why social media usage has flatten.

A Fork in the Road

Second, social media has come a fork in the road. After five years of enthusiastic embrace as many companies jumped on the bandwagon to figure out the benefits or keep up with the competition, many companies are starting to scrutinize their social media activities and/or spending more time on how and why they should get into social media.

For the companies using social media, one of the key issues is the recognition that simply using a blog, Twitter and Facebook isn’t enough because many rivals have also embraced the tools so it has become a level playing field. To now be successful with social media, companies must be creative, agile, fast-moving and ultra-engaged. It has created a new competitive paradigm that is more complicated and challenging than just setting up a Facebook Page or Twitter account.

Another important consideration is while the Fortune 500 may feature the “titans of American business”, there is still plenty of enthusiasm about social media, particularly among small and medium size businesses. So while the largest companies may have apparently stalled when it comes to social media, there is lots of interest and activity among smaller companies.

Truth be told, there has been a five-year honeymoon with social media. It’s been an exciting, promising and challenging place to be, and many companies have enthusiastically embraced it because social media offers benefits or they feel the need to be active.

Today, it’s a different landscape in which enthusiasm is being replaced by pragmatism, which includes the growing interest in return on investment (ROI).

What we’re seeing may be social media plateauing but I suspect it could be a pause in the action.