Web 2.0 Social Media Success Is Still Elusive

It's clear that companies are using social networks to connect with customers. Less clear, though, is what success means in this new media and how businesses can achieve it.

That was a hot topic at the recent Seattle Interactive Conference.

"We haven't seen a lot of 'R' in the ROI," said David Camp, head of marketing for AmazonWireless, Amazon's site for sales of cellphones and service plans. He was referring specifically to financial returns.

But Kim Johnston, vice president of marketing at Parallels, said she sees good returns -- although not necessarily the type Camp was referencing. "The R," she said, "could be insight, not just money." Parallels -- which makes virtualization software for Macintoshes -- learns a lot from customers via Facebook and Twitter, she added.

Tapping into customer feedback streams can be tricky, said speakers and other attendees. T-Mobile monitors social networks to gather insights that can benefit product development, said Alex Samano, general manager for Bobsled, a T-Mobile voice-over-IP product. But "you have to be cautious of what you're hearing," he said, since not everyone who posts on Facebook is necessarily representative of other customers.

Still, social-media-based interactions with customers can be useful. Ten years ago, it was common to pay $150,000 to get a focus group of customers together. "You don't have to do that anymore," Samano said.

The rate at which social media followers turn into paying customers varies. AmazonWireless, for instance, hasn't found social networking tools to be particularly efficient at converting traffic into sales, Camp said.

T-Mobile, however, has had great success -- for some products. The company launched Bobsled initially for Facebook users and, owing to its media-launch strategy, began signing up users at a rate of 3,000 per hour, Samano said.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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