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Social media analysis: Valuable tool or overhyped technology?

Companies need to ask some basic questions to determine whether they'll gain business value from social media analytics, says expert Mark Whitehorn.

Is social media analytics overhyped or for real?

It is, I believe, both. It's certainly for real because some enterprises demonstrably do it and get great business value from it. Big companies that enjoy -- or suffer -- a high profile on social networks clearly cannot afford to ignore analytics applications that can tell them how they're faring on customer sentiment and in the court of public opinion. And those analytics had better be state of the art and as near to real time as possible because social media has the attention span of a gnat. If you don't respond effectively to comments and discussions as they're happening, you might as well not bother.

On the other hand, social media analytics is also most certainly overhyped. Social media analytics tools are highly specialized, so they're only of use to companies that have good business reasons to care about what the twitterati think/believe/tweet. For those companies, social media analysis is clearly valuable, but a great number of organizations don't need to invest in it in order to understand what their customers want or think. I'm thinking in particular about small and midsize enterprises, which also might not have the resources and in-house analytical skills needed to take advantage of social media analytics software.

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So, the burning question for any company is not, "Shouldn't we start looking at social media analytics?" Rather, it is, "Do we think that we can gain value from analyzing social media data?" And that in turn should raise a host of other questions. For example, "Do we want to know when we've made a mistake that affects people's opinions of our company? Do we want to know when one of our competitors has made a mistake of that sort?"

The bottom line is that you have to decide what you want from social media analysis in order to decide whether it is overhyped or for real for what your organization has in mind.

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