Why Fortune 500 Companies Are Hesitant to Leverage Social Media

It seems fairly obvious that social media would now make up a large part of any business’ branding strategy, but the emerging pattern seems to be that the bigger the company, the less likely it is to take advantage of social media. Many Fortune 500 companies have been late to the party, and while it hasn’t gone unnoticed, they still continue to shy away from social.

The social media phenomenon is barely ten years old, and a large number of enterprise corporations are still managed by baby boomers. While social media is a very important cog in the machine of modern-day consumerism, decision makers who haven’t grown up alongside the medium often view it as just another marketing tactic — or even a passing fad. The reality is that consumer behavior is changing faster than companies are adapting, so what’s the reasoning behind their apprehensions?

Social Media: Marketing Tactic vs. Brand Strategy

Some companies still consider social media just an extension of marketing, and not an absolute necessity when it comes to cultivating a brand image. A turning point could be reached if CEOs acknowledged that social media is a valuable resource for interacting with customers, not just a way to broadcast a marketing message.

This conclusion is especially difficult for decision makers to understand when they don’t use social media themselves. For example, only 7.6 percent of Fortune 500 CEOs are active Facebook users, and a minuscule 4 percent have Twitter accounts, according to recent research by Domo.

This means that roughly 90 percent of Fortune 500 CEOs are not exposed to social media strategies from other brands and competitors. Most probably don’t realize that developing a brand voice is easily achievable by leveraging social platforms. Brands no longer just have sporadic magazine or television ads to rely on. They can reach their target demographic everywhere and at any time, while finding their voices and forming tighter bonds with their customers.

Lack of Proven ROI and Metrics

Fortune 500 companies are driven by numbers, and we’re just starting to understand the best ways to measure social ROI. If there isn’t a standardized way to measure results, it’s likely to be dismissed.

According to an infographic by InventHelp, 75 percent of marketers take the number of followers and Facebook Likes they acquire into consideration when measuring ROI, while only about 35 percent measure success from what CEOs really care about – sales.

Followers and Likes mean a lot less to CEOs than increased revenue (remember how many of them actually use social media). However, if you are able to tell them that a Facebook campaign generated a spike in sales, their ears will definitely perk up.

Public Criticism

Putting your brand on a public platform where anything can be said is certainly daunting, but what brands might not realize is that their lack of social media presence won’t stop people from talking. One of the benefits of a highly engaged social media presence is that it enables companies to become aware of customer issues and complaints much faster. As a result, problems can often be resolved in more personal and organic ways.

However, even the most light-hearted social media campaigns can turn ugly if someone dislikes your product or has a bad experience with your business. When McDonalds created the #McDStories hashtag in hopes of generating some positive buzz, the iconic company received pictures of loose screws found in McFlurries and horror stories from former employees. Despite the attention the campaign stirred up, out of more than 72,000 mentions, only 2 percent were negative, according to a tweet from McDonald’s social media director, Rick Wion. McDonald’s need for a social media presence definitely outweighs the occasional controversial campaign.

Legal Issues

Large corporations have a slew of legal rules to adhere to, and as we’ve seen over the past couple years, social media has spawned many high-profile, public apologies. The infrequent slip-up is probably unavoidable, but many corporations operate proactively by implementing a strict set of rules and standards for those who manage their social media platforms.

Developing a consistent brand voice and sticking to it can also help avoid sticky legal situations. The best rule is also the easiest: if you have any doubts about something you’re about to broadcast to millions of people, don’t do it! But proceeding with caution isn’t an excuse to lie dormant. An active social media presence is just as risky as no presence at all. If your customers are looking for you and you’re nowhere to be found, they might move on to greener, more sociable pastures.

[Image credits: Fortune Live Media, Kamer van Koophandel Limburg, Kentee Gardin,  David GoehringGabriel White]