Corporates have wrong approach to social media

As you'll gather from this month's cover story, social media is a hot ticket, and it's only going to get hotter. Which is why plenty of companies - including, most likely, yours - have a profile on Facebook, LinkedIn, Twitter and possibly YouTube (among others).

The general idea of corporate social networking is to leverage it as another marketing/PR channel to generate buzz about new products and services and build online relationships with customers and partners - and somehow harness that buzz into something productive.

The trick is how to actually do that. And - like the early days of the World Wide Web, when web pages were little more than online brochures - few companies understand how to integrate the data into their strategies or business processes.
Monitoring your image 

Consequently, a cottage industry has sprung up around the business of using social media as a consumer research and management tool. According to a recent BBC report, companies like SAS, HP, Meltwater, Attensity, Radian6 and Alterian are offering services and tools to help companies appreciate just what social media can do for them - serve as a marketing channel, a CRM tool or even an early warning system if something goes sour (think about how British Petroleum was so oblivious to the negative Twitter buzz over its handling of the oil spill in the Gulf of Mexico that its Twitter PR team didn't even know someone had set up a fake BP Twitter feed posting satirical tweets).

There's a darker side to this as well. A California start-up called Social Intelligence is offering corporate HR managers a social network data-mining service that constructs profiles of prospective employees to see if they're worth hiring or - interestingly - might pose a possible problem to the company in the future (by, say, selling company secrets to competitors or trying to kill your supervisor). Put another way, Social Intelligence is urging clients to use their service to decide who to hire based on what they might do in the future. 

To be fair, Social Intelligence only mines public data. On the other hand, look at Facebook's propensity for selling user data to third parties, and the line between public and private data becomes even more blurred than it already is. 

That gets me to thinking just how much longer the standard operating procedure of social media is going to last as users become more concerned about privacy issues.

Which they will, if only because - as BT Counterpane CTO and security expert Bruce Schneier correctly pointed out last month at an RSA Conference in London - the business model of social media thrives on less user privacy, not more. Facebook is a service, but its customers are not users - they're marketing partners and advertisers who see value in the data that users generate. 

"The free-to-user market with services paid for by a third party is a common business model on the internet," said Schneier, according to The Register. "Service providers in this model will always act in interest of their customers, not users, and this can work against the interests of consumers."

This is nothing new, and it's a business model that even telecom operators are interested in - after all, they're sitting on a wealth of subscriber data that marketers would love to get their hands on. But Facebook and others have to walk a fine line to not only avoid breaching local data privacy regulations, but also alienating users as they start to get more savvy about data privacy. Social media loses its value when users churn or learn to post a lot less stuff.

All of which go to show that it's early days for social media as a corporate communications tool. But that's probably a good thing - if social media sites are increasingly being taken to task by their own users for not taking their privacy seriously enough, enterprises keen to harness the power of social media have a chance to ensure their own data privacy policies don't backfire on them.