The Power of Social Media Analytics

2 minute read

Fan, W., & Gordon, M. D. (2014). The power of social media analytics. Communications of the ACM, 57(6), 74—81. doi:10.1145/2602574


In this article Fan and Gordon discuss the social media process and present business applications of this process.

Why social media does matter

  1. social networking is the most popular online activity; users spend more than 20% of their time on social media sites.
  2. 91% of adults online use social media
  3. Facebook's global market penetration is 12%; in North America 50%
  4. In October 2012, Facebook's nearly one billion users where spending approximately 20,000 years online each day.

The social media analytics process

  1. capture; covers obtaining relevant social media and includes pre-processing steps
  2. understand; refers to (i) selecting relevant data (i.e. data cleanup), and to (ii) assess the meaning of these data (e.g. by using sentiment analysis, obtaining success metrics, uncovering trends, ...)
  3. present; focuses on presenting the results in a meaningful, easy-to-understand form
The authors also identify the following key techniques for social media analytics: (i) sentiment analysis, (ii) trend analysis, (iii) topic modeling, (iv) social network analysis, (v) trend analysis, and (iv) visual analytics.

Business Value

The article discusses the benefits of social media analytics based on a life-cycle model covering the following phases:

  1. product design-development; social media analytics helps mitigating the following threads in this phase by applying (i) trend analysis, (ii) capturing and understanding feedback from loyal customers and average customers, and (iii) by applying co-creation techniques:
    • risk involving technology change
    • misjudgment of technological gaps
    • poor selection of product features
    • improper differentiation with other products
  2. production; social media analytics anticipate significant changes in demand and allows adjusting accordingly, and may provide data on production problems competitors are facing (e.g. troubles with suppliers, components, ...)
  3. utilization; covers the following three key objectives and may act as (i) an early warning system for adverse events, (ii) a tool for market segmentation, and to (iii) identify social community leaders.
    • brand awareness (e.g. measured by the number of tweets and followers)
    • brand engagement (e.g. measured by the number of replies and followers)
    • word of mouth (e.g. measured by the number of retweets)
  4. disposal;

Success Stories

  1. Accor Hospitality used a social media tool to track online reputations of 12,000 hotels (including hotels of its competitors) to identify problems Accor's guests were having. Following the implementation of recommendations obtained from this program, Accor's Novotel brand saw a 55% growth of positive feedback in online posts within a year.
  2. Del Monte Food, Inc. created and launched an new dogfood product in just six weeks based on feedback from loyal customers
  3. Dell Inc. used its IdeaStorm website to collect ideas about improving its products from average users.
  4. The software industry uses media-baed product testing by releasing different software versions and soliciting reactions;
  5. Audi AG was the first to use a hashtag in its 2011 Super Bowls, allowing the company to follow users which tweeted the hashtag and to (i) initiate a real-time dialog with these users and (ii) assess the performance of its online campaign.