1. It's become big business. Sites like Facebook and Twitter help companies market new products and services, but they also allow customers to share gripes with an audience of millions. A rash of vendors have emerged with tools, usually cloud-based, that can track, collect, analyze and respond to conversations on social sites. These products are crucial to companies that want to understand how they're perceived online, according to Forrester Research analyst Zach Hofer-Shall. "The social Web is simply too big, too fast, and too full of irrelevance and spam to manage alone," Hofer-Shall wrote in a recent report.
2.The market has matured. Salesforce.com's Radian6 division started as an independent vendor in 2006, says Rob Begg, vice president of marketing for Radian6. Back then, "it was about getting the most [social] content the quickest," and the main goals were PR and brand marketing, he says. As the technology progressed, Begg says social listening moved toward gaining deeper insights about customers, thanks to advances in natural language processing and other technical areas.
3.It's a tricky time to buy. "Businesses evaluating the listening platform market have a tough task ahead," Hofer-Shall wrote in his report. "Differentiating among vendors in the crowded landscape can be difficult." A rash of recent mergers and acquisitions hasn't helped matters, and recently large analytics vendors such as IBM and SAS Institute have rolled out social data-themed products, Hofer-Shall added.
4.CIOs are not leading the way. Radian6 deals primarily with marketing and customer service-related executives during sales cycles, Begg says. But CIOs should consider getting out in front of a social media initiative at their companies, says Jeremy Epstein, vice president of marketing at Sprinklr, a Radian6 competitor. "There's a really exciting opportunity to be a source of innovation." In addition, social analytics may affect a company's service operations, legal department, human resources and other areas of concern to CIOs, he says.
5.It's not just for marketing. Associate professor Jason Thatcher had Clemson University students use the school's new social media command center in his business class to track the currency exchange market and create a trading algorithm that spots significant selling or buying trends. He thinks social analytics has broad applicability, including in product development and supply chain risk. He says dozens of companies from a range of industries have visited Clemson's lab, and "they all can see a different application of the tool."
Read more about analytics in CIO's Analytics Drilldown.