There is no question that social media is transforming the business world, with more companies starting blogs, forging business relationships through social networking, and using online videos and podcasts as a compelling marketing tool. And the Inc. 500 -- Inc.'s annual list of the fastest-growing private companies in the United States -- appears to be at the forefront of the movement, according to new research.
A study by the University of Massachusetts at Dartmouth's Center for Marketing Research found that 51 percent of Inc. 500 companies are monitoring social media, and they are doing so by various methods, including reading RSS feeds, looking at Web statistics, tracking video downloads, and watching online competitive activity.
The study examined the monitoring of social media among 121 of the 2006 Inc. 500 companies. Respondents were generally managers and other senior-level executives, and represent a wide range of Inc. 500 companies in terms of industry, size, and location.
According to Nora Barnes, director of the Center for Marketing Research and the study's co-author, Inc. 500 companies were chosen as the focus of the research because of their fast-growth and tendency to be innovators in their industries. The findings were published in the June issue of The Journal of New Communications Research.
Barnes and her co-author Eric Mattson, a marketing and social media consultant, conclude in their report that for companies where social media is a valued part of the culture, there is also the tendency to monitor what others in the business world are doing with the medium.
"Inc. 500 companies are saying that not only is it important for us to communicate in an outbound way, but it's also important to listen to what is going on out there and what other companies are saying," Mattson said. One of the popular ways to keep up with competitors, according to Mattson, is to read other companies' blogs. "Blogs and their content have become a real market force, and provide the ability for word of mouth to spread and be around for a very long time," Mattson added.
The study also found a strong correlation between companies that monitor social media and the level of their familiarity with and usage of various types of social media. A related study released in February by the center looked at the familiarity with and usage of six types of social media among Inc. 500 companies, including social networking, blogging, message boards, online videos, podcasts, and wikis.
In the first study, which had the same number of respondents, social networking was the most familiar type of social media, with 42 percent of respondents who said they were "very familiar with it." Overall, at least 30 percent of the Inc. 500 companies reported being "very familiar" with message boards, blogging, online video, and podcasting.
Respondents also had a high level of social media adoption, with 27 percent who said they use social networking sites and 19 percent who have a blog. When comparing these findings to previous research on social media and business, the study's co-authors found that Inc. 500 companies are adopting social media at a rate more than twice that of Fortune 500 companies.
From their research on familiarity with, and usage and monitoring of social media among Inc. 500 companies, Barnes and Mattson suggest that the respondents' relationship to social media provides a preview to how U.S. businesses will use social media in the future.
"Some of the fastest-growing companies are seen as the leaders of tomorrow," Mattson said. "As companies grow, they are able to touch more people and they will be looked at as leaders by the rest of their industry."
According to Barnes, it is also important to note the way Inc. 500 companies incorporate social media into their culture. "The embracing and accepting of social media shows that these companies know there are other things that can be done with new media to give them guidance and help to define their business strategy," Barnes said. "This shows a real understanding of the power of this venue."