An intelligent approach to reducing the risk from social media
THE words are still ringing in Greg Daniel’s ears from 2008, the year his social media intelligence company SR7 was born.
“When we started the business, I told a pretty well-known non-executive director that I was starting a social media intelligence business. He looked at me, didn’t say anything for a while, but finally said: ‘Social media intelligence. Isn’t that an oxymoron?’ ’’ Daniel says with a wide smile.
When Daniel — also a former director of Tourism Australia and British American Tobacco — ended his 10-year association with marketing and advertising giant Clemenger BBDO to set up SR7, the number of times the term “social media risk” was retrieved on a Google search was so low it didn’t even show up. Now the term is Googled 15,000 times a month.
SR7 is now a part of KPMG after it was swallowed by the accounting giant earlier this year, consummating a two-year alliance between the two groups. It is now working in all of the firm’s capabilities.
Over six years SR7 has quadrupled in size. And social media risk has become the new buzzword for corporate Australia and the accounting profession.
In May Deloitte teamed up with a Silicon Valley company that analyses more than half of all mobile data traffic in the US to bolster its Australian data analytics capabilities. PwC and EY have also been buying up digital assets. Within corporates, social media is no longer simply the domain of the marketing department. And directors on big boards are putting their management teams through the hoops, demanding to know their strategic response to the phenomenon that has changed the world.
No one forgets the experience of Myer chairman Paul McClintock and his chief executive Bernie Brookes last year and the war waged against them on social media after Brooke’s now infamous comment about the funding of the National Disability Insurance Scheme.
“What we have seen over the past year is a greatly heightened interest from boards in the whole area of social media risk. Board members have seen enough incidents where adverse events on social media have affected share prices, reputations of companies and they have become very alert to that risk,” Daniel says.
“There has been an increased call on the part of boards to challenge management about whether they have the correct procedures in place to handle those risks, whether they be reputational, operational or regulatory.”
In many firms, social media is now firmly the responsibility of the chief risk officer or the corporate affairs director.
Even chief executives themselves are recognising they need to get with the times.
Last November Qantas chief executive Alan Joyce made his first foray into the world of social media by joining the LinkedIn Influencer program.
The invite-only program requires the “Influencers” to write regular blog posts that are then distributed to LinkedIn’s 259 million users worldwide. He joined ANZ chief executive Mike Smith, Freelancer chief executive Matt Barrie, Red Balloon founder Naomi Simson and Entreprenaissance Movement founder Creel Price who were Australian pioneers of the venture.
Smith himself has since talked up the role of social media in the bank’s strategy, writing in its new public media publication BlueNotes, earlier this year:
“With social media the opportunity is to have a more direct, deeper and authentic relationship with our most important audiences including customers, staff, investors and other stakeholders. Ultimately that’s a prize that’s worth having in terms of customer satisfaction, corporate reputation, attracting and retaining talent, gaining market share and reducing the cost of doing business,” he wrote.
“The reality is that for many of our customers, the digital and social future is already here. As a business we need to respond more quickly to participate in the opportunity. That’s why I have made accelerating ANZ’s progress with digital solutions for our customers, and engagement through social media a key business priority over the next three years.”
In PwC’s 17th annual CEO survey earlier this year, 91 per cent of Australian chief executives believe technology is the biggest transforming trend for business.
But ask Daniel whether the nation’s top chief executives need to get themselves on to Twitter, Facebook or other social networks in a hurry, his response is surprisingly contrarian.
“I wouldn’t recommend a number of CEOs run off and start using Twitter and get on Facebook. I think it is unnecessary. But I think they are aware enough to know their organisations need to be on social media. It would certainly be helpful if they had some working knowledge of how the platforms are used by the various stakeholder groups,” he says.
“If they aren’t in a consumer facing business, if they are not comfortable with it and it is unnatural for them, I think it is unnecessary.”
Yet Daniel is alive to the opportunity for organisations to improve their bottom line by making better use of social media intelligence and platforms in their business.
A study commissioned by global tech giant Google released last week found better use of collaborative technology in business — especially social media tools — had the potential to generate almost $10 billion in additional value to Australian business every year.
The Collaborative Economy report released by Deloitte Access Economics said $46bn a year could be the value of faster growing, profitable businesses that had collaboration at their core.
Daniel says SR7’s eight full-time staff and more than 25 contractors are helping companies make the best use of data as both a preventive and proactive tool.
“Over the years we have attained some valuable IT that helps our analysts see through the strings of a few noisy people. And decide whether an issue is building enough momentum both in volume and the vehemence of the comments. This is not just about numbers. It is an analyst-driven business,” he says.
“We use information to get the information but it is the analysts that join the dots and provide the insights that clients find really valuable. Without that it is just more data.”
SR7’s client base is skewed towards larger companies and government institutions, working in the resources, financial services, and fast-moving consumer-goods sectors.
For government clients with large projects that require an understanding of the community’s reaction to development proposals, SR7 provides the client with what Daniel says is “coal face information” to let them know what the citizens are really saying, allowing them to better engage, shape their messaging and improve transparency.
“Where we help corporate affairs departments quite significantly is by giving them the firepower to have instant, real-time knowledge of what people are saying about their brands and issues that affect their organisations. Most corporate affairs departments simply don’t have the resources necessary to do that,” Daniel says.
“We often provide daily reports for those companies on issues they see emerging and want to watch quite closely. Or just general themes that may start arising on social media that we then see gaining momentum and perhaps becoming a risk.”
The benefits of proactive social media policies are being shown by innovative companies like Domino’s Pizza.
Chief executive Don Meij recently revealed the company had spent $5 million developing a product allowing customers to build, brand and sell their own pizzas through social media.
The ASX as well as regulatory agencies such as the Australian Securities & Investments Commission and the Australian Competition and Consumer Commission have also set up internal working groups to look at how they can better use social media to communicate with investors and the broader public.
Daniel says it is inevitable that these agencies will increasingly turn to social media as a communication tool.
But for the time being, he says it will not replace the traditional methods of dialogue.
“It is a question of the tipping point — when will you get people that have only ever known this technology sitting in positions of power within those organisations?” he says.
“As long as you have people in those positions who are not true digital natives, you will find some resistance and a compromise between the old and the new.”
July 19, 2019