A couple years ago a friend of mine told me how he is starting a new job at a well-known hedge fund. This wouldn’t be surprising if he worked in finance but this friend had been working for IBM as a hardware engineer with several patents under his belt. Moving to Google or Amazon or even NASA would have been more believable than a hedge fund. What I learned at the time was that speed in high frequency trading had become somewhat of an arms race in the hedge fund world. Custom hardware was being created in-house to shave a few milliseconds off each trade and beat out the competition. In the world of high frequency trading, in-house custom development had become a worthwhile investment.
The discussion of bringing social media marketing in-house is discussed on the agency side all the time. One of the more pervasive theories is that community management will eventually move in-house but other facets of social media marketing (listening, measurement, analysis, content creation, strategy, influencer outreach, etc) will stay within the agency world. One of the many rationalizations behind this thinking is that innovation is mostly seen on the agency side. Companies are too corporate and stodgy to innovate and therefore they rely on agencies to drive the brand in ways the company itself cannot.
What is deceiving about this thinking is that much of what people think is based on what they read. Whatever social media case studies hit the zeitgeist, <cough>Oreo<cough>, are seen as best in class. What people don’t realize is that some of the most innovative work is happening behind the scenes in places people wouldn’t expect and I think the best and most innovative work in the coming years will come from those big corporate entities everyone has counted out.
The key to understanding this is to understand the value of data in social media. Many experts will tell you the importance of measurement, listening, and data in their work but when it comes down to the tactical implementation of a social campaign, KPIs are measured in Likes, Followers, and Views. It’s not the agency’s fault. They don’t have access to sales and customer data that can connect a social action to a sale. There is a disconnect in the conversion data so agencies work with what they can.
As social media becomes a priority for large corporations, the desire to connect those dots will trickle down from upper management down to every employee. Agencies won’t be equipped to connect those dots. Companies will have to build internal departments to connect those dots.
I write this as if it’s in the distant future but it’s not. Many companies have set up internal departments that analyze listening metrics (I helped Sprint set up theirs). Innovation happening internally at these companies (which I’m sure is already happening) won’t be found in Mashable case studies or on your LinkedIn feed. These innovations will stay hidden…company secrets. In the world of social media marketing, in-house departments are becoming a worthwhile investment.