Like the rest of the world, we have watched over the last year as social media and web 2.0 technologies have transformed the way society engages on a daily basis and, in particular, changed expectations of — and styles of engagement with — the corporate world. With nearly eighty percent of Fortune 500 companies employing at least one type of web 2.0 technology, it’s clear companies are catching on. As this shift occurs, however, many of our clients question “What is the real value?” and “Why use it?” To put it bluntly, “What is the business case?”

In May of 2009 we set out to answer these questions in a research project for our Engaging Stakeholders membership program. Through a series of interviews with companies, and research on key web 2.0 platforms we came to the following conclusions:

• Business case still emerging, but clearest on risk management: There is potential for these platforms to provide opportunities for more seamless collaboration. However it seems that the business case for web 2.0 is unfolding similarly to that of the sustainability agenda years prior as a response to perceived risk.
• Engagement paradigm is flipped: With web 2.0 the playing field is leveled giving stakeholders the opportunity to initiate and drive the conversation.
• Get comfortable losing some control: By allowing the conversation to evolve unedited, companies benefit from unfiltered commentary and feedback from advocates and critics.
• “Formula” for successful engagement is the same: Honesty, transparency and candor win companies trust on web just as they do in a traditional stakeholder engagement session. Online, these traits are even more critical.
• Requires clear ownership and collaboration across functions: Social media spans multiple business functions (PR, marketing, communications, R&D, CR) so identifying a point person to coordinate strategy is key.
• Better or complementary – not additional: Web 2.0 tools don’t necessarily change what companies are doing but could make their process more efficient.

Download the attached presentation to review our findings and examples.

In 2010 we plan to continue our exploration of this topic. Stay tuned for more updates and let us know if you have questions or feedback.

See also our article “What Next for Social Media”, published in Época Negócios in July 2009.