[Originally published on Digithoughts)
Right now is a good time to be a social media startup. With a growing emphasis on social ROI and keen interest from all industries in harnessing the power of social influencers, big companies are taking notice and quickly snatching up social media startups.
In 2011, Salesforce acquired social media platform Radian6. Earlier this year, Oracle acquired social marketing platform Vitrue and Google acquired Wildfire, a social marketing software developer. Just last week, search engine optimization giant SEOmoz announced their acquisition of Followerwonk, a social tool that measures influence of Twitter users, continuing the trend.
Moral of the story: Companies like Google and Oracle know that the future of social is search, CRM and data.
Beyond these acquisitions, we are already witnessing the effect of social’s growing importance in search. Hubspot’s Dan Zarrella recently released a study in conjunction with SEOmoz that revealed a correlation between social sharing of URLs and inbound links pointing to them. Whether this has a direct or major impact on search result rankings is still unclear, but some in the industry have their suspicions.
“I don’t think anyone really knows exactly how trending topics on social sites impact rankings – however, we’ve seen strong correlations between organic rankings and social signals, such as likes and shares,” Larry Kim, founder of WordStream, told MediaPost last week. “Whenever we have a new article with a decent amount of social interaction, it seems to catapult the page to the first page of results for keyword searches directly related to the post.”
And now, with search engine updates, like Bing’s social integration with Facebook and Twitter, and Google’s “Your World” results from Google+, search and social have grown increasingly dependent on who is doing the sharing. Enter the CRM function of social.
Platforms like Followerwonk and Klout are tools that help people identify influence in the social realm. Though not yet perfect, these tools give marketers the opportunity to find people who have the ability to get the social network buzzing (which, as mentioned earlier, could boost search rankings).
But aside from the possible SEO implications, what this type of software really gives a brand is the opportunity to build strong relationships with a target market. When Salesforce bought Radian6 for $326 million, they recognized the value of social conversations and saw the future importance of cultivating and monitoring these conversations. For example, studies show that 60 percent of brand followers on Twitter are more likely to recommend that brand, while 50 percent are more likely to actually buy that brand. We can expect to see more integration of CRM with social in the future, especially from Salesforce and Oracle, which will no doubt continue to buy out social startups.
Value must be quantified, of course, which is why the data and analytics function of these social media tools have become so important. CMOs are increasingly spending more and more budget on social media each year. In fact, within the next five years, marketers expect to spend almost 20 percent of their budget on social media — nearly three times the current amount. With the increase in spending, CMOs are going to be hard-pressed to show ROI. Link tracking, change in customer sentiment and increase in engagement will become even more important; I suspect that companies are already trying to figure out how to make these more quantifiable.
The big questions now become: How will all these companies end up integrating the social startups into their platforms? How will these moves affect the way social campaigns are run in the future? We may find out sooner than later if the buy-out trend continues.