The unstoppable rise of social media and its growing significance as a marketing tool has been well documented. Yet while two-thirds of marketers reported plans to increase investment in social media, according to digital marketing and e-commerce company Econsultancy, less than one-fifth can effectively measure return on investment. Although social networks reach 22% of the global population, not much is known of the exact value that investment promotion agencies (IPAs) can derive from them.
As organisations embrace social media, IPAs are following the trend by including a social media component in their investment promotion efforts. “The shift reflects the mindset across the board,” says Jake Hird, senior research analyst at Econsultancy. “It is not a case of 'should we be doing it'. It is now more a case of 'how should we be doing it'. You have to be [present] but you must make sure you are in the right place in front of the right audience.”
Mattias Durnik, business development manager and project director at Stockholm Business Region Development, says: “We adopted social media because our target audience is in the social media world and we thought it would be natural to be there.” While Dan Kudla, business development officer at Locate In Leeds, says: “We are actively engaged on Twitter, and it has proven useful in generating awareness.”
Open to discussion
Described by accountancy firm Deloitte as “word of mouth on steroids”, social media, loosely dubbed 'Web 2.0', is all about connecting to communities online by leading as well as following. fDiMagazine found that the more successful IPAs understood that social media is not a monologue with a passive audience.
“The launch of our new name – Invest Atlanta – in January 2012, coincided with changes made to the website, posting a video on YouTube and Vimeo, and [utilising] Facebook and Twitter,” says William Cronin, vice-president of economic development at Invest Atlanta. “We understand that we require a two-way communication. We are posting the information and [also] making this a live discussion.”
Mark McDonald, group vice-president and head of research at Gartner Executive Programs, a membership-based organisation of CIOs and IT heads, says: “Social media allows you to engage the energy of individuals, and [it] allows those individuals to [form] a consensus on a global scale, almost simultaneously.”
Mr Durnik says: “Social media is a great interface for the market. You can listen in on the discussion, and you can participate. It provides you with tools that used to be very difficult [to attain]. For example, to listen in on the market, [IPAs] had to use focus groups before. Now you can look at, say, Twitter online, and follow the hash tags to follow the discussions.”
There is a growing realisation among IPAs of the need to incrementally develop their brand advocacy through social media platforms. This strategic approach enables the IPA to learn best practices for utilising social media, and understand how best to leverage each platform.
Katarina Hartgers, social media manager at Latvia's Investment Development Agency (LIAA), says: "LIAA started to implement a social media strategy in spring 2011. Step-by-step social networks were added. Today we see that Twitter, for example, is bringing a lot of leads to our website.”
Àngel Mesado-Jardí, deputy head of the delegation of the government of Catalonia to the UK, says: “Social media an extremely powerful tool and it enhances our capabilities in terms of communication. Social media enables us to reach all the organisations and media in the UK, more than any other traditional tool. [It] is extremely cost effective and it allows us to reach organisations in a very fast and immediate fashion.”
Virtually new ground
Although 91% of organisations were reported by Econsultancy to be utilising social media, 65% of marketers surveyed reported that they have only been using it for a few months or less. fDiMagazine also found that very few of the IPAs it interviewed had a long-term presence of over two years on social media platforms. A long-standing presence tended to be the exception, rather than the rule, and most IPAs reported that they were still in the process of developing an organisational strategy in relation to social media. Nonetheless, all unanimously gave social media a high value in relation to their organisational goals.
Anders Wangby, director of Västerbotten Investment Agency (VIA), says: “Västerbotten [is] considered to be remote. The perception that people have of Västerbotten is that it is cold and dark. So we use social media to show Västerbotten is a dynamic region.”
Caoimhe Buckley, outgoing director of communications at UK Trade & Investment (UKTI), says: “We are on LinkedIn, Twitter, YouTube, Flickr, and we have a web presence. We have a more generic recognition we are trying to achieve. We are trying to describe and showcase the UK as an innovative place to do business. Social media is the top referrer of traffic into our website, and we find it really useful. On UKTI’s organisational LinkedIn profile, we have 16,000 registered members. We know we get customers from LinkedIn.”
According to social media magazine Social Media Examiner, 85% of marketers surveyed reported the top advantage of social media is to generate brand exposure, while 52% maintained that they used it to generate qualified leads. fDiMagazine found that LinkedIn and Twitter were the two most popular platforms among IPAs.
“We found the most effective [platform] in terms of rapid distribution is Twitter,” says Chris Pilling, director of frontier market intelligence at Trade Invest Africa. “[It has] several networks and the beauty of that is as we send messages out to a Twitter network, the number of retweets grows as people tweet these interesting opportunities out to their network and so on. The viral effect of Twitter is the most powerful right now.”
Inger Pedersen, investment promotion manager at VIA, says: “We are currently using Twitter and LinkedIn. We have chosen not to focus on Facebook since our targets groups are mainly executives.”
Indeed, with executives from each of the Fortune 500 companies registered as LinkedIn members, and 65% of the world’s top 100 companies having a Twitter account according to Econsultancy, combining a Twitter account with a LinkedIn profile has become a popular strategy for IPAs.
The widespread availability of social media platforms is a boon for IPAs. Yet with most popular platforms being third-party tools, social media holds its own risks. “I think there is a danger because all those platforms are not proprietary to a business, which is problematic,” says Econsultancy's Mr Hird. “You do not own your audience or the data that comes from it.”
VIA's Mr Wangby says: “There is a risk you can give yourself a wrong image." While his colleague Ms Pedersen adds: “You have to make conscious choices about which social media platform to work with and what your purpose is.”
fDiMagazine found that the more successful IPAs placed content at the heart of their interactions. The ability to provide informational value on these platforms enabled the IPA to attract and retain the most relevant clients. Having a clear purpose, a willingness to experiment and invest time will therefore be the only way IPAs can successfully adapt to the rapidly evolving requirements of the emerging world of Web 2.0.