Corporate Eye

Research Reveals Senior Business Leaders Do Not Understand Social Media

broken chainThe results of a recent survey by Stanford University’s Rock Center for Corporate Governance and The Conference Board should come as no surprise to brand marketers who have to fight executives every day for budget dollars to invest in social media marketing activities.

According to the survey of 180 senior executives and corporate directors from public and private companies in all major industries in Canada and the United States, senior business leaders do not understand the importance of social media to their companies. The report authors explain that there is “a disconnect between companies’ understanding of social media and the actions they are taking to apply it to their businesses.

Some of the most unsettling statistics found in the “What Do Corporate Directors and Senior Managers Know about Social Media?” include:

  • 90% of respondents report that they understand the effects social media can have on their companies but only 32% monitor social media to identify risks to their companies and only 14% use social media metrics to measure company performance.
  • Only 8% of directors and 24% of senior managers receive social media reports.
  • 50% of companies do not collect social media information and metrics.
  • 65% of respondents use social media for personal purposes.
  • The majority of respondents do not have formal social media policies at their companies.
  • The majority of respondents have never had a social media expert consult with their companies.

Lead author of the study, Professor David F. Larcker of the Stanford Graduate School of Business, explains that senior business leaders’ lack of understanding of the importance of social media to their companies poses a high level of risk. The study authors recommend that companies identify key performance metrics and risk indicators and monitor those metrics and threats using a listening system. Furthermore, the study authors recommend that companies develop formal social media policies and guidelines for all employees in order to minimize risks.

The challenge for brand marketers has always been trying to convince senior executives that social media should be a priority for both increasing brand awareness and sales as well as protecting the brand and company. The report found that more than two out of three business leaders use social media for personal reasons (primarily LinkedIn), so it’s clear that the majority understand social media and are not averse to it. However, the importance of social media in their personal lives doesn’t transition to the importance of social media for their companies.

Twenty years ago, those business leaders would have done anything to have such open access to consumers, competitors, and their conversations and actions. They have it today, but for some reason, it’s not a priority, and it’s given few budget dollars. It’s time for the disconnect to end, don’t you think?

Image: Sigurd Decroos

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Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for and, and her marketing-related articles have appeared on websites such as,,, and more. She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.