November 15, 2011

Fortune 500 Companies Slow Down Social Media Adoption

Rank on list significant factor in adoption of Twitter, Facebook and blogs

Technology may be spreading, but Fortune 500 companies have slowed their adoption of social media. Technology may be spreading, but Fortune 500 companies have slowed their adoption of social media.

It may be hard to believe as more and more firms take up social media, but a report from the University of Massachusetts at Dartmouth found that adoption could be leveling off. The report studied Forbes' Fortune 500 companies on the premise that these companies' "hugely influential role" in the business world provides a useful yardstick for measure corporate trends.

"While these companies may not always be the first to innovate," according to the report, "they do provide a look at emergent trends among America's most successful companies."

The university's Center for Marketing Research released its first study on blog use at Fortune 500 companies in 2008 and has published a new study every year. The latest iteration, "The 2011 Fortune 500 and Social Media Adoption: Have America's Largest Companies Reached a Social Media Plateau?" includes data on Facebook and Twitter adoption. Data was studied over the summer following Forbes' release of the 2011 Fortune 500 in May.

The report notes that there is evidence of companies using social media for their employee communications, but have declined to institute a public-facing social media presence.

"The F500 are definitely a more regulated group as well as a more B-B group," Nora Ganim Barnes, chancellor professor of marketing and director of the Center for Marketing Research, told AdvisorOne in an email. "They are also very large hierarchical corporations. All these factors have been negatively correlated with the use of social media."

Of the primary corporations listed on the 2011 Fortune 500, 114 companies have a public-facing corporate blog and have posted on it in the last 12 months. Of the top five companies, just Wal-Mart and Exxon have a blog. The percentage of companies using blogs to interact with the public has increased since the inaugural study in 2008, but has declined since 2010 when 116 companies maintained a blog.

Firms that do adopt a corporate blog do so with gusto. Interaction levels have remained high since 2009 when 90% of companies allowed comments to be posted to their blog and offered RSS feeds or subscriptions. In 2011, 91% of companies did so. "These blogs are kept current with frequent posts on a range of topics," according to the report. "It appears that those companies that have made the decision to 'blog' have utilized the tool well."

To measure firms' Twitter adoption, researchers looked for official Twitter accounts with a post made within 30 days and found that Twitter is the most popular social media tool among Fortune 500 companies. Almost 62% of firms have a Twitter account, up 2% from 2010, and all of the top 10 firms post consistently on their accounts.

Facebook is slightly less popular. The report found 58% of firms have a Facebook page. This year was the second time Facebook adoption was studied. The insurance industry was most likely to take up a Facebook account, the report found, though the number of firms that maintained a page fell slightly from 2010 to 2011. 

"These results may signal a leveling off and possibly retrenchment when it comes to the adoption of social media among the 2011 F500," according to the report. "There is also evidence of change in the adoption of these tools by industry and a clear sign from some companies that these are not part of their communications strategy.

Given that the F500 are the titans of American business, we may be seeing the slowdown in business adoption of social media. At the very least, this group appears to have slowed or stopped its adoption of the three most prominent tools–blogging, Facebook and Twitter."

Rank is a significant influencer in social media adoption, the report found. "In 2011, 35% of the top 100 companies have a blog. With over one-third of all F500 blogs coming from the top 100 companies, rank continues to be a factor in the use of this tool."

The top 200 companies account for 58% of corporate blogs, while the bottom 200 account for just 28%, consistent with reports from 2008 through 2010. "It is interesting to note that adoption remains lower in the bottom 200 than in the top 200 for the fourth year in a row with no significant change in the numbers," according to the report.

Rank was a factor in Twitter adoption as well. Almost half of the top 200 firms have an account and 34% of the bottom 200 have accounts. Rank doesn't seem to affect the number of followers, however. Of the top 10 Fortune 500 firms, only Wal-mart (the top ranked firm in the Fortune 500) numbered more than 100,000 followers. Fannie Mae, which ranked No. 5, has less than 1,800 followers. The firm with the most followers, Google, ranks No. 92 on the Fortune 500. Whole Foods, the firm with the second highest number of followers is ranked 273.

The report found Facebook followed the same adoption pattern by rank as Twitter and blogs. Of the top 200 firms, 48% have a corporate Facebook page and 35% of the bottom 200 have a page. Thirty-one percent of firms don't have a Twitter account or a Facebook page.

Here again, the top 10 Fortune 500 companies did not necessarily have the most fans. When the report was released, Wal-mart was the only firm in the top 10 to have more than 5 million fans. As of Nov. 15, the company had over 10 million fans.

"The point is simply that there are some places where social media is going to be more integrated and useful than other places depending on the organization's mission and structure," Barnes added.

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