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we're here today with Lin Wu she's a wharton professor of operations information and decisions and she's
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going to be talking to us about her paper data analytic skills and the corporate value of social media Lin
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thanks for being here sure so first of all could you give us a brief summary of the research what were you trying to
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study here sure absolutely so the research is really need to understand how firm derive value when they start
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using social media and that's an important question because according to a reason CMO survey and only fifteen
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percent of executives can quantitatively say the impact of social media on their
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bottom lines that means eighty-five percent of them do not and all and the forty five percent do not have any clue
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both quantitatively or qualitatively with the value of the social media is to their business and that's even a bigger
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problem as social media spending or is projected to double within the next three to five years so understanding how
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firms derive value from social media is becoming a really important question now
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how did you examine this question and what did you find yeah so what we did is what we did is we collect a larger
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simple the largest possible sample because before social media study often targets marketing related activities or
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firms so here we just look in all the firm who ever had a you know social media presence in this case a Facebook
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company page okay and then we map all their stock market value into into our model to look at whether when they adopt
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or start using social media do their market value increase or decrease or stay the same and what we found is that
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on average it is a positive relationship but not when they adopt but when they actually start using social media and
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what's interesting is that the return extremely heterogeneous as in some firm
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derive a lot of great value from using social media some don't and some even
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have a negative impact after they started using social media and that's really interesting because we thought
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well what is really driving that right why do some firm do so well with media and some don't and we're trying to
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understand this from from a perspective entire organization not just the marketing department and we found is
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that is really the data analytic skills embody in their employees but ultimately
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driving their return on social media now when you say Dana other skills like how
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does that can you explain a little bit more about how that kind of keys into social media like what is it that these
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people with these skills are bringing to the table that's helping companies maximize value from social media
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absolutely so here the data skill will be measures really using the employee resume so we called about like 15 50
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million resumes across the United States and then we look at their resume do they
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have relevant data skills like theydo mining skill data centric and analytic skills and what we found is that this
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data skills has cannot just be concentrate on the marketing department alone at first we thought oh maybe you
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know since marketers are using advanced analytics and maybe is really the value came from there when we found exactly
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the opposite that has really data skill across entire spectrum of functions within the firm that matters the most
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now includes data skills in HR in finance in operation in product development in rd only when data skill
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to stupid across all function aspect of the firm can firm drive greater great greater value and if you think about it
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it makes sense because social media data does not means only for marketers right
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the data the consumer preferences consumer sentiment and feedback can really be applied broadly to every
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aspect of firms operation right example bizarra hey Zara is great at tapping consumer preferences and they are you
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know because they are taught there because they track consumers preferences over time there they are actually
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introduced to introducing new products every two weeks and so firms are turning their biggest Facebook fans into
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employees so that can be great for HR functions as well so you think of the wealth of social media data and it can
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be really applied to every aspect for evaporation and we those winners function of within the
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firm I finance HR and operation a product and product development can make sense of these data and turn those data
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into strategies and that's when you see the greatest value so it's really not
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just about it seems like the differentiating factor here is first of all not just adoption but actually using
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it but then not just actually using it but knowing how to use it in a smart way exactly exactly now we're their
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conclusions that you found that we're surprising to you absolutely um you know
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at first we thought the positive relationship without all you know some firms just naturally fit to use social
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media right if you're a consumer-facing firm you have products and you are you
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need to know what users are doing then it makes sense so we thought most of these will be concentrating the consumer
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products it retails or in our high tech but we found was that actually opposite is really the non consumer-facing firms
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that generates the most value and that gets us thinking oh really maybe the social media data is really impacting
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every aspect of the firm's operation the marketing outcome may be just tip of
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iceberg and that's interesting and also we thought marketing the apartment might
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be the benefiting the most when they have strong analytic skills again we did not find that we really find the
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concentration of data skill with in on departments none marketing departments but across all function of the firms
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that ultimately drives the value so now if I am if I'm a company any kind of
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company and I'm looking at this research what do you think that companies can
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take from this in terms of being able to actually apply it to their operations absolutely I think this may not just
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apply to social media per se but any kinds of data centric decision-making right so we have search data we have
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clickstream data we have mobile data all these data need some kind of sense making so having theta and little skill
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within the firm is becoming more important than ever and you're not any can't just hire raw number of them and
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put them on RD or put them all in marketing it's really they had to be distributed decentralize across all
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departments that's when you can actually gave a dry the most been this now what do you think are there
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misperceptions I think you've talked about a little bit other misperceptions
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that you think this research dispels like I think it really just goes to the fact of it's so important to have people
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to interpret your data or just to interpret your data it was just having data yeah absolutely so I think
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translating data into strategies in every aspect or operation is really is the key and and it can have it could
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potentially have effect on firm hierarchies for example before you are developing a product you may not
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necessarily need to ask your boss for permission you just go into the data directly go to social media data other
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type of data and say oh this is where it makes sense to do to do this and you just make that decision decision on your
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own it also seems like it may be sort of lends credence to the idea of maybe incorporating a data layer in
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departments or areas where maybe you wouldn't normally think that you should
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absolutely right fate and people analytics HR analytics the big is a big deal how do you use this data find your
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nice employees it's something maybe its most firm have not thought about that
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what social media can do or you know may using the next social media data to generate the next next product
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development or new product for for consumers that may not be that may be releasable as well now you said some of
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the data that you found was that actually social media in some cases impacted companies negatively and I was
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that companies that did not engage like they just adopted or companies that had didn't have as much data analytic skills
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I mean what was the thing that kind of made it a negative impact sure freezy Apple if you just adopt and without
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using it that's a negative effect but the morning defense really came from you
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spend a lot of time energy developing social media platform and you don't really have the capability to make sense
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of data so you make all this upfront investment else into social media but you don't really get a maximum return as
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a result you maybe have a negative ROI from social media now what would you say what do you think sets this research
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apart from other analysis that's good then connected on this topic absolutely
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a thing I think what one important factor is that we really look at all firms across very industry manufacturing
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and mining but not just consumer-facing industries and so it's really a very large comprehensive study on how
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social media affects firm value and more importantly we're not looking at the you
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know the marketing outcomes or things that we may be all of us know that for social media could impact but other
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things that sets a data skill and howl if affect every aspect firm is not as not something that we or the you know
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the other pay are the research have really delved into and how will you follow up this research what's next oh I
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think this is a really big emerging area on data analytic skills so here we so show the impact on social media I think
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will be really interesting to see how data skill can affect various various other part operations such as innovation
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activities what kind of innovation does see the skill jet engenders is it going to be incremental is it going to be
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novel is gonna be a brand new innovation that will change the world so that's
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gonna be really interesting to see and now do you think it does it lend credence to the idea that maybe data
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analytics is going to be one of those just kind of basic level things that everyone's going to be expected to have
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at least some level of data analytic skills I mean it seems like that's the direction we're moving in to some extent
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I think he I think it possible i think everybody have should have some skills but i think they're still had to be some
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special specialized the specialized skills involved to really make sense of this data to make sure oh this is really
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was telling you and because you make the wrong strategy based on the running perturbation that can be very
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detrimental to the firm so again somebody people should have the ability to understand the results but people who
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actually generate those result require some specialty special trainings you