Why companies watch your every Facebook, YouTube, Twitter move

 Why companies watch your every Facebook, YouTube, Twitter move

 By Tim Weber

 Dave Carroll's United Breaks Guitars video has been watched 9.23 million times

 Once upon a time companies could afford to be rude. Unhappy customers would grumble to a few friends, withdraw their custom, but there was little else they could do.

 Today, they still tell their friends, but they do it online, using social media websites like YouTube, Facebook and Twitter.

 Take the Canadian folk singer, Dave Carroll. After nine months of complaining he had had enough.

 United Airlines baggage handlers had damaged his $3,500 guitar, but the airline refused to pay compensation and its customer service agents were less than courteous.

 So he made a music video about the experience and on 6 July 2009 posted it on YouTube. Within three days it had been watched half a million times; by mid-August it had reached five million.

 United had a massive public relations crisis at its hands, not least as thousands of other unhappy customers now came forward to vent their frustration.

 These days one witty Tweet, one clever blog post, one devastating video - forwarded to hundreds of friends at the click of a mouse - can snowball and kill a product or damage a company's share price.

 It's a dramatic shift in consumer power. But what if companies could harness this power and turn it to their advantage?

 What's the social media story?

 At Alterian, for example, the social media database currently holds about nine billion postings, with 50 million more added every day.

 At the most basic, these tools measure the volume of social media chatter. Researchers at Hewlett Packard showed that they can accurately predict a Hollywood movie's box office takings by counting how often it is mentioned on Twitter before it opens.

 It gets trickier when companies try to measure "sentiment", whether the deluge of social media comment is positive or negative.

 When bad is good

 Rory Cellan-Jones: Why Starbucks wants to have millions of Facebook 'friends'.

 It's a crude science, with accuracy levels as low as 60%, as analysis falls victim to slang and subculture. "This movie kills" can mean something different in Bradford to Boston.

 Some social media tools don't allow users to customise their "sentiment dictionaries"; other firms like SAS throw plenty of business analytics and teams of linguists at the problem, which in turn makes their tool more of a fit for companies with deep pockets.

 But even the best software would probably judge the tweet "This board is really bad" as a negative comment, although it might be the ultimate praise among skateboarders.

 One European clothing company, popular with inner city youth in the United States, admits privately that its social media team is baffled by its customers' ever changing slang, and even the online Urban Dictionary provides little help.

 Mind readers

 «Once companies have worked out that they should do something with social media, they usually don't know how to do it”

 Social media is quickly becoming a customer relationship management system, as companies have "for the first time access to people's minds in real-time," says Jorn Lyseggen. The tools on offer provide companies with dashboards that show trends, hot topics, the reach of brands, customer mood and how competitors are doing.

 Most companies are still cagey about showing off their dashboards. After all, this is their reputation laid bare ... although what they see is hardly a secret: anybody (with enough money) can subscribe to a social media analytics service and do the very same research.