Contractors embrace social media, but where's the ROI?

Value often can't be measured in dollars and cents

Federal contractors are staking out a major presence on social media — often with a hazy view of return on investment — and that is just fine with Tom Haser of Lockheed Martin Corp.

Just as with e-mail and Internet access 15 years ago, it is difficult to quantify social media’s utility, said Haser, director of social media solutions for Lockheed Martin’s information systems and global solutions group. But he is confident that involvement in social media will pay off.


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“You can measure the value, but not in dollars and cents,” Haser said. “It is making us more transparent, more agile and more connected.”

Federal contractors are actively increasing their participation in social media both externally on Facebook, LinkedIn, YouTube, Twitter, GovLoop and other Web sites, and internally, with collaborative tools such as wikis and blogs. Contractors also are researching new social media solutions for government clients and one area for exploration is emergency response.

Lockheed Martin, for example, has developed its own social media platform, Eureka Streams, for its employees and clients. The company recently made Eureka Streams available as open-source software for free to the community, in the hopes of stimulating collaboration and innovation, Haser said. It seems to be catching on: the introductory video featured on Lockheed’s YouTube channel has received more than 4,700 views.

Most of the attention in contractor social media has been on their public activity. A recent survey of 167 federal contractor employees by Market Connections Inc. research firm highlighted the expanding nature of federal contractors’ involvement in social media.

Overall, 55 percent of the respondents said they are utilizing social media for communications with their government clients: just more than a third of those respondents are using formal strategies, while two-thirds are doing so on an ad hoc basis, the survey said.

Overall, 87 percent of the 167 federal contractor employees surveyed are using social media at home or work.

Fifty-nine percent said their companies use social media for customer engagement, 59 percent for marketing, 48 percent for lead generation, 42 percent for employee recruitment and retention, and 41 percent for collaboration.

The greatest challenge for federal contractor use of social media was in measuring return on investment, cited by 63 percent; lack of resources, cited by 50 percent; difficulties in identifying the appropriate channels for engagement, cited by 46 percent; and security, cited by 45 percent.

John Kagia, research manager at Market Connections, said the informal nature of the federal contractors’ experiences with social media indicates an evolving process.

“They are still in the early stages of understanding which tools are most effective,” Kagia said. Most are using ad hoc strategies, trying out a variety of tools to gauge where they get the greatest response. Lockheed Martin has received 2.3 million views on YouTube, for example, but only has 2,300 fans on Facebook.

The most popular social media tool for contractors is LinkedIn, used by 36 percent, followed by Facebook, with 26 percent. “LinkedIn has surpassed Facebook as the platform for engaging with an audience. It allows for a more specific, targeted audience,” Kagia said.

The companies tend to experiment internally before using social media tools to reach targeted audiences, Kagia said. “The contractors have become very sophisticated users of social media; many have learned from mistakes made when they were using the tools internally,” Kagia said. Those mistakes typically fell into the category of making too much information available to too many people, running the risk of offending a client or releasing sensitive information, he added.

Because social media demands a lot of attention — with a staff dedicated to responding to comments within hours and not days — there is concern about difficulty in measuring return on the investment of time and resources.

Contractors are split on how to view social media ROI. “One group views social media to be as integral as e-mail, and how do you measure ROI on e-mail?” Kagia asked. “Others might be rigid about needing to find a dollar value for social media, but most are in the middle and believe it does open doors.”

On Facebook, among the largest federal contractors, the ones with the greatest number of fans are Hewlett-Packard, with 86,000 fans, and Booz Allen Hamilton and Northrop Grumman, each with about 6,200 fans. Several of the very large contractors with thousands of employees had fewer than 400 fans on Facebook.

One factor that might have helped Booz Allen and Northrop gain fans was that both of their Facebook pages allow fans to submit comments, while most of the other federal contractors’ Facebook pages do not allow for comments.

Allowing for interaction is a major factor in gaining more fans on Facebook, said Adriel Hampton, manager of the Gov 2.0 group on LinkedIn, which has 4,000 members. “Attracting fans is more successful if you allow interaction,” he said.

Although many federal contractors fear spontaneous interaction or losing control of the message when they use social media, most of the time those fears are overblown and there can be valuable conversations that take place, Hampton added.

He advises that social media is most effective when used in a hybrid fashion, mixing business with personal insight and interests. “If you go into social media trying to tweet and network strictly for business, you will not have much to show for it. People are looking for a human element. If you want to make connections, you have to be more personal in social media,” Hampton said.

Steve Radick, a lead associate and consultant at Booz Allen Hamilton and an active blogger, said his social media activities have helped bring visibility to both him and his company. In some cases, government executives have contacted him after reading a blog entry or engaging in a discussion on a social media site.

“With social media, now I’m a person, not just a cog in a machine,” Radick said. Making relationships through social media can be empowering, especially for junior employees, he added.

Sometimes, a young blogger or tweeter may develop greater access to a government official than the contractor executive in charge of the account does. If that happens, it may be awkward but manageable, Kagia said, adding that contractors are smart if they can take advantage of those relationships to everyone’s benefit.

Many federal contractors are active on GovLoop, interacting with government executives and employees. “Those who are most successful are jumping into conversations and raising awareness without a product pitch,” said Andrew Krzmarzick, director of community engagement at GovLoop. “If you are seen as a thought leader in the Gov 2.0 and social media space, the government agencies want to work with you.”

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Thu, Sep 2, 2010 RS Silver Spring, MD

Great article, Alice. Even mid-tier government contractors are finding the benefits of using new social media tools to engage and interact with prospective customers and their community.

Take WBB Consulting, a client of mine, for example. They recently launched a geographically-focused blog called Celebrate Huntsville that is designed to be a tool to both existing residents of the city and military personnel moving there via BRAC.

Although it just launched a few weeks ago, the portal is already drawing great traffic predominantly from the targeted region and has become a news source and resource for Huntsville residents. Check it out at www.celebratehuntsville.com.

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