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More companies at least considering corporate blogs

Shamus McGillicuddy and David Braue

A majority of US companies are now at least considering corporate blogs, but there are still plenty of businesses not convinced that blogging has business potential.

Forrester Research surveyed 275 IT decision makers at U.S. companies with 500 or more employees and found that while 54% of those polled said they are blogging at some level -- or at least considering an investment -- 46% have no plans to invest in blogs.

That's far more progressive than the situation in Australia, where corporate blogs remain few and far between. Here, executive blogging has largely been limited to propaganda sites like Telstra's Now We Are Talking blog, as well as local executives of blog-loving multinationals like Microsoft and Sun Microsystems.

According to Forrester, the reason so many of them have no interest in blogs is because they see no business value in blogging. It's a headache they don't want and many have more critical problems to solve.

"Strategic decision makers see adoption of blogs in the consumer world and they see the chaos that goes on," said G. Oliver Young, a Forrester analyst. "They see the flame wars and so forth, and they question the validity of its business value."

But the main stumbling point on blogs, Young said, is that the business return isn't as revolutionary as most people expect. "A lot of companies look at blogs and think, 'Boy it should be doing a heck of a lot more for us.' It provides incremental

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value, but not revolutionary value."

Customer outreach

For South Australia based Savings & Loans Credit Union (SLCU), the decision to start blogging a year ago was a conscious effort to explore a new avenue of customer outreach. CEO Greg Connor has regularly used the company's blog, at http://savingsloans.typepad.com, to convey information about new company offers, policies, and market news.

CIO Tony Hampton, who has facilitated the blogging, says the decision to get Connor online came out of a desire to relate to customers in a new way. "Being a financial institution, we have a lot of distribution channels," he explains.

"However, our online channel is especially important; a lot of members choose to deal with us online, and we want to be able to fulfil their needs totally through that channel. The blogging came not from looking at what other corporates were doing, but from looking at the Internet and ways of sharing information."

SLCU also maintains an internal blog for conveying company updates to the credit union's 550 employees. Both sites have proven popular, says Hampton, who concedes that SLCU's membership-based shareholding structure means the initiative wasn't hobbled by concerns about potential shareholder miscommunication.

Returns on blogs vary widely, and many companies may find it difficult to attribute hard financial benefits to their online efforts. A recent Forrester analysis pointed out that the exact benefits of blogging are impossible to measure, but suggested that blogs will be most successful if they're not overmanaged, and if companies go into the project with realistic expectations about costs and potential benefits.

The Forrester report included a detailed analysis of the ROI of General Motors' FastLane blog, which it concluded had delivered an ROI of 99 percent in its first year of operation. However, much of this was based on increased press coverage about the blog; a risk-adjusted ROI for 2007, after two years of operation, was a more moderate 39 percent.

Power from the people

Despite sporadic successes, for many companies, blogging is just not living up to the hype. However, Young said some companies have found blogging to be critically important.

He pointed to Eastman Kodak Co., the US$13.3 billion company known for its photographic technology. In an age of declining interest in film photography, the company was at a crossroads.

"Kodak was a company that was struggling with its transition to digital photography. They had their employees start blogging to share their passion for photography, and they had the scientists talking about the technology they're working on to get customers excited," Young said.

Kodak has two blogs, with about 50 employees contributing to them.

"Our motivation was to have the blogs as a digital communications medium to be a support for Kodak's transformation," said Denise Stinardo, Kodak's corporate communications manager of new media. "Kodak had always had a strong association as a film manufacturing company. As we were leading our transformation into a digital imaging company ... we wanted to give our consumers and potential consumers an inside look into Kodak."

Stinardo said Kodak considered a variety of new media options, such as podcasts and RSS feeds, before settling on blogging. She said Kodak saw Fortune 500 companies such as General Motors doing well with blogs and decided to try it. Stinardo said the blogs have received a lot of attention.

'A Thousand Words', a blog where employees share their passion for photography and other personal interests, receives up to 20,000 visitors a month. 'A Thousand Nerds', where Kodak scientists blog about research and development, receives up to 10,000 visitors a month.

Stinardo said it's difficult for her company to calculate an ROI from the blogs because it's nearly impossible to connect blog visitors to actual retails sales. But she and the company's executives see a clear business case for the blogs. The sheer volume of visitors has created a dialog between customers and the company and helped educate the market about Kodak's new business initiatives. Stinardo said blogging has also raised employee morale.

"There isn't a week that goes by when someone doesn't contact me and ask, 'How do I contribute?'"

Although Kodak has enjoyed success with its external-facing blogs, more companies use the technology internally.

Forrester asked adopters of blog technology to list the business reasons for using it. Sixty-three percent said they use blogs for internal communications, and 50% use them for internal knowledge and content management. Forty-seven percent said they use blogs for external thought leadership and 46% said they use them for marketing to customers and prospects.

"There's definitely a business case for blogging internally to employees and for blogging externally to the world at large," Young said. "Opening up a communication channel to customers is valuable."

Although in many cases the business value of blogging may not be as revolutionary as evangelists claim it is, Young said practical barriers to adoption of the technology are low. It's just a question of whether IT decision makers have the time to put a relatively small blogging project in their project portfolio.

"It doesn't take a heck of a lot to get up and going," Young said. "But for most enterprises, blogging is going to require the input of IT along the way, and increasingly IT shops are pushed to the limit. IT doesn't have time to invest in it."