Social Media Analytics: Deal Breaker?

Over the past several weeks, we looked closely at a number of case studies in which major corporations have both acquired and merged with other companies at some point in the company’s lifecycle. From the Voice of Montreal to Katzenbach Partners and Booz, we know that M&A’s are a common (and often necessary) fact of life in business.

Unfortunately, however, not all M&A’s go as smoothly as we’d like to think. In fact, Robert Sher, founding principal of CEO to CEO, writes explains that “most research indicates that M&A’s have an overall success rate of only 50%.” As informed and learned professionals, we hear about mergers and acquisitions quite frequently; however, rarely do we discuss the rampant failure of such. Sher argues that while most deals look great on paper, the integration process is not always properly executed.

One solution? Using non-traditional data analytics, with particular emphasis on social media, in an effort to ensure the culture of one’s target acquisition aligns with one’s company culture. Social media is essentially a collection of people’s opinions on which most major companies do not necessarily depend. Bruce Fadem¹, former VP and CIO at Wyeth, argues that big data and analytics separates the “winners from the losers.” So too can it separate the success from the failures of major business mergers and acquisitions, especially those who decide against leveraging social media data.²

^{Current Role of Social Media in M&A Process ₃}

I think the most crucial reason for which companies should leverage social media in the M&A process is the unique information and landscape of data that most social media platforms provide. Where else would a company be able to accurately gauge the voice and perception of a target company’s customers and employees? Generally, individuals hold little back when tweeting about a certain experience with a particular company. In addition to employee and customer satisfaction, companies are able to assess the character of an organization by how they respond to their employees and customers via social media.

Ultimately, social media provides unedited, real-time data that has largely been unavailable through traditional data analytics. Last year, only 36% of senior M&A executives used social media platforms to research potential acquisition targets instead of waiting for market studies.³ Companies that yearn for a competitive advantage and success through mergers and acquisitions should hop on this bandwagon sooner than later!

 

¹ IBIT: The Business Value of Big Data
² Leveraging Social Media to Improve M&A’s
³ Brand Watch: Social Media