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Twitter: A fad or a crucial brand-building tool for business?

More companies are setting up Twitter accounts as they look to take advantage of the social networking phenomenon.

If business leaders have any lingering doubts about the influence of social media in 21st century Britain, these should quickly be cast aside. For the first time, in January, the channel overtook entertainment to account for the largest share of UK-based internet traffic. Websites such as Facebook, MySpace and LinkedIn took a 12.46 per cent share of all web activity during the first month of the year, highlighting the importance of the role it now plays in many people's lives. There were a reported 2.4 billion visits to social networking sites in the UK, including hundreds of millions of visits to Twitter, the ever-popular micro-blogging service.

Last month saw Twitter celebrate its fifth anniversary, with the website having been founded in San Francisco on March 21st 2006. After a relatively slow start, the portal burst into life around three years later and 200 million people now post tweets – short status updates using a maximum of 140 characters - every week. The site is reported to be gaining 500,000 new users every day, and with consumers spending so much of their time on the site following the activities of their friends, favourite celebrities and preferred brands, corporate organisations are also making their presence felt. Since the Twitter explosion of 2009, companies have been scrambling to capitalise on this latest consumer craze, and as a consequence, millions of firms worldwide now have their own feeds.

Yet initially, businesses have struggled to identify a clear role for their Twitter accounts. Some firms have used their feeds solely for marketing purposes, but many commentators argue that micro-blogs are ineffective as a direct promotional tool. The majority of corporate users see the greatest value in engaging in conversation with customers, with the aim of winning their appreciation, trust and eventually their brand loyalty. Some companies have attempted to drive sales directly via the website, but Twitter is largely viewed as a corporate communication tool and a mechanism for raising brand profile. Establishing a direct link between Twitter use and increased revenue may be difficult, but companies recognise that free online exposure can rarely be a bad thing.

According to IT analyst Gartner, businesses are continuing to explore ways of using Twitter to their advantage. Jeffrey Mann, research vice president at the firm, said that while the website is primarily geared at individuals rather than companies and organisations, many users tweet about business issues on their own personal feeds. He suggested that this discussion gives companies the encouragement they need to enter the Twitter landscape – either as a brand, or a professional individual closely associated with one.

Gartner noted that company employees may use Twitter to enhance and extend their personal reputations, thereby enhancing the company's reputation. By making clever, interesting comments and attracting feed followers, employees can raise their own profile and also awareness of their employer as a whole. "[This] elevates these companies that want to be seen to employ influential leaders," the firm said.

According to the firm, the website is also used by some business employees to communicate about what they are doing, projects they are working on and ideas that occur to them. Gartner warned subscribers to take care when micro-blogging in this way, as there is no guarantee of security. "It is crucial that employees understand the limitations of the platform and never discuss confidential matters, because a seemingly innocuous Tweet about going to see a particular client can tip off a competitor," Gartner stated.

One other way companies can use Twitter to their advantage is by scouring the site for feedback – both positive and negative. Gartner noted that Twitter streams provide "a rich source of information" about what customers, competitors and others are saying about particular firms. "Search tools can scan for references to particular company or product names, and savvy companies use these signals to get early warnings of problems and collect feedback about product issues and new product ideas," the report stated.

While consumers continue to engage in conversation on Twitter, the chances are that UK businesses will attempt to derive value from the website. There are potential risks, and inappropriate use of the channel can lead to reputational damage. But where companies have a clear strategy for embracing the consumer, and remain focused on their end goals, Twitter appears to offer various marketing opportunities. Attempting to generate revenue through the website directly looks a somewhat risky approach, but as a supporting player in corporate communications, Twitter clearly has a valuable role to play.