ANN ARBOR—In the rush to align marketing strategy with social media such as Facebook and Twitter, firms may miss critical opportunities to maximize their return on investment, says a University of Michigan marketing expert.

So how should companies think about social media? There are three ways they can leverage this major shift in consumer behavior, according to Puneet Manchanda, a marketing professor at U-M’s Ross School of Business.

The first is to be present where consumers are by creating simple content (ads, keyword links, links to brand websites, etc.) on popular sites, Manchanda says.

Second, companies can leverage social media by just plain listening, he says. The web is replete with discussion forums, newsgroups, ratings and review sites, fan websites and blogs that contain rich and nuanced conversations. Text and multimedia mining software can distill the content and sentiment from millions of conversations on topics important to consumers.

“The relative anonymity of the web gives consumers free rein to express their concerns, suggest ideas, voice complaints and criticize company actions,” Manchanda said. “Virtually all this content is available publicly for free. All companies need to do is listen systematically.

“Companies tend to underrate this ‘unglamorous’ part of the web as they try to chase the hottest new site or trend in the social media space. However, in terms of most bang-for-the-buck in gaining customer insights and intimacy, this is as good as it gets.”

A third way that companies can leverage social media is by proactively engaging consumers, Manchanda says. In such approaches, companies should choose the optimal level of intervention with the objective of creating the maximum possible engagement. The amount of intervention is a function of consumer involvement in the product category and the company position or objective

“At one end of the spectrum, for example, with passionate and involved customers and a strong brand, companies would do well to set up brand communities that facilitate consumer-to-consumer interaction and then step out of the way,” he said. “Companies that are developing their brands could be a little more interventionist by participating in discussion forums and building relationships with the category mavens and brand evangelists.”

Whatever the level of intervention, it is crucial that companies are completely transparent in their activities by revealing their identity and obtaining relevant permissions, he says.

Manchanda says that in the stampede to use social media, companies—no matter which strategies they employ—often overlook simplicity and are prone to two kinds of missteps.

The first, he says, is that companies develop a fragmented “site-based” strategy—they have a plan for Facebook or Twitter instead of an overall social media strategy.

“This can become a problem as consumers in this space migrate to different sites and platforms with breathtaking speed,” he said. “Remember Friendster or Dodgeball? You haven’t thought about them in eons. MySpace, a pioneer and technophile darling at one time, is heading toward Friendster status at an increasing speed. So companies should treat their presence at a given site as a tactical execution that leverages site-specific features of the overall social media strategy.”

The second misstep companies make is that they try to adapt the “site du jour” to the requirements of branding and marketing.

“Maintaining a Facebook brand page is incredibly time-consuming, primarily because the life of a brand is not replete with the small and banal updates that comprise activity on Facebook,” Manchanda said. “But if there is no activity, then consumers lose interest, so brand teams spend a huge amount of time creating frothy content that doesn’t ring true. In a similar vein, providing a constant series of tweets when there is really not much to tweet about can drain resources at an alarming rate.”

As with all consumer communication and engagement strategies, the elephant in the room is the return-on-investment of social media initiatives, Manchanda says.

“Unfortunately, there is no one-size-fits-all approach possible, as the medium has not yet reached any sort of equilibrium,” he said. “In such a situation, the best approach is to start at the beginning. As companies develop and formulate their overall social media strategy, they need to ensure that they build in a method to measure both returns and costs.”