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LeWeb KeynoteDecember 9, 2010
Jeremiah OwyangIndustry Analyst
Social Business Forecast: 2011 The Year of IntegrationResearch reveals focus on integration, staffing, advertising, and measurement.
© 2010 Altimeter Group
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1) What happened in 20102) What’s going to happen in 2011
3) What companies should do about it
Agenda:
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2010 Overview
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Image by Slowtron used with Attribution as directed by Creative Commons http://www.flickr.com/photos/fuckr/91530309
© 2010 Altimeter Group
Just 2 years in corporate social business, 2010 was the year of formation.
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Most Social Media programs report under Marketing or Corporate Communications
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Companies organize for social in 5 ways
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DECENTRALIZED- Organic growth- Authentic- Experimental- Not coordinated- e.g. Sun
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- One department controls all efforts- Consistent- May not be as authentic- e.g. Ford, Regulated
CENTRALIZED
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HUB AND SPOKE- One hub sets rules and procedures- Business units undertake own efforts- Spreads widely around the org- Takes time- e.g. Red Cross
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MULTIPLE HUB AND SPOKE OR “DANEDELION”
- Similar to Coordinated but across multiple brands and units
- e.g. HP, Microsoft, Tech Giants
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HOLISTIC OR “HONEYCOMB”- Each employee is empowered- Unlike Organic, employees are organized- e.g. Twelpforce, Zappos
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Most companies organize into Hub & Spoke or Centralized12
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Maturity drives Total Budget, Team Size, and Org Model
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Formalized Mature/Advanced
Average Total BudgetAverage Team Size
Organizational Model
We asked 140 Corporate Social Strategists their total strategy budget, number of full-time equivalent staff dedicated to social media, and organizational model:
© 2010 Altimeter Group
Maturity drives Total Budget, Team Size, and Org Model
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Formalized Mature/Advanced
Average Total Budget $66,000
Average Team Size 3.1
Organizational Model
Centralized
37%
Corporations who are just getting started have miniscule budget and are significantly understaffed in a centralized team –this does not scale.
© 2010 Altimeter Group
Maturity drives Total Budget, Team Size, and Org Model
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Formalized Mature/Advanced
Average Total Budget $66,000 $1,002,000
Average Team Size 3.1 8.2
Organizational Model
Centralized
37%
Hub & Spoke
49%
Corporations who have formalized their programs have a cross-functional team that lead and serve many business units with a larger budget line–they may not deploy on their behalf.
© 2010 Altimeter Group
Maturity drives Total Budget, Team Size, and Org Model
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Formalized Mature/Advanced
Average Total Budget $66,000 $1,002,000 $1,364,000
Average Team Size 3.1 8.2 20.8
Organizational Model
Centralized
37%
Hub & Spoke
49%
Hub and Spoke
44%
Mature and Advanced corporations have only slightly large budgets but involve many more across the company and are formed in Hub and Spoke, and often “Dandelion”
© 2010 Altimeter Group
2011 Forecast
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Image by ronni44052 used with Attribution as directed by Creative http://www.flickr.com/photos/ronnie44052/2730239605
© 2010 Altimeter Group
2011 is the Year of Integration
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For Internal Goals In 2011, Social Strategists will focus on Measurement of ROI
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
We asked 140 Corporate Social Strategists: “What internal social strategy objectives will you focus most on 2011?”
Policies and Procedures
Resources: Increasing budget/headcount
Getting Tools and Technologies in Place
Developing a Listening/Monitoring Solution
Getting Buy-In from Stakeholders
Applying Social Insights to Product Roadmap
Determining an Organizational Model
Internal Education and Training
Creating ROI Measurements
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
22.0%
24.6%
26.3%
29.7%
32.2%
34.7%
34.7%
37.3%
48.3%
© 2010 Altimeter Group
Other (please specify)
Share of voice or total mentions
Conversions or leads
Sentiment: Overall opinion of what people say
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
10.1%
21.8%
27.7%
33.6%
34.5%
39.5%
46.2%
65.5%
Social Strategists struggle with relying on engagement data
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
We asked 140 Corporate Social Strategists: What measurements are most important to evaluating the success of your program?
© 2010 Altimeter Group
In External ‘Go to market’ a focus will be on integrating social onto the corporate website
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
We asked 140 Corporate Social Strategists: “What external social strategy objectives will you focus most on 2011?”
Enabling Peer-to-Peer Support
Providing Direct Customer Support
Collobarating with Customers
Mobile/Location
Social Commerce
Formalizing an Advocacy Program
Fostering Word of Mouth
Listening/Learning about Customers
Developing Ongoing Dialog with Customers
Website Integration
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
13.9%
16.4%
19.7%
20.5%
22.1%
24.6%
36.9%
37.7%
43.4%
46.7%
© 2010 Altimeter Group
Brand Monitoring
Staff
Research & Dev
Community
Custom Tech Dev
Traditional Agencies
0% 20% 40% 60% 80% 100%
76%
71%
75%
65%
67%
55%
54%
52%
47%
47%
46%
26%
6%
7%
2%
10%
3%
9%
5%
6%
8%
3%
1%
8%
2010-2011: Adoption of Social Business programs
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
We asked 140 Corporate Social Strategists their budget for 12 social business programs in 2010, and projected increases/decreases in 2011 to calculate adoption forecast:
© 2010 Altimeter Group
Staff to ManageAd Spend
CommunityTraditional Agencies
Boutique AgenciesBrand Monitoring
Custom Tech DevInfluencer
Research & DevSCRM
TrainingSMMS
$- $100,000 $200,000 $300,000
$190,000
$104,000
$92,000
$104,000
$78,000
$63,000
$53,000
$31,000
$40,000
$19,000
$18,000
$14,000
20102011
2010-2011: Spending on Social Business programs
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
$278,000$160,000 $129,000 $120,000 $108,000
$98,000 $90,000 $47,000 $47,000 $37,000 $23,000 $22,000
We asked 140 Corporate Social Strategists their budget for 12 social business programs in 2010, and projected increases/decreases in 2011 to calculate adoption forecast:
© 2010 Altimeter Group
2011 top spending by Company Maturity
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Mature Advanced
First
Second
Third
Fourth
Fifth
We asked 140 Corporate Social Strategists their budget for 12 social business programs in 2010, and projected increases/decreases in 2011 to calculate top spending by Company Maturity in 2011:
© 2010 Altimeter Group
2011 top spending by Maturity
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Mature Advanced
First Staff: $133,000
Staff: $303,000
Staff:$406,000
Second Community:$78,000
Ad Spend:$204,000
Custom Tech Dev:$272,000
ThirdTraditional Agencies:
$51,000Traditional Agencies:
$162,000Boutique Agencies:
$238,000
Fourth Brand Monitoring:$42,000
Community:$126,000
Community:$198,000
Fifth Ad Spend:$36,000
Brand Monitoring:$108,000
Ad Spend:$195,000
A small compartment of staff will be hired, scalable branded communities, and reliance on agencies which could help with monitoring.
© 2010 Altimeter Group
2011 top spending by Maturity
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Mature Advanced
First Staff: $133,000
Staff: $303,000
Staff:$406,000
Second Community:$78,000
Ad Spend:$204,000
Custom Tech Dev:$272,000
ThirdTraditional Agencies:
$51,000Traditional Agencies:
$162,000Boutique Agencies:
$238,000
Fourth Brand Monitoring:$42,000
Community:$126,000
Community:$198,000
Fifth Ad Spend:$36,000
Brand Monitoring:$108,000
Ad Spend:$195,000
Teams will continue to grow, but likely stymied by true ‘engagement’ brands may throw ad dollars and campaigns in order to scale –expect few to have maturity to truly engage.
© 2010 Altimeter Group
2011 top spending by Maturity
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
Beginner/Experimental
Mature Advanced
First Staff: $133,000
Staff: $303,000
Staff:$406,000
Second Community:$78,000
Ad Spend:$204,000
Custom Tech Dev:$272,000
ThirdTraditional Agencies:
$51,000Traditional Agencies:
$162,000Boutique Agencies:
$238,000
Fourth Brand Monitoring:$42,000
Community:$126,000
Community:$198,000
Fifth Ad Spend:$36,000
Brand Monitoring:$108,000
Ad Spend:$195,000
Expect the advanced to customize social media software and data, and then focus on engagement with social media agencies of record (SMAOR) –with less focus on advertising than the mature
© 2010 Altimeter Group
How You Should Invest in
2011
Image by zetson used with Attribution as directed by Creative Commons http://www.flickr.com/photos/zetson/254608875
© 2010 Altimeter Group
Invest in scalable social media programs29
1) Hire correctly (Gurus/Ninjas/Samurai need not apply) and properly train for scale
2) Integrate social media on the corporate website, then aggregate and curate
3) Invest in advertising that leverages social graph4) Build an unpaid army of advocates –get your
customers to do the work for you5) Invest in scalable systems like SCRM and SMMS6) Learn to measure using the ROI Pyramid
Invest in scalable social media programs30
© 2010 Altimeter Group
Gurus, Ninjas, and Samurai need not apply Hire a program manager rather than a social
media “hot shot.”• Seek candidates with a track record of early technology
adoption in their careers.
• Look for a corporate entrepreneur, comfortable with “calculated risks.”
An internal resource to serve the entire enterprise.
1) Hire correctly and properly train for scale31
© 2010 Altimeter Group
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2) Pragmatically integrate social media on the corporate website, then aggregate and curate
Source: http://www.web-strategist.com/blog/2010/05/19/slides-roadmap-for-integration-of-social-into-your-corporate-website/
1. No social integration
2. Link away with no strategy
3. Link away but encourage sharing
4. Brand integrated in social channels
5. Aggregate discussion on site
6. Users stay on site with social log-in
7. Social log-in triggers sharing
8. Seamless integration
© 2010 Altimeter Group
Advertising is the second highest social business program spend in 2010-2011 ($104,000 and $160,000)
48% of corporations plan to increase their spend in 2011
Focus on clear metrics Make ads engaging and
tie to social graph –not just banners
3) Invest in advertising that leverages social graph33
Twitter’s advertising is a combination of both earned and paid –that results in WOM
© 2010 Altimeter Group
Invest in Advocacy programs – they scale Research indicates a 5 step process
Example: Microsoft has @4000 MVPs who are nominated by peers, employees and other MVPs; MVPs write books, articles, participate in user groups, host events, and answer community questions
4) Build an unpaid army of advocates –get your customers to do the work for you
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© 2010 Altimeter Group
SCRM connects the social web to your customer data bases, in 2010 to 1011 –budgets are small $19K to $37K (SCRM) but growing• Most corporations don’t know they are implementing
SCRM, as brand monitoring integrated with CRM applies
Invest in Social Media Management Systems (SMMS) to help your brands scale.• Forecast: $14K to $22K (SMMS) in 2011 spending
• Vendor short list: CoTweet, HootSuite, Sprinklr, Objective Marketer, Expion, SpredFast, or Seesmic
5) Invest in scalable systems like SCRM and SMMS35
© 2010 Altimeter Group
Learn to measure correctly Serve the right metrics to the right roles See: The Social Media ROI Pyramid
6) Learn to measure using the ROI Pyramid36
© 2010 Altimeter Group
ROI Pyramid: Roles View Provide the right metrics to the right audience. A novice
mistake is to provide ‘engagement
metrics’ to executives
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The ROI Pyramid: Metrics ViewThese metrics are
formulas comprised of the tier below them. Currently,
there is no industry standard.
© 2010 Altimeter Group
The ROI Pyramid: Metrics Examples (there are more)
A junior mistake is providing
‘engagement data’ to
executives –instead focus on
business metrics.
© 2010 Altimeter Group
The ROI Pyramid
Role: Metrics: Specific Data (examples)
© 2010 Altimeter Group
1) 2010 was the read of Foundational Investments.
2) In 2011, expect to see a focus on Measurement, Integration, Staffing and Advertising.
3) Invest in Scalable Programs that leverage your crowds –1:1 dialog does not scale.
Summary41
© 2010 Altimeter Group
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Jeremiah OwyangIndustry Analyst
[email protected]/blogTwitter: @jowyang
Research team includes significant contributions from Christine Tran, and Charlene Li, Altimeter Group