Despite its attractive promise, the social media industry is struggling to secure the budgets it thinks it deserves. Building upon recognised planning principles, this presentation highlights where these arguments are being won and lost and the future of social media in business.

1. mutsmuts

2. on2wheelz

5. tipiro

6. Usage by Companies is Growing and the Increase in Spend
Reflects That
Forecast: US Social Media Spend, 2011 to 2016
$5,000 Social media mgmt
technology
$4,000
Social Media Spend
Agency fees for
(US$ millions)
$3,000 Social media
$2,000
$1,000 Integrated campaigns
on social networks
$0
2011 2012 2013 2014 2015 2016
Social mgmt technology $272 $389 $530 $678 $828 $970
Agency fees for SM $535 $786 $952 $1,124 $1,314 $1,523
Integrated campaigns
on social networks $684 $945 $1,278 $1,652 $2,076 $2,503
$1,590 $2,119 $2,760 $3,453 $4,217 $4,995
US Interactive Marketing Forecast 2011-2016, Forrester, 2011: http://www.bcama.com/documents/Forrester_interactive_marketing_forecast_2011_to_2016.pdf

7. Companies Using Social Media are Seeing a Higher
Increase in Both Revenue and Profit*
Experienced revenue increase in the past year Experienced profit increase in the past year
Firms NOT using Firms using social Firms NOT using Firms using social
social networks to networks to acquire social networks to networks to acquire
acquire new business new business acquire new business new business
Global Average 42% 52% Global Average 48% 53%
India 56% 63% China 79% 69%
China 64% 62% India 64% 69%
Germany 53% 56% Belgium 61% 65%
Canada 36% 55% Germany 64% 65%
Netherlands 33% 50% Canada 45% 63%
Australia 60% 49% Netherlands 40% 61%
US 32% 43% Australia 50% 57%
UK 25% 40% France 48% 50%
South Africa 36% 38% US 39% 50%
France 32% 31% UK 31% 48%
Japan 21% 30% South Africa 56% 46%
Mexico 31% 22% Japan 21% 36%
Mexico 40% 36%
Spain 18% 19%
Spain 32% 33%
A higher proportion of businesses are successfully using social media to acquire new business. They are
experiencing rising profits (+5%) and increasing revenues (+6%), compared to their counterparts who do not use
social networks.
The important take-away from this data is that overall revenue /profits are higher, but not that social directly
drives revenue.
A Social Recovery, Regus, 2011: http://www.regus.co.uk/images/A_Social_Recovery_tcm7-39640.pdf

8. A Multitude of Challenges Still Persist around Getting
Enterprise Social Media Right
Business Area
Measurement
Human
Resources
Proving success
Organisational
and the need for
Support appropriate
resources are the
Technology most pervasive
challenges
Other
Forrester: “The State Of Social Media Marketing In Europe, 2011”: http://www.forrester.com/dl/The+State+Of+Social+Media+Marketing+In+Europe+2011/-/E-
RES60750/pdf

9. dolescum

10. For the UK Social Users, Less than a Quarter Want to
Interact with Brands in that Channel
• For most, social media is a conversation with friends and family
• Conducting conversations with brands is still an underdeveloped activity
8.28 million people in
the UK actively want to
interact with brands online
IBM Institute for Business Value Analytics, CRM Study 2011: http://www.slideshare.net/ikinser/from-social-media-to-social-crm-ibm

11. A Misalignment Between What Social Consumers Want and
What Firms Think They Want Is Big
For the consumers who want to interact with brands using social media (23%), a
disparity exists between what the consumers want and what companies are
providing1.
Consumers’ Ranking Business’ Ranking
The reasons why consumers interact Perception Why businesses think consumers
with companies via social media Gap follow them via social media
(61%) Discount Learn about new products (73%)
(53%) Reviews and product rankings General Information (71%) Companies are
(53%) General Information Submit opinion on current products (69%) creating social media
(52%) Exclusive information Exclusive information (68%) environments that
(51%) Learn about new products Reviews and product rankings (67%)
provide content on new
(49%) Submit opinion on current products Feel connected to brand (64%)
products that are only
(37%) Customer service Customer service (63%)
mildly engaging t o the
(34%) Event participation Submit ideas for new products/services (63%)
customer (73%
business vs. 49%
(33%) Feel connected to brand Be part of a community (61%)
Consumer).
(30%) Submit ideas for new products/services Event participation (61%)
(22%) Be part of a community Discount (60%)
1. IBM Institute for Business Value Analytics, CRM Study 2011
2. From Social Media to Social CRM, IBM Institute for Business Value, 2011

13. Facebook User Growth Now Dependent of Emerging Markets,
US Peaked and Declining
Global Web Index, Web Trends February 2012: http://www.slideshare.net/Tomtrendstream/global-webindex-6-trends/download

14. For the 8.28M People In the UK Who Interact with Brands on
Social Media, Most Interact with Media from the Advertising
and Marketing Industry
Advertising and
Marketing companies
are ideally suited for
creating content and
communities in social
media given their ability
to create clever videos
and ads.
January 2011; Global Web Index: http://globalwebindex.net/thinking/annual-report-2011-welcome-to-social-entertainment/

15. Most Consumers Do So to Receive Discounts
• Aligning consumer expectation and drivers with the CVP of the community
strategy is imperative
• This helps the business reach the engagement KPIs it set for the communities
Chadwick Martin Bailey, 10 Quick Facts You Should Know About Consumer Behavior on Facebook, 2011 - http://www.cmbinfo.com/

17. “In a survey of nearly 200 senior marketing managers, 77 per
cent responded that they found the "return on investment"
metric very useful”
“For a single-period review just divide the return (net profit) by the
resources that were committed (investment): Return on investment (%)
= Net profit ($) / Investment ($) * 100 %”
+
“Net profit is equal to the gross profit minus overheads.”
=
“Can I sell my product / service more
cheaply through other channels?”

18. Social networking still provides less than half the reach of
TV, Radio and Print
•Gap between reach of social networking and broadcast media is significant. In addition:
•70% of consumers aged 25-34 agree that they rarely pay attention to adverts on social networking sites1.
*
Ofcom, December 2010: Media Activities with the Highest Daily Reach: http://stakeholders.ofcom.org.uk/binaries/research/811898/Full_Chart_Pack.pdf
(1) http://www.mintel.com/press-centre/press-releases/714/two-thirds-of-consumers-fail-to-click-with-unengaged-social-media-advertising

19. B Tal

20. Companies Find it Challenging to Measure and Interpret
Social Media Activity
33% of companies state
that customer behaviour on
social networks is difficult or
very difficult to measure or
interpret 2
26% stated that a top
challenge was the ability to
understand influence of a
campaign beyond
acquisition3
Half of companies stated
that they will be investing in
more robust social media
marketing management in
20123
1 - Brands Make The Pivot to Pursue The Social Consumer, Pivot, 2011: http://thesocialcustomer.com/briansolis/34830/report-2011-brands-make-pivot-pursue-social-consumer
*
2 - Bringing 20:20 Foresight to Marketing, Forbes, 2012: http://www.scribd.com/doc/59767172/Wp-Forbes-Bringing-Foresight-to-Marketing#archive_trial
3 - The State of Social Media Marketing, Awareness Social Marketing, 2012: http://info.awarenessnetworks.com/The-State-Of-Social-Media-Marketing.html

22. Despite These Challenges, Investment is Significant and
Marketers Will Continue to Increase Adoption
Base:132 European interactive marketing professionals who use social media
01.09.11 (Diagrams): Forrester Report: The State Of Social Media Marketing In Europe, 2011

23. Bullet #1: Engagement = Trust = Value
Therefore ROI can become Realisation of Influence

25. Value of Trust
• Permission to communicate
• Willingness of consumer to give ‘one more chance’
• Increased message penetration
• Increased amplification / recommendation from public
• Increased wallet spend
• Lower cost per acquisition
• Reduced churn in customers and employees

26. Bullet #2: Social Business = More Profitable Business
Therefore investment can be associated with costs
saved and sales across the business

27. To Meet the Demand, Companies Need to Refine their
Relationship Management Cycle
Traditional CRM Cycle Social CRM Cycle
Social CRM helps brands
Traditional CRM does not build relationships and
provide the engagement and engage with today’s social
interaction today’s social customer using a wide variety
customer requires of platforms and channels.
*
Econsultancy, Traditional CRM vs Social CRM, 2012, http://econsultancy.com/uk/blog/9783-traditional-crm-vs-social-crm-infographic

29. Bullet #3: Long-term Success Requires Social Data
Data management is next ‘watershed’ frontier for
businesses

30. Social Media is Fuelling “Big Data” Paradigm
2011, Gartner Hype Cycle 2011: http://www.gartner.com/it/page.jsp?id=1763814

31. Mainstream Adoption of ‘Big Data’ Maps To Emerging
Social Media ROI Timeframe
2012, Social Media Examiner: Social Media Marketing Report: http://www.socialmediaexaminer.com/SocialMediaMarketingIndustryReport2012.pdf?9d7bd4