The real value of social media

1. Where is the Real Value of Social Media? SMS Club session February 10, 2011

2. Agenda for tonight ▪ Introduction to Social media … a few facts and ideas ▪ Quick refresh on Nielsen and McKinsey… the growing importance of social media ▪ Leveraging social media in business … does your company facebook?

4. Social media … do we still need to introduce the topic? SOURCE: Nielsen 3

5. Social media does include YouTube marketing … Direct social media engagement drove impact Traffic to • Videos generated more than 34 oldspice.com grew 300% million aggregate views and a billion PR impression in a single week • Old Spice, with 94 million views, had become the No. 1 all‐time most‐ viewed sponsored channel on YouTube • Facebook fan interaction jumped 800% since the launch of the personalized videos Old Spice launched 186 viral videos featuring http://www.youtube.com/watch?v=owGykVbfgUE former NFL wide receiver Isaiah Mustafa as “The Man You Can Smell Like” 4

6. … but also a much broader array of consumer‐controlled media … Social networking Blogs Message boards Reviews and Wikis recommendations 5

7. … which can inform and bring innovation across business functions Product development Marketing and sales Service 1 Product innovation 4 Brand positioning and 8 Service experience messaging and engagement 2 Launch and real time product feedback 5 Brand health along the 9 Defensive branding consumer decision journey 3 Merchant insights 6 Social media marketing 7 Marketing ROI SOURCE: NM Incite 6

8. But how do I use Social Media in practical ways for my marketing ? SM 7

10. Nielsen Watch – Buy Strategy: Understand influencers & Drivers Of Shopper / Consumer Behavior Over 8 million consumer Purchasing behavior interviews each year in 250,000+ households Tested 87,000 new 85% of the world’s product concepts since 1977 advertising spending 35,000 Mobile Conditions & sales in phone users 350,000+ stores Over 48% of global Over 62.4 billion retail TV viewing Product transactions a year 85% of global internet activity Copyright © 2011 The Nielsen Company. Confidential & proprietary.

11. The Demand Chain: Linking knowledge about shoppers, consumers, & retailers across many points CONSUMERS New Product Innovation Television Advertising Assortment Pricing Online Trade promotion Mobile Marketing ROI Segmentation Social Media & Targeting SHOPPERS VIEWERS

12. Introducing NM Incite: an innovative Joint Venture between Nielsen and McKinsey & Company What is NM Incite? Our value proposition We enable our clients to capture value from social media intelligence and social marketing: ▪ Jointly owned by Nielsen and McKinsey; co‐developing social media software, metrics, analytic services ▪ Discover unprompted, authentic consumer insights on brand strengths and weaknesses, unmet consumer needs, etc. ▪ Market leader in enterprise social media monitoring/analytics (Source: Forrester) ▪ Set and track rigorous measurements of earned media e.g.,: – Brand share vs. competitors ▪ Dataset: Billions of social media conversations per year – Reach of brand buzz (for media mix modeling) across 120 million blogs, message boards, customer reviews – Brand attributes and social networks ▪ Global: 14 markets now (US, UK, Germany, Spain, Italy, ▪ Build marketing, communications, and service capabilities to understand and engage consumers, e.g. France, Australia, New Zealand, China, Japan, India, Brazil, – Talent Canada and Korea); 20 by EOY 2010; over 150 clients globally – Central vs. distributed structure ▪ Proprietary technology for analyzing social media – Platforms ▪ Dedicated analyst support with category expertise – Performance management

14. You have likely seen the data … Social is Significant and Rich with Valuable Consumer Data More than 2/3 of Facebook Rising Globally consumers global consumers spend 6 hours a use online product month on Facebook reviews to make purchase decisions >35% of consumers More than 60% of rely on peer consumers have recommendations visited a consumer‐ and WOM to make driven website purchase decisions

15. And learned new media frameworks ... How Should We Be Thinking About Media in Today’s Landscape? PAID EARNED OWNED Example Tactics Marketing • Drive Awareness • Build advocacy • Deliver deep brand Objective • Enhance equity / liking • Drive credibility of or category knowledge • Build emotional rapport messaging • Build a sustained relation‐ • “Personalize” branding • Build community ship with my consumers for consumer • Connect w/ consumers • Drive Sales

16. And discussed new processes … 2) Learn, Strategise, and Organise 1) Listen 3) Leverage Listening can be Continuous!

17. And dissected a “new” funnel … Expression 16

18. go to an The Manager Event I keep seeing ... then ask the team to ‘do’ Social Media 17

19. 18

20. Increasingly relevant for brands “This product made my hair frizzy, dry and “I love this shampoo. I went through a phase worst of all, led to...HAIR LOSS! Totally not in my life where I dyed my hair every color worth it. I will go back to my old shampoo under the sun. This caused my hair to and conditioner.” become dry and damaged. No matter what product I used nothing helped. Then this beauty came into my life and my hair is wonderful! I suggest this to anyone with dryness, split ends, or frizz.” of online discussion 26% mentions brands SOURCE: NM Incite 19

21. Amplified impact on business Case example: TV buzz (US) 20

22. Social media drives intent … Net sentiment and change in purchase intent from buzz exposure (case example) Large increase in intent A Brand A had a 15% lift Difference in in purchase intent vs. B intent between 3% for Brand E exposed and control E D No increase C in intent Less positive buzz More positive buzz Net sentiment SOURCE: NM Incite 21

23. … and influences sales Online word‐of‐mouth influence on purchases (European example) Percent of sales influenced Electronics and computer equipment 29 Beauty care and clothes Word‐of‐mouth is the 27 primary factor behind Finance products/ of all purchasing services 27 decisions Telecom services 25 Travel & Entertainment 22 SOURCE: McKinsey 22

24. Impact spans beyond marketing and sales Measurable impact of using social media and other web 2.0 technologies Percent of companies Increasing marketing effectiveness (e.g., awareness, consideration, conversion, loyalty) 63 Increasing customer satisfaction 47 Reducing marketing costs 43 Reducing customer support costs 32 Reducing travel costs 26 Increasing revenue 25 Reducing time to market for products/services 23 Increasing number of successful product/service innovations 21 SOURCE: McKinsey Global Institute 23

25. 24

26. Challenges to social media strategy 25

27. Relevance: buzz can be messy What people tweet of tweets have ~50% “useless” information ... but cutting through this messiness is where the value and your advantage lies. In a word: Unprompted! SOURCE: Nielsen; Google Trends; Mashable 26

28. Challenges of social media measurement Relevance Reach and impact Advocacy ▪ Identifying relevant ▪ Measuring the full ▪ Identifying information reach of social media “influencers” and and its influence measuring influence ▪ Determining the right ▪ Quantifying the ▪ Determining the scope for your business impact impact of online brand/product (marketing ROI) advocacy and category criticism 27

29. Organizing for social media transformation Product development Marketing Customer care Defensive branding 28

30. How do we listen and what should we listen to? 29

31. Measuring buzz can be messy … What people tweet of tweets have ~50% “use‐less” information SOURCE: Nielsen; Google Trends; Mashable 30

32. … but effective measurement can deliver robust client metrics 31

33. Client case example: Insights from social media buzz Who is talking and about what Differentiation vs. competition Implications for marketing touchpoints 32

34. What is social media? Product development Marketing Customer care Defensive branding 33

35. Product development example: Kraft ILLUSTRATIVE VERBATIM “I LOVE fun food” “I hate it when my refrigerator is without…” “…when I’m eating in my “I wish I could find…” car.” “Mornings are Brand IMPOSSIBLE without my…” “We will be focusing on developing several Centric concepts out of this work for further testing.” ‐ NPD Group, Kraft

36. Marketing example: Philadelphia cream cheese Direct social media engagement drove impact Philadelphia Cream Cheese partnered ▪ Paula Deen’s video with Food Network introduction has 10MM+ star Paula Deen to YouTube views invite everyday ▪ Website has had 550,000 cooks to create a unique visitors and 3,600 community recipe submissions, and cookbook an estimated total 97MM impressions Sales growth of 8% since launch SOURCE: Website; Equal 35

37. Evian Dancing Roller Babies France [5mn] UK [8mn] Germany [9mn] US [43mn] Japan [8mn] Canada [6mn]

38. Using Digital Media to Maximum Effect ▪ 2X GRPs in earned media to paid media (U.S.) ▪ 26% increase in spontaneous awareness (France) ▪ 8% increase in purchase intent (France) ▪ 5% sales increase above base spend in weeks following the campaign (U.K.)

39. What is social media? ▪ Who can engage? ▪ How to guide engagement? ▪ What systems to track engagement? ▪ How to build engagement into core processes? 38

40. ASDA: In testing and learning mode with Facebook “We’ve been looking at how do we internally get ourselves ready for plugging Facebook into what we already do.” “We’re tip‐toe‐ing our way into Facebook with things like George Brands… building up the fan base quite organically. Not going too DOMINIC BURCH, aggressively, too early.” ASDA Head of Corp Comms and New Media

41. Sense & Respond to Threats, Be Prepared Feb – BBC runs program on March – Greenpeace launches anti‐ Palm Oil / Deforestation March – Nestle Nestle campaign (palm oil) called out for poor corp response on Facebook May – Nestle Mar/Apr – changes policies Greenpeace related to Palm campaign and Oil sourcing Facebook mishap hit mainstream media

42. Nestle Brand Association Maps – Pre/Post Pre ‐Crisis During/Post Crisis

43. Increasing customer lifetime value by improving service experience Trended Sentiment Score 3.5 3.0 2.5 BT or 2.0 British Telecom 1.5 1.0 0.5 15 26 10 24 07 21 5 19 02 16 30 13 27 11 25 08 22 06 20 03 17 31 14 28 14 28 11 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 2009 2010

44. The Consumer Experience Twitter – @BTCare BT.com/help BT.com Community Forums You Tube BTCare Channel BT.com Community Forums Mobile Live Chat UK Consumer and Technical Forums

45. How do we get there? 44

46. Social Media Strategy – What are the main barriers? Percentage of respondents CLIENT SURVEY No standard metrics to track impact 52 Cannot quantify impact 50 Senior executives not literate 46 Lack of social media talent to execute plan 40 No clear social media operational plan 40 Lack of case studies 35 Belief that social media is not credible 31 Regulatory concerns 31 No CEO mandate 21 SOURCE: NM Incite Social Media Summit Survey (n=48) 45

47. Mobilizing for social media ▪ What is the source of competitive advantage? Does it matter? ▪ What is the major driver of growth? ▪ Is corporate strategy central to talent strategy? ▪ Call to action/ burning platform (“creation story”) How to lead it? ▪ Inspiring, accountable leader(s) – corporate‐wide vs. by function vs. by BU vs. by geography ▪ Coordinated test‐and‐learn investment program; rapid transfer How to of insights operationalise? ▪ Single standard for measurement (brand health, service quality, campaign performance) and business cases ▪ Scale and expertise in vendor management ▪ Architect IT for single view of the customer/consumer ▪ Effective governance (values, policies) for consumer engagement ▪ Build/retain talent: own vs. rent, market‐based evaluation 46

48. Key Takeaways 1. Social is relevant, impactful, drives intent, and influences sales 2. However, there is impact beyond the Marketing & Sales departments 3. To capture this value, you must create a new strategy and a foundation in measurement and build a new kind of organization 4. The key is to evolve the way you listen, act, and engage by changes in culture, talent, and systems 47

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