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LeWeb KeynoteDecember 9, 2010
Jeremiah OwyangIndustry Analyst
Social Business Forecast: 2011 The Year of Integration
Research reveals focus on integration, staffing, advertising, and measurement.
© 2010 Altimeter Group
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1) What happened in 2010
2) What’s going to happen in 2011
3) What companies should do about it
Agenda:
© 2010 Altimeter Group
2010 Overview2010 Overview
© 2010 Altimeter Group
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.
© 2010 Altimeter Group
Most Social Media programs report under Marketing or Corporate Communications
© 2010 Altimeter Group
Companies organize for social in 5 ways
© 2010 Altimeter Group
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DECENTRALIZED
- Organic growth- Authentic- Experimental- Not coordinated- e.g. Sun
- Organic growth- Authentic- Experimental- Not coordinated- e.g. Sun
© 2010 Altimeter Group
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- One department controls all efforts- Consistent- May not be as authentic- e.g. Ford, Regulated
- One department controls all efforts- Consistent- May not be as authentic- e.g. Ford, Regulated
CENTRALIZED
© 2010 Altimeter Group
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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
- One hub sets rules and procedures- Business units undertake own efforts- Spreads widely around the org- Takes time- e.g. Red Cross
© 2010 Altimeter Group
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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
- Similar to Coordinated but across multiple brands and units
- e.g. HP, Microsoft, Tech Giants
© 2010 Altimeter Group
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HOLISTIC OR “HONEYCOMB”
- Each employee is empowered- Unlike Organic, employees are organized- e.g. Twelpforce, Zappos
- Each employee is empowered- Unlike Organic, employees are organized- e.g. Twelpforce, Zappos
© 2010 Altimeter Group
Most companies organize into Hub & Spoke or Centralized
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© 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
Average 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
© 2010 Altimeter Group
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
© 2010 Altimeter Group
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?”
© 2010 Altimeter Group
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?”
© 2010 Altimeter Group
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
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:
$133,000Staff:
$303,000Staff:
$406,000
SecondCommunity:
$78,000Ad Spend:$204,000
Custom Tech Dev:$272,000
ThirdTraditional Agencies:
$51,000Traditional Agencies:
$162,000Boutique Agencies:
$238,000
FourthBrand Monitoring:
$42,000Community:
$126,000Community:
$198,000
FifthAd 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:
$133,000Staff:
$303,000Staff:
$406,000
SecondCommunity:
$78,000Ad Spend:$204,000
Custom Tech Dev:$272,000
ThirdTraditional Agencies:
$51,000Traditional Agencies:
$162,000Boutique Agencies:
$238,000
FourthBrand Monitoring:
$42,000Community:
$126,000Community:
$198,000
FifthAd 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:
$133,000Staff:
$303,000Staff:
$406,000
SecondCommunity:
$78,000Ad Spend:$204,000
Custom Tech Dev:$272,000
ThirdTraditional Agencies:
$51,000Traditional Agencies:
$162,000Boutique Agencies:
$238,000
FourthBrand Monitoring:
$42,000Community:
$126,000Community:
$198,000
FifthAd 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 graph
4) Build an unpaid army of advocates –get your customers to do the work for you
5) Invest in scalable systems like SCRM and SMMS
6) 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
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/
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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 SMMS
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© 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
Provide the right metrics to the right audience. A novice
mistake is to provide ‘engagement
metrics’ to executives
© 2010 Altimeter Group
The ROI Pyramid: Metrics View
These metrics are formulas comprised
of the tier below them. Currently,
there is no industry standard.
These 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.
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
This research is published under the spirit of Open Research, use it, reference it, and build on it.
The more you share the more we can conduct, spread it widely.
Our papers are published under non-commercial Creative Commons – you are free to use our research, with attribution to Altimeter Group.
Open Research42
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Jeremiah Owyang
Industry Analyst
jeremiah@altimetergroup.co
m
web-strategist.com/blog
Twitter: @jowyang
Research team includes significant contributions from Christine Tran, and Charlene Li, Altimeter Group