A 2010 presentation but still up-to-date: Implementing Social Marketing for business and communication, a remix of some previous ideas and some new approaches by David J Carr, Digital Strategy Director, Chemistry Communications
McKinsey Global Institute’s fifth annual survey on social technologies used by businesses revealed that more companies are improving the ways they use the technologies to enhance their operations and find new growth opportunities. The results of the 4,200 executives surveyed depended largely on their company’s efforts to maintain and improve its usage of social tools.
Of the responding companies, 72 percent report that they are using at least one type of social technology. Of the existing technologies, 50 percent use social networking, 41 percent use blogs, 38 percent use video sharing and 23 percent have microblogs. Specific industry use varied depending on the type of industry. 86 percent of telecommunications companies used at least one tool while only 62 percent of energy companies surveyed used a social technology tool.
Compared to the previous year’s survey, companies found little, if any, difference in the benefits of social technologies. Companies using technology for their employees’ benefit saw a small decrease in its effectiveness.
For example, three percent of reporting companies using social tools to increase the speed at which employees could access knowledge saw a decrease in its effectiveness.
Two percent found their social technologies less effective at reducing communication costs and one percent less effective as a means for employees to access internal experts than the year before.
Companies using social technology primarily for customer purposes, found a six percent increase in their marketing effectiveness from the previous year. These gains were overridden by three percent of the companies reporting a decrease in customer satisfaction and two percent reporting higher marketing costs.
The integration of social technologies in the business ecosystem and employees’ day-to-day work
Organizations reporting benefit gains when using technology to inform partners, suppliers and external-experts were the only companies that saw an across-the-board increase in its benefits:
- 8% of the companies reported an increase in the speed of accessing knowledge.
- 8% reported a reduction in communication costs.
- 10% reported an increase in speed when accessing external experts.
While the majority of companies surveyed are in the developing stages of their social technology usage, the study also breaks its information down by internally networked, externally networked and fully networked companies.
Fully networked companies have the largest mean percentage in benefit improvements, followed by internally networked, externally networked and developing companies. Of the reporting companies, 48 percent of the employees, 51 percent of customers and 64 percent of partners of fully networked companies used social technology tools that benefited the company. Of these companies, 80 percent report that social technologies are very integrated into their employees’ day-to-day work.
Answers to survey questions from corporations that reported market share gains show a correlation between the gains and the use of social technologies to scan external environments and match employees with specific tasks. These same companies report lower correlations between operating margins compared with their competitors and their use of social tools. Fully networked market leaders reported a decrease in the correlation between their leadership and their use of social tools from the previous year.
The future: blurring lines between customers, employees and vendors
Companies that promote the use of social technologies will see changes within the next three to five years if they continue exploring new options and using current tools effectively.
- 35% of reporting companies are expecting the boundary lines between customers, employees and vendors to blur leading to increased satisfaction between all concerned.
- 35% of the companies expect the development of self-organizing teams through the more effective communication brought about by the use of social technology tools.
- 27% of reporting companies expect the elimination, or at least lessening, of an organizations formal hierarchy because it will be easier to make decisions as a group.
Regardless of where a company is in its use of social technologies, it must actively promote their use among its employees, customers and partners if it wants to see the available benefits. It is imperative that employees from executives on down realize the benefits for the company in order to understand, and decide, the best way to integrate existing and new technology into their company. And it’s clear that the main benefits of social technologies will go far beyond marketing tactics as they are used today but will be found in collaboration, productivity, intelligence and benefits for the overall business ecosystem.
You can check the full survey and analysis in the McKinsey Quarterly here (free registration required).
Source of additional graphic: MarketingCharts.
Many marketers still ignoring dissatisfied customers on social media
Marketers are well aware that social media is a double-edged sword when it comes to word-of-mouth. Not only does it give rave reviews and glowing recommendations a chance to be seen by millions, but it also does the same for negative feedback. How to best deal with negative buzz online is a perennial question.
Some companies are confident that their customers use sites like Facebook and Twitter to complain about them, according to a September 2011 survey by feedback management software providerMarketTools. But nearly half of companies surveyed think their customers don’t comment or complain about their products and services online, and almost a quarter did not know whether their customers did so or not.
While it’s possible that some business-to-business companies really don’t have to worry much about customers turning to Twitter to vent their frustration, for consumer-facing firms, the probability seems high, raising the question as to whether executives are aware enough of online complaints.
MarketTools also found that while a sizeable number of marketers respond to customer complaints on Facebook or Twitter at least some of the time, many leave questions and negative feedback completely unanswered. On Twitter, 29% said they responded to such feedback seldom or never, while 17% said the same of Facebook.
Consumers may not be happy with this frequency of response. Research tends to show that social media users want businesses to answer them, and that an interaction with a company representative online can defuse negative feedback sometimes simply by offering attention.
Recently, Belgium-based Leads United (part of Lewis PR), released the results of a social media marketing survey among communication and marketing “professionals”. Although the respondents were Belgians, the report shows some shocking numbers that lead to conclusions that are valid in many countries!
The fourth edition of the survey indicated that the use of social media and networking tools is relatively well established, but that is about all, really. When looking at social media marketing, there still is a huge lack of a social media strategy, let alone some sort of plan. Furthermore, 73% of the questioned companies don’t have a social media policy.
However, if you don’t have a clear strategy, a policy isn’t really necessary, is it? Looking back over the years there was barely any evolution to speak of since Leads United started the survey. The company even established that the number of businesses with a social media policy in Belgium has ceased to grow!
The social media marketing hype is bad for business…
What is the problem? Maybe we should realize that a vast majority of companies in Belgium (and probably in many other countries) may not yet consider social media seriously, or that they simply don’t get it.
Among other things there appears to be a problem with the communication, information and education efforts regarding social media. The hype and noise regarding the matter, with a battalion of opinion makers and “experts”, that sometimes is more of a plague, might not really help in that regard.
However, is that all? Is it all because of communication and education issues? Certainly not! It’s the task of businesses and marketers to learn, try and inform themselves if they are serious about their business and customers. It’s also their task to see social media in a broader marketing, business and customer perspective. Business is improving, innovating and taking responsibility. It’s not listening to everything you hear (and worse: believing it) or blocking out the reality of consumer behavior in a multi-channel world.
…but not looking at social media is simply bad business
No, you won’t necessarily go bankrupt for not using social media marketing and not every single business on this planet needs a Twitter account or even a blog. There is a context for everything, and it’s not about the tactics and channels in the first place.
However, if you don’t at least listen to your clients, and if you aren’t present where your customers and prospects are in some or the other way (and that’s increasingly on social media and networks as well), you will definitely not succeed in providing better customer and business value in every stage of the customer life cycle and buying journey.
Social media marketing is also a very broad concept. If you can improve any kind of business process, customer interaction or whatever by using social media smartly, why not do that? Not doing it, or at least seriously looking at it, is not trying to improve, innovate and evolve. It’s, simply said, bad business.
The social media business basics are missing
As far as I know a company’s obligation is among other things:
Improve customer experience by listening to your clients.
Generate turnover by working efficiently and informed in a multi-channel reality.
Increase profits by offering proper, relevant and personalized customer service and communication, resulting in conversion and customer engagement.
Satisfy the corporate and social ecosystem: employees, shareholders, customers, providers, fans you name it. Everyone is a customer.
However, what do I read? The basics of social media marketing are simply absent in most Belgian businesses (and is it really only in Belgium?).
Only 27% of the questioned companied have a social media policy (while probably every employee uses at least a social network, so why not USE that in a positive way?).
Only 16% of the interviewed “communication professionals” use social media for crisis communication (while social media often play a pivotal role in a “crisis” in this real-time economy).
Only 46% of the interviewed parties actually use social media monitoring, despite the enormous opportunities that it offers and the fact that the least a business must do is listen and monitor the ecosystem within which it operates.
In short: half of the companies have absolutely no clue what is being spread on social media.
Social media ROI: measuring the wrong metrics and KPI’s
Analyzing the ROI is just as bad. However, naturally one cannot measure what he is doing wrong or not at all. 30% of the respondents claim to know the ROI, but in practice you see that they look specifically at metrics that really say little or nothing about efficiency such as the number of fans or followers (14%), the good old click (4%) and the number of comments to their community pages (also 4%).
Where is the brand impact? Where are cross-channel interaction metrics? Conversion? Money saved on customer service? Loyalty? Sales? Alternatively, whatever kind of metric that might be useful, depending on business goals? Nowhere. And the reason is simple: there are rarely business goals.
You can’t pay your employees with the number of fans and comments, all you can do is blow smoke in the eyes of your senior management members.
Until they determine that social media marketing is probably ‘cool’ but doesn’t provide any profit and then decide that “social media” doesn’t work. Nonsense of course (it is not about the media), but a logical reaction. No manager in its right mind will invest one single Euro or Dollar in something if there are – at least – no goals.
Is “social” the only free lunch in the world?
Quite amazing and even shocking is this finding in the survey, and I quote from the press release now:
“The most common reason cited for not doing so (measure or try to measure ROI) was that companies do not know how they should approach this, or do not see the benefit of investing time and money in measuring the results a free tool generates.”.
So: social media is free and a tool. Is this really how businesses look at social media? This simple answer probably shows the core of the issue: many organizationsdon’t get it yet. And it’s certainly not only businesses. It’s many of the ‘experts’ as well. It is NOT about Twitter, Facebook, Foursquare or whatever else: it’s about business, customers, branding, PR, listening, community, human resources or whatever you want to do.
But most of all, it’s about customer-centricity.
Interesting is also this little fact on social media monitoring: Belgian companies that use it, spend increasingly less time following what is said on blogs (a drop from 14% to….1%!) and focus primarily on social networks (40%) and micro blogs, yes, you can say Twitter (34%). So we don’t monitor very much, some of us do have plans but blogs are no longer important to monitor?
Ask the right questions before starting with social media
Some tips for anyone wanting to participate professionally in social media marketing: think – as a team – about which business functions can be improved by social media, talk to someone who has some experience instead of gathering ‘expert tips’, study, talk to a social business that does well, analyze why it does well, listen to your customer or even buy a good book now and then. These options aren’t free, nor are they ‘tools’ as many people consider social media to be.
But you might learn something relevant. However, making your hands dirty, getting out there, asking advice and talking to people is – along with DOING something – still the best way to get it. Try out things, test and improve. Forget the “best Twitter tips”, “social media speak” and all these so-called ‘expert’ opinions that so often contradict each other, except if you can really distinguish what is relevant and what is not for you, your business and your customers.
Note that the study also contains some numbers about the various social media channels, objectives and working methods used by Belgian companies. More graphs can be found on Flickr or via the press release . Finally, take into account that the report is based on a survey of 70 marketing and communication professionals.
What’s the real cost of social media? Last week we looked at an interesting infographic on the value of social commerce and today we wanted to share another interesting infographic on the cost of social media. So how do your social media costs compare?
These stats, which have been aggregated by Focus.com, show some good insights into how much brands are paying, on average, for their social media strategy and activities.
The second half of this infographic shows some good stats on the benefits of social media, including a comparison of what an average Facebook fan will spend on certain brands compared to a non-fan. On average it shows that a Facebook fan is 28% more likely than a non-fan to continue using a brand and that fans are 41% more likely to recommend a fanned product to their friends. What’s a Facebook fan worth to your brand?
Old Stuff… But Good Stuff.
This article originally appeared on Huffington Post
There is angst in ad land over the complexity of media. (There’s also endless angst in legacy media companies, but that story’s been told and re-told .) Ad planners wring their hands, bemoaning the proliferation of media channels and the unpredictable ways in which “consumers” (as they refer to people) jump from TV to Facebook to text messages to Google to foursquare to iPods…and so on.
What’s a brand to do?
Out of the chaos in the media world and the complexity of infinite digital channels, a new way of looking at media is emerging that is simple, useful and strategic. The latest buzz in advertising puts all media in just three categories: paid, owned and earned. But advertisers and everyone else struggle to make sense of that. So this is a combination how-to and how-come piece about those three categories of media and how they can vastly improve the way advertisers small and large approach advertising.
For everyone who’s addicted to short, numbered lists, here’s the 3-step answer:
- Paid jumpstarts owned.
- Owned sustains earned.
- Earned drives cost down and effectiveness up.
(If, by any chance, you are a real person, not a media person, definitions of paid, owned and earned media are lower down in this post. For shorthand purposes, paid is stuff you pay for like TV spots; owned is stuff you create and own; earned is nice free stuff people say you about on Twitter–and anywhere else.)
There are a plethora of benefits to approaching media this way; the most important are these two:
1. No matter what new media channels the geniuses invent tomorrow, this logical set of strategic categories doesn’t change; and
2. The end result of using media this way is the creation of a permanent marketplace advantage for a business: Total cost of marketing ultimately goes way down because expensive media buys are less necessary. Credibility goes way up because ordinary people are talking up the brand to their friends and online connections, which has far greater impact on purchase behavior than anything a brand could ever do or say on its own.
Any brand that doesn’t put this set of media strategies to work will end up with a higher cost basis and lower credibility than its competitors. Not a good thing.
What you’ve read so far may be all you need to create a new mental framework that goes beyond old thinking about media channels and ad planning. But read on if you want some background and a few prescriptive words about a new, more useful approach to advertising and the nature of media in a digital, social era.
First, some necessary background.
Roughly eight years ago, it became clear that traditional media (newspapers, magazines, TV, music and so on) and traditional marketing (TV spots, print ads, radio spots and so on) were on a collision course. New technology was passing control over media from the media companies to the audience. The day was approaching when no one could force people to watch ads. So the ads had to go away or become something else.
It became accepted dogma that advertising needed to add value to people’s lives or it would be ignored. It had to be useful and valuable, entertaining or informative or both. It had to be (drum roll)…great media. Everyone supposedly began to understand, in other words, that brands have to be media companies, but almost no one knew how to do that or what it really might mean.
Also only dimly understood until just a few years ago was how much legacy media companies would suffer as advertisers began to become media companies. But as old-fashioned advertising began to be less effective and as people gained the power to by-pass and avoid most ads, everybody in the media/advertising ecosystem began see they were in the same leaky boat: Not just advertisers, but publishers, broadcasters and agencies, too. Everybody.
The collision between marketing and media finally occurred in the mid-2000s. The exact date doesn’t matter. Ever since, everybody has been wandering through the wreckage, dazed, trying to figure out what happened and, more terrifying, what will happen next.
A recent dinner party at New York’s 21 gathered two-and-a-half dozen smart media people to talk about what might happen next. The Jordan Edmiston Group, media investment bankers, invited the leaders of established and emerging companies in publishing and marketing to sit down together. Mediating and setting the agenda was Rishad Tobaccolwala, a man with a large reputation and title, Chief Strategy and Innovation Officer at VivaKi, the media arm of Publicis, the French advertising holding company.
“The future does not fit in the containers of the past,” Tobaccowala began. It was, of course, an incantation echoing the parable from the Gospel of Luke: “And no one pours new wine into old wineskins. If he does, the new wine will burst the skins, the wine will run out and the wineskins will be ruined.”
One way to apply that biblical metaphor, of course, is to conclude that the new forms of advertising–the post-advertising forms–will not fit into the old categories of media. That might have been on Tobaccowala’s mind when he identified the central question for the dinner discussion–a question he believes will be at the center of media’s future for quite a while: What roles are to be played by the three kinds of media that now exist: paid, owned and earned?
Again, this was not new for Tobaccowala or, he acknowledged, the rest of us at dinner that night. But it was, I think, a very smart way to focus the evening because it is precisely the question that advertisers are asking (or ought to be asking). Everyone is talking about media in a new way, but few know what’s to be done about it.
What’s needed, of course, is a new mental framework about media.
In the old days, just a few short years ago, all media was conveniently and simplistically divided by channel or device–broadcast was radio or TV, print was magazines and newspapers, out of home was billboards and events. And we confidently measured things like “impressions” and “reach” and “frequency”–measurements that have no meaning today.
As a matter of habit, the advertising business is still trying to think this way; ad folks just keep adding new media categories–”digital” and “social” and “mobile” and so on–and new metrics that sound disturbingly like the old ones (clicks, hits, etc.).
Ad agencies are still organized to a great extent around this ancient view of media, dividing their people by channel as if that made any sense: Over here are our TV people and there’s our print unit and, oh yes, here’s our digital agency and way over there in the corner are the social media experts…and so on. Advertising clients, too, tend to organize in this outmoded fashion, sporting titles like “Head of Social Media” and “Head of Digital.”
Problematically, this kind of division doesn’t work anymore when all kinds of content routinely runs on multiple channels and most content with any value becomes social. Print (text) exists on mobile and stationary screens as well as on paper of all sorts and walls and bus exteriors and so on; film is on theater screens, DVDs, TVs, PCs, tablets, smartphones; conversations are on telephones, email, mobile text, Facebook, Twitter and a thousand apps. And so on.
As a result, on a practical level, it just doesn’t help today to draw up advertising plans that begin by dividing a brand’s budget mainly by media channel. “How much cash should we plow into TV?” is no longer a meaningful initial question.
What makes sense now is to understand how to achieve the right mix of paid, owned and earned media. But to do that, of course, advertisers first need to know which jobs should be done by paid media, owned media and earned media. They need to know if these are different or identical jobs. They need to know how to allocate money and effort among the three to get the best results.
Brands also are asking how to migrate from traditional advertising to non-traditional. But that goes back to understanding the roles of paid, owned and earned, all of which come in traditional and non-traditional boxes. (Consider: A 30-second spot on “The Closer” is paid, but “Iconoclasts” is owned media–a TV show owned by brand. And when a fan who knows video creates a new, unauthorized episode of a branded series and puts it on YouTube, that’s earned TV.)
It was in vogue for a while to declare that traditional advertising was dead. (I used to say it myself to get attention.) But it’s a silly thing to say. What’s not silly is to understand that TV spots are just one tactic (and a pretty expensive one with decreasing results) among a wide range of paid media–a range that now runs from network prime time spots to paid search to promoted tweets, for example.
So the time now has arrived to define paid, owned and earned and consider how best to use each. I’m going to offer my definitions and a few examples as my final act in this story. (For some statistics on the buzz around these terms and a look at the history, read my colleague Ryan Saghir’s recent post.)
FIRST, PAID MEDIA: It’s any form of media where brands pay the media owner to insert the brand’s message. Central to this exchange is the idea that the media owner has gathered an audience that the brand wants to address. That’s why the brand is willing to pay.
Examples of paid, as I’ve said, include TV spots, print ads, billboards, paid search, online banners, promoted tweets and so on.
The truth about paid media: Paid media works, but only so long as the money spigot is turned on and gushing. Stop spending and paid media stops working with little or no residual benefit. Put another way, the meter is always running and no matter how far you ride, you never own the taxi.
NEXT, OWNED MEDIA: Owned media is real, engaging media that is created and owned by a brand. That sounds simple enough, but it requires great skill to execute. Brands now create and own all kinds of media. Films, TV shows, webisodes, magazines, books, blogs, Facebook pages, tweets and so on. Owned media is what everyone is talking about when they say, “Brands must be media companies.”
Examples of owned are everywhere now. Brands like Levi’s jeans and Palladium boots are creating new forms of journalism on film. The Converse shoes folks are producing new bands in the brand’s Brooklyn recording studio like some new-age record label. Lexus (disclosure: Story Worldwide client) publishes one of the world’s leading luxury lifestyle and travel magazines, in print and electronic versions, featuring world-class writers like Jane Smiley (A Thousand Acres). And so on. Owned media traces its history back to 1900, when tire maker Michelin launched a travel guide for drivers.
The truth about owned media: It is relatively expensive to create great content, but when the spending is over the media can keep working indefinitely. In the case of owned media, the brand’s spending is really investing; the brand is creating a valuable asset with a more or less unlimited useful life. There are two main challenges. One is finding the right people to create great content that actually embodies a brand, achieves the brand’s business goals and truly engages its intended audience. Traditional ad agencies have proven to be unskilled at this. The second is gathering the audience to consume the brand’s media. Audience generation usually requires paid media to get it started, especially if anyone’s in a hurry to get noticed, which everyone usually is.
FINALLY, EARNED MEDIA: Earned media is positive brand messaging that’s produced and spread by unpaid (at least not paid by the advertiser) influencers. This group includes bloggers and tweeters, journalists and media reporters, Facebook updaters. Anyone large or small, amateur or professional, who finds your brand content worth sharing with others is creating earned media. Earned media is routinely focused on spreading content that an advertiser created (see “Owned Media” above). (This, of course, makes owned media the center of all attention because it is or should be the object of paid media and the subject of earned media.) The purest variety of earned media, of course, involves content that is both created and spread by brand advocates on their own.
Pure examples of earned media are not rare, but they are rarely measured or documented except in the most vague way by “social media listening tools” which claim, with huge margins of error, to measure sentiment and volume of online chatter.There are myriad, well documented examples of brands creating media that is then seen, commented on, shared and spread by fans. This is owned media sustaining earned media. The brand blog post that gets attention and draws comments. The YouTube video that gets a million or 100 million views largely because people are telling their friends to watch it. (The “telling” can take place in-person, through emailing the link, through Twitter, Facebook or almost anywhere outside of YouTube.) And so on and so on.
Ford has been pretty good about generating positive buzz for new cars by loaning them to influential bloggers and other social media mavens, as in the Ford Fiesta Movement. Johnson & Johnson’s pharma division, Janssen (disclosure: Story Worldwide client), won a prestigious European digital award for making a film about ADHD that appeared only on YouTube and was watched 120,000+ times in some three months. And so on.
The truth about earned media: Earned media, when it happens, is the best form of advertising on Earth. Not only does it spread brand messages at no additional cost, it also carries more credibility and has greater impact on purchase decisions (according to global survey evidence from Nielsen) than anything the brand can ever say about itself. But it is impossible to control (a popular corporate word) and very hard to generate completely free marketing from a brand’s fans. Generally, you need a paid campaign to get it going and owned media to keep it going.
All of which brings us back to the beginning of this story and the roles of paid, owned and earned in the new age of advertising, which my friends and I call the post-advertising age.
Paid media, more and more, is all about generating an audience for owned media. Paid’s greatest virtue is that it gets attention and it’s fast. But it works best if it’s getting attention for something specific–if it’s pointing people to a piece of content that can deepen their knowledge, understanding and emotional connection to the advertiser’s brand. So the first new rule of paid–whether it’s a network TV spot or banner ad or search–is that it should point to a really good, genuinely engaging, audience-pleasing piece of content.
Owned media is about telling the brand’s story in great depth and infinite variety. This is the kind of media that connects the advertiser’s brand to the audience’s lives. Like all great media, it’s got to be deeply engaging, informative, entertaining. But that’s just table stakes in the owned media game, because the content also must embody the brand and accomplish the brand’s business goals. Fueled by a smart paid campaign to generate audience, owned media needs to be search optimized so it’s easily findable and it must be spread across digital and traditional channels where its audience spends time. When all this is done properly, there is nothing more powerful than owned media, which has the unique ability to gather and grow communities of brand fans.
It used to be that owned media was pretty much restricted to a brand’s web site. In today’s world of distributed digital content, owned media needs to be strategically spread all over hell and gone on the digital and traditional channels where its intended audience is most like to encounter it.
Advertisers looking for earned media have only one choice: a really well executed owned media strategy. Owned media, deployed so it is easily shared and commented on, is the sole reliable sustainer of earned media. Every marketer, of course, has the option of praying or waiting for lightning to strike. But only by sending off a piece of attractive owned media can advertisers set off a predictable round of conversation and pass-along that has the potential to spread brand stories and messages almost endlessly through the ranks of their audience.
Paid, owned and earned–the present and future structure of media–only work together in integrated, content-focused programs. They are not generated by siloed marketing organizations. They are not the province of the old general agency or the new digital agency or, sad to contemplate, some even more isolated and truncated little silo like the social media agency. Thinking about such programs and executing them requires, in many cases, re-organizing the advertiser’s marketing function and the agency’s structure.
The bad news is that the punishment for not pursuing true integration is to be left behind. The good news is that the rewards are worth the pain.