Going Social

How businesses are making
the most of social media

kpmg.com
KPMG INTERNATIONAL
Organizations cannot afford not to be
listening to what is being said about
them, or interacting with their customers
in t...
Table of Contents
02 Introduction
04  Talking directly to customers
06  Getting it right

08  Benefits outweigh risks
10  ...
2

GOING
SOCIAL

P

Introduction

articipating in social media has become a business
imperative. More than 70 percent of o...
GOING
SOCIAL

3

Emerging markets sprint ahead
100%
China
82.7%
US
71.5%

80%

60%

India
70.2%

Canada
51.0%

UK
48.2%

B...
4

GOING
SOCIAL

Talking directly to
customers

N

ot surprisingly, the majority of businesses use social
media to enhance...
GOING
SOCIAL

Plans to use social media to drive innovation

Not interested
7.1%

Don’t know
7.3%

Expanding
30.6%

Intere...
6

GOING
SOCIAL

Getting it right

R

espondents were clear that an ability to identify new
opportunities is the most impo...
GOING
SOCIAL

Many of the traditional program management tenets also ranked surprisingly
low for respondents. Measurement ...
8

GOING
SOCIAL

Benefits outweigh risks

A

ccording to respondents, social media programs tend
to deliver significant re...
GOING
SOCIAL

Has your organization experienced any of the following issues in the last 12 months,
by allowing employee ac...
10

GOING
SOCIAL

Hidden dangers –
Bandwidth consumption

A

cross the board, those that have taken the leap into
social n...
GOING
SOCIAL

When asked for their top three concerns, more than 20 percent of respondents
without social media programs c...
12

GOING
SOCIAL

Hidden dangers –
Overestimating time-wasting

M

anagers’ views of how much time employees spend on
soci...
GOING
SOCIAL

13

According to our research, four out of ten managers in the USA and Australia
believe that their organiza...
14

GOING
SOCIAL

Hidden dangers –
Restricting access

R

estricting access to social networks may not be the
panacea that...
GOING
SOCIAL

Our research found that a third of those working in organizations with blocked
access were not only still ac...
16

GOING
SOCIAL

Checks and balances

O

rganizations often provide employees with guidance on
how to most appropriately ...
GOING
SOCIAL

0%
Informal
expectation
setting

Employee

General
policies on
technology
use

Employee

Organization
monito...
18

GOING
SOCIAL

Unexpected benefit –
Encouraging advocates

M

any organizations are finding that – with proper training...
GOING
SOCIAL

Interestingly, guiderails and training seem to have little impact on the frequency
of negative employee comm...
20 GOING
SOCIAL

Methods and
demographics

K

PMG’s survey about external social media stances,
uses and approaches by org...
GOING
SOCIAL

21

Employees
100%
90%

6.5%
17.2%

4.5%

80%
15.1%

70%

3.5%

14.5%

60%
21%

50%
4.8%

18.8%

5%
5%

15%
...
22 GOING
SOCIAL

Managers
100%
9.9%
90%
12.2%
80%

14.9%
3.1%
5.1%

16.8%

10.6%
5.8%

4.7%

4.2%
5.2%

6.3%

5.8%

4.9%

...
GOING
SOCIAL

23

Why KPMG?

K

PMG helps organizations to identify and develop business
opportunities available from leve...
24 GOING
SOCIAL

KPMG’s social media methodology & services

3. Innovate
2. Learn
1. Listen
Status

Issues

Status

• Litt...
GOING
SOCIAL

25

Our analysis has demonstrated that
we can look at the experiences of both
early business adopters and ou...
Contacts
To find out more about how KPMG can help your business better understand the
impact of social media, please conta...
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Going Social How businesses are making the most of social media

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Este informe recoge datos sobre la participación de las organizaciones empresariales mundiales en el entorno de las redes sociales. La documentación incluye encuestas a más de 1.800 directivos y 2.000 empleados en las organizaciones de diez mercados principales y analiza la distancia entre las expectativas y la realidad cuando se trata de medios de comunicación social. Se incluyen comparativas de uso de las redes sociales entre los mercados desarrollados y los emergentes, independientemente del grupo sectorial o la estructura de propiedad.

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Going Social How businesses are making the most of social media

  1. 1. Going Social How businesses are making the most of social media kpmg.com KPMG INTERNATIONAL
  2. 2. Organizations cannot afford not to be listening to what is being said about them, or interacting with their customers in the space where they are spending their time and, increasingly, their money too.  – Malcolm Alder, Partner, KPMG’s Digital Economy practice KPMG in Australia © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  3. 3. Table of Contents 02 Introduction 04  Talking directly to customers 06  Getting it right 08  Benefits outweigh risks 10  Hidden dangers – Bandwidth consumption 12  Hidden dangers – Overestimating time-wasting 14  Hidden dangers – Restricting access 16  Checks and Balances 18  Unexpected benefit – Encouraging advocates 20  Methods and Demographics 23  Why KPMG? © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  4. 4. 2 GOING SOCIAL P Introduction articipating in social media has become a business imperative. More than 70 percent of organizations operating around the world are now active on social media. Many are finding significant benefits and unexpected risks along the way. KPMG surveyed more than 1,800 managers and 2,000 employees at organizations in ten major markets and found that – in many cases – there remains a significant gap between expectation and reality when it comes to social media. The adoption of social media is widespread for businesses in the emerging markets of China, India and Brazil who – on average – are 20 to 30 percentage points more likely to use social media than counterparts in the UK, Australia, Germany or Canada. In part, this may be attributed to the emerging markets’ lower dependence on ‘legacy systems’ that – in more established markets – tends to bind organizations to their long-established channel strategies, as well as the rapidly declining cost of internet access and devices in the developing world. From an industry perspective, retailers and wholesalers seem to slightly lead over all other sectors, though it must be noted that all sectors (except the ‘Other’ segment) were closely grouped within a 10 percent differential. Does your organization use social media? 80% Retail/Wholesale 76.1% 74.0% 72.1% 70% 72.0% 71.3% Business services/Communications/ Finance/Insurance 71.2% Hospitality/Cultural/Recreational services 67 .2% Agriculture/Mining/Manufacturing/Construction 59.2% 60% Health Private sector – Scientific/ Technical services Public sector Private sector – Other 50% Source: Going Social, KPMG International, 2011 Managers, n = 1850 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  5. 5. GOING SOCIAL 3 Emerging markets sprint ahead 100% China 82.7% US 71.5% 80% 60% India 70.2% Canada 51.0% UK 48.2% Brazil 68.1% Germany 42.7% 40% Australia 41.6% Japan 27 .5% Sweden 41.7% 20% Source: Going Social, KPMG International, 2011 Managers, n = 1850 Key take aways Clearly, social media is rapidly moving up the boardroom agenda, regardless of industry group or ownership structure. And with adoption rates averaging around the 70 percent mark across the board by industry sector, there seems to be little doubt that social media is widely seen as a viable and effective business tool. Surprisingly, many of the more developed markets seem to be lagging behind their peers in the emerging markets, indicating significant room for expansion in the advanced economies. For their part, emerging markets seem to be quickly finding that social networks offer yet another opportunity to leapfrog the competition in the developed markets. In some cases, inefficient, unreliable or monitored email systems are foresaken in preference of the faster and more consistent social network channels. In others, a lack of alternatives may be driving businesses to adopt social networks within the enterprise. And while the spread between industries was particularly thin, there is just cause for retailers and wholesalers to lead the pack. On the one hand, social networks tend to be consumer-focused and therefore provide a costeffecitve marketing channel. But they also enable retailers and wholesalers to capture a rich source of customer information to better direct their product development and planning. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  6. 6. 4 GOING SOCIAL Talking directly to customers N ot surprisingly, the majority of businesses use social media to enhance their relationships with their customers. But more than half are also expanding their use of social media to drive innovation in their products and services, and for recruitment. Companies are finding a wide variety of business uses for social media. Around the world, two thirds of respondents suggested that their organizations were either expanding or initiating plans to utilize social media for sales and marketing purposes and six in ten cited use of social media in business development. Almost six in ten respondents also said they communicated directly with customers over social media for customer service purposes. And while somewhat less frequently cited, 57 percent of respondents also suggested that they were either in the process of expanding or about to initiate plans to leverage social media as a catalyst to developing new products or services. Expanding or initiating now 80% 70% Marketing and sales 66% 62% 60% 59% 59% 58% 57% 50% Business development/ research Customer service, e.g. feedback, support, complaints handling 40% Corporate brand and reputation management 30% 20% Recruitment/ Alumni 10% Product and/or service innovation, e.g. co-innovation, crowd-sourcing, knowledge resource 0 Source: Going Social, KPMG International, 2011 Managers, n = 1850 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  7. 7. GOING SOCIAL Plans to use social media to drive innovation Not interested 7.1% Don’t know 7.3% Expanding 30.6% Interested but no plans 9.0% Initiating in more than a year 5.5% Plans to use Social Media to drive innovation Initiating in next 12 months Initiating now 26.4% 14.1% 5 We said let’s experiment and let’s try creating our own customer service account…we launched [but] we followed traditional corporate processes…minutes into this thing customers accused us of using robots because it had gone through our processes, everything was stripped out. Within days we revamped the process and made the changes quickly.  We’ve got some core assets like YouTube, our corporate blog, Twitter and Facebook accounts where people are seeing some of the things we can do. Now we’re doing a bit more of a deeper dive in with the business units to say ‘how do you see social media supporting your business objectives’.  Managers, n = 1850 Source: Going Social, KPMG International, 2011 We don’t just talk to people who talk to us. We talk to people who are talking to each other about us. We get points then just for responding. You’re already better off.  Key take aways With more and more business activities now leveraging social media, the need for a coordinated and consistent approach becomes critical. In part, this is to ensure that social networks are being used properly and appropriately across the business. But it also enables the enterprise to achieve better synergies between individual projects to encourage the sharing of best practices and risk management. In particular, the need for greater coordination on marketing, business development and product development will become increasingly important as these three functions begin to engage customers in two-way conversations over social networks. However, there seems to be every indication that marketing budgets dedicated to social networking will only increase as the technology becomes more mature and accepted. For instance, most pundits expect retailers to start to combine their social networking capability with their wholesale systems and cashier infrastructure to gain greater insight into customer spending patterns and preferences. Others are talking directly with their customers on Facebook to help them develop more customer-friendly products and retail spaces. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  8. 8. 6 GOING SOCIAL Getting it right R espondents were clear that an ability to identify new opportunities is the most important factor for ensuring success in social media. Interestingly, less than one in ten suggested that securing dedicated funding for social media programs was a critical requirement. Critical success factors 70% 60% Identifying new social media opportunities 60.3% Listening to or monitoring online conversations about your organization Responding to conversations about your organization on social media sites 50% 43.1% 40% 38.6% 37 .1% 41.2% Clearly defining a social media strategy Dedicating funding for social media initiatives 30% Allocating a team/roles to manage the use of social media for work purposes 23.0% 18.9% 20% 15.0% Gaining top management ‘buy in’ for social media initiatives Measuring the impact/success of social media engagement, e.g. tracking numbers of followers, etc 8.9% 10% Defining policies to control/manage social media use 0% Managers, n = 1850 Source: Going Social, KPMG International, 2011 Expanding or initiating now Identifying new social media opportunities 80 70 60 Listening to or monitoring online conversations about your organization 68% 60% 60% 63% 60% 54% 58% 62% 56% Clearly defining a social media strategy 50 Dedicating funding for social media initiatives 40 Allocating a team/roles to manage the use of social media for work purposes 30 Defining policies to control/manage social media use 20 Gaining top management ‘buy in’ for social media initiatives 10 Measuring the impact/success of social media engagement, e.g. tracking numbers of followers, etc 0 Source: Going Social, KPMG International, 2011 Responding to conversations about your organization on social media sites Managers, n = 1850 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  9. 9. GOING SOCIAL Many of the traditional program management tenets also ranked surprisingly low for respondents. Measurement was only cited by 15 percent of respondents, gaining management buy-in by slightly more than a fifth, and even strategy definition and resource planning were cited less than 40 percent of the time. But when it comes to actual activity, respondents indicated that their companies were taking a more formal approach in developing their own social media program. More than 60 percent reported that they were actively working to define a strategy, develop policies or conduct measurement related to social media. However, respondents were least likely to cite specific activity in securing dedicated funding and gaining top management buy-in, both of which are key ingredients to achieving sustainability in any business venture. 7 Internal stakeholder buy-in [is key], I would’ve invested a lot more time in that upfront. You need to do it a lot more than you think. You’ve done the presentation but often people only absorb about ten percent and you need to go back again and again to keep on hammering the benefits.  Key take aways In social media, success is directly related to the quality of your ideas, not the size of your budget. And while securing a dedicated budget can certainly provide some benefits such as coordinated spend and strategy, it seems clear that most organizations see social networking as a functional strategy rather than a business one. In fact, the lack of dedicated funding suggests the reality that social media programs tend to be ‘add-ons’ to existing business strategies, rather than a specific strategy in its own right. So, for example, advertising executives may choose to divert budget from traditional advertising to social media to reflect the changing audience profile, rather than request a dedicated budget to experiment with a new technology. Additionally, based on the rather broad and consistent list of social media activities, coupled with low management buy-in and measurement, there is every indication that social networking still has a long way to go before it is accepted as a core business strategy. All of this serves to remind us that we are still really only in the early dawn of social media in business. We suspect in a couple of year’s time, the responses to these sorts of questions may be very different and that we will see social media moving far closer to the core of strategy considerations. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  10. 10. 8 GOING SOCIAL Benefits outweigh risks A ccording to respondents, social media programs tend to deliver significant returns to the business, often outweighing the risks. In fact, almost 80 percent of respondents say that they have either personally seen or organizationally measured all of the key benefits that were anticipated from their program. Benefits of social media 100 88.8% 86.9% 84.8% 81.9% 79.7% 80 79.3% 60 40 22.9% 20 18.4% 15.9% 14.9% 12.6% 13% 0 Cultivate relationships Perceived Job satisfaction Experienced Productivity gains Wider knowledge pool Attractiveness to employees Public profile Managers, n = 1170 Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  11. 11. GOING SOCIAL Has your organization experienced any of the following issues in the last 12 months, by allowing employee access to social media? 50% 49.20% 45.60% 40% 35.00% 30% Consumption of bandwidth 22.10% 20% 19.00% Time wasting 9 What’s the risk, it’s not doing it. Not only can someone say something whenever they want, they can open up a Facebook page themselves and start commenting. There is also a limited amount of real estate and we created our accounts before launching, gather the assets before the launch.  Exposure to malware 10% Sensitive/confidential information Negative representation 0% Source: Going Social, KPMG International, 2011 Managers, n = 1170 Companies seem to be experiencing substantial benefits from their social media programs. Almost nine out of ten respondents cite wider access to knowledge and enhanced job satisfaction, while more than 80 percent reported cultivating better relationships and developing their organization’s public profile. It is also important to note that more than 80 percent noticed productivity gains as a result of their programs. To date we’ve had hardly any issues – probably a handful of issues. But given how active our staff are on social media… the policies seem to prevail.  Our research demonstrates that – once implemented – the benefits clearly outweigh the risks. So, for example, while only around a third of respondents cited time wasting as an experienced risk, more than double that amount claimed to have witnessed productivity gains. Key take aways With more than 80 percent of respondents citing benefits and only around 40 percent identifying any one risk, it seems clear that the exploitation of social networks should be an organizational imperative. Executives would be well advised to balance the risks of engaging in social media against the opportunity cost of not participating. So, while almost 20 percent of respondents suggested that they had experienced some negative representation as a result of social media use, this must be viewed against the 80 percent that indicated that their public profile had actually been enhanced through employee participation. Organizations considering further expansion into social media would be wise to consult with their internal audit departments at the planning phase of their strategy development to ensure they are asking the right questions and quantifying the risks appropriately. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  12. 12. 10 GOING SOCIAL Hidden dangers – Bandwidth consumption A cross the board, those that have taken the leap into social networking seem to have underestimated both the risks and the rewards of their social networking strategy (although, as we have already discovered, and will continue to see in later chapters, the benefits continue to strongly outweigh the risks). Many respondents to our survey seem to indicate that they had not fully considered the risks inherent in social media before entering the social media fray. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  13. 13. GOING SOCIAL When asked for their top three concerns, more than 20 percent of respondents without social media programs cited challenges related to IT security, the loss of sensitive information, or reduced productivity from time wasted. Challenges related to bandwidth and the potential for negative representation were viewed as less of a concern. 11 At a day to day level the biggest problem with social media at [our organisation] is use of bandwidth.  But according to those with social media programs already in the field, some challenges tend to become more acute as social media programs become institutionalized. For example, bandwidth consumption occurs much more frequently than expected and can blind-side the uninitiated. Key take aways While the higher use of bandwidth seems to have surprised many organizations that now allow some form of social networking at work, this seems to be indicative of a lack of both preparation and coordination with IT. In truth, both the increased use of bandwidth and the potential for higher levels of malware are both risks that IT face on a regular basis from a variety of sources and therefore should be easily and rapidly managed by an alert and informed IT function. As a result, organizations contemplating wider access to social networking must work closely with their IT function to identify the potential risks and build robust strategies and contingency plans to mitigate any unwanted outcomes. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  14. 14. 12 GOING SOCIAL Hidden dangers – Overestimating time-wasting M anagers’ views of how much time employees spend on social media appear to be significantly overestimated, while productivity gains tend to be underestimated. Work and home use Manager 56.2% Employee 55.9% 0% 20% 22.2% 14.7% 40% 14.3% 14.3% 60% 3.6% 3.6% 3.4% 6.2% 80% 100% Work use only Manager Employee Managers think employees using 0% 43.8% 19% 39.2% 17.7% 47.8% 20% 17.7% 22.5% 40% 6.3% 22.3% 60% 5.9% 19.4% 80% 5.8% 13.8% 3% 5% 100% Managers, n = 1850; Employees, n = 2016 More than once a day Once every two weeks Once a day Once a month A few times a week Never Once a week Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  15. 15. GOING SOCIAL 13 According to our research, four out of ten managers in the USA and Australia believe that their organization’s employees are using social media multiple times a day. But this was in direct contrast with employees’ own reports on their frequency of use at 14 percent and 16 percent for the USA and Australia respectively. Additionally, managers tend to have higher usage of social media at work than their employees. More than 85 percent of managers reported using social media at the workplace a few times a week or more, compared to 75 percent of employees. Employees were also much more likely to never use social media than the managers, with almost 14 percent of employees reporting that they never use it compared to just 6 percent of managers. Key take aways Perception does not quite meet reality when it comes to employees wasting time on social networks. This suggests that perceptions of time wasting may be based on the actions of a few individuals who abuse their privileges. However, when juxtaposed against the benefits that organizations report, it seems that they self-admittedly achieve an overall productivity gain from staff. In reality, many of the worries about time wasting are no different from similar concerns when organizations adopted email or telephones: the potential for time wasting is certainly there, but generally it is only those that are determined to waste time that tend to abuse these privileges. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  16. 16. 14 GOING SOCIAL Hidden dangers – Restricting access R estricting access to social networks may not be the panacea that risk-averse organizations expect. For employees blocked from using social media (around one in ten), over half are accessing it anyway, using both their personal devices and work provided technologies. Employee access to socal media 0.70% 0% 5.00% 20% 40% 22% TOTAL 60% 31% 80% 100% 47% 10.60% 64% Blocked 23.80% Other 26.80% I don’t know Open Guided Restricted Blocked 20% Restricted Guided Open 14% 33% 15% 47% 34% 8% 52% 36% 38% I don't know/Other 22% 56% 25% 37% Employees, n = 2016 33.20% Personal Business Both Employees, n = 2016 Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  17. 17. GOING SOCIAL Our research found that a third of those working in organizations with blocked access were not only still accessing social media, but were also finding ways to circumvent the security protocols on their work devices to meet their social networking needs. The study also found that those organizations that block employee access, yet leverage social media in their marketing and business strategies, may face a losing battle. Almost three quarters of employees expect to have access to social media when they know their organization is using the medium for marketing or other purposes, compared to only 45 percent when the company does not. 15 We have a social media policy in place for staff and franchisees, when we’re looking at what customers say, we invariably come across staff [making comments].  Job satisfaction levels were also reported to be higher when allowed access, with 63 percent of employees at organizations with open policies citing job satisfaction compared to only 41 percent who are restricted. Key take aways Blocking or severely restricting employee access to social networks may create more risks than it removes. For one, employee morale seems to be closely interlinked to social network access, even more so when the organization itself uses social networks for business objectives, yet restricts employee access to the same sites. Executives may also be tilting at windmills in thinking that banned access to social networks eliminates employee use. Indeed, the survey shows that by restricting or blocking access, many employees tend to move their activity to their own personal devices which are often less secure and completely unmonitored. Organizations with blocked access do not tend to offer employee training or guidance on appropriate social media use, thereby opening themselves up to a range of new and unmanageable risks. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  18. 18. 16 GOING SOCIAL Checks and balances O rganizations often provide employees with guidance on how to most appropriately use social media within the business. Many tend towards formal processes and controls, while others rely on their employees to ‘do the right thing’ in the interest of the business. Almost 60 percent of organizations have either developed a specific policy or set informal expectations around social media. Only around half of all respondents believe that their organization offers specific social media training. More than one in ten employees surveyed had no idea whether their organization had a policy or not. Responses reveal that a significant number of organizations also seem to monitor social media use. 57 percent of management respondents admitting that their organization supervises use, yet only around 40 percent of nonmanagement respondents believed that their organization monitored their use. Similarly, 63 percent of managers noted the potential for organizational reprimands for un-approved use or conduct, but only 55 percent of employees were aware of that possibility. 78.6% 80% 70% 63.0% 61.6% 61.2% 60% 57 .2% 52.6% 50% Informal expectation setting 40% 30% 20% Specific social media training General policies on technology use Specific social media policy Organization monitors use 10% Organization reprimands 0 Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  19. 19. GOING SOCIAL 0% Informal expectation setting Employee General policies on technology use Employee Organization monitors use Employee Organization reprimands 60% 80% 12.2% 61.2% Manager 34.5% 41% 6.8% 43.5% 71.1% 4% 23.6% 78.6% Manager 38.1% 61.6% 31.6% 63% Yes No 5.9% We have a really straightforward four step policy…it is funny, a lot of companies have clamped down and they’ve got an intricate detailed policy about what you can and can’t say on these different platforms. But that seems to often fly back in the face of people, because it is so easy to transgress.  13.8% 30.7% Don’t know 3.9% 14.9% 37% 54.6% Manager 10.6% 45.4% 57 .2% Employee 2.9% 34.4% 39.8% Manager 5.3% 18.5% 51.4% Manager 4.2% 52.2% 52.6% Manager 100% 41.7% Employee Specific social media policy 40% 46.1% Employee Specific social media training 20% 17 6.3% Managers, n = 1850; Employees, n = 2016 Source: Going Social, KPMG International, 2011 Key take aways One would be hard pressed to overstate the importance of a social networking policy. Clear, practical and concise policies supported by appropriate training should be high on the agenda to give employees the confidence to be active in social media, while reducing risk by knowing the boundaries within which they should act. In fact, setting the rules of engagement and use for the organization should generally be the very first step that an organization takes on the path to social network adoption. Training is also critical: there is no use maintaining a social media policy if employees are unsure how to comply with it, or – worse still – unaware of its existence. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  20. 20. 18 GOING SOCIAL Unexpected benefit – Encouraging advocates M any organizations are finding that – with proper training and expectation setting – employees often become strong advocates for the business. And while these activities will not necessarily deter those determined to make negative comments, organizations seem to have much to gain from implementing smart and appropriate guiderails. 0 Informal Education Specific Training on SM General policies Specific policies on SM Organization monitors use Organization warns/reprimands Yes No Yes No Yes No Yes No 20 5.7% 7% 5.8% 6.3% 8.9% Yes 7 .7% No 6.8% Yes 7 .6% No 6.8% 31.7% 40.6% 28.4% 38.7% 8.2% 36.4% 42.5% 5.8% 10.5% 38.3% 39.9% 7 .3% 10.5% 35.4% 39.9% Disagree Neutral Strongly agree 10.1% 13.3% 32.7% Agree 10% 13.9% 32.7% 36.4% 9.4% 12.8% 30.2% 34.3% 7 .1% 11.6% 30.7% 37% 8.4% Strongly disagree 34.7% 41.5% 7 .4% 6.7% 16.9% 44.1% 8.5% 10.4% 15.2% 43.8% 10.7% 100 80 37 .9% 32.2% 9.8% 6.5% 60 34.2% 9.4% 8.5% 4.5% 40 10.1% Employees, n = 2016 Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  21. 21. GOING SOCIAL Interestingly, guiderails and training seem to have little impact on the frequency of negative employee comments: 19 percent of employees who work for an organisation with a general policy are likely to post or have posted negative comments compared to 16 percent employed where there is only a specific policy. However, the likelihood of making positive comments appears to increase dramatically when employees are given either specific training on social media use or informal expectation setting by managers. More than half (57 percent) of employees with specific training are likely to make a positive comment compared to only 36 percent without. Similarly, 53 percent of employees with informal expectation setting are likely to post positive comments compared to only 38 percent without. 19 We don’t have a very large team of people working on social. So scalability is one of the aspects that I’m looking at. How to build up the skills of our colleagues and potentially create 5500 [employee] advocates that are in social. Actually getting them out there to tell our story is quite the challenge.  Key take aways These findings indicate that – while negative employee comments on social networks may be almost impossible to stamp out – organizations that properly deploy social media training can influence the likelihood that their employees will post positive comments about the organization. This is not about incentivising employees to curry favor with their managers and leaders by ‘fanning’ their organizational or brand profile; rather it is about empowering the workforce to speak and advocate on behalf of the organization within public forums. Once again, this means providing clear policies and effective training (both formal and informal) to help employees understand and follow the rules of social media engagement. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  22. 22. 20 GOING SOCIAL Methods and demographics K PMG’s survey about external social media stances, uses and approaches by organizations and employees was completed by a total of 1850 managers and 2016 employees from 10 countries. The survey was administered online during April and May 2011. Data from the survey was analyzed by professionals from KPMG’s Technology, Media and Telecommunications practice. Additional insight and context was provided by regional subject matter experts from across KPMG’s global network of experienced professionals. To help ensure the data was representative of the target populations, the responses were weighted to reflect the relative sizes of the employee populations per country for employees and the number of enterprises per country for managers. Overall, respondents were from a wide range of industries, including: financial and insurance services, mining and agriculture, science, and government. 19 percent of employees and 8 percent of managers worked in the public sector, with the remainder in the private sector. Of the managers, 11 percent were chief executive officers/business owners, 26 percent were senior executives and 63 percent were managers. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  23. 23. GOING SOCIAL 21 Employees 100% 90% 6.5% 17.2% 4.5% 80% 15.1% 70% 3.5% 14.5% 60% 21% 50% 4.8% 18.8% 5% 5% 15% 14.5% 1.5% 3.3% 40% 17% 10.5% 7.4% 8.4% 4.5% 12.5% 13.9% 14.9% 3.5% 7.5% 9.9% 5% 4.5% 3.9% 24.5% 20.2% 11.4% 4% 26.1% 13.8% 1% 23.2% 11.4% 9.9% Public sector/Government 4% 9.4% Private sector – Agriculture/Mining/ Manufacturing/Construction 2% Private sector – Retail/Wholesale 3.5% 7.5% 9.5% 12.4% 13.9% 4% 3.5% 5.9% 7.9% 6.4% 10.9% 30% 18.7% 10.4% 14.3% 38.5% 2.5% 3% 4.4% 56.2% 13.8% 32.2% Private sector – Health 44.6% Private sector – Scientific/Technical services 5.4% 9.9% 24.1% 21.3% 17% Private sector – Hospitality/Cultural/ Recreational services Private sector – Business services/ Communications/Finance/Insurance 24.6% 2.5% 3.4% 36.5% 19.3% 29.1% 3.4% 30% 20% 20.2% 15.8% 5.1% 10% 8.5% 6.9% 11.4% 8% 12.3% 6% 13.3% Private sector – Other 7.9% 0% TOTAL UK Australia US Canada Japan China Brazil India Sweden Germany Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  24. 24. 22 GOING SOCIAL Managers 100% 9.9% 90% 12.2% 80% 14.9% 3.1% 5.1% 16.8% 10.6% 5.8% 4.7% 4.2% 5.2% 6.3% 5.8% 4.9% 7.8% 22.1% 23.7% 29.5% 6.3% 5.8% 50% 40% 6.2% 4.5% 9.3% 14.9% 30% 14.9% 20% 3.2% 13.2% 10% Australia 20.8% 7% 8.3% 22.7% 29.8% 23.1% 11.5% 7% Private sector – Retail/Wholesale Private sector – Hospitality/Cultural/ Recreational services 18.9% Private sector – Health 8.2% 19.5% Private sector – Agriculture/Mining/ Manufacturing/Construction Private sector – Business services/ Communications/Finance/Insurance 13.5% 2.4% 4.4% Public sector/Government 11.9% Private sector – Scientific/Technical services 10.5% 32.3% Private sector – Other 20.3% 7.7% UK 15.6% 4.9% 32.9% 10.4% US Canada 0% TOTAL 38.9% 21.1% 8.3% 10.5% 3.1% 3.4% 14.5% 30.7% 8.3% 4.8% 15.9% 24.2% 18.5% 6.3% 12.1% 13.2% 27.2% 15.4% 7.7% 9.6% 17.2% 3.9% 18.4% 15.1% 11.2% 18.2% 22.2% 22.6% 60% 2.9% 5.8% 15.9% 3.8% 70% 2.1% 3.4% 10.6% 3.9% Japan China 8.3% 6.7% Brazil India Sweden Germany Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  25. 25. GOING SOCIAL 23 Why KPMG? K PMG helps organizations to identify and develop business opportunities available from leveraging social media. Whether just starting out, already a little experienced or well-advanced in social media, our global network of professionals bring a business-centric ‘hype-free’ approach and a comprehensive social media methodology, tailored to your specific needs. With experience across many industries, our team has in-depth knowledge from organizations who have been there before, and draws on specialist expertise from our strong social media alliances. KPMG’s Social Media Approach Realizing the opportunity that Social Media holds for businesses has led KPMG to develop a robust methodology, which helps companies to reap the benefits of a clear and robust social media strategy. Some recommendations include: – Listening is a key initial stage to effective social media engagement – Experimenting and early learning is a natural part of involvement – Challenging old ways of thinking on community engagement – Embedding social media use across the organization and empowering employees to speak on behalf of the business © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  26. 26. 24 GOING SOCIAL KPMG’s social media methodology & services 3. Innovate 2. Learn 1. Listen Status Issues Status • Little or no pro-active Social Media activity • Low Social Media presence • Not aware of benefits and/or risks • No solid future strategy • Lack of policy and governance models • Limited understanding of stakeholder sentiment in Social Media • Low share of voice & brand permission • Lacks a clear roadmap or ownership to initiate Social Media projects • Senior mgt/Board education • Low cost Social Media diagnostic • Low cost Social Media audit i.e. KPMG footprint of Social Media public profile service • Governance/Social Media policy advice • Review/support for business case • Competitor/market analysis • Risk exposure review Issues • Confident in knowledge of Social Media landscape and brands position • Regular interaction in Social Media space with customers • Good governance and policy guidelines developed and communicated • Used primarily as a marketing function without clear understanding of the ROI • Lack of synergy around Social Media data and other forms of business intelligence • Wanting to do more but not sure about strategy • Risk is still not fully understood • Project risk management • Analysis/interpretation of Social Media monitoring outputs • Review/support/measurement of KPMG business case service • IT readiness assessment • Social Media strategy development • Forensic reviews • Performance reporting • Cost effectiveness reviews Status Issues • Highly experienced in the Social Media space • Strong brand permission and regular interactions with customers • Exploring new applications of Social Media tools and platforms • Strong innovation methodology which can be applied to develop technology driven opportunities • Open and risk aware environment • Lack of evidence based strategy with clear ROI around applying Social Media to other areas of the business – service delivery. Sales etc • Lack of alignment between Social Media strategy and general brand/business strategy • Value of Social Media hard to prove outside marketing and customer engagement • • • • KPMG service • • • • • • • Business case development Process and structure design Supply chain assurance Employee Social Media use risk management Enterprise 2.0 strategy development Commercial opportunity identification Proposition development/Prototyping and testing Cost optimisation Forensics Customer experience design and improvement Innovation capability development Source: Going Social, KPMG International, 2011 © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  27. 27. GOING SOCIAL 25 Our analysis has demonstrated that we can look at the experiences of both early business adopters and our overseas counterparts, to learn from them. If businesses do not get on board quickly, they may very well be left behind.  – Malcolm Alder, Partner, KPMG’s Digital Economy practice KPMG in Australia © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  28. 28. Contacts To find out more about how KPMG can help your business better understand the impact of social media, please contact: Sean Collins Global Chair Media and Telecommunications T: +656 597 5080 E: seanacollins@kpmg.com AMERICAS REGION: Sanjaya Krishna Partner KPMG in the US T: +1 212 954 6451 E: skrishna@kpmg.com ASIA PACIFIC REGION: Malcolm Alder Partner KPMG in Australia T: +61 2 9335 8041 E: malcolmalder@kpmg.com.au Peter Mercieca Head of Telecommunications and Media ASPAC Region T: +61 2 9455 9155 E: pmercieca@kpmg.com.au EUROPE, MIDDLE EAST AND AFRICA REGION: Tudor Aw Head of Technology KPMG in the UK T: +44 20 7694 1265 E: tudor.aw@kpmg.co.uk David Elms Head of Media KPMG in the UK T: +44 20 7311 8568 E: david.elms@kpmg.co.uk Timothy Norris Partner KPMG in Brazil T: +5 521351 59411 E: tnorris@kpmg.com.br kpmg.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: Going Social — How Businesses are Making the Most of Social Media Publication number: 111139 Publication date: December 2011

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