Brands the cost of being human sxsw 2012

Brands: The Cost of Being Human @jenvandermeer EVP, Services Dachis Group SXSW, 2012 #SXhumancost

A Story in 3 Acts:1. Brands2. The Cost3. Of Being Human

I calculate ROI in my sleep

BRANDS

I was talking to some socialbusiness executives a few days ago

and a few nights ago

what does your company’s socialbusiness budget look like?Informal survey over cocktails of 10 Fortune 500 consumer brand marketers - median

what does your company’s social business budget look like? Staff to manage Tools 4% 7% Custom Development 7% Agencies Media 10% Commerce 2%10% 15% 12% 39% 60% 11% 10% 31% 21% 24% 26%11% 2010 2011 2012E $Small $Still small Still only 1% of total marketing spendInformal survey over cocktails of 10 Fortune 500 consumer brand marketers - median - not statistically significant.

Staff to manage 2010 2010 2012E 1.5 FTE 3 FTE 7-8 FTEInformal survey over cocktails of 10 Fortune 500 consumer brand marketers - median - not statistically significant.

paid media to drive social efforts 2010 2010 2012E $Rounding $See what Becoming best friends error you can do with my Facebook repInformal survey over cocktails of 10 Fortune 500 consumer brand marketers - median - not statistically significant.

Staff/media: the olive ratio 2010 2010 2012EInformal survey over cocktails of 10 Fortune 500 consumer brand marketers - median - not statistically significant.

This sets up a conflict vsInformal survey over cocktails of 10 Fortune 500 consumer brand marketers - median - not statistically significant.

This sets up a conflict social business vs cmo team

This sets up a conflict Cluetrain vs Madmen

This sets up a conflict Authentic vs Reach! Conversation!

This sets up a conflict Give me Get me more vs headcount! fans!

This is a false conflict.

To re-connect thebrand back to thepeople, we’regoing to need toalign the vision Dave Gray’s sketch

Branding didn’t start here.

It started here.

And then HERE.

Oh, and here.

“When it rains, it pours.”Which “It’s toasted.”created a “A diamond is forever.”need forTHEM... “Reach out and touch someone.” “Be all you can be.”

and THIS...

Whenever there’san advancement intechnology......someone figures out how to use thattechnology to stimulate the economy.

and wetried. sovery hard.

and we stepped oneach other’s toes.

and we gotinto falsearguments.

but then thebusiness value wasfound.

But the revolution didNOT actually happen.

Because we are still stuck. In HERE.

but this this happened...

and then THIS!!!!!!!

SO great.

the market moved from here14th Street and 9th Avenue 1911

to here in 100 years14th Street and 9th Avenue 2011

and back again14th Street and 9th Avenue 2011

so howdo wetalk

to all of these people.

TheCOST

But I still want to know....How do I get moreheadcount.I’m tired.

But that’snot thepoint.

2 Case Studies: _ Small business _ Complex global multibrand jumbocorp

The following numbers are imaginary, for illustration purposes only.please do not quit your day job to start a mutton honey truck or anyfood truck without doing a thorough ROI analysis.

Food truck social business ROI inputsTime frame: 2008 - 2012Food Trucks: 1Employees: 1% FTE dedicated to social media: 10%Cost of employee: $14k first year, increasing 3%every year but really am much more fulfilledInvestment in social media: 1 iPhone which lastedfor 5 years and never fell into the deep fryer

Social data Twitter > Bit.ly Clicks Foursquare Redemptions15001125750375 0 2008 2009 2010 2011 2012

Incremental Revenue Per Year Incremenatal Revenue150001125075003750 0 2008 2009 2010 2011 2012Value of each Foursquare redemption: $60 yearly share of wallet + average oneadditional customer referred who had a $60 yearly spend

ROI calculation Year 0 2008 2009 2010 2011 2012 Revenue $480 $720 $1920 $5400 $1440iPhone Cost -$400Costs x Year -$1400 -$1540 -$1694 -$1864 -$2050Proﬁt x Year -$920 -$820 $226 $3537 $12350 $14373 - $400 = $13973 = 35X ROI!! $400

What did we learnWorfklow to capture ROI dataValue is not the individual transaction level but thelonger term spend, and referral valueROI does not kick in until scale acceleratesBut... there are limits to growth

Case 2: BigMultinationalBrand

Bigger staffs #FAILYou can’t staff into capitalizing on engagement @ scale #FAIL 11 + 33 = .37 + .25Deleted slides here on cost of command centers -Contact directly to talk about how to think about this.

BRANDS:THE COSTOF BEING HUMAN

WE CARE ABOUT THISBECAUSE

“Fans” spend $72 more on products than “non-fans”Syncapse 2010

People who follow brands on Facebook are 51% more likely to buy a product post-connection. 60% more likely to recommend a product post- connection.Constant Contact and Chadwick Martin Bailey 2011

People who follow brands on Twitter are 67% more likely to buy a product post-connection. 79% more likely to recommend a product post- connection.ROI Research for Performance, June 2010

PRE-INTERNET:BRAND BUILDINGAll about meaning.Unreliable measurement.

INTERNET: PRE-INTERNET:MEASUREMENT BRAND BUILDINGDirect response model. All about meaning.Metrics, but less meaning. Unreliable measurement.

SOCIAL:MEANING AT SCALEThe best medium for measurable brandexpression.Companies that are active in socialperform better than those that are not.

By giving And now, weBy finding advocates can measureadvocates interesting the impact of things to advocacy do, together At scale

What will we see when we look at thesocial data?

Great brands grow because they connect deeply with peopleBrands as diverse as Method, Red Bull,Lindt, Petrobas, Samsung, and Zappos –were built not just on innovative productor service ideas but on IDEALSMillward Brown Stengel Study on Business Growth Jan 2012

Top 50 brands pursuefundamental human valuesthat improve people’s lives:

1. Eliciting Joy: Activating experiences ofhappiness, wonder, and limitlesspossibility.

2. Enabling Connection: Enhancing theability of people to connect with each otherand the world in meaningful ways.

3. Inspiring Exploration: Helping peopleexplore new horizons and newexperiences.

4. Evoking pride: Giving people increasedconfidence, strength, security, and vitality.

5. Impacting Society: Affecting societybroadly, including by challenging thestatus quo and redefining categories

Where do I get my headcount? Wrongquestion.It’s time for us to become performancebrand markters.To reconnect the brand back to ourselves.

THANK YOU.@jenvandermeer#SXhumancost

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Brands the cost of being human sxsw 2012

by Jen van der Meer on Mar 11, 2012

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