Universam McCann Wave 6: The business of social

THE BUSINESSOF SOCIALSocial media tracker 2012

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ContentsExecutive summary 5What is Wave? 7The continuing story of Wave 9Social movements 15Will data privacy slow social? 27The Business Of Social 43Connecting with social experiences 55The impact: Summary 67What does this mean for your business? 71About this report 72 3

The business of social | Social media tracker 2012

Executive SummaryThe story so far in social networking has been the incredible growth in the numbers of people usingthem. But Wave 6 shows that in the future the biggest impact will come from the increasing amountof time people are spending on them. Social networks are now legitimate rivals to all forms of mediaand will continue to have a huge effect on online consumption in particular.Consumers are continuing to move away from increasingly siloed brand websites, viewing it as a onedimensional experience compared to that offered by social media. Brands will need to reach out toconsumers in the social spaces if they are to connect online.Attachment to social networks is stronger than ever, with over 40% of people saying they are worriedabout missing out if they don’t visit their social network. As a result users are fully prepared to sharetheir data in return for the benefits they bring.Social experiences deliver very clear value to brands. Understanding the social experiences theconsumer wants AND which of these experiences deliver the brand’s marketing objectives is the keyto unlocking this value. This is an important part of making social media a legitimate platform forbrand development.Despite the reluctance of many companies to discuss problems, particularly in social media, ourresearch has shown that actually responding to a customer’s issues is one of the most powerful socialexperiences a brand can deliver. In the future social CRM should be a fundamental part of any brand’scommunication strategy.The consumer has many devices through which they can interact with a brand digitally but not all ofthese devices are a suitable environment for every experience. Tablets and smartphones, for example,have very different strengths. Marrying the right experience to the right device is key to creating acompelling social strategy.This report is a brief snapshot of the insight available. You will find contact details if you require furtherinformation at the end of this report. 5

What is Wave? Wave is a social media study. Wave has retained the same methodology from Wave 1 to Wave 6, enabling comparison across Waves. All research is conducted by the EMEA Research team in collaboration with the UM network of agencies. The survey is carried out using UM’s in-house research system, Intuition. We have surveyed 41,738 16-54 Active Internet Users in 62 countries. All surveys are self-completed and the data collected is purely quantitative.Why the Active Internet User? Active Internet Users are those that use the internet every day or every other day. Social media is driven by Active Internet Users. They drive adoption of platforms and tools and they will determine which tools and platforms become dominant. 7

BUSINESS THE BUSINESS SOCIAL OF SOCIAL 62 countries Social media tracker 2012 42,000 respondents December 2011: September 2011: Over 845M active users QQ IM - over 700M active users June 2011: Over 200M tweets a day June 2011: LaunchMOTIVATIONAL 54 countries March 2011: April 2011: 37,600 respondents 100M members Valued at over £3Bn December 2010: 100M users October 2010: “The Social Network” film released just 2.5 months after launch August 2010: Groupon is the July 2010: 100M check-ins 38 countries April 2010: iPad released fastest growing company of all time 23,200 respondents February 2010: Facebook Mobile - 100M users INFLUENTIAL August 2009: Xiaonei becomes RenRen There are now more than 3.6Bn images on Flickr 29 countries June 2009: Launch 17,000 respondents March 2009: Launch October 2008: Launch September 2008: VISUAL August 2008: First Android phone launch TEXTUAL Over 100M users April 2008: Facebook overtakes 21 countries MySpace in popularity 10,000 respondents March 2007: Launch 15 countries 7,500 respondents January 2007: iPhone launch October 2006: Launch September 2006: Facebook is opened to everyone July 2006: Launch December 2005: Launch February 2006: Founded August 2005: Google acquire Android April 2005: First video uploaded to Youtube March 2005: Yahoo acquire Flickr January 2005: Launch December 2004: Launch February 2004: Launch January 2004: Launch August 2003: Launch Delicious September 2003: Launch June 2003: Launch May 2003: Launch January 2003: LaunchJanuary 2001: Launch March 2002: Launch October 1999: Launch The business of social | Social media tracker 2012

The continuing story of WaveIn 2006, UM embarked on a project to measure the scale and impact of social media across the globeand to explore the changes occurring in communication technologies. To date, we have surveyed morethan 136,000 Active Internet Users across 64 countries.Over the course of this project Wave has taught us that growth in social media is unprecedented.However, the real story has not just been one of growth but also of evolution. In a few short years socialmedia has made content creators, sharers and influencers of us all. Wave 1 (2006): demonstrated that social media was living up to the hype. There was a large and active community communicating online. Wave 2 (2007): showed how social media moved from a text-based medium of bloggers and posters to a fully audio visual one full of content creators and sharers. Wave 3 (2008): charted the democratisation of influence, how social media was driving greater means and opportunity for consumers to influence their peers. Wave 4 (2009): examined the reasons behind the huge growth in social media by understanding the motivations to use different social media platforms. It showed that consumers engage with a platform because it meets specific consumer needs and all platforms meet these needs differently. Wave 5 (2010): told us that there was huge demand for social interaction with brands. However, the nature and depth of this interaction varied wildly from person to person and category to category. But those brands that could create the right experience benefited enormously, driving brand loyalty, endorsement and sales. 9

The expanding Wave universe 41,738 62 RESPONDENTS COUNTRIESThe business of social | Social media tracker 2012

WAVE 6 WAVE 5 Algeria Argentina Algeria Australia Argentina Austria Australia Bahrain Austria Belgium Bahrain Brazil Belgium Canada WAVE 4 Brazil Canada Chile China Chile Colombia Australia China Croatia Austria Colombia Czech Republic WAVE 3 Belgium Czech Republic Denmark Brazil Denmark Ecuador Canada Australia Ecuador Egypt China Austria Egypt Estonia Colombia WAVE 2 Brazil Canada Czech Republic Denmark Estonia France France Finland China Germany Germany Australia Ecuador Czech Republic Hong Kong Greece Brazil Finland Denmark Hungary Hong Kong China FranceWAVE 1 France India Hungary France Germany Germany Italy India Germany Hong Kong Greece Ireland (ROI) Italy Australia Greece Hungary Hong Kong Japan Ireland (ROI) China India India Hungary KSA Japan France Italy Italy India Kuwait KSA Germany Japan Japan Italy Latvia Kuwait Italy Malaysia Latvia Japan Lebanon Latvia Philippines Mexico Lithuania Korea Lithuania Lebanon Russia Pakistan Malaysia Mexico Malaysia Lithuania South Korea Philippines Mexico Netherlands Mexico Malaysia Spain Russia Netherlands Pakistan Netherlands Mexico UK Singapore Norway Philippines Norway Netherlands US South Korea Peru Poland Oman Norway Spain Philippines Romania Philippines Oman Taiwan Poland Russia Poland Philippines Thailand Portugal Spain Portugal Poland UK Romania Switzerland Qatar Portugal US Russia Taiwan Romania Puerto Rico Singapore Turkey Russia Qatar South Africa UK Serbia Romania South Korea US Singapore Russia Spain Slovakia Serbia Sweden South Africa Singapore Turkey South Korea Slovakia UK Spain South Africa US Sweden South Korea Taiwan Spain Thailand Sweden Tunisia Switzerland Turkey Taiwan UAE Thailand UK Tunisia Ukraine Turkey US UAE UK Ukraine US Vietnam 11

Welcome to Wave 6 -The Business of SocialSocial media remains at the top of the agenda for many brands. However, it is clear that as a mediumfor marketers it’s still very much in its infancy. Popular measures of success, such as “Likes”, posts orTweets, are no more than proxies for other more meaningful brand objectives. In fact, by definition,setting these goals suggests you may have already confined yourself to creating a one-dimensionalsocial experience.Perhaps this is one reason why so many social media strategies look the same, using familiar platformsin familiar ways to achieve similar goals. With Wave 6 we intend to address this challenge. Wave 5 –The Socialisation Of Brands told us that people want vastly differing social relationships with brands.Wave 6 – The Business Of Social tells us what these social relationships can deliver for brands.Do they make people want to spend more time with the brand, do they make them feel valued ascustomers, or do they encourage people to recommend the brand to others?Our research has revealed a deeply complex environment where different social experiences meetdifferent marketing objectives. An experience that drives brand advocacy in one category simplycreates awareness in another. An experience that encourages brand participation for one person doesvery little for someone else. Knowing the value of an experience means we can build a social mediastrategy designed to meet a marketing objective, rather than starting with how to exploit an existingsocial platform.We believe this knowledge is vital if we are to make social media a legitimate platform for thedevelopment of brands. 13

SOCIALMOVEMENTS

Growth in social networkinghas slowedFIGURE 1:“Thinking about the internet, which of the following have you done in the last 6 months?- Manage a profile on an existing social network (eg: facebook.com)”GLOBAL 45.1% 51.4% 61.4% 65.2% Wave 5 Wave 6 Wave 4 Wave 3 The business of social | Social media tracker 2012

U.S.A. CHINA U.K.33.1% 48.3% 58.1% 64.5% 47.4% 51.4% 68.4% 68.9% 53.4% 55.5% 58.6% 62.9%BRAZIL INDIA ITALY63.6% 53.9% 74.5% 74.3% 51.4% 62.8% 72.5% 67.1% 24% 34.4% 53.9% 61.2%SPAIN FRANCE GERMANY29.9% 46.2% 55.5% 59.6% 26.3% 43.4% 53.2% 53.5% 27.2% 36.6% 37.8% 53.1%RUSSIA64.8% 66.1% 79.8% 77.1% Wave 3 4 5 6 17

But as profile creation begins toplateau, active management stillgrowsThe social network is beginning to reach a plateau amongst the active internet universe (see Figure2). As a result, we are going to see growth at a much slower rate from now on. This will naturally putpressure on Facebook as it IPOs. Investors will expect a return on their investment and the growth ofthe platform will be a key performance indicator. Facebook will need to find ways to get consumers tospend more time with them and further commercialise their services.It is clear however, that active management of a social network profile is continuing to rise (see Figure2) and time spent on a social networking site will continue to grow, at the expense of other platforms(see Figures 3 & 5). The business of social | Social media tracker 2012

FIGURE 2:“Thinking about the internet, which of the following have you ever done?” 49% 88% 81% 77% 75% 49%Upload a video Watch video Create Manage Visit a friend’s to a video clips online a profile a profile social network sharing site page Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 Wave 6 19

But people are spending moretime than ever on social networksFIGURE 3: Everyone 16 - 24 year olds“Approximately howmuch time did you 10spend consuming the Television 9following media in thelast 7 days?” Hours per 6week Radio 7 4 Magazines 6 5 Newspapers 6 13 Internet 13 7 Email 7 7 Social networks 9 6 Microblogging sites 7 8 Mobile phone 10 5 Blogs 6 Video sites 6 7 The business of social | Social media tracker 2012

And the number of socialcontacts continues to growFIGURE 4:“Approximately how many people do you stay in contact with in your personal life through the following means?” 80 Social network 70 i m Instant messengerAverage number of people 60 Forum/Message board My personal blog 50 Phone 40 Email 30 Face to face SMS Text message (SMS) 20 Post/Letter 10 0 Wave 3 Wave 4 Wave 5 Wave 6 2008 2009 2010 2011 21

2010 may prove to be the peakfor many other social platforms2010 may have been the high point for many social platforms. Growth in some activities, like blogreading and creation, has stagnated (see Figure 5). In others, like starting a topic on a forum or visitinga photo website, we are seeing a marked decrease.FIGURE 5:“Thinking about the internet, which of the following have you ever done?” 90% Read blog/weblogs 80% Start my own blog/weblogs 70% Visit a photo sharing website% Ever done 60% Use instant messenger Visit a message 50% board/forum Started a topic on a message board/forum 40% 30% 20% Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 Wave 6 2006 2007 2008 2009 2010 2011 23

But Microblogging is still risingalthough yet to be universallyadoptedSince Wave started in 2006 we have tracked the FIGURE 6:growth of many emerging technologies and we “Thinking about using the internet, which of the following have you used in the past 6 months?often see vast differences in the rate by country. – Used a microblogging service (e.g. Twitter, Jaiku)”Microblogs, e.g. Twitter, fit the typical profile of anemergent social media. Small faltering steps asthe platform begins to grow and then suddenly GLOBALthe event horizon is reached and they burst intolife drawing in huge numbers of participants. 14.9% 33.2% 42.9%What is different about microblogging though isthat the Chinese active internet universe is leadingthe way with a penetration of 71.5%. Chinesemicrobloggers are a highly vocal and activecommunity. They are more likely to be highly Wave 6educated and well paid, viewing microblogging Wave 5as a tool for self expression (49% in China vs. 32% Waveglobally) and sharing experiences (46% in China 4vs. 30% globally). It’s no wonder then that in afew short years using sites like Sina Weibo, Sohu.com and Tencent microblogging have reachedmass penetration. Clearly the microbloggingplatform is becoming a highly influential form ofmedia, explaining why the Chinese government isbecoming so heavily involved through new rulesof use and the launch of it’s own platform. The business of social | Social media tracker 2012

U.S.A. CHINA U.K.8.5% 18.8% 22.1% 26.3% 53.1% 71.5% 6.4% 19.3% 62.9%BRAZIL INDIA ITALY13.4% 43.9% 47.6% 24.4% 45.5% 42.9% 9.4% 11.1% 17.7%SPAIN FRANCE GERMANY11.5% 19.1% 24.8% 4.1% 8.8% 12.2% 6.2% 7.7% 15.9%RUSSIA14.2% 19.9% 25.8% Wave 4 5 6 25

WILL DATA PRIVACY SLOW SOCIAL?

FIGURE 7: FIGURE 8:“Please indicate how much you agree (definitely or tend “Please indicate how much you agree (definitely or tendto) with the statement [I am concerned about the amount to) with the statements [I worry about missing out onof personal data that goes online]” something if I don’t visit my social network] & [Social networking sites are an integral part of my social life]” I am concerned about I worry about Social networking sites the amount of personal missing out on (eg: facebook.com) data that goes online something if I don’t are an integral part of visit my social network social life 70% 55% 50% 65% 45% % Agree % Agree 60% 40% 55% 35% 50% 30% Wave 4 Wave 5 Wave 6 Wave 4 Wave 5 Wave 6 2009 2010 2011 2009 2010 2011 The business of social | Social media tracker 2012

Concern rises but so doesattachment to social networksCurrently, one of the most valuable commodities that a social business can own is data. Many arecommercialising their platforms by delivering targeted advertising based on a user’s data andpreferences. This has driven much discussion over the privacy policies of both Google and Facebookin the last 12 months and the knock-on effect is a rise in the concern amongst users (see Figure 7).However, despite this concern, it’s clear that social media is becoming an increasingly importantfacet of social life. We see a huge rise in the number of people saying that the social networks arefundamental to their social life (see Figure 8).Our research shows that concern about sharing personal data online is real and building. However, thisconcern goes hand in hand with the growing importance that social networks are now playing in userslives. People are sharing as much data as ever before, be this photos, videos or simply updating theirprofile or status (see Figure 9). So it is clear that users are aware that they are sharing data and, whilethis is a concern, the perceived benefits brought are too strong or outweigh the risks . 29

And people are still sharingpersonal dataUpdating your profile (62% globally) and status (52% globally) is a fundamental part of the socialnetworking experience (see Figure 9). Also uploading your own content is continuing at high levels.FIGURE 9:“What have you done with your social networking profile?, amongst those who have used a social network in the past 6months” 38% 38% 30% 30% 31% 29% 27% 19% 19% 21% 21% Join a Dating Organise Purchased Make Shared Affiliate Write a Upload Join an Removed celebrity events something contacts your with or blog videos interest someone group for work/ location become a group from my professional fan of a or cause friend list reasons brand The business of social | Social media tracker 2012

64% 62% 59% 59% 52% 49% 47% 47%43% 44% 44%Join a Display my Play Used a Used live Find new Update my Find old Upload Update my Messagegroup interests games “like” chat friends status friends photos profile friends button 31

Sharing personal data is anaccepted riskFIGURE 10:“Please indicate how much you agree (definitely or tend to) with the statements [I worry about missing out on something if Idon’t visit my social network] vs. [I am concerned about the amount of personal data that goes online]” amongst those whohave created a profile on a new social network. - Size of bubble represents size of audience% agree social networking is an integral part of my social life 75% 70% 65% 60% Russia 55% 50% Turkey Germany France Italy 45% 40% 35% 50% 55% 60% % agree concerned about the The business of social | Social media tracker 2012

Brazil Social networking more important China Egypt India S Korea Mexico Spain USA UK Canada Poland Privacy more Japan important 65% 70% 75%amount of personal data that goes online 33

FACEBOOK IS THE MOST SEARCHED FOR WORD ON THE INTERNET 1. FacebookTOP 10 US SEARCH TERMS 2. YouTube JANUARY 2012 3. Facebook Login 4. Craigslist 5. Facebook.com 6. Yahoo 7. eBay 8. www.facebook.com 9. Mapquest 10. Yahoo.com SOURCE: EXPERIAN HITWISE US The business of social | Social media tracker 2012

The rise of social networking is not a self contained phenomenon. It is having a profound effect onthe internet as a whole, way beyond the confines of social media. In 2011, Facebook and YouTubecompeted with the search engines and have proven themselves legitimate rivals by becoming themost searched and visited destinations on the web. 10.29% ACCOUNTED FORand OF ALL WEBSITE VISITS IN THE UNITED STATES, A 15% INCREASE FROM 2010 TOP 10 1. google.com 2. facebook.com WEBSITES 3. youtube.com GLOBALLY 4. yahoo.com 5. baidu.com 6. wikipedia.org 7. live.com (Windows Live) 8. blogspot.com 9. twitter.com 10. QQ.com SOURCE: ALEXA.COM 35

FIGURE 11:“Thinking about the internet, have you visited an official company / brand website in the past 6 months?” 90% 85% 80% 75% 70% 65% 60% Wave 3 2008 Wave 4 2009 Wave 5 2010 Wave 6 2011FIGURE 12:“Thinking about the internet, have you visited an official company / brand website in the past 6 months?” 90% 16-24 25-34 35-44 45-54 85% 80% 75% 70% 65% 60% Wave 3 2008 Wave 4 2009 Wave 5 2010 Wave 6 2011 The business of social | Social media tracker 2012

Is the world abandoning thebrand website?One casualty of this battle is the brand website, often a considerable investment for many brands.Since 2008, we have seen a continued decrease in the number of people saying that they visited anofficial brand website (see Figure 11).The exodus is even clearer amongst the youngest audiencesThis drop in visiting brand websites is not confined to any one group or demographic. We are seeingthis happening equally amongst men and women and across the age ranges too. But, perhaps mostsignificantly, it is amongst the youngest audiences that the exodus is most dramatic (see Figure 12). Afall of 15% points amongst the 16-24s represents the biggest drop of any age group. 37

FIGURE 13:“Which of these online applications does a good job when you want to...” 9% 18% 11% 13% Meet new people 22% 27% 20% 12% Seek other 45% 24% 28% people’s opinions 9% 37% 16% Stay in touch 12% 9% 24% 16% with friends 19% 12% Manage my 51% 24% 19% life better 14% 26% 14% Make contacts 9% 16% 15% 16% for work 15% 19% Explore the 27% 19% 21% world around me 13% 30% 15% Promote myself 16% 23% 20% 18% 24% 15% 34% 23% Keep up to date 22% 25% 36% 23% Learn 17% 13% something new 19% 19% 23% 25% “Hang out” 27% 23% or waste time 22% 13% 43% 24% 14% 12% Share knowledge 23% 14% 29% 10% 34% 16% Earn respect 19% 12% 26% 22% 11% 12% Change opinions 20% 21% 24% 15% Share new 32% 24% 27% experiences 12% 39% 14% 19% 12% Be creative 18% 15% 23% 10% 26% 18% Feel like I belong 19% 9% 36% 21% 16% 13% Express myself 26% 16% 30% 28% Have fun/ 38% 21% 22% be entertained 16% 41% 11% 9% Make money 10% 16% 16% Official brand Forums Photo/Video websites sites Microblogs Blogs Social networks The business of social | Social media tracker 2012

So what then is the role of thebrand website?The question, then, is what role does the brand website play in a socially dominated web? If web usersare naturally migrating to the social platforms, where does the brand website fit in?The social web is a diverse and multi-dimensional environment allowing people to meet many humanneeds. As we saw from Wave 5 – The Socialisation Of Brands, people use different platforms to meetdifferent needs. Blogs are great for self expression, microblogs (e.g. Twitter) are great for keeping intouch and forums help you seek others opinions.In comparison, the brand website meets very few. Its primary role is confined to information andcommerce (see Figure 13). This suggests that the brand website is not the right location for creatingan interactive social experience. By comparison the social network platforms are far more powerfulplaces to provide these needs. 39

FIGURE 14:“Which of these online applications [Social networks e.g. facebook.com] does a good job when you want to…?” By country FUN SELF-IMPROVEMENT “Hang Out” or waste time Romania Argentina Denmark Slovakia Japan Norway Australia Learn something new Sweden UK Finland Hong Kong China Express yourself Ireland Greece Manage my life better Share knowledge Stay in touch with friends Have fun/be entertained Ukraine Netherlands Spain Taiwan Belgium USA Latvia Italy Vietnam South Africa Estonia Canada Portugal Poland France Meet new people Make contacts for work Serbia Singapore Turkey Keep up to date Share new experiences Earn respect Change opinions Switzerland Macedonia Chile Feel like you belong South Korea Explore the world around me Thailand Croatia Lithuania UAE Germany Philippines Czech Republic Mexico Malaysia Seek other people’s opinions India Austria Lebanon Colombia Ecuador Tunisia Kuwait Make money Russia Puerto Rico Egypt Be creative Qatar Bahrain Hungary Algeria KSA Brazil Oman Promote yourself CONNECTION ENABLEMENT The business of social | Social media tracker 2012

The power of social networksdiffers across the worldDespite social networking being a truly global phenomenon, this hasn’t led to cultural homogeneityamongst communities. It is evident that understanding the role that social media plays and the needsthey best meet is important and our research shows that these needs are not uniform. As millions ofpeople across the world flock to join the social networking platforms the nuances between nationsbecome clear (see Figure 14).For social networks, the desire to meet new people is the central need that unites everyone but forother needs cultural differences come into play. In the West, places like the UK and the USA, they areused for hanging out and having fun. In China and Hong Kong it’s about learning. In Eastern Europe it’sabout community and connecting with others, explaining why some of the largest and most engagedsocial communities in the world reside here. For example, using local sites such as Vkontakte, socialnetworking has reached 77.1% penetration in Russia, one of the highest in our study. When we lookat the Middle East, we see that many use social networks for earning respect from others, but alsoimportantly, changing other’s opinions. This explains why, during the Arab Spring, users naturallyturned to social media to spread information. 41

THE BUSINESS OF SOCIAL

The value of social experiencesA word that is frequently used in social marketing is ‘Engagement’, often when citing the power ofsocial media and the opportunity it brings for marketers. There is nothing wrong with this; it’s a worthyambition for a brand to try to engage with their consumers. The problem is that engagement isessentially a meaningless term. It could mean anything or everything and is really just used as a proxyfor more meaningful brand objectives. With Wave 5 – The Socialisation Of Brands we asked somefundamental questions: do consumers want a social relationship with brands and if they do what kindof relationship do they want? This information has allowed UM to guide clients in the social space byunderstanding the needs of the consumer first and foremost.With Wave 6 – The Business Of Social we have taken things a step further. Not just understandingthe social experience that consumers want but also, crucially, defining the marketing value that theseexperiences can deliver to brands. This means we can not only identify the right experiences but alsothose that best meet our marketing objectives. The results of this research have truly been surprisingand allowed us to further understand the incredibly diverse world of social media. Also, in the space ofsocial CRM, the results have some profound things to say about how brands connect with consumersto create the most compelling experiences of all. 45

Social needs vary by category...Consumers want varying degrees of social relationship with brands. This can range from very superficialrelationships, such as wanting discount vouchers or access to entertaining content, to very deep onessuch as helping with product development or being part of a brand community (see Figure 15). FIGURE 15: “Thinking about companies that make computer software, which of following statements describes the kind of interaction you would like to have with these companies?” Access to news about new developments & software upgrades To be part of a The ability to contact brand community computer software companies and influence product development Discount vouchers for The opportunity to learn computer software or something new about free software downloads different applications 0 10 20 30 40 50 Access to unique An opportunity sponsored events to develop my or competitions software skills Access to fun and The ability to communicate entertaining content and share experiences with other users A personal response to Tools and help to express my issues / complaints my creativity and make something worth sharing The business of social | Social media tracker 2012

And these experiences deliververy different outcomesWhat is very interesting is that each of these experiences deliver very different outcomes. Figure 16shows that giving people access to new news about a computer software brand drives awareness andeducation but very little else. Again discount vouchers stimulate transaction and trial but do very littlefor a computer software brand elsewhere. However a much deeper relationship, such as cooperatingin new product development, drives commitment and prompts people to find out more. FIGURE 16: “Thinking about the interactions that you have indicated you would like to have with companies that make computer software, which interaction is best…?” 20% 30% 40% 50% 60% 70% Access to news about new developments & Awareness Letting you know about the company software upgrades Giving a detailed understanding Education of the company and its products The ability to contact computer software Desire Making the company seem more desirable companies and influence product development Seek More Making you feel closer to the company Discount vouchers Encouraging you to at least try out Trial the company or its products for yourself for computer software companies or free software Encouraging you to buy a product downloads Transaction from the company Commitment Making you feel valued as a customer Makes you want to spend more time Involvement with the company or brand Encouraging you to recommend Recommendation the brand to others 47

The same experiences deliverdifferent outcomes by categoryThe same experiences can deliver very different outcomes by category. Let consumers help youdevelop products in the movie category and it drives awareness and education but not much else (seeFigure 17). Create the same experience in the computer software category and it drives loyalty andprompts people to find out more about the brand.FIGURE 17:“Thinking about the interactions that you have indicated you would like to have with companies that make computer softwareand with companies that produce and distribute movies, which interaction is best…?”25% 30% 35% 40% 45% 50% Awareness Education Desire Seek More Trial Transaction Commitment Involvement Recommendation The ability to contact The ability to contact computer software film makers / movie studios companies and influence and influence movie product development development The business of social | Social media tracker 2012

This allows us to be far morefocussed on delivering socialexperiences that meet ourobjectivesFIGURE 18:“Thinking about the interactions that you have indicated you would like to have with companies that make computer software,companies that make computer hardware, companies that are involved in the fashion industry and companies & artists thatmake & distribute music, which interaction is best…?”Objective - Making you feel closer to the company Computer Computer software hardware Fashion50% Music45%40%35%30%25%20% Access to Ability to Opportunity Opportunity Communicate Tools to A personal Access to Access to Discount To be part of breaking contact to learn to develop & share express my response to fun & unique vouchers a brand news or companies more skills experiences creativity & my issues / entertaining events or community product & influence make complaints content competitions launches product something development worth sharing 49

The most powerful socialexperience?Brands and companies no longer FIGURE 19:find themselves in complete “Thinking about the interactions that you have indicated you would like to have with companies in these categories, [A personal response to issues andcontrol of either the conversation complaints] is best at…?”or content being shared about 25% 30% 35% 40% 45% 50% 55%them. While many brands seethis as an opportunity, using paid Awarenessand owned brand assets to driveearned media, just as many don’t. EducationA natural fear of amplifying issuesaround the brand are a legitimate Desireconcern. One negative commentcan quickly grow to become a Seek Morereal threat to a brands reputation.However, Wave 6 has shown Trialus this is possibly the biggestopportunity that brands have to Transactionconnect with consumers. If youwant to make a customer feel Commitmentvalued, don’t give them rewards,simply respond to their issues Involvementand complaints (see Figure 19). Recommendation Travel Movies Health & Fashion Luxury Telecoms Computer beauty hardware The business of social | Social media tracker 2012

A personal response to issues /complaintsAgain and again as we analyse the results from Wave 6 we see the power of social media to createloyalty. What is even more apparent is amongst influencers, those people who often talk about thecategory, we can see that it not only drives loyalty it creates desire for the brand too (See Figure 20).Responding to a customer’s problem is a natural behaviour for a truly social brand and consumersclearly respect and respond to this.20% 30% 30% 40% 50% 60% 70% FIGURE 20: “Thinking about the interactions that you have Awareness indicated you would like to have with companies in the computer software Education category, [A personal response to issues and Desire complaints] is best at…?” By which statement best describes your Seek More relationship with the computer software category Trial Transaction Commitment Involvement Recommendation Consider myself a Need lots of I often talk “fan” of a brand information before about this in this category buying category 51

The Power of Social ExperiencesA key element for making the social network platforms accountable tools for marketers is being ableto evaluate the value they bring to brands. This effort begins with understanding the intrinsic values ofthe social media platforms and the power of the experiences they can deliver. Wave 6 – The BusinessOf Social has begun to answer this question and now allows UM to plan social strategies from thestarting point of brand or business objective. We think this is an important step towards using socialmedia in a more focussed and value driven way.This approach also has implications for social CRM. Social media platforms, such as Twitter, areincredibly powerful tools for customer feedback. Using them in pro-active way to deal with problemsvery quickly is a proven and powerful driver of loyalty. However, responding quickly isn’t always easyand many marketing teams require input from many other areas of the organisation before dealingwith a problem. This suggests that a social media strategy should not just be the sole domain of themarketing department, but rather part of a company wide effort including legal, PR, customer supportand others. This requires commitment and investment but our research has shown that those brandsthat accomplish this will benefit greatly. 53

CONNECTINGWITH SOCIALEXPERIENCES

DevicesCreating a compelling social experience is one part of the challenge. The second is understandingthe means with which consumers want to connect with brands. There are now so many ways thata consumer can interact in the social space and many devices through which they can do it. So thequestion is which is the most appropriate? An app, a website, a widget? Or do they want to access thesevia a mobile phone, a desktop computer, a laptop computer, a tablet device or an internet connectedTV? Each of these devices is used very differently and has different strengths and weaknesses.Wave 6 – The Business Of Social tracks the usage and power of these technologies and helps us toidentify the key way to deliver social experiences to consumers. The business of social | Social media tracker 2012

People now have many ways toconnect with the internetConsumers have many means with which to connect with the internet. On average they own fourdevices of which the majority of them are used to access the internet (see Figure 21).Average number of devices owned FIGURE 21: “Which devices do you own and whichand used to access the internet have you used to access the internet in the past 6 months?”5 4.1 Laptop / netbook PC Desktop PC43 2.9 Smartphone (eg: iPhone) Tablet device (eg: iPad)2 Mobile phone E-book reader (eg: Kindle)1 Internet- Games connected TV console0 Own Have used to Portable MP3 / Portable access the internet video player games console 57

PC, laptop and mobile devicesare still the main ways to connectDespite the rise of the smartphone for many the laptop and desktop remain the primary means ofconnection.FIGURE 22:“Which devices do you own and which have you used to access the internet in the past 6 months?”Size of the bubble represents % who own device. Desktop PC 70% Mobile phone 60% Portable Laptop / MP3 / video player Netbook 50%% Own Device 40% Games console Smartphone Portable games console 30% Internet-connected TV 20% Tablet 10% e-book Reader 0% 0% 10% 20% 30% 40% 50% 60% % Use Device to Go Online The business of social | Social media tracker 2012

As the PC remains the mostversatile internet enabled deviceAlthough we can start to see the areas where smartphones (e.g. iPhone, Blackberry etc.) are encroachingon this dominance. Searching for a location, using a search engine and microblogging are all activitieswhere the smartphone is particularly powerful (see Figure 23).FIGURE 23: Joined a Post / group buying Read write on“Which activities have community blogs a blog Upload photos to ayou carried out using Browsed the internet photo sharing siteeach device in the past 6 Shared your location via Watch videomonths?” location-based social network clips online Read a book Shared a video with a friend Read a digital Download newspaper / magazine a podcast Searched for Download a Laptop / Desktop video podcast netbook PC PC a location Managed a social Watched live TV network profile 0 20 40 60 80 100 Smartphone Tablet device (eg: iPhone) (eg: iPad) Visited a friend’s Made a purchase social network page Joined an online Used instantMobile phone E-book reader community messenger (eg: Kindle) Visited a professional Visited a company social network / brand website Take part in multi-player Used a search engine Internet- Games game onlineconnected TV console Wrote / sent a message Used a cloud-based on a microblog music recommendation service Read a message Downloaded Sent Visited on a microblogPortable MP3 / Portable & used an app a text a video player games console message forum 59

Although we can see thatsmartphone penetration isgrowing rapidlyFIGURE 24:“Which of the following devices do you own?” Smartphone (e.g. iPhone, Blackberry etc.) 28% 28% 44% 61% 59% 22% 44% 31% 43% 18% 37% 45% 47% 38% 37% 33% 43% 43% 38% 28% 34% 67% 40% 35% 44% 25% 27% 45% 62% 37% 34% 24% 36% 16%% own a smartphone 53% 37% 36% 42% 26% 39% 22%>60% 20%25% 23%50-60% 38% 45%45%29% 28%11% 24%40-50% 41% 34% 27% 44% 42% 40%30-40%<30% 9% 8% The business of social | Social media tracker 2012

With tablet penetration slowlycatching upFIGURE 25:“Which of the following devices do you own?” Tablet device (e.g. iPad, Samsung Galaxy etc..) 10% 12% 14% 16% 33% 8% 20% 14% 20% 16% 8% 18% 17% 17% 19% 21% 12% 19% 19% 34% 22% 28% 12% 12% 44% 10% 12% 15% 11% 11% 6% 6% 6%% own a tablet device 11% 12% 5% 13%11%>20% 6% 5% 23% 11% 18% 10% 5%15-20% 6% 2% 6%10-15% 14% 8% 12% 14% 11% 11%5-10% 4%<5% 5% 61

Different devices are seen asbetter at doing different thingsDifferent devices have different FIGURE 26:strengths. When we compare “You have indicated you own these devices, which of these devices do you think does a good job when you to… Smartphone Owners vs. Tabletsmartphones and tablet devices we Owners.see that they offer very differentenvironments for communication. A Smartphones aresmartphone (e.g. iPhone, Blackberry better when Ward offetc.) is about fun and function. you want to... boredom 55% Socialise Access informationHelping you manage your life and with others quicklyfill in down time. A tablet device Have fun / Find your Be entertained(e.g. iPad, Samsung Galaxy etc.) is way Hang out or 50% waste timevery good at allowing more leisurely % Smartphone owners Manageexperiences such as creativity and my lifelearning (See Figure 26). 45% Relax Organise Read contentEven more importantly, the tablet somethingis seen as a better environment 40% Explore the world Play a gamefor making a purchase. This shows Learn something new Get somethingus that when we consider the doneexperience we want to create we 35% Be creative Watch contentmust understand which screen ismore suited to deliver it. 30% Make a purchase 25% Tablets are Research something thoroughly better when you want to... 20% 20% 25% 30% 35% 40% 45% 50% 55% % Tablet owners The business of social | Social media tracker 2012

What impact do multiple deviceshave on media consumption?As the number of devices that the consumer FIGURE 27:can use to access the internet grows, “Approximately how much time have you spent consuming the following media in the last 7 days by the number of devices usedunsurprisingly, time spent online, including to access the internet”time spent on social networks, also grows 16dramatically (see Figure 27). Clearly the Average hours spent consuming media in last 7 daysrise in mobile devices will transform ourdaily media consumption and this is already 14having an detrimental effect on traditionalprint media, although not an immediately 12catastrophic one.The interesting fact, though, is that 10television seems unaffected. This datasuggest that TV, rather than being a rival 8to social media consumption, is a perfectpartner through “second screening”, people 6accessing media via another screen (eithera P.C. or mobile device) whilst watching 4TV. This data again suggests that not onlyshould we consider the device best suitedto deliver the social experience but how we 2should also consider using multiple screensin combination to deliver it. 0 1 2 3 Number of devices used to access the internet Browsing TV Social Magazines Newspapers the internet networks 63

Connecting devices toexperiencesFIGURE 28:“You have FUNPlay a Game INFORMATIONindicated you ownthese devices, Portable Games Consolewhich of these Games Console Have Fun/ Bedevices do youthink does a good Entertainedjob when you to…” Portable Ward Off Boredom MP3 / video Learn Something New player Relax Desktop P.C. “Hang Out” or Research Something Waste Time Thoroughly Access Information Socialise With Others Quickly Watch Content Mobile Phone Laptop/Netbook P.C. Organise Something Read Content Be Creative Make a Purchase Internet connected Smartphone Find My Way TV Explore the World Around Me Manage My Life e-book Reader Get Something Done Tablet device ORGANISATION ACTION The business of social | Social media tracker 2012

Connecting experiences toscreensMarketers are now faced with enormous choice when thinking about how to connect with consumers.Never mind the fragmentation in traditional media, the growth of internet connected devices meansthat we cannot just think about the media itself, social or otherwise, but also the screen through whichit is delivered.Penetration of these devices differs enormously (see Figures 24 & 25), and video-on-demand servicesdelivered by smart TV’s are fast growing. In South Korea, South Africa and Russia the mobile deviceis king. But it’s not just the penetration of these technologies we must consider but also their relativestrengths. As we try harder and harder to create powerful social experiences it’s clear that the abilityof these screens to deliver them differs enormously.Wave 6 – The Business Of Social, delves into these attributes in far more depth than is available in thisreport. We also look at the power of apps and the role of m-commerce. We think that understandingwhere to best deliver the experience will become increasingly important as these technologies grow. 65

THE IMPACT: SUMMARY

The impact: summaryOur research shows that social experiences can be very powerful, creating strong connections withthe consumer. However, it also shows that knowing this is not enough. We also need to know thevalue that these bring. These experiences need not be complicated. The consumer is often the mostpowerful advocate and ally of a brand: Wave 6 - The Business Of Social demonstrates that evensimply responding to a customer’s problems creates more loyalty and advocacy than any rewardprogramme could.So it is no good spending time and investment on a social experience that you don’t know the value ofor doesn’t meet your brand’s challenges. It’s necessary to look at both the consumer’s needs and yourown objectives if you are to build something that not only connects to the consumer but also helpsbuild value for your brand. 69

What does this mean for yourbusiness? What are the social dynamics of your category? How are your consumers currently behaving in social media? What kind of social media experience are they looking for? Which of these experiences best deliver against your brand’s marketing objectives? Which devices and social platforms are best able to deliver this experience?Wave 6 – The Business Of Social is an in-depth study and there are many other aspects that we areunable to cover in this report.If you want to know how to operate in the new social media landscape and what this means for yourbusiness please contact:EMEA APACGlen Parker Natalie PidgeonResearch Director - EMEA Director IQ and Insights - APACGlen.Parker@umww.com Natalie.Pidgeon@umww.comNORTH AMERICA LATIN AMERICAHuw Griffiths Mario MejiaEVP Global Director of Research Strategic Director - Colombia / LatAmHuw.Griffiths@umww.com Mario.Mejia@umww.com 71

About this reportWave 6 - The Business Of Social is part of UM’s on-going research programme aimed at exploring themassive changes occurring in communication technologiesThe studies have been conducted annually since 2006.The research is conducted by the UM EMEA research team in collaboration with the UM global networkof agencies.If you have any questions about the research or future Wave projects please contact the authors ofthis report:Glen ParkerResearch Director EMEAglen.parker@umww.comLindsey ThomasSenior Research Executive EMEAlindsey.thomas@umww.com The business of social | Social media tracker 2012

This report is printed on Cocoon Silk 100: a paper produced usingeco-sensitive technology from 100% recycled & de-inked waste paper (FSC certified) Designed & illustrated with love by

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Universam McCann Wave 6: The business of social

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