Social Media Marketing Friends, Likes, Tweets, Lend me your ears !

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Social Media Marketing Friends, Likes, Tweets, Lend me your ears !

  1. 1. March, 2011 Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!The past decade brought a significant change in buying behavior; social Analyst Insightnetworks are now used to access and share any information on virtually Aberdeen’s Insights provide theevery organization. In June and August 2010, Aberdeen surveyed more than analyst perspective of the450 executives for the 2011 Marketing Executives Agenda. The responses, research as drawn from anreceived from companies of all sizes and across all industry segments, aggregated view of the researchhighlight the crucial factors driving marketing programs: most companies surveys, interviews, andunderstand the rising use of social media and plan to increase their data analysisinvestments in the medium accordingly. However, most organizations arestruggling to develop an adequate business case and strategy to leveragesocial media adequately in the marketing mix. In fact, a majority oforganizations do not have executive support to undertake such efforts. ThisAberdeen Analyst Insight will review how top performing companiesestablish a business case for social media, and use the differentiating factorsthey deploy as a result to improve their marketing effectiveness.Figure 1: 12 Month Marketing Spend Projections 80% 67% 60% 291% Higher 40% 23% 20% 0% Percent of Companies Increasing Spend Number of respondents, n=453 Social Media Traditional Media Source: Aberdeen Group, March 2011Business ContextThe speed and breadth of changes in the marketing arena is intense. Indeed,Aberdeens research from the 2011 Marketing Executives Agenda indicatesthat while companies face greater competition and economic uncertainty,more than half of all marketers surveyed are simultaneously required todemonstrate a measurable ROI with fewer dollars and resources availableto execute them. Yet, survey results indicate that spending on social mediaby all companies will increase by 2.9-times or more over the next 12This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologies provide for objective fact-based research andrepresent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.
  2. 2. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 2months versus traditional media (Figure 1). It is important to also note that24% of companies plan to decrease spending on traditional media while only2% of companies plan to trim social media spending. These findings showthat despite the pressure to produce more with less, marketing executivesare turning to social media to deliver results.Barriers to AdoptionRegardless of social medias ability to readily engage customers andprospects, organizations still face clear challenges with their social mediainitiatives (Figure 2). The ability to quantify benefits of social media forestablishing a business case is a key challenge cited by almost half of allrespondents. Limited or no visibility on the benefits or results of socialmedia investments also has a negative impact on obtaining executive supportfor these initiatives. With lack of budget being one of the top pressuresmarketers cite within recent research, the ability to produce a strongbusiness case to gain executive management support is crucial to implementthese efforts.Figure 2: Key Barriers to Adoption of Social Media60% 48%40% 36%20% 0% Inability to establish a business case No executive management support / mandate Number of respondents, n=453 All Respondents Source: Aberdeen Group, March 2011Participation in Social Media Drives Greater Performance Maturity Class DefinitionsDespite these challenges, research shows that Best-in-Class companies are √ Best-in-Class: top 20% of38% more likely than all others (Industry Average and Laggard companies) aggregate performanceto actively engage and monitor conversations (Figure 3). In fact, the Best-in- scorersClass are 90% more likely than other companies to engage and monitor √ Industry Average: middlesocial media activities within their community (prospects and customers 50% of aggregatesubscribed to receive updates through various channels) as well as beyond performance scorerstheir community. √ Laggards: bottom 30% of aggregate performance scorers© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  3. 3. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 3Figure 3: Engagement and Monitoring of Social Media Activities Active social media 58%engagement strategy 42%Passive or No social 41% Best-in-Class media engagement All Others strategy 51% 0% 20% 40% 60% 80% Number of respondents, n=453 Source: Aberdeen Group, March 2011Aberdeens February 2009 report The ROI on Social Media Marketing: Why It Performance ResultsPays to Drive Word of Mouth, provides additional context to the underlying Aberdeens The 2011reasons for this finding; it found that companies that realize they cant Marketing Executives Agendacontrol the message in social media are increasingly focused on creating research shows that Best-in-context and becoming a contributor. This awakening is fundamentally Class marketing organizationschanging companies approach to social media; evolving it from "monitor the achieved significantconversation" to "join the conversation" to "share the conversation." performance gains:Top-performing marketing organizations are laser-focused on strategies that √ Annual Revenue: 20%deliver tangible, measurable results. Utilizing key marketing channels like average year-over-yearsocial media allows them to achieve greater corporate revenue results as improvement, comparedwell as higher marketing contribution to sales forecasted pipeline - see 4% worsening amongsidebar. Comparing the social media engagement figures for Best-in-Class Laggard organizations.against all other companies in the graph above strongly validates the value of Also, 100% of Best-in- Class improved in thissocial media as a differentiating marketing channel utilized by these top metric, compared to 11%performing companies to achieve greater marketing effectiveness. of Laggard organizations √ Percent of the salesEstablishing a Business Case for Social Media forecasted pipelineAberdeens research shows that leading companies are more active in using generated by marketing:social media because they can quantify its impact on their business 47% for Best-in-Class,performance - in fact, the Best-in-Class are 40% more likely than others to compared to 5% ofdo so. Laggard organizationsWhen asked about the most valuable metrics to measure social mediascontribution to overall marketing efforts, the Best-in-Class indicated qualityand quantity (number) of new sales leads as the most valuable metrics - 3.35and 3.07 respectively on a scale of 1 to 5 where 1 = no value 5 = highlyvalue (Figure 4). This demonstrates that in order to establish the connectionbetween business performance and investment in social media efforts, theBest-in-Class are monitoring the source of sales leads. By analyzing thepercent of closed business coming from leads generated and nurturedthrough this channel, leading companies are able to understand the impactof social media, and establish a financial model / justification for spending.© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  4. 4. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 4This also provides greater visibility for executive management team tounderstand the benefits of investing in social media as a strategic marketingchannel.Figure 4: Building a Business Case for Social Media3.80 3.62 3.463.403.00 2.90 2.902.60 Quality of new sales leads Quantity (number) of new sales leads Value of Metric, n=453 Best-in-Class All Others Source: Aberdeen Group, March 2011The benefits and importance of lead management are identified further in Best-in-Class CriteriaAberdeens January 2010 benchmark report, Crossing the Chasm with The following keyAutomated Lead Management. In that research, Aberdeen notes that lead performance indicators weremanagement allows organizations to monitor prospect behavior to engage used to determine the Best-in timely, personalized interactions that have a higher chance of generating in-Class for Crossing therevenue. Best-in-Class companies from this research improved their average Chasm with Automated Leadannual revenue by 59% year-over-year, compared to 3% average decrease in Management:annual revenue. Clearly, integrating information captured through social √ Annual revenuemedia with lead management activities is beneficial in establishing a businesscase for social media as well as improving overall business results. √ Click-through rate on email marketing campaignsSuccess in Social Media is in the Eyes of Capabilities and √ Customer acquisitionEnabling Tools revenueWhile there are many factors that account for the success of a marketingorganization, Aberdeens research reveals critical capabilities and specifictools that enable Best-in-Class companies to reap greater benefits fromtheir efforts. "We monitor social media because it provides unsolicited and unbiased consumerKey Capabilities opinions about our productsAs noted earlier, executive management support is closely associated with and brands in real time."the ability to establish a business case for social media efforts. However, it ~ Christine Stasiw Lazarchukdoes not stop there; having support for this channel allows companies to Director, Global Marketcapture and provide crucial customer feedback to executives including Research, Fordstrategic visibility into how customers perceive product(s), brand(s), and thecompany. Research shows that the Best-in-Class are 65% more likely thanother companies to have executive-level support for their social mediainitiatives (Figure 5). Such important information provides companies with© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  5. 5. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 5much needed insights on the impact of their marketing on customer Best-in-Class Criteriaperception and experiences. Aberdeens October 2009 report The ROI on The following keySocial Media Monitoring: Why It Pays to Listen to Online Conversation, shows performance indicators werethat Best-in-Class companies are twice as likely as Laggards to have used to determine the Best-processes in place for applying costumer insights captured through social in-Class for The ROI on Socialmedia into their overall marketing efforts, including product development Media Monitoring:and brand reputation management. √ Customer advocacyFigure 5: Capabilities Are Crucial to Achieve Greater Results √ Ability to generate consumer insights that drive new product/service Executive-level 71% development support for Social Media initiatives 49% √ Customer service costs √ Ability to identify and reduce risk to the brand A formal strategy 47% devoted to Social Media 30%Dedicated resources 43% Best-in-Classdevoted to managing 30% All Others Social Media efforts 10% 30% 50% 70% 90% Fast Facts Number of respondents, n=453 Source: Aberdeen Group, March 2011 Aberdeens research indicates the followingGiven that social media as a marketing channel is still in its early phases for findings in terms of themany companies, creating and implementing a formal strategy is crucial. As likelihood of Best-in-Class companies having processesindicated in Figure 5, Best-in-Class companies are 57% more likely than in place to share insightsothers to have a formal social media strategy currently in place. Those gleaned through social mediaorganizations with no existing strategy for social media initiatives should be with following functionswilling to examine whats been done in other industry segments, and adopt across the enterprise;successful approaches regardless of the source of these ideas. √ Product Development:In order to ensure successful processes to monitor, engage and analyze 217% more likely than allsocial media conversations (see sidebar), organizations need to deploy the othersright resources for managing these efforts. Again, as illustrated by the chart √ Sales: 169% more likelyabove, top performing companies are 43% more likely than all other than all otherscompanies to dedicate appropriate resources for their social media efforts.Considering that a majority of these top performing companies have annual √ Customer Service: 167%revenue below $50 million, dedicated resources for social media activities is more likely than all othersnot a matter of organizational size but a matter of strategic importance √ Executive Management:related to marketing spend. 150% more likely than all others √ Marketing: 127% more likely than all others© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  6. 6. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 6Having the Right Tools Makes All the DifferenceSimply deploying social media to extend organizational reach and brand Benefits of Social Mediaawareness is only "the tip of the iceberg." What lies below the water line is Tools/Solutionshow customer experience data is used to drive marketing efforts, and Besides the performanceresearch shows that top performing companies are 52% more likely than results illustrated in Figure 6,Laggards to invest in a combination of social media monitoring, engagement Aberdeens The ROI on Socialand analytics tools to measure and report customer experience data. The Media Marketing researchbenefits of deploying these solutions on improving overall marketing also reflects impressivecampaign results are illustrated in Figure 6 and the side bar. findings on average year- over-year performance gains of companies using socialFigure 6: Benefits of Deploying Social Media Monitoring, media monitoring,Engagement, and Analytics Tools engagement, and analysis tools, compared to non- users: Customer 49% √ 5% average year-over-year profitability 33% improvement in customer profitability, compared to 2% improvement by non- Return on 43% users marketing 21% √ 4% average year-over-year investment Users of social media monitoring, improvement in Return on engagement, and analysis tools Marketing Investments (ROMI), compared to 1%Likelihood to 31% Non-users of social media improvement by non-users recommend monitoring, engagement, and 12% analysis tools √ 3% average year-over-year improvement in likelihood to recommend (net 0% 10% 20% 30% 40% 50% 60% promoter score, online Percent of companies improving year-over-year performance, n=304 promoter score), compared to 1% Source: Aberdeen Group, March 2011 improvement by non-usersThere is a broad range of social media monitoring, engagement, and analysissolutions to help companies listen, join, and understand the implications ofconversations. These solutions continue to evolve at a tremendous pace.Whatever the social media solution, one thing is clear: as control of abrands marketing messages continues to shift from traditional media tosocial media, companies need to recognize that paying attention to howtheyre perceived in the online world is crucial!Valuable Social Media Applications/ApproachesTo understand the value of the social media approaches companies use,Aberdeen asked executives participating in the 2011 Marketing ExecutivesAgenda study to indicate which applications are used to support social mediainitiatives and their importance/value. The results were clear; certainapplications and approaches are nearly twice as valuable for top performingcompanies compared to Laggards (Figure 7).© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  7. 7. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 7Social networks (i.e. LinkedIn, Facebook) allow individuals to communicatewith each other, voice their opinions and experiences, and follow companyevents and information. Research shows that top performing companies are25% more likely than other companies to utilize such networks in theirsocial media activities.Figure 7: If Customers are Talking, Companies Need to Listen,and Participate 60%Social networks 48% 56% Blogging 31% 39% Best-in-Class Commenting 24% All Others 0% 20% 40% 60% 80% Number of respondents, n=453 Source: Aberdeen Group, March 2011Blogging is another key application leveraged by top performing companies.The Merriam Webster New World Dictionary defines it as "a Web site thatcontains an online personal journal with reflections, comments, and oftenhyperlinks provided by the writer." Best-in-Class companies are 81% morelikely than other companies to use blogging in their pursuit to capturecustomer information, analyze what they mean, and engage with them in atargeted manner.In the context of social media marketing, commenting means enablingcomments to others blog posts (i.e. individuals, groups, associations). It isparticularly beneficial as it allows organizations to generate conversationswith customers, add breadth to existing conversations and determinespecific customer perceptions and sentiment based on the content withinthese comments. Top performing companies are 63% more likely thanothers to rely on this approach in their social media programs.Key TakeawaysWith the swift changes to the global economy and to customer purchasingbehavior, social networks have risen to become a strategic marketingchannel that is attracting some of the spending traditionally allocated toconventional media and programs. Yet, Aberdeens research shows that© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  8. 8. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 8many companies still dont know how to leverage this medium in theirmarketing activities. The following actions will help organizations across alllevels of experience (beginners, intermediate, and experts) to improve theirmarketing effectiveness through using social media: • Establish the business case and secure executive support. Integrate your existing lead management activities with social media efforts to determine the value of leads that are currently generated or nurtured through social media. By doing so, Best-in-Class organizations are 40% more likely than others to establish a business case. If your organization doesnt have leads produced from this channel, start on a smaller scale; begin generating and nurturing leads through social networks and track them through the sales cycle to determine the impact on your business. • Create a formal social media strategy to integrate networks, blogging and commenting within the marketing mix. Identify where social media integrates with product development, customer service, and marketing to produce maximum results from these efforts. For example, 50% of all leading companies have processes in place to share insights captured through social media with executive management team, compared to only 20% of others. Given the value of targeting customers, these strategies must include social networks, blogging and commenting. • Devote necessary organizational resources to support and manage your organizations efforts. The ability to allocate budget and personnel not only communicates the importance and relevance of social media for each business unit but also provides crucial components needed for success. With only 30% of Industry Average and Laggard companies providing necessary resources for their social media programs, there is substantial improvement potential to be achieved. • Use a combination of social media monitoring, engagement, and analytics tools. These tools are crucial to track the overwhelming number of conversations currently underway through countless social networks and are leveraged 52% more by Best-in-Class, compared to others. These solutions allow detecting conversations that matter the most and registering them on the corporate radar to understand customer perceptions and align marketing activities accordingly.For more information on this or other research topics, please visitwww.aberdeen.com.© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897
  9. 9. Social Media Marketing - Friends, Links, Tweets, Lend Me Your Ears!Page 9 Related Research Email Marketing: Customers Take It Crossing the Chasm with Automated Lead Personally; December 2010 Management; January 2010Offer Results Speak Louder than Words: Using Optimization: Using Customer Analytics to Marketing to Improve Sales Effectiveness Improve Marketing Performance, December 2010 October 2009 Sales and Marketing Alignment: Data Driven Marketing; October 2009 Collaboration + Cooperation = Peak Social Media Marketing: Why It Pays to Performance; September 2010 Drive Word of Mouth; February 2009 The 2011 Marketers Agenda: Accessing Social Media Marketing: The Latest Buzz and Understanding Customer Experience on Word of Mouth: July 2008 Data is Life or Death, July 2010 Authors: Chris Houpis, Senior Research Analyst, Marketing Strategy & Effectiveness (chris.houpis@aberdeen.com); Omer Minkara, Research Associate, Customer Management Technologies (omer.minkara@aberdeen.com)Since 1988, Aberdeens research has been helping corporations worldwide become Best-in-Class. Havingbenchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provideorganizations with the facts that matter — the facts that enable companies to get ahead and drive results. Thats whyour research is relied on by more than 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% ofthe Technology 500.As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community oflocal, regional, national and international marketing executives. Combined, we help our customers leverage the powerof insight to deliver innovative multichannel marketing programs that drive business-changing results. For additionalinformation, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call(800) 456-9748 or go to http://www.harte-hanks.com.This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlessotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent byAberdeen Group, Inc. (2011a)© 2011 Aberdeen Group. Telephone: 617 854 5200www.aberdeen.com Fax: 617 723 7897

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