Mastering Digital Feedback:
How the Best Consumer Companies
Use Social Media
A TCS 2013 Global Trend Study
INTERNET BLOGGING

DATA follow

SURFING
WEB ONLINE

CLOUD

VIDEO
TWEETS COMPUTING
FORUMS FOLLOWERS
DIGITAL

2

Mastering D...
Contents
004

Introduction and Key Findings

014

Comparing Results Across Four Regions of the World

061

Results in 11 G...
Introduction and Key Findings

4

Mastering Digital Feedback
Consumer Companies Begin Tapping Into the Social Media Mania
If you had asked a chief executive at any global company abou...
If we analyze the way Americans use social media, we find that as of this May, 72% of
American adults who use the Internet...
And the trend in Western, Central and Eastern Europe is no different. In Western Europe
(a region that we surveyed) eMarke...
The Focus of This Study: How Consumer Companies are Tuning into
Consumers Through Social Media
In this research, we focuse...
In all, we surveyed 655 respondents from mostly $1 billion+ consumer companies in June
and July 2013.The average revenue o...
Exhibit I-4: Percentage of Survey Respondents in
11 Global Consumer Industries
Q2 (Global): Survey Respondents Across Regi...
We also interviewed executives in 13 companies, whose participation was based on
remaining anonymous:
n Two large insuranc...
Our 10 Key Findings
Our core finding is that a small minority of consumer companies today - only about
10% - have organize...
3.	 	 Industries with greater benefits from social media are more likely to sell
products and services that consumers are ...
Comparing Results Across
Four Regions of the World

14

Mastering Digital Feedback
Highlights:
n	
Most consumer companies have become serious about social media in just the last

three years
n	
Companies w...
Exhibit II-1: Social Media is in its Relative Infancy at Consumer Companies
Q7 (Global): When Companies Began Regularly Us...
The duration of consumer company experience with social media varies by geography.
Some 39% of the Latin American responde...
Social Media Spending and Staff Sizes Vary Greatly by Region
There’s a huge disparity in spending on social media. We aske...
Average spending per respondent will be nearly $19 million this year, but the median is
only $2.7 million, which reflects ...
Spending by region of the world also varies significantly. (See Exhibit II-5)

Exhibit II-5: Regional Spending on Social M...
We also asked companies how big their social media staff was across their entire organizations
(not just in their division...
Staff sizes are larger in Asia-Pacific and Latin American companies (average of 63-70) as
compared to 51-52 in North Ameri...
The Return on Social Media: Elusive and Difficult to Measure
In addition to asking respondents to quantify what their comp...
By region of the world, the picture of ROI varies markedly. Asia-Pacific respondents
lead the pack in the likelihood to re...
The average rating on these 15 items was between 2.95 (reducing new product
development costs) and 3.67 (increasing consum...
Functional Participation in and Goals for Social Media Reflect the Heavy
Influence of Marketing and Customer Service
Acros...
This pattern repeats itself in all four regions (Exhibits II-13, 14, 15 and 16): Marketing most
frequently views consumer ...
Exhibit II-14: European Functions and Their Views
on Social Media Comments

Q8 (Europe): Business Functions Using Social
M...
Exhibit II-15: Asia-Pacific Functions and Their Views
of Social Media Comments
Q8 (Asia-Pacific): Business Functions Using...
Exhibit II-16: Latin America Functions and Their Views
of Social Media Comments
Q8 (Latin America): Business Functions
Usi...
Case Studies: Why it is Not Easy for Functions Beyond
Marketing and Service to Harness Social Media
While interviewing exe...
Exhibit II-17: Brand Affinity Trumps All Other Goals
Q10 (Global): Importance of Goals for Social Media
(Summary of Means,...
These trends generally apply across the four regions (Exhibits II-18 through 21), but with
some exceptions depending on th...
Exhibit II-19: European Company Goals for Social Media

Q10 (Europe): Social Media Goals
Understanding how consumers view ...
Exhibit II-20: Asia-Pacific Company Goals for Social Media
Q10 (Asia-Pacific): Social Media Goals
Understanding how consum...
Exhibit II-21: Latin American Company Goals for Social Media
Q10 (Latin America): Social Media Goals

Improving after-sale...
How Social Media is Organized, Who Controls It and How Effective the
Structure Is
We asked respondents four questions abou...
Exhibit II-23: How Social Media Activities are Organized (by Region)
Q11 (Region): How Respondents Have Organized Their So...
Case Studies: How Two Companies Leverage Small Social
Media Staff
Social media activities in many large companies start ou...
The responses to the second question on this issue of organization show how much
central control of social media is exerci...
At the regional level, a major discrepancy exists between the way North American
companies control social media and how th...
All to say that the control of social media as a marketing tool is most pronounced in
North American companies – and least...
Some regions were happier than others with their structure:
n	
55% of Latin American and 58% of Asia-Pacific respondents s...
Few Functions Strongly Collaborate on Social Media
Related to our questions about how consumer companies had structured th...
By region, the picture was similar, although North American companies were least likely
to have truly cross-functional soc...
When asked more specifically about how business functions work together (or not) on
social media, only about half the resp...
Who Collaborates – Internally and Externally?
We asked the respondents who said at least two functions work closely togeth...
Marketing was at the top of the list in all regions but Latin America, where customer
service was the most frequently ment...
But this wasn’t the case in North America and most of Europe. Only 29% of North American
respondents share social media da...
What Types of Social Media Platforms Do They Use – and Find Most
Valuable?
Without the public social networks that have at...
Exhibit II-36: Which Social Media Platforms are Used the Most in North
America

Q22A (North America): Which Social Media P...
Exhibit II-37: Which Social Media Platforms are Used the Most in Europe
Q22A (Europe): Which Social Media Platforms
Do Res...
Exhibit II-39: Which Social Media Platforms are Used the Most
in Latin America
Q22a (Latin America): Which Social Media
Pl...
But which of these six platforms are most important for success with social media? (See
Exhibit II-40) Surprisingly, the p...
Exhibit II-41: Most Important Social Media Platforms by Region
Q22AA (Regions): The Most Important Platforms for Social Me...
Across the four regions, 88% of respondents said their companies have pages on public
social networking sites such as Face...
Exhibit II-43: Top Five Public Social Networking Sites for Company Pages
(by Region)
Q22 (Regions): Top Five Social Media ...
Case Studies: Form Follows Function - How Choice of Social
Platform Depends on Firm Strategy
A social media strategy (and ...
Exhibit II-44: Key Success Factors of Social Media

Q23A (Global): Key Success Factors With Social Media (Scale 1-5)
Adher...
Exhibit II-45: Top Five Success Factors of Social Media (by Region)

Q23A (Regions): Top Five Success Factors With Social ...
Findings by 11 Global Consumer
Industries

Mastering Digital Feedback

61
Highlights:
n	 media and entertainment industry has the highest percentage of companies
The

that have been using social m...
Exhibit III-1: How Long Have 11 Consumer Industries Been
at the Social Media Game
Q7 (Global Industries): When Industries ...
How long an industry has been using social media appears to influence how serious
that industry is in getting results from...
So what are their goals? We asked respondents to rate on a scale of 1-5 (not important to
very high importance) a number o...
Understanding how consumers view the brand and the firm’s products: This was
most important to telecom services, CPG and b...
Increasing brand affinity: Most important to travel/hospitality/airlines and telecom,
but of high importance to all sector...
Increasing consumer awareness (the number of consumers who receive a company’s
marketing messages): This was of greater im...
Curtailing consumer attacks on a company’s brand: Less important than many other
goals, but highest in the telecom and tra...
Understanding consumer trends: Of high importance to most industries, but highest
to retailers and telecom companies. Many...
Identifying new product/service opportunities: This did not reach high importance in
any sector. But the highest rankings ...
Improving existing products or services: This goal was not nearly as important as
the awareness-related goals for most ind...
Improving customer service: Two industries rated this higher than the other sectors:
telecom and travel-related. Health ca...
Improving marketing campaigns: Rated highest by the retail, telecom, CPG and
manufacturing sectors and rated lowest by hea...
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
Mastering Digital Feedback with Social Media 2013
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Mastering Digital Feedback with Social Media 2013

  1. 1. Mastering Digital Feedback: How the Best Consumer Companies Use Social Media A TCS 2013 Global Trend Study
  2. 2. INTERNET BLOGGING DATA follow SURFING WEB ONLINE CLOUD VIDEO TWEETS COMPUTING FORUMS FOLLOWERS DIGITAL 2 Mastering Digital Feedback
  3. 3. Contents 004 Introduction and Key Findings 014 Comparing Results Across Four Regions of the World 061 Results in 11 Global Consumer Industries 088 Findings by Business Function 100 130 Mastering Digital Feedback Learning from the Best Adopters of Social Media: Implications and Recommendations for Consumer Companies Research Approach and Survey Demographics 3
  4. 4. Introduction and Key Findings 4 Mastering Digital Feedback
  5. 5. Consumer Companies Begin Tapping Into the Social Media Mania If you had asked a chief executive at any global company about social media 10 years ago, you would have likely received puzzled looks. “Social what?” While that may be hard to imagine now, consider that in 2003, Facebook (the current king of public social networking sites in the Western world, with more than 1 billion users today) was a year away from being launched out of Mark Zuckerberg’s Harvard dorm room. LinkedIn (with 225 million members today) had just opened up for business. Twitter (now 550+ million users) wouldn’t appear until 2006, and Google+ (500 million users) did not launch until 2011. Of course, CEOs are no longer in the dark about social media. In fact, about a third of Fortune 500 CEOs today have their own presence on social media platforms – their own Facebook, Twitter, LinkedIn or another account available for the public to view.1 More importantly, social media has become a serious undertaking in many of these firms. In the last three years, the majority of large consumer companies have incorporated social media in their strategies and operations. Since 2010, 64% of the companies we surveyed in June and July 2013 (average revenue of $15.6 billion; a median of $4.9 billion) had assigned at least one full-time equivalent to use public social sites such as Facebook, Twitter and LinkedIn regularly to monitor what consumers say, communicate with them and understand their needs. The companies we surveyed will spend an average of about $19 million on social media activities this year and, on average, employ 56 people to plot their social strategy, listen and respond to consumer comments on public sites, and handle other tasks to stay in tune with social media discussions about their brands, products and practices. That nearly two-thirds of big companies around the world are now fully plugged into social media is no surprise; it has become an important channel to reach consumers. According to researcher eMarketer, the average U.S. adult is now online for an average of more than five hours daily; for the first time, that’s more time than they’ll spend watching TV (about 4½ hours).2 1 2013 CEO.com Social CEO Report, http://www.ceo.com/wp-content/themes/ceo/assets/2013Social-CEO-Report-Final.pdf. The study was conducted by CEO.com and Domo. 2 According to an article by S. Ng and S. Vranica, ’P&G Shifts Marketing Dollars to Online, Mobile’, The Wall Street Journal, Aug. 1, 2013. Mastering Digital Feedback 5
  6. 6. If we analyze the way Americans use social media, we find that as of this May, 72% of American adults who use the Internet were members of social networking sites – a huge increase from the 8% in 2005, according to the Pew Research Center.3 (See Exhibit I-1) Given that 85% of U.S. adults use the Internet, the number of social media users is immense: nearly 150 million. Exhibit I-1: Since 2010, American Adults Have Flocked to Social Networking Sites Adult use of social networking sites and Twitter–change over time % of adult internet users who use social networking sites or Twitter, over time Twitter Social networking sites 80% 72% 70% 60% 50% 40% 30% 20% 10% 18% 8% 8% 0% 2005 2006 2008 2009 2010 2011 2012 2013 Source: Pew Research Center’s Internet & American Life Project tracking surveys 2005-2013. Spring Tracking Survey, April 17 – May 19, 2013. N=1,895 adult internet users age 18+. Interviews were conducted in English and Spanish and on landline and cell phones. the margin of error for results based on all internet users is +/2.5 percentage points. Audiences of this size are forcing large consumer product companies to shift their marketing investments and campaigns to social media and other online media. Procter & Gamble Co. (P&G), the world’s biggest advertiser (spending $9.3 billion on it in its fiscal 2012 year), has marketing investments in social media, online ads and other digital media of 25% to 35% of its total marketing spending.4 Of course, many consumer companies don’t limit their marketing to adults; they pitch their products to teens and children too. In the U.S., 81% of the 95% of teenagers who use the Internet also use online social networking sites such as Facebook or MySpace.5And social media is by no means a U.S. phenomenon. In fact, American social media users comprise only 10% of the 1.7 billion total worldwide (which is one-fourth of the world’s population), according to researcher eMarketer. (See Exhibit I-2)Asia-Pacific is predicted to have more than four times as many social media users by the end of this year as North America - some 777 million people.� Up 23% from 2012, the number is predicted to reach 1 billion by 2015. 3 Joanna Brenner and Aaron Smith, ’72% of Online Adults are Social Networking Site Users’. Pew Research Center’s Internet & American Life Project, Aug. 5, 2013, p. 2. http://pewinternet.org/~/ media//Files/Reports/2013/PIP_Social_networking_sites_update.pdf 4 Serena Ng and Suzanne Vranica, ‘P&G Shifts Marketing Dollars to Online, Mobile’, The Wall Street Journal, Aug. 1, 2013. 5 Pew Research Center’s Internet & American Life Project 2011 Teen/Parent Survey, July 26-Sept. 30, 20112. http://www.pewinternet.org/Reports/2013/Teens-Social-Media-And-Privacy/MainReport/Part-1.aspx 6 Mastering Digital Feedback
  7. 7. And the trend in Western, Central and Eastern Europe is no different. In Western Europe (a region that we surveyed) eMarketer projects 174 million social media users by the end of 2013. But it also predicts just as many in Central and Eastern Europe. Exhibit I-2: Social Networking is a Global Phenomenon (eMarketer) Social Network Users Worldwide, by Region and Country, 2011-2017 millions 2011 501.6 Asia-Pacific 256.5 —China* 54.8 —India 34.4 —Indonesia 39.9 —Japan —South Korea 30.7 9.3 —Australia 86.0 —Other Latin America 151.6 56.1 —Brazil 24.8 —Mexico 14.1 —Argentina 56.5 —Other Middle East 123.2 & Africa 163.6 North America 147.4 —US 16.1 —Canada Western 142.5 Europe —Germany 25.7 —UK 27.3 —France 20.0 —Italy 15.8 —Spain 15.5 —Netherlands 9.9 —Sweden 4.9 —Norway 2.8 —Denmark 2.6 —Finland 2.5 —Other 15.6 Central & 137.2 Eastern Europe 48.7 —Russia 88.4 —Other Worlwide 1,219.6 2012 632.6 307.5 87.3 52.2 45.0 22.9 10.4 107.3 182.7 66.2 31.8 15.9 68.7 164.3 2013 2014 2015 2016 2017 777.0 906.6 1,018.3 1,129.6 1,231.5 366.2 414.5 451.6 451.6 525.4 127.5 168.7 209.1 209.1 282.9 89.3 109.9 89.3 67.2 79.3 52.7 55.7 52.7 48.2 51.0 27.0 28.6 27.0 24.7 26.0 13.3 15.0 13.3 11.4 12.4 131.8 154.6 175.2 175.2 214.0 216.9 246.6 280.2 280.2 324.4 97.8 110.0 97.8 78.3 88.3 49.9 60.2 49.9 38.4 44.5 21.2 22.9 21.2 17.8 19.5 82.4 94.3 111.3 111.3 131.3 209.8 248.6 287.3 287.3 358.1 174.2 181.2 187.9 193.8 198.8 203.7 157.3 163.5 169.5 174.9 179.4 183.8 16.9 17.7 18.5 18.9 19.4 19.9 159.7 174.2 185.8 194.5 202.3 208.6 39.4 38.1 36.5 34.7 29.2 32.4 36.7 36.0 35.0 33.9 30.2 32.1 27.7 26.9 26.0 25.1 22.0 23.7 24.7 23.7 22.8 21.6 18.2 20.0 24.9 23.9 22.6 21.2 17.5 19.5 13.2 13.0 12.6 12.1 10.8 11.7 6.9 6.7 6.5 6.2 5.4 5.9 3.8 3.7 3.6 3.5 3.0 3.3 3.8 3.7 3.5 3.3 2.9 3.1 3.5 3.4 3.3 3.2 2.7 3.0 24.0 23.2 22.2 21.1 17.8 19.6 154.7 173.6 189.8 202.6 213.4 223.3 54.3 60.5 65.5 69.2 72.4 75.0 100.4 113.2 124.3 133.4 141.0 148.3 1,468.1 1,732.7 1,965.3 2,176.8 2,371.4 2,549.7 Note: Internet users who use a social network site via any device at least once per month; number may not add up to total due to rounding; *excludes Hong Kong Source: eMarketer, April 2013 155358 Mastering Digital Feedback www.eMarketer.com 7
  8. 8. The Focus of This Study: How Consumer Companies are Tuning into Consumers Through Social Media In this research, we focused on large consumer companies (as against business-tobusiness firms) and their use of public social networking sites (not their use of social networking tools for internal collaboration). What’s more, we explored how these companies were using social media as far more than a marketing tool. There had already been significant research by other firms about how consumer companies were using social media to market their offerings and improve their brand reputations. But we wanted to go beyond that – to know how many companies were using public social media such as Facebook, Twitter, Instagram, Pinterest, and LinkedIn for such purposes as: n Improving their current products and services n Generating and testing ideas for new products and services n Bolstering customer service n Identifying production and distribution flaws n Making other vital changes to their products and the processes that supported them In other words, we wanted to investigate how large consumer companies were (or were not) using public social media in just about every aspect of their business that affects consumers: marketing, sales, customer service, R&D/product development, production, logistics, finance and more. More specifically, we wanted to understand five core issues: 1. How cross-functional companies’ social media initiatives were: Did each function (or just one function) use social media in isolation, or did multiple functions share social media data and insights about consumers? 2. Who controlled these companies’ social media activities? Was it marketing? Sales? Service? No one function? A social media group? Another entity? 3. What kinds of benefits were companies generating from being able to listen and respond to consumers via social media? How did their initiatives help them market more effectively, sell more, improve current offerings, identify the need for new offerings, and improve processes, policies and practices? 4. What led to larger benefits from social media? Was it the way social media activities were organized (e.g., centralized vs. decentralized)? How much was invested in terms of money and people? Since what year had the company been engaged in social media? What social media platforms did they use (e.g., corporate blogs or pages on public social network sites)? Was their corporate culture different? Did they have backing from the top? Were senior executives using social media themselves? Something else? 5. What were the biggest barriers to gaining benefits from social media? And how did the companies with the biggest benefits overcome them? 8 Mastering Digital Feedback
  9. 9. In all, we surveyed 655 respondents from mostly $1 billion+ consumer companies in June and July 2013.The average revenue of our respondents was $15.6 billion (median of $4.9 billion). (See Exhibit I-3) They came from 11 global industries (see Exhibit I-4): n Banking/financial services n Consumer packaged goods (food and beverage, health and beauty, etc.) n Heavy manufacturing (automotive, appliances, etc.) n Retail n High tech (consumer software and hardware) n Media and entertainment companies (including consumer Internet companies) n Insurance (life, health, auto, home) n Hospitality, airlines and other travel services n Telecommunications services (mobile, wireline and devices) n Healthcare products and services n Utilities (gas, electric, water, etc.) Exhibit I-3: Survey Respondents by Average Annual Revenue Q2a (Global): Survey Respondents by Annual Revenue 13% $50 billion or more $20 billion to less than $50 billion 9% $10 billion to less than $20 billion 10% $5 billion to less than $10 billion 17% 32% $1 billion to less than $5 billion 18% $500 million to less than $1 billion $100 million to less than $500 million 2% $50 million to less than $100 million 0% Less than $50 million 0% 0 Mastering Digital Feedback 5 10 15 20 25 30 35 9
  10. 10. Exhibit I-4: Percentage of Survey Respondents in 11 Global Consumer Industries Q2 (Global): Survey Respondents Across Regions by Global Industry (Total: 655) Banking/financial services (168) 26% Retail (87) 13% Manufacturing (automotive, heavy equipment, appliances, etc.) (81) 12% High tech (computer hardware, software, communications equipment) (81) 12% Consumer packaged goods (food, beverages and other packaged goods) (54) Health care services and products (medical services, pharmaceuticals, biotechnology, medical productsa and equipment) (49) 8% 8% Travel/hospitality/airlines (39) 6% Telecommunications services and equipment (wireline and/or mobile service providers) (33) 5% Insurance (life, health and property/casualty) (31) 5% Utilities (gas, electric, water) (21) 3% Media and entertainment (13) 2% 0 5 10 15 20 25 30 10 Mastering Digital Feedback
  11. 11. We also interviewed executives in 13 companies, whose participation was based on remaining anonymous: n Two large insurance companies n Four major financial services firms n Four large media and entertainment companies n A midsized (less than $1 billion) apparel company n One major consumer electronics company n One large food company Further, we spent significant time finding and reviewing the public speaking presentations and press articles on several dozen other major companies (including 3M, Nestle, and Ford Motor Co.). Their public discussions provide numerous insights into how they view and use social media initiatives. This study explores how 11 global consumer industries and large companies in the world’s four largest economic regions, North America, Europe, Asia Pacific and Latin America, are using social media. This report provides the results of our research. It also compares where large companies are with social media as compared to their adoption of Big Data/analytics and mobile devices. This report is the fourth we’ve published since 2011, the most recent of which was on Big Data. Thus, we can compare the results of this study to those of our other studies. Mastering Digital Feedback 11
  12. 12. Our 10 Key Findings Our core finding is that a small minority of consumer companies today - only about 10% - have organized their social media activities in a way that has generated significant improvements in multiple areas of their business: the way they market, sell, provide customer service after the sale, develop new products and services, and identify and make corrections to their current offerings, to name a few. These companies have created one large internal ‘social circle’ for their social media activities. By this, we mean a central group that collects and analyzes social data, and gets managers from marketing, sales, service, product development, production, finance and other functions to jointly make sense of the unprecedented (and ever-growing) amount of daily consumer input that social media now makes available to consumer companies. What’s more, these consumer companies view social media as a game-changer, one that allows them to shift from a world of cursory and episodic consumer feedback, to one of broad, deep and continuous consumer interaction. But they realize that the biggest challenges in capitalizing on social media are as much organizational (structuring the activities) and cultural (being externally and internally transparent about their practices) as they are about mastering social technologies. We discuss these and numerous other findings in this report, beginning with an examination of the data by regions of the world, global industries, and business functions. We then compare the survey results by two groups of respondents: n ‘Leaders’ in social media – Respondents whose answers to a question asking them to evaluate the benefits they’ve achieved in 16 domains (marketing, sales, service, product innovation and others) put them in the top third in terms of total benefits. n ’Followers’ in social media – Respondents whose total benefits in the 16 areas place them in the bottom third of benefits achieved. While this report sheds critical light on a broad number of issues related to social media in consumer companies, we believe the 10 listed below are more important than the rest. 1. Some 38% of consumer companies report a positive return on their social media investments – more than double the number of companies with a negative ROI –­­ but 44% haven’t measured the return: The number of companies with a negative ROI on social media is 18%. Asia-Pacific and Latin American companies are more likely to report positive ROI on social media than companies in North America and Europe. (See Section II) 2. Companies with broader benefits from social media are more likely to have a large internal ‘social circle’ with multiple functions working closely together on social media: Companies that reported much greater benefits from social media in 16 areas of performance (a group we refer to as the ’leaders’) were much more likely to have a large number of functions working together to sort out social media strategy, insights, tactics and responses to consumers. In contrast, companies with with fewer benefits from social media (the ’followers’) were much more likely to have a smaller number of functions collaborating on social media, or functions managing social media independent of one another. (See Section V) 12 Mastering Digital Feedback
  13. 13. 3. Industries with greater benefits from social media are more likely to sell products and services that consumers are passionate about: These industries – media, retail, high tech, travel-related and telecom companies – have products and services that are easier to create avid ‘tribes’ of loyalists around. (See Section V) 4. Leaders at social media go far beyond creating company pages on public social networks; a majority of them have blogs, online communities for consumers, mobile apps, and company video channels: Approximately 81% have corporate blogs, 77% have mobile apps for consumers who use social media, and 61% have online video channels. No more than half the followers had blogs, mobile apps or video channels. (See Section V) 5. Leveraging social media requires corporate cultures to be more transparent – both externally (with consumers) and internally (with employees): The majority of the companies with the greatest gains to date from social media have cultures that value consumer opinions and encourage internal transparency and knowledgesharing. Amongst the followers, a minority of companies value consumer opinions and encourage internal sharing of knowledge across functions. (See Section V) 6. The best consumer companies at social media on an average spend double of what the worst companies do; but the leaders are nearly four times more likely to get a positive return on their social media investment: Average spending by leaders - $28 million - is double the average of followers. (Leaders will spend a median of $7 million this year on social media as compared to $1 million for the followers.) But 62% of leaders say their ROI on social media to date is positive, compared with only 17% of followers. (See Section V) 7. Only three business functions are actively involved in monitoring what consumers say about their firm through social media: marketing, customer service and sales: These functions regularly track what consumers are saying on social media in a majority or near majority of consumer companies. (See Section II) 8. Other functions that should be actively listening largely are not: R&D and product management: Only 27% of R&D/product development and 37% of product management departments regularly view social media comments from consumers. (See Section II) 9. Marketing most frequently controls social media, but most companies aren’t satisfied with how these activities are structured: In about one-third of companies, marketing controls social media activities – a much higher percentage than any other function. However, only 42% of respondents view their organizational structure for social media activities as effective or highly effective. (See Section II) 10. Companies are investing fewer resources on social media than they are on Big Data (based on previous TCS studies): Median spending this year on social media is $2.7 million per respondent (average is about $19 million). Based on the median number, these companies will invest about a fourth of what they spent in 2012 on Big Data (median of $10 million), and about 37% less than what they spent last year on responding to consumers who want to do business with them through mobile devices. (See Section II) Section V provides recommendations based on the leader/follower and qualitative data. We offer prescriptions based on how the most advanced companies in our study use social media. Mastering Digital Feedback 13
  14. 14. Comparing Results Across Four Regions of the World 14 Mastering Digital Feedback
  15. 15. Highlights: n Most consumer companies have become serious about social media in just the last three years n Companies will spend an average of nearly $19 million per company this year on social media, and will increase that to $24 million by 2015 n 56% of respondents have measured the return on social media investments, and most of them say it has been positive n Marketing and customer service are the functions that most regularly view consumers’ comments on social media; R&D, manufacturing and finance do so infrequently n More than two-thirds (68%) of the respondents centralize social media activities at the parent company or in each division; marketing controls social media in 35% of companies surveyed; no other function comes close n minority (42%) believe their company’s organizational structure for social media A activities is effective or highly effective, and 51% say they’ll likely reorganize them by the end of 2014 n three-quarters of companies, three or fewer business functions collaborate In closely on social media; in only a quarter do four or more functions work closely together n The three biggest success factors for using social media effectively are protecting consumer data, having a corporate culture that values consumer opinions, and responding rapidly to consumers who have issues about a company or its products Companies and Social Media: A Relatively New Phenomenon Forget that Facebook is nine years old and that LinkedIn turned 10 this year. And ignore the fact that consumer usage of social media actually dates back to at least the 1980s, when online services such as CompuServe and America Online provided online services for consumers to exchange ideas.7 For nearly two-thirds of companies across all four regions, social media is a relatively new thing – an activity to which 64% have assigned at least one full-time equivalent in the last three years. (See Exhibit II-1) Globally, only 14% of our respondents were regularly using public social networking sites in some fashion before 2007. By 2009, about one-third of the respondents were actively involved in social media. And in 2010 and 2011, social media burst through the mainstream: nearly half (49%) of the respondents whose companies actively use social media today launched their activities in those two years. The University of North Caroline at Pembroke has a short history of social media, which can be viewed here: http://www.uncp.edu/home/acurtis/NewMedia/SocialMedia/SocialMediaHistory.html 7 Mastering Digital Feedback 15
  16. 16. Exhibit II-1: Social Media is in its Relative Infancy at Consumer Companies Q7 (Global): When Companies Began Regularly Using Social Media to Track Consumer Comments 1% 2013 2012 14% 23% 2011 2010 26% 13% 2009 2008 5% 2007 5% 10% Between 2000 and 2006 4% Before 2000 0 16 5 10 15 20 25 30 Mastering Digital Feedback
  17. 17. The duration of consumer company experience with social media varies by geography. Some 39% of the Latin American respondents said their companies had been using social media prior to 2010. That was slightly higher than North American and Asia-Pacific respondents (38%). And it was 11 percentage points above Europe, where 28% had been regularly using social media before 2010. (See Exhibit II-2) Exhibit II-2: Regional Experience with Social Media Q7 (Regions): When Respondents Began Using Social Media Before 2000 2007 to 2009 2010 2011 2012 2013 North America 3% 13% 22% 25% 21% 14% 2% Europe 2% 5% 21% 30% 28% 14% 0% AsiaPacific 5% 11% 22% 23% 22% 16% 1% Latin America Mastering Digital Feedback 2000 to 2006 7% 3% 29% 26% 24% 9% 2% 17
  18. 18. Social Media Spending and Staff Sizes Vary Greatly by Region There’s a huge disparity in spending on social media. We asked respondents to estimate what their companies would spend on social media this year. Across the four regions, 37% of respondents’ companies will spend less than $1 million this year on social media activities: staff, technology, marketing agency fees, consulting services and other expenses. On the other end of the spectrum, 8% of respondents said their firms would spend at least $50 million; half of those will invest more than $100 million. (See Exhibit II-3) Exhibit II-3: What Respondents Across the Four Regions Will Spend This Year on Social Media Q16a: Percentage of Respondents’2013 Spending on Social Media (Staff, Technology, Marketing Agencies, Consulting Services, etc.) $250 million or higher 2% $100 million to $250 million 2% $75 million to $100 million 2% $50 million to $75 million 2% $40 million to $50 million 2% $35 million to $40 million 2% $30 million to $35 million 2% $25 million to $30 million 3% $20 million to $25 million 4% $15 million to $20 million 5% $10 million to $15 million 6% $5 million to $10 million 9% $2.5 million to $5 million 9% 16% $1 million to $2.5 million $500,000 to $1 million 13% $250,000 to $500,000 13% Less than $250,000 11% 0 18 5 10 15 20 Mastering Digital Feedback
  19. 19. Average spending per respondent will be nearly $19 million this year, but the median is only $2.7 million, which reflects the wide disparity between the biggest spenders and the smallest. Respondents predicted their spending would only grow by 2015 - by 28% to $24 million (average per respondent), and by 67% to $4.5 million (median). (See Exhibit II-4) Exhibit II-4: Average and Median Spending Per Respondent Company Q16: Spending Per Respondent Company on Social Media in 2013 (in US $millions) $18.8 Average Spending $24.0 Median Spending $2.7 $4.5 $0 2013 Mastering Digital Feedback $5 $10 $15 $20 $25 $30 2015 (Projected) 19
  20. 20. Spending by region of the world also varies significantly. (See Exhibit II-5) Exhibit II-5: Regional Spending on Social Media (Per Respondent Company) Q16 (Region): Social Media Spending per Respondent Company (In US$) Total North America Europe Asia-Pacific Latin America Average $18.8 million $21.9 million $15.0 million $17.3 million $12.6 million 2013 Median $2.7 million $2.1 million $2.9 million $4.7 million $1.6 million Average $24.0 million $29.0 million $17.3 million $21.8 million $13.2 million 2015 Median $4.5 million $4.4 million $4.8 million $5.7 million $1.6 million While $19 million per respondent may seem sizable, realize that it is far below the average spending in 2012 on Big Data and Analytics. In the TCS survey on Big Data, average spending per respondent was more than four times as high – $88 million – while median spending ($10 million) was five times the median for social media. (See Exhibit II-6). Still, average spending on social media was above the average spent by more than 600 consumer company respondents who participated in our 2012 survey on how they are managing consumers who want to do business with them through mobile devices. In that study, we found the average company would spend $15 million (and a median of $4.3 million) in 2012 on dealing with such digital mobile consumers. Exhibit II-6: How Social Media Spending Compares to Big Data and Mobility Investments Q16 (Global): What Respondents are Spending on Social Media vs. Spending on Big Data and Mobile Computing in Other TCS Studies (in US $ millions) 15.1 Responding to Digital Mobile Consumer Spending 4.3 88 Big Data Spending 10 18.8 Social Media Spending 2.7 0 10 20 Average 20 30 40 50 60 70 80 90 100 Median Mastering Digital Feedback
  21. 21. We also asked companies how big their social media staff was across their entire organizations (not just in their divisions). The average number of social media employees working full-time across respondents’ companies was 56; the median was 19. These figures also demonstrate a big gulf between the respondents with a large social media staff and those with a small one. (See Exhibit II-7) About one-third of respondents totaled up 10 or fewer employees working full-time on social media across their entire company. At the other end were the 17% of respondents with more than 100 full-time social media staff across the organization. Nestle S.A., the $89 billion (revenue) Switzerland-based food and beverage company, shows how many resources some large consumer companies are devoting to social media. In February 2012, the company launched what it calls a ‘Digital Acceleration Team’ at its Vevey headquarters, staffed with about 30 employees in a room that looks like a mission control room. The team monitors and responds when necessary to social media conversations and trends worldwide that involve Nestle, keeping watch for both positive and negative issues.8 The team also sets social media guidelines and policies for marketers at Nestle’s product brands, which collectively have about 150 million Facebook fans on 650 Facebook pages. The company is also active on Twitter, Pinterest and Google+.9 Exhibit II-7: The Size of the Social Media Staff Q13 (Global): Percentage of Respondents by Number of Full-Time Social Media Employees Across the Company More than 200 12% 101 to 200 5% 76 to 100 5% 51 to 75 6% 8% 41 to 50 4% 31 to 40 9% 21 to 30 8% 16 to 20 11 to 15 10% 13% 6 to 10 1 to 5 20% 0 1% 0% 8 5% 10% 15% 20% 25% Emma Thomasson, ’Insight—At Nestle, interacting with the online energy’, Reuters, Oct. 26, 2012. From a July 11, 2013 Holmes Report interview with Nestle’s global head of digital & social media, Pete Blackshaw, which can be found here: http://www.holmesreport.com/people-info/13662/SmartRouter.aspx 9 Mastering Digital Feedback 21
  22. 22. Staff sizes are larger in Asia-Pacific and Latin American companies (average of 63-70) as compared to 51-52 in North America and Europe. Exhibit II-8: Regional Differences in the Size of Social Media Staffs Q13 (Region): Social Media Staffs Per Respondent Organization (Full-Time Employees) 2013 Average Median Total North America Europe Asia-Pacific Latin America 56 51 52 70 63 19 16 20 32 16 But some companies had very large staff dedicated to social media. Take Ford Motor Co. The $134 billion (2012 revenue) auto manufacturer has a ‘couple of hundred’ people involved in social media, both inside and outside the company, according to its head of social media.10 A large bank that we spoke with has about 100 people worldwide focused on social media. Case Study: A Major Media Company All global companies are faced with the same conundrum of having to choose between multitudes of emerging technologies and businesses to invest in. Social media is often just one opportunity among many. This problem is especially true for a large cable TV company we interviewed that is only now investing in growth outside of the U.S. Since the company’s business is much more developed in the U.S. – it has stable TV distribution in the U.S. and benefits from a strong economy - it can experiment much more at home with social media than in other regions. The company also has very popular websites for its TV channels, with millions of unique visitors on many social media platforms. This company sees social media as a complement to its core, rather than as a profit center. It views social media as a way to help it get closer to consumers. Although the company invests in social media in regions of the world where audiences are growing, these investments have to be balanced with investments in video on demand and other digital platforms. In addition, it requires a lot of energy in non-English speaking territories to get social media going. The company often uses partners in these areas. Resources are the biggest constraint. The company is playing catch-up in regions outside the U.S. It needs to prioritize where it can make money and can’t justify spending as much outside the U.S. for the return it is getting. From an April 2013 Boston University publication that interviewed Scott Monty, Ford’s global head of social media: http://www.bu.edu/today/2013/how-ford-became-a-leader-in-social-media/ 10 22 Mastering Digital Feedback
  23. 23. The Return on Social Media: Elusive and Difficult to Measure In addition to asking respondents to quantify what their companies would spend this year on social media, we asked a related question: Have their investments to date in social media paid off? Did they have a positive or negative return, or did they not know the return? We found that there were more than twice as many respondents with positive returns (38%) as ones with negative returns (18%). Also, 32% hadn’t measured the return but planned to, and another 12% said they had not measured ROI and had no plans to measure it. (See Exhibit II-9) Exhibit II-9: How Many Consumer Companies Have Positive Returns on Social Media Investments? Q24 (Global): Percentage of Companies with Positive or Negative ROI with Social Media – or Haven’t Measured ROI We have measured the value, and it is more than our investment in social media (i.e., our return on investment is positive) 38% We haven't measured the value, but we do plan to measure it 32% We have measured the value, and to date it is less than our investment (i.e., the return on investment is negative) 18% We haven't measured the value, and we do not plan to measure it 12% 0% Mastering Digital Feedback 10% 20% 30% 40% 50% 23
  24. 24. By region of the world, the picture of ROI varies markedly. Asia-Pacific respondents lead the pack in the likelihood to report positive ROI: 55% claimed they had gained, whereas there were only 35% of North American and 29% of European respondents with positive ROI. Asia-Pacific respondents were also less likely to have negative returns. (See Exhibit II-10) Exhibit II-10: Asia-Pacific Companies More Likely to Get Positive ROI Q24 (Regions): Percentage of Respondents with Positive or Negative ROI on Social Media North America Europe Asia-Pacific Latin America Those with positive ROI 35% 29% 55% 41% Those with negative ROI 17% 20% 13% 31% Those that haven’t measured ROI 48% 52% 32% 28% Believing we would find many companies that hadn’t been able to measure the returns on social media, we asked another question to assess the value of social media activities. We had respondents rate on a scale of 1-5 (1= not at all, 2= minor, 3= moderate, 4=high, 5=very high) the degree to which their social media activities had improved 15 items in four areas of performance: n Brand and consumer awareness related: Awareness, brand affinity, how consumers view the brand and reduction in consumer attacks on the brand n Improvements in customer-facing processes: Marketing campaigns, customer service and revenue n Innovation (both product and process): The identification of new product/service opportunities and new trends n Cost reduction: In sales, service, marketing and product development (Note: Respondents could choose another category and measure its benefit on the same 1-5 scale.) 24 Mastering Digital Feedback
  25. 25. The average rating on these 15 items was between 2.95 (reducing new product development costs) and 3.67 (increasing consumer awareness). (See Exhibit II-11) This shows that across the 15 items, social media had a moderate but less than high impact. It’s important to note here that lower ratings were attached to goals related to reducing costs. Exhibit II-11: The Impact of Social Media on 16 Areas of Performance Q25 (Global): Degree to Which Social Media has Improved Company Performance (~16 Criteria) (Scale of 1-5) Increased consumer awareness --the number of consumers who receive our messages 3.67 Increased brand affinity-the number of consumers who view our brand favorably, and their affinity toward 3.61 Measured how consumers view our brand and products (i.e., consumer sentiment) 3.58 Improved marketing campaigns 3.54 Understood important consumer trends 3.5 Improved after-sale customer service 3.4 Identified new product/new service opportunities 3.32 Improved existing products/services 3.29 Reduced the number and severity of consumer attacks on our brand image 3.25 Increased revenue 3.25 Improved our sales processes 3.24 Reduced marketing costs 3.14 Other 3.13 Reduced customer service costs 3.1 Reduced sales costs 3.04 Reduced new product development costs 2.95 2 2.5 3 3.5 4 4.5 5 These numbers were largely consistent across all four regions. Mastering Digital Feedback 25
  26. 26. Functional Participation in and Goals for Social Media Reflect the Heavy Influence of Marketing and Customer Service Across all respondents and the four regions, two functions – marketing and customer service – are the ones that most regularly view consumer comments about their companies in social media. The sales function is close behind. (See Exhibit II-12) Exhibit II-12: Who Plays in Social Media? Usually Marketing and Customer Service Q8 (Global): Which Functions Use Social Media Regularly to View Consumer Comments? 69% Marketing 58% Customer Service Sales 49% Product management (brand managers, product managers, brand strategists, etc.) 37% 33% IT R&D/product development product engineering 27% Manufacturing/operations (including procurement) 21% Human resources 21% Distribution/logistics 15% Legal 13% Risk management 11% Finance/accounting 11% 0% 26 20% 40% 60% 80% Mastering Digital Feedback
  27. 27. This pattern repeats itself in all four regions (Exhibits II-13, 14, 15 and 16): Marketing most frequently views consumer comments in social media, followed by customer service, then followed by sales. Only amongst a minority of respondents in all regions (only in the 25% range) do R&D/product development professionals regularly view consumer comments on social media. Exhibit II-13: North American Functions and Their Views of Social Media Comments Q8 (North America): Business Functions Viewing Customer Comments on Social Media Marketing (including product/brandmanagement, social media marketing, market research, public relations, corporate communications, etc.) 76% Customer service (including call centers, social media monitors, etc.) 60% Sales (including headquarters and field sales management) 53% Product management (including product brand managers, brand strategists, etc.) 39% Information technology (IT) 28% R&D/product development (including research, product engineering, product development, etc.) 28% HR 22% Product manufacturing/ service operations/procurement/ purchasing (including factories, service operations, manufacturing engineering, purchasing, supply management, etc.) 21% Distribution/logistics 14% Legal (compliance, etc.) 12% Risk management 8% Finance/accounting 7% 1% Other 0 Mastering Digital Feedback 10 20 30 40 50 60 70 80 27
  28. 28. Exhibit II-14: European Functions and Their Views on Social Media Comments Q8 (Europe): Business Functions Using Social Media to View Consumer Comments Marketing (including product/brand management, social media marketing, market research, public relations, corporate communications, etc.) 66% Customer service (including call centers, social media monitors, etc.) 63% Sales (including headquarters and field sales management) 52% Product management (including product brand managers, brand strategists, etc.) 33% Information technology (IT) 29% R&D/product development (including research, product engineering, product development, etc.) 23% HR 22% Product manufacturing/ service operations/ procurement/ purchasing (including factories, service operations, manufacturing engineering, purchasing, supply management, etc.) 16% Distribution/logistics 13% Risk management 11% Legal (compliance, etc.) 10% Finance/accounting 9% Other 1% 0 28 10 20 30 40 50 60 70 Mastering Digital Feedback
  29. 29. Exhibit II-15: Asia-Pacific Functions and Their Views of Social Media Comments Q8 (Asia-Pacific): Business Functions Using Social Media to View Consumer Comments Marketing (including product/brand management, social media marketing, market research, public relations, corporate communications, etc.) 65% Customer service (including call centers, social media monitors, etc.) 51% Information technology (IT) 48% Sales (including headquarters and field sales management) 46% Product management (including product brand managers, brand strategists, etc.) 37% Product manufacturing/ service operations procurement/purchasing (including factories, service operations, manufacturing engineering, purchasing, supply management, etc.) 30% R&D/product development (including research, product engineering, product development, etc.) 28% HR 19% Legal (compliance, etc.) 18% Finance/accounting 18% Risk management 16% Distribution/logistics 16% 0 Mastering Digital Feedback 10 20 30 40 50 60 70 29
  30. 30. Exhibit II-16: Latin America Functions and Their Views of Social Media Comments Q8 (Latin America): Business Functions Using Social Media to View Consumer Comments Information technology (IT) 43% Customer service (including call centers, social media monitors, etc.) 43% Marketing (including product/brand management, social media marketing, market research, public relations, corporate communications, etc.) 41% Finance/accounting 31% Product management (including product brand managers, brand strategists, etc.) 31% R&D/product development (including research, product engineering, product development, etc.) 26% Sales (including headquarters and field sales management) 26% Distribution/logistics 22% Risk management 19% Product manufacturing/ service operations procurement/purchasing (including factories, service operations, manufacturing engineering, purchasing, supply management, etc.) 17% Legal (compliance, etc.) 14% HR 14% 0 30 10 20 30 40 50 Mastering Digital Feedback
  31. 31. Case Studies: Why it is Not Easy for Functions Beyond Marketing and Service to Harness Social Media While interviewing executives at companies across multiple industries, we quickly learned how challenging it was to harness consumer conversation to make change happen beyond pure marketing and customer service – especially in manufacturing, R&D and (in the case of the television industry) programming. One global food company found itself blindsided when a new promotional flavor of a popular product took off unexpectedly through tweets and Facebook posts, all of which was organic. Production was just not prepared to meet demand as their run schedules are planned almost a year in advance and are virtually impossible to modify on quick notice. The executive interviewed was concerned that the company kept increasing manufacturing capacity around the world but hasn’t found inventive ways to add in flexibility to deal with sudden increase in demand, especially for new flavors and products where demand is relatively unknown. Social media will only heighten this disparity. Although somewhat more flexible, the TV broadcasters we interviewed also find it very hard to make changes to a season if consumer conversations on social media highlight problems or lack of interest in a particular show. Most programs have been filmed and edited long before they are broadcast. That said, one executive at a cable company that airs many reality TV shows said that they can often add more screen time for a character during the season and certainly in later seasons if they see he or she is generating lots of social media interest. Some companies are learning how to incorporate feedback into their product design. An executive at a leading consumer electronics company talked about how the company incorporated consumer feedback from social media into the packaging, user information and instructions for a new product before launch. He said social media has become one of many inputs into the product development process. Eight months ago it wasn’t used at all. The influence of marketing and customer service on corporate social media activities also shows up in the goals that respondents rated for their social media activities. By far, the two highest rated goals (scale of 1-5) were brand-related: determining how consumers view the company’s brand and products, and increasing their brand affinity. On a global basis, the goals of using social media to reduce the cost of marketing, service, sales and product development were rated to be of lower importance. Social media allows companies to test marketing campaigns and products under development with large numbers of consumers before big investments are put behind them. However, these goals are rated less than 3.5 on our five-point scale. (See Exhibit II-17) Mastering Digital Feedback 31
  32. 32. Exhibit II-17: Brand Affinity Trumps All Other Goals Q10 (Global): Importance of Goals for Social Media (Summary of Means, Scale 1-5) Understanding how consumers view our brand and products (i.e., consumer sentiment) 4.07 Increasing brand affinity - the number of consumers who view our brand favorably, and their affinity toward our brand 4.05 Increasing consumer awareness --the number of consumers who receive our messages 3.99 Understanding consumer trends 3.96 Improving marketing campaigns 3.9 Increasing revenue 3.85 Improving after-sale customer service 3.79 Improving existing products/services 3.76 Identifying new product/new service opportunities 3.7 Improving our sales processes 3.61 Reducing the number and severity of consumer attacks on our brand image 3.61 Reducing marketing costs 3.43 Reducing customer service costs 3.35 Reducing sales costs 3.33 Reducing new product development costs 3.2 Other 2.82 2 32 2.5 3 3.5 4 4.5 Mastering Digital Feedback
  33. 33. These trends generally apply across the four regions (Exhibits II-18 through 21), but with some exceptions depending on the goal: n Improving after-sale customer service is rated higher by Latin American (4.09) and Asia-Pacific (4.05) companies than by North American (3.66) and European (3.75) firms. n Asia-Pacific firms were the only region to rate ‘identifying new products/service opportunities’ at least a 4. n Latin American and Asia-Pacific respondents rate improving sales processes a more important goal for their social media activities (3.9) than do North American and European respondents (3.42 and 3.64 respectively). n Asia-Pacific respondents rate using social media to cut new product development costs (3.61), sales costs (3.77), marketing (3.79) and service costs (3.79) generally much higher than the three other regions do. Exhibit II-18: North American Company Goals for Social Media Q10 (North America): Social Media Goals Increasing brand affinity-the number of consumers who view our brand favorably, and their affinity toward our brand 4.09 Understanding how consumers view our brand and products (i.e., consumer sentiment) 4.08 Increasing consumer awareness --the number of consumers who receive our messages 4.02 Understanding consumer trends 3.96 Improving marketing campaigns 3.89 Increasing revenue 3.87 Improving existing products/services 3.66 Improving after-sale customer service 3.66 Identifying new product/new service opportunities 3.63 Reducing the number and severity of consumer attacks on our brand image 3.56 Improving our sales processes 3.42 Reducing marketing costs 3.31 Reducing customer service costs 3.21 Reducing sales costs 3.16 Reducing new product development costs 2.97 2.61 Other 1 Mastering Digital Feedback 2 3 4 5 33
  34. 34. Exhibit II-19: European Company Goals for Social Media Q10 (Europe): Social Media Goals Understanding how consumers view our brand/ and products (i.e., consumer sentiment) Increasing brand affinity - the number of consumers who view our brand favorably, and their affinity toward our brand 4.02 3.98 Improving marketing campaigns 3.88 Increasing consumer awareness -the number of consumers who receive our messages 3.87 Understanding consumer trends 3.83 Increasing revenue 3.75 Improving after-sale customer service 3.75 Improving existing products/services 3.73 Improving our sales processes 3.64 Identifying new product/new service opportunities 3.58 Reducing the number and severity of consumer attacks on our brand image 3.5 Reducing new product development costs 3.29 Reducing marketing costs 3.27 Reducing sales costs 3.27 Reducing customer service costs 3.25 3.1 Other 1 34 2 3 4 5 Mastering Digital Feedback
  35. 35. Exhibit II-20: Asia-Pacific Company Goals for Social Media Q10 (Asia-Pacific): Social Media Goals Understanding how consumers view our brand and products (i.e., consumer sentiment) 4.15 Understanding consumer trends 4.11 Increasing brand affinity - the number of consumers who view our brand favorably, and their affinity toward our brand 4.1 Increasing consumer awareness - the number of consumers who receive our messages 4.07 Improving marketing campaigns 4.06 Improving after- sale customer service 4.05 Improving existing products/services 4 Identifying new product/new service opportunities 4 Increasing revenue 3.97 Improving our sales processes 3.96 Reducing the number and severity of consumer attacks on our brand image 3.81 Reducing customer service costs 3.79 Reducing marketing costs 3.79 Reducing sales costs 3.77 Reducing new product development costs 3.61 Other 2.92 1 1.5 2 2.5 3 3.5 4 4.5 5 Mastering Digital Feedback 35
  36. 36. Exhibit II-21: Latin American Company Goals for Social Media Q10 (Latin America): Social Media Goals Improving after-sale customer service 4.09 Understanding how consumers view our brand and products (i.e., consumer sentiment) 3.95 Understanding consumer trends 3.91 Improving our sales processes 3.9 Increasing consumer awareness --the number of consumers who receive our messages 3.88 Improving existing products/services 3.88 Increasing brand affinity -the number of consumers who view our brand favorably, and their affinity toward our brand 3.86 Identifying new product/new service opportunities 3.78 Increasing revenue 3.76 Reducing the number and severity of consumer attacks on our brand image 3.74 Improving marketing campaigns 3.69 Reducing marketing costs 3.67 Reducing sales costs 3.57 Reducing new product development costs 3.5 Reducing customer service costs 3.45 Other 3.14 1 36 1.5 2 2.5 3 3.5 4 4.5 Mastering Digital Feedback
  37. 37. How Social Media is Organized, Who Controls It and How Effective the Structure Is We asked respondents four questions about how they organized their social media activities and the impact of that decision: n Whether they were centralized or decentralized n Which function or individual controlled the activities (if any) n How effective their organizational structure for social media was n Whether they would reorganize these activities by the end of 2014 The responses show big differences across the four regions. But viewed on a global basis, by far the most common approach for organizing social media activities is centralizing them at the parent company (rather than in the divisions). That approach was taken by 47% of the respondents we surveyed. However, North American respondents were much more likely to do this: 54% did, as against only 35% in Latin America, 40% in Europe and 41% in Asia-Pacific. Those regions were more likely than North American respondents to centralize social media in each division, in one group or function per division. And they were more likely to decentralize them by division – but keep them coordinated. In contrast, 11% of North American respondents decentralize social media by function in every division and do not coordinate the activities. That only happens in 6% to 7% of respondents in the three other regions. (See Exhibits II-22 and 23) Exhibit II-22: How Social Media Activities are Organized (Globally) Q11 (Global): How Respondents Have Organized their Social Media Activities They are centralized at our parent company 47% In every division, they are decentralized by business function (e.g., within marketing, sales, and customer service) but are coordinated 22% Every division centralizes its own social media activities in one function/group 21% In every division, they are decentralized by function and are not coordinated 9% Other 1% 0 Mastering Digital Feedback 10 20 30 40 50 37
  38. 38. Exhibit II-23: How Social Media Activities are Organized (by Region) Q11 (Region): How Respondents Have Organized Their Social Media Activities North America Europe AsiaPacific Latin America They are centralized at our parent company 54% 40% 41% 35% Every division centralizes its own social media activities in one function/group 13% 29% 30% 31% In every division, they are decentralized by business function (e.g., within marketing, sales, customer service) but are coordinated 20% 23% 23% 28% In every division, they are decentralized by function and are not coordinated 11% 7% 6% 7% Other 1% 2% 0% 0% Having social media centralized at either the parent company or in a division is the most common structure – exhibited by between 66% and 74% of the respondents (depending on the region) and 69% overall. It offers economies that just can’t be gained when functions control their own social media activities. The respondents that centralized social media will spend an average of $16.3 million each on it this year. In contrast, those that decentralized their social media activities will spend about 50% more: $24.5 million. (See Exhibit II-24) Exhibit II-24: How Centralization and Decentralization of Social Media Affects Spending Q11 + Q16 (Global): Average Per Company 2013 Spending on Social Media in Companies That Centralize or Decentralize Social Media Activities (in US $ millions) Average 2013 Social Media Spending per Company in Those that Decentralize Social Media $24.5 Average 2013 Social Media Spending per Company in Those That Centralize Social Media $16.3 $0 38 $5 $10 $15 $20 $25 $30 Mastering Digital Feedback
  39. 39. Case Studies: How Two Companies Leverage Small Social Media Staff Social media activities in many large companies start out in silos or decentralized. Once senior management decides to monitor social media activities and formulate the company’s social strategy, they often put together a centralized group composed of the original mavericks and then ‘embed’ social media experts in the businesses and regions that focus on implementation with a thinly staffed central function. In addition to setting strategy, this central team is often called on for best practices, reporting and measurement, formulating guidelines, ensuring compliance, integrating platforms and – last but not least – facilitating collaboration. In the meantime, the embedded employees are called on to implement. Most companies we interviewed keep a tight rein on the core dedicated social media teams while leveraging social media activities across tens of thousands of employees across many regions and business units. These small teams can, in this way, generate maximum impact. A large insurance company developed a next wave knowledge management platform to help employees collaborate with brokers worldwide to value complicated risk. This is managed by the corporate innovation team with just four full-time employees, including a dedicated general counsel. The team is periodically supported by four corporate communications employees. A $2 million budget covers headcount and software. Likewise, a wealth management company has a very small team within its digital strategy group. They work closely with the legal team and other stakeholders, such as IT and risk. The head of the group would love to have more staff but social media is still an unproven entity. Because it is not easy to measure the ROI, getting more employees is difficult. However, the head of the group will probably add more people to the team, especially those with skills in legal and compliance. Mastering Digital Feedback 39
  40. 40. The responses to the second question on this issue of organization show how much central control of social media is exercised by the marketing function – especially in North American companies. Around the globe, marketing is more likely to control social media than any other function: 35% of our total respondents said marketing controls it, whereas ‘multiple business functions’ control it in 13% of respondents, and the CIO/CTO had control in 12%. Viewed another way, the customer-facing functions of marketing, sales and customer service controlled social media in 45% of respondents. A function that wasn’t controlled by these three departments (IT, a separate social media group, a chief digital or customer experience officer) controlled social media in 35% of respondents. (See Exhibit II-25) Exhibit II-25: Who Controls Social Media? More Often Than Other Functions, It’s Marketing Q12 (Global): Which Function or Person Controls Social Media? Marketing 35% Multiple business functions 13% CIO/CTO 12% A separate social media group that does not report to marketing, sales, service or other functions 10% A chief digital officer 7% Customer service 7% A chief customer experience officer 6% No one function or person controls these activities 5% 3% Sales Other function or individual (please describe) 2% 0% 40 5% 10% 15% 20% 25% 30% 35% 40% Mastering Digital Feedback
  41. 41. At the regional level, a major discrepancy exists between the way North American companies control social media and how the other three regions control it. In 54% of the North American respondents, customer-facing functions control social media. That’s only the case with 40% of European and 38% of Asia-Pacific respondents. And it’s much lower in Latin America, where only about one-quarter of respondents say marketing, sales or service owns social media. (See Exhibit II-26) In fact, in Europe, about as many respondents say that a ‘neutral’ function (one that it isn’t marketing, sales or service) is just as likely to control social media: IT, a social media group, a chief digital officer or a chief customer experience officer. These functions are even more likely to control social media in Asia-Pacific companies (47% of respondents) and Latin America (63%). Exhibit II-26: Who Controls Social Media Depends on the Region Q12 (Regions): Which Function or Person Controls Social Media? North America Europe Asia-Pacific Latin America Marketing Sales 4% 5% 2% 0% Customer Service 5% 6% 14% 3% 54% 40% 38% 24% 6% 7% 15% 45% Separate social media group that does not report to other functions 8% 17% 10% 5% Chief digital officer 6% 9% 8% 10% 4% 6% 14% 3% Subtotal 24% 39% 47% 63% Multiple business functions 14% 11% 14% 10% Other function 2% 3% 0% 3% No one function 6% Mastering Digital Feedback 21% Chief customer experience officer Other 22% CIO/CTO Centralized Function 29% Subtotal CustomerFacing Functions 45% 6% 1% 0% 41
  42. 42. All to say that the control of social media as a marketing tool is most pronounced in North American companies – and least pronounced in Latin America and Europe. Domination of the social media discussion by marketing limits social media’s reach (and thus potential), especially when viewed in the context of the 15 possible goals of social media discussed earlier. The answers to our third question about the organizational structure of social media activities reveals that only a minority of companies are satisfied with their current structure. Only 42% of all respondents termed their structure ‘highly effective’ or ‘effective.’ A greater percentage (58%) called it ‘somewhat effective’, ‘slightly’ or ‘not at all effective’. (See Exhibit II-27) Exhibit II-27: Effectiveness of Respondents’ Structure for Social Media Q14 (Global): How Respondents View the Effectiveness of Their Company’s Organizational Structure for Social Media Activities Highly effective 10% 32% Effective 35% Somewhat effective Slightly effective Not at all effective 20% 4% 0% 42 10% 20% 30% 40% Mastering Digital Feedback
  43. 43. Some regions were happier than others with their structure: n 55% of Latin American and 58% of Asia-Pacific respondents saw their structure as effective/highly effective n only 38% of European respondents and 35% of North American respondents said But it was effective/highly effective Asked whether they would reorganize their social media activities by the end of 2014, the majority (51%) said that was likely. Only 15% said it wasn’t likely, and 34% weren’t sure. (See Exhibit II-28) Exhibit II-28: Whether Respondents Will Reorganize Social Media Q15 (Global): Whether Respondents’ Companies are Likely to Reorganize Social Media Activities by End of 2014 34% Not Sure Not Likely to Reorganize 15% Likely to Reorganize 51% 0% 10% 20% 30% 40% 50% 60% n North American and European respondents were equally likely to reorganize social media by the end of next year (45% of respondents in both cases). n But curiously, 63% of Asia-Pacific and 72% of Latin American respondents said they would likely reorganize social activities as well – even though a greater percentage of them saw the current structure as effective. Mastering Digital Feedback 43
  44. 44. Few Functions Strongly Collaborate on Social Media Related to our questions about how consumer companies had structured their social media activities, we asked respondents to rate the degree to which multiple business functions collaborated on social media strategy and daily activities (such as sharing and making sense of consumer data). Our finding: while social media is largely not a siloed activity, it is not a highly cross-functional activity either. Only about one-quarter (26%) of respondents across all four regions combined have four or more functions working closely together on social media, including sharing the same consumer data. (See Exhibit II-29) Far more often, two to three functions were collaborating on social media (in 45% of respondents). And in 30%, each business function was largely or totally managing its social media activities independent of what other functions were doing. Exhibit II-29: How Many Functions Collaborate on Social Media? Not Many Q18a (Global): Number of Respondents That Have One or More Functions Working Closely Together on Social Media (Including Sharing the Same Consumer Data from Social) 4+ functions work closely together on social media 26% 2-3 functions work closely together on social media 45% Each function manages social media activities totally or largely independently 30% 0% 44 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Mastering Digital Feedback
  45. 45. By region, the picture was similar, although North American companies were least likely to have truly cross-functional social media activities. (Only 23% said they had four or more functions collaborating strongly on social media, as against 31% in Europe and AsiaPacific.) Yet North American respondents had the lowest percentage who said functions operated largely autonomously on social media. (See Exhibit II-30) Exhibit II-30: How Strongly Functions Collaborate on Social Media, By Region Q18a (Regions): Number of Respondents That Have One or More Functions Working Closely Together on Social Media Latin North Europe Asia-Pacific America America Each business function manages its social media activities independently 32% 33% 36% 2 to 3 functions work closely together on social media 51% 37% 36% 41% Four or more functions work closely together on social media Mastering Digital Feedback 26% 23% 31% 31% 22% 45
  46. 46. When asked more specifically about how business functions work together (or not) on social media, only about half the respondents said ‘most’ or ‘all the time’ to five measures: whether they share social media management practices; how they determine whether to act on consumer data; in generating collective insights from social data; in sharing such data; and in creating and revising a social media strategy. (See Exhibit II-31) Exhibit II-31: How Closely Do Functions Collaborate? In About Half the Respondents, Not Much Q18 (Global): Degree to Which Business Functions Work Together on Social Media Sharing practices on how to manage social media 58% 42% Determining how the company should act on consumer data from social media 52% 48% Generating insights from consumer data that comes from social media 49% 51% Sharing consumer data from social media 48% 52% Creating and revising a social media strategy 54% 0% Not at all / rarely / occasionally 46 20% 46% 40% 60% 80% 100% Most of the time / All of the time Mastering Digital Feedback
  47. 47. Who Collaborates – Internally and Externally? We asked the respondents who said at least two functions work closely together on social media to indicate which functions they were. Of these 462 respondents, the function mentioned most frequently by far was marketing (by 73%) – another statistic that shows marketing to be the epicenter of most companies’ social media activities. A distant second was customer service (50%), and a close third was sales (49%). (See Exhibit II-32) Functions that should be collaborating closely on social media but aren’t include product management, IT (often the keepers of other important digital data on consumers), and especially R&D. Only in cases where two or more functions work closely together on social media (around one-fifth of respondents), R&D was mentioned as one of the collaborating functions. The functions collaborating the least (in terms of number of respondents), were distribution, risk management, finance and legal; this suggests that the social media efforts at many companies may be at risk. Exhibit II-32: Functions That Collaborate Strongly on Social Media Q18AA (Global): Which Business Functions Work Closely Together on Social Media Activities? Marketing (including social media marketing, market research, public relations, corporate communications) 73% Customer service (including call centers, social media monitors, etc.) 50% Sales (including headquarters and field sales management) 49% Product management (including product brand managers, brand strategists) 39% Information technology R&D/product development (including research, product engineering, product development) Product manufacturing/ service operations/ procurement/purchasing (including factories, service operations, manufacturing engineering) 33% 20% 19% HR 16% Legal (compliance, etc.) 13% Finance/accounting 12% Risk management 12% Distribution/logistics 10% Other 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% Mastering Digital Feedback 47
  48. 48. Marketing was at the top of the list in all regions but Latin America, where customer service was the most frequently mentioned function. (See Exhibit II-33) Exhibit II-33: Who’s on the Cross-Functional Social Media Team (by Region)? Q18AA (Regions): Which Business Functions Work Closely Together on Social Media Activities (% of Respondents That Said At Least 2 Functions Work Closely Together on Social Media) North America Europe Asia-Pacific Latin America Marketing (79%) Marketing (76%) Marketing (67%) Customer service (43%) Sales (53%) Customer service (64%) IT (48%) IT (41%) Customer service (48%) Sales (54%) Sales (44%) Finance/accounting (32%) Product management (44%) IT (37%) Customer service (44%) Marketing (32%) IT (25%) Product management (34%) Product management (35%) Manufacturing/operations (27%) R&D/product development (19%) Manufacturing/operations (29%) Manufacturing/operations (25%) Sales (27%) Manufacturing/operations (13%) R&D/product development (22%) HR (20%) R&D/product development (24%) HR (14%) HR (20%) Risk management (19%) Product management (24%) Legal (13%) Risk management (15%) R&D/product development (18%) Risk management (22%) Finance/accounting (9%) Finance/accounting (11%) Finance/accounting (14%) Legal (19%) Distribution/logistics (8%) Legal (11%) Legal (14%) HR (14%) Risk management (7%) Distribution/logistics (11%) Distribution/logistics (12%) Distribution/logistics (14%) We also wanted to know the degree to which companies are sharing select social media data with channel partners like brokers, retailers, distributors, suppliers and other external companies that supply them or bring products to market. We believed most companies would want to reveal some consumer data (or even insights) with their channel partners to help them see what customers thought about products and services, product and service components, and practices. 48 Mastering Digital Feedback
  49. 49. But this wasn’t the case in North America and most of Europe. Only 29% of North American respondents share social media data with channel partners, while 34% of European respondents do so. However, in Asia-Pacific, about half the respondents share social data with external business partners, while 60% of Latin American respondents said they do so (including 95% of the Mexican companies we surveyed). (See Exhibit II-34) Exhibit II-34: How Extensively Respondents Share Social Media Data with Channel Partners (by Region and Country) Q20 (Regions and Countries): Percentage of Respondents That Share Social Media Data with Channel Partners NORTH AMERICA 29% United States 28% Canada 35% EUROPE 34% United Kingdom 26% Germany 44% Netherlands 50% ASIA-PACIFIC 51% Australia 27% 75% India Japan 44% 60% LATIN AMERICA 95% Mexico Brazil 42% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Mastering Digital Feedback 49
  50. 50. What Types of Social Media Platforms Do They Use – and Find Most Valuable? Without the public social networks that have attracted flocks of consumers over the last decade, there would be no ‘online playground’ for consumer companies to tap into. Without ‘neutral’ sites (meaning, not owned by consumer product or service companies) such as Facebook, LinkedIn, Twitter and YouTube, it is doubtful that consumers would engage in open discussions on their favorite (or not-so-favorite) companies on social media. We wanted to know several things about how consumer companies are using the largest public social networks (as well as a few things about their own social sites): n Which types of social platforms are they using – company pages on public social networks (such as Facebook), company-sponsored channels on video sites such as YouTube, online social games, corporate blogs (on their own sites), private online communities for consumers, or mobile applications that consumers can download on their smartphones. n Which of those social platforms are most and least important for success with social media? n On which of the public social networks do companies have company pages – Facebook? Twitter? LinkedIn? Google+? Others? On the issue of social media platforms, company pages on public social networking sites were the most popular globally and by region. (See the following five exhibits.) Corporate blogs were second across the regions, followed closely by mobile apps. At the bottom of this list of six platforms were online social games. Exhibit II-35: Which Social Media Platforms are Used the Most (Global) Q22A (Global): Which Social Media Platforms Do Respondents Use? (% of Total Respondents) Company pages on public social networks 88% Corporate blogs 66% Mobile apps for consumers who use social media 65% Private online community for consumers Company sponsored online video channel Online social games/ gamification 51% 47% 26% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 50 Mastering Digital Feedback
  51. 51. Exhibit II-36: Which Social Media Platforms are Used the Most in North America Q22A (North America): Which Social Media Platforms Do Respondents Use? Company pages on public social networks (eg. Facebook, LinkedIn, Pinterest, etc) 90% Mobile applications for consumers who use social media 68% Corporate blog(s) 65% Private online community for consumers (that the company hosts and controls) 47% Company-sponsored online video channel 47% Online social games/gamification 22% Other 3% 0% Mastering Digital Feedback 20% 40% 60% 80% 100% 51
  52. 52. Exhibit II-37: Which Social Media Platforms are Used the Most in Europe Q22A (Europe): Which Social Media Platforms Do Respondents Use? Company pages on public social networks (e.g. Facebook, LinkedIn, Pinterest, etc.) 87% Corporate blog(s) 67% Mobile applications for consumers who use social media 64% A private online community (that the company hosts and controls) 52% Company-sponsored online video channel Online social games/gamification Other 39% 20% 2% 0% 20% 40% 60% 80% 100% Exhibit II-38: Which Social Media Platforms are Used the Most in Asia-Pacific Q22A (Asia-Pacific): Which Social Media Platforms Do Respondents Use? Company pages on public social networks(e.g., Facebook, LinkedIn, Pinterest, etc.) 90% Corporate blog(s) 70% A private online community (that your company hosts and controls) 58% Mobile applications for consumers who use social media Company-sponsored online video channel Online social games/gamification 57% 54% 37% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 52 Mastering Digital Feedback
  53. 53. Exhibit II-39: Which Social Media Platforms are Used the Most in Latin America Q22a (Latin America): Which Social Media Platforms Do Respondents Use? Company pages on public social networks (eg. Facebook, Linkedin, Pinterest, etc) 76% Mobile applications for consumers who use social media 64% A private online community (that your company hosts and controls) 60% Corporate blog(s) 60% Company-sponsored online video channel 50% Online social games/ gamification Other 35% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% Mastering Digital Feedback 53
  54. 54. But which of these six platforms are most important for success with social media? (See Exhibit II-40) Surprisingly, the platform used the least (mobile apps) was rated the most important across the regions. It was ranked first for North American and Asia-Pacific respondents. (See Exhibit II-41) Next in rank across all respondents were company pages on public social networks, and close behind were private online communities for consumers where companies have the most control over the conversation (since the companies host and run their communities). Exhibit II-40: Which Social Media Platforms are Most Important to Social Media Success? Q22AA (Global): Importance of Social Media Platforms to Respondents' Success with Social Media (% Saying They are of "High" or "Very High" Importance) Mobile apps for consumers who use social media 3.91 Company pages on public social networks 3.87 Private online community for consumers 3.86 Corporate blogs 3.66 Company-sponsored online video channel 3.66 Online social games/gamification 3.62 3 54 3 3 4 4 4 Mastering Digital Feedback
  55. 55. Exhibit II-41: Most Important Social Media Platforms by Region Q22AA (Regions): The Most Important Platforms for Social Media Success (Scale of 1-5) North America Asia-Pacific Mobile apps for consumers who use social media (3.89) Company pages on public social networks (3.78) Company-sponsored online video channel (3.88) Company pages on public social networks (3.80) Private online community (3.8) Mobile apps for consumers who use social media (4.1) Company pages on public social networks (4.07) Company-sponsored online video channel (4.01) Private online community (4.23) Private online community (3.74) Corporate blog (3.48) Mobile apps for consumers who use social media (3.79) Private online community (3.99) Corporate blog (4.03) Company-sponsored online video channel (3.42) Corporate blog (3.68) Corporate blog (3.95) Online social games/ gamification (3.33) Mastering Digital Feedback Europe Latin America Online social games/ gamification (3.56) Online social games/ gamification (3.85) Online social games/ gamification (4.25) Company pages on public social networks (4.09) Mobile apps for consumers who use social media (3.95) Company-sponsored online video channel (3.76) 55
  56. 56. Across the four regions, 88% of respondents said their companies have pages on public social networking sites such as Facebook and LinkedIn. ( See Exhibit II-42) Of the 88%, by far the most popular social site on which to have company pages is Facebook (the choice of 88% of these respondents). That was followed by Twitter (63%), LinkedIn (57%) and YouTube, the online video channel (with 45%). A number of sites housed public social pages of no more than a third of the respondents: Google+, Pinterest, Instagram, MySpace, Flickr and Friendster. By region (see Exhibit II-43), Facebook had the highest percentage of respondents’ company pages. Next (in three of the four regions) was Twitter. Google+ was the fifth most popular site for company social media pages – except in Latin America, where it is No. 3. Exhibit II-42: Which Public Social Networking Sites to Companies Have Pages? Q22 (Global): Where Respondents with Company Pages on Public Social Media Sites Have Those Pages 88% Facebook 63% Twitter LinkedIn 57% YouTube 45% Google+ 33% Pinterest 14% Instagram 13% MySpace 11% Flickr 9% Friendster 4% Other 2% 0% 56 20% 40% 60% 80% 100% Mastering Digital Feedback
  57. 57. Exhibit II-43: Top Five Public Social Networking Sites for Company Pages (by Region) Q22 (Regions): Top Five Social Media Sites Where Respondents Have Company Pages (Percentage of Respondents) North America Asia-Pacific Latin America Facebook (91%) Facebook (84%) Facebook (88%) Facebook (82%) LinkedIn (65%) Twitter (66%) Twitter (63%) Twitter (66%) Twitter (62%) LinkedIn (50%) YouTube (53%) Google+ (64%) YouTube (45%) YouTube (32%) LinkedIn (48%) YouTube (55%) Google+ (27%) Mastering Digital Feedback Europe Google+ (31%) Google+ (42%) LinkedIn (34%) 57
  58. 58. Case Studies: Form Follows Function - How Choice of Social Platform Depends on Firm Strategy A social media strategy (and the platforms used) must reflect a company’s priorities and objectives. For some consumer firms, it is about protecting a corporate brand and subsuming all products under that brand – as is often the case with financial services companies and large banks – while for others it is about promoting and focusing on leading brands within their portfolio. Most of a leading fashion company’s social media activities today are about branding, given that it is the company’s priority. It uses extensive blogger events for new product launches, inviting up to 500 fashion bloggers and influencers on Instagram, Twitter, Google+ and other media sites to participate. Pinterest has also become a prime site because of its popularity among women. Not unexpectedly, the themes are usually around how to dress stylishly. On the other hand, since the music industry is all about their talents’ branding, a leading music company uses Facebook, YouTube, Twitter and any other social media channels to connect with its fan base. Some artists come to the company with strong social media skills; these artists manage their own social media activities. Others request help from the music company’s social media professionals. The same applies to all the TV broadcasters we interviewed. An executive at a major cable network said the more they get their talent tweeting and engaging in other social media activities, the greater the response they get from viewers and advertisers. However, the network competes with its talents’ own websites and businesses, and they have to let them do their own thing. It is a real management challenge. What are the Keys to Gaining Benefits from Social Media? From a list of 29 success factors, we asked respondents to rate each in terms of its importance to being successful with social media, using a scale of 1-5. Across all 655 surveys, these factors fell within a narrow band – between 3.3 and 3.9. In other words, all were deemed to be of at least moderate importance. However, three ranked higher than all the others: n Adhering to privacy regulations on consumer data (and protecting it) n company culture that strongly values consumer opinions about a company’s A products, services and practices n Responding rapidly and clearly through social media to consumers with questions or problems about a company’s products, services or practices. Two issues that finished at the bottom of the list were not deemed to be nearly as important to success: balancing a company’s global and local social media activities, and maintaining archives of social media activity. How did the rankings vary by regions? Not greatly, although there were a few differences in what issues ranked in the top five (see Exhibit II-44). Privacy issues, corporate cultures that welcomed consumer feedback (no matter how bad), and acting promptly on social media comments were rated important to success in all four regions. (See Exhibit II-45) 58 Mastering Digital Feedback
  59. 59. Exhibit II-44: Key Success Factors of Social Media Q23A (Global): Key Success Factors With Social Media (Scale 1-5) Adhering to privacy regulations on consumer data/protecting consumer data A company culture that strongly values consumers' opinions about the firm's products, services and practices Responding rapidly and clearly via social media to consumers who have questions or problems with products/services/practices A security plan and measures to protect how consumer information is used Turning social media interactions with consumers into compelling consumer experiences with the company Ensuring the company does not violate other firms' trademarks, copyrights, etc. Clear understanding of consumer sentiments expressed in social media (i.e., sentiment analysis) A culture of openness and communication 3.88 3.83 3.82 3.76 3.74 3.74 3.73 3.73 A sound social strategy 3.73 Making sure that consumers do not post offensive content The ability to get consumers deeply engaged online -to nurture a relationship A company culture that encourages internal transparency and sharing knowledge (i.e., across business functions) Creating compelling online content (e.g., blogs, videos) that is informative and/or entertaining for consumers Clear goals and measures of success Stringent guidelines and policies on who in our company can use social media and how they can use it The ability to identify the key external social media influencers on our products/services Senior executives who understand social media's potential 3.72 3.63 The ability to analyze 'Big Data' from social media 3.63 A full view of all consumer comments on social media (360-degree view) 3.63 3.72 3.71 3.69 3.68 3.66 3.65 A deep understanding of quickly evolving social media technologies A clear owner of social activity who can get functions to take action on consumer insights Internal agreement of how to respond to consumer sentiments from all affected business functions An audit capability to quickly find consumer comments and the responses to them A common social media platform/enterprise information system used across the company A company culture that encourages external transparency and sharing knowledge (i.e., with consumers, channel partners, etc.) Integrating a social media systems with the core information systems Getting consumers to provide online content that other consumers see as compelling Senior executives who use social media themselves (whether to just 'listen' to what others are saying, or post comments them selves, or both) Balancing global vs. local social media activities 3.6 3.6 3.58 3.58 3.55 3.55 3.52 3.51 3.5 3.39 Archives of social media activity 3.34 3 Mastering Digital Feedback 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4 59
  60. 60. Exhibit II-45: Top Five Success Factors of Social Media (by Region) Q23A (Regions): Top Five Success Factors With Social Media (Scale of 1-5) Rank 2 3 4 5 Europe Adhering to privacy regulations on consumer data and protecting it (3.84) Adhering to privacy regulations on consumer data and protecting it (3.89) A company culture that strongly values consumer opinions about the firm’s products, services and practices (3.80) Responding rapidly and clearly via social media to consumers with questions or problems (3.77) Making sure that consumers do not post offensive content (3.77) Turning social media interactions with consumers into compelling experiences (3.71) 1 North America A clear owner of social media activity who can get functions to take action (3.72) Asia-Pacific Latin America Responding rapidly Responding rapidly and and clearly via social clearly via social media media to consumers to consumers with with questions or questions or problems problems (3.98) (3.98) Adhering to privacy A security plan and regulations on measures to protect how consumer data and consumer information is protecting it (3.98) used (3.97) A company culture A culture of openness that strongly values and communication consumer opinions (3.98) about the firm’s products, services and practices (3.76) Ensuring the Clear goals and A security plan and company does measures of success measures to protect not violate other (3.75) how consumer firms’ trademarks, information is used A culture of copyrights, etc. (3.76) (3.96) openness and communication (3.75) A sound social strategy (3.95) Making sure that consumers do not post offensive content (3.95) A company culture that strongly values consumer opinions about the firm’s products, services and practices (3.90) Senior executives who use social media themselves (3.90) Turning social media interactions with consumers into compelling experiences (3.86) A company that encourages internal transparency and knowledge sharing (3.86) A common social media platform (3.86) 60 Mastering Digital Feedback
  61. 61. Findings by 11 Global Consumer Industries Mastering Digital Feedback 61
  62. 62. Highlights: n media and entertainment industry has the highest percentage of companies The that have been using social media the longest to engage with consumers; most insurance companies are relatively new to social media. n Telecom, insurance, banking and retail companies are the most likely to centralize social media activities; media and entertainment is least likely to centralize them. n Social media is more likely to be a cross-functional activity in travel, high-tech and telecom industries; these industries also have a higher percentage of companies that rate their organizational structure for social media as effective. n Utilities, insurance and retail spend the most on social media (per company); travel and banking/financial services spend the least. How Long Have Industries Been at The Social Media Game, and What Are They Trying to Achieve Our 655 survey respondents work in 11 global industries, from media and entertainment and banking to consumer packaged goods and high tech. Some have been involved in social media for a long time; others are relatively new. Four industries have been using social media the longest (based on the percentage of respondents whose companies regularly began using social media to engage with consumers prior to 2009): media and entertainment, consumer packaged goods, banking/financial services and telecom. (See Exhibit III-1) In each industry, at least 30% of respondents launched their social media activities before that year. (Note: When we say regularly using social media, we mean having at least one full-time employee devoted to it.) In stark contrast, only 3% of insurance respondents launched serious social media efforts before 2009; in fact, 52% of insurers have started their formal social media activities since 2011 (the largest percentage of any of the 11 industries). Only 23% of media and entertainment firms launched their social media activities since 2011. And only 18% of retailers and 19% of manufacturers were at the social media game before 2009. 62 Mastering Digital Feedback
  63. 63. Exhibit III-1: How Long Have 11 Consumer Industries Been at the Social Media Game Q7 (Global Industries): When Industries Began Regularly Using Social Media to Engage with Consumers 23% 39% 39% Media and Entertainment 30% 52% Retail 18% High Tech 25% 42% 33% Travel/Hospitality/Airlines 21% 46% 33% Utilities 24% 38% Health Care Services and Products 20% Banking/Financial Services Manufacturing 19% Insurance 45% 18% 47% 35% 21% 30% 3% 39% 27% 37% Telecom Services and Equipment 39% 41% 33% Consumer Packaged Goods 38% 45% 49% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Before 2009 Mastering Digital Feedback 2009-2010 2011-2013 63
  64. 64. How long an industry has been using social media appears to influence how serious that industry is in getting results from the activity. We asked respondents whether or not their companies had measurable goals for their social media activities. The industry that has been at social media the longest – media and entertainment – had the highest percentage of respondents with measurable goals (85%). (See Exhibit III-2) The industry that has been at social media for the shortest period of time (insurance) had the lowest percentage. Telecom (82%) and CPG (76%) were near the top on this count. Exhibit III-2: Industries Which Have Social Media Goals Q9 (Global Industries): Percentage of Respondents with Measurable Goals for Social Media Activities 85% Media and Entertainment Telecom Services and Equipment 82% High Tech 81% Consumer Packaged Goods 76% Travel/ Hospitality/ Airlines 74% Manufacturing 72% Utilities 71% Banking/ Financial Services 69% Retail Health Care Services and Products Insurance 66% 63% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% 64 Mastering Digital Feedback
  65. 65. So what are their goals? We asked respondents to rate on a scale of 1-5 (not important to very high importance) a number of goals for social media initiatives (Exhibit III-3 through III-14). (Note: We asked them to rate these whether or not they had measurable goals for them.) The goals ranged from increasing revenue and identifying new product/service opportunities, to reducing customer service, marketing and other costs. Here are the results by industry for each goal. Increasing revenue: Surprisingly, not a high goal in nine of the 11 sectors. The two that rated it at least a ‘4’ on our scale were media and entertainment, and telecom. Health care, insurance and utilities did not rate this as an important goal. Exhibit III-3: Industry Importance of Using Social Media to Increase Revenue Q10 (Global Industries): Importance of Using Social Media to Increase Revenue (Scale of 1-5) Banking/ Financial Services 3.92 Consumer Packaged Goods 3.91 Health Care Services and Products 3.53 High Tech 3.82 3.55 Insurance Manufacturing 3.85 4.15 Media and Entertainment 3.89 Retail Telecom Services and Equipment 4.09 Travel/ Hospitality/ Airlines 3.95 3.67 Utilities 3.2 Mastering Digital Feedback 3.4 3.6 3.8 4 4.2 65
  66. 66. Understanding how consumers view the brand and the firm’s products: This was most important to telecom services, CPG and banking/financial services firms. Exhibit III-4: Industry Importance of Using Social Media to Understanding Brand Perception Q10 (Global Industries): Importance of Using Social Media to Understand How Consumers View Our Brand and Products (Scale of 1-5) Banking/ Financial Services 4.12 Consumer Packaged Goods 4.17 Health Care Services and Products 3.92 High Tech 4.03 Insurance 4.06 Manufacturing 4.04 3.85 Media and Entertainment 4.06 Retail Telecom Services and Equipment 4.3 Travel/ Hospitality/ Airlines 4 Utilities 3.95 3.6 66 3.8 4 4.2 4.4 Mastering Digital Feedback
  67. 67. Increasing brand affinity: Most important to travel/hospitality/airlines and telecom, but of high importance to all sectors. Exhibit III-5: Industry Importance of Using Social Media to Increase Brand Affinity Q10 (Global Industries): Importance of Using Social Media to Increase Brand Affinity (Scale of 1-5) Banking/ Financial Services 3.93 Consumer Packaged Goods 4.19 Health Care Services and Products 3.94 High Tech 4 Insurance 4.06 Manufacturing 4.04 4 Media and Entertainment 4.13 Retail Telecom Services and Equipment 4.24 Travel/ Hospitality/ Airlines 4.28 4.14 Utilities 3.7 Mastering Digital Feedback 3.8 3.9 4 4.1 4.2 4.3 4.4 67
  68. 68. Increasing consumer awareness (the number of consumers who receive a company’s marketing messages): This was of greater importance to retailers and telecom companies; it was of least importance to health care services/products companies (although still important). Exhibit III-6: Industry Importance of Using Social Media to Increase Consumer Awareness Q10 (Global Industries): Importance of Using Social Media to Increase Consumer Awareness (Scale of 1-5) Banking/ Financial Services 3.93 Consumer Packaged Goods 4.07 Health Care Services and Products 3.65 High Tech 3.99 Insurance 4.1 Manufacturing 3.88 4.08 Media and Entertainment 4.22 Retail Telecom Services and Equipment 4.18 Travel/ Hospitality/ Airlines 4 4 Utilities 3.2 68 3.4 3.6 3.8 4 4.2 4.4 Mastering Digital Feedback
  69. 69. Curtailing consumer attacks on a company’s brand: Less important than many other goals, but highest in the telecom and travel-related sectors. It was ranked least important by insurance companies. Exhibit III-7: Industry Importance of Using Social Media to Reduce Consumer Attacks on the Brand Q10 (Global Industries): Importance of Using Social Media to Reduce the Number and Severity of Consumer Attacks on our Brand Image (Scale of 1-5) Banking/ Financial Services 3.71 Consumer Packaged Goods 3.48 Health Care Services and Products 3.33 High Tech 3.54 3.13 Insurance Manufacturing 3.75 3.46 Media and Entertainment 3.64 Retail Telecom Services and Equipment 3.88 Travel/ Hospitality/ Airlines 3.82 3.48 Utilities 3 Mastering Digital Feedback 3.2 3.4 3.6 3.8 4 69
  70. 70. Understanding consumer trends: Of high importance to most industries, but highest to retailers and telecom companies. Many retailers, of course, compete on the ability to be the first to recognize consumer trends (especially in apparel retailing). This goal was rated lowest by health care services/products companies. Exhibit III-8: Industry Importance of Using Social Media to Spot Consumer Trends Q10 (Global Industries): Importance of Using Social Media to Understand Consumer Trends (Scale of 1-5) Banking/ Financial Services 3.93 Consumer Packaged Goods 4.07 Health Care Services and Products 3.65 High Tech 3.99 4.1 Insurance Manufacturing 3.88 4.08 Media and Entertainment 4.22 Retail Telecom Services and Equipment 4.18 Travel/ Hospitality/ Airlines 4 Utilities 4 3 70 3.4 3.6 3.8 4 4.2 4 Mastering Digital Feedback
  71. 71. Identifying new product/service opportunities: This did not reach high importance in any sector. But the highest rankings were given by telecom, utilities and manufacturing. Exhibit III-9: Industry Importance of Using Social Media to Spot New Product Opportunities Q10 (Global Industries): Importance of Using Social Media to Identify New Product/New Service Opportunities (Scale of 1-5) Banking/ Financial Services 3.73 Consumer Packaged Goods 3.78 Health Care Services and Products 3.22 High Tech 3.68 3.42 Insurance Manufacturing 3.89 Media and Entertainment 3.77 Retail 3.75 Telecom Services and Equipment 3.94 Travel/ Hospitality/ Airlines 3.54 3.95 Utilities 3 Mastering Digital Feedback 3.2 3.4 3.6 3.8 4 71
  72. 72. Improving existing products or services: This goal was not nearly as important as the awareness-related goals for most industries. Two sectors rated it higher than other sectors: telecom and manufacturing. Exhibit III-10: Industry Importance of Using Social Media to Improve Existing Offerings Q10 (Global Industries): Importance of Using Social Media to Improve Existing Products/Services (Scale of 1-5) Banking/ Financial Services 3.72 Consumer Packaged Goods 3.7 Health Care Services and Products 3.41 High Tech 3.81 3.52 Insurance Manufacturing 3.91 3.69 Media and Entertainment 3.8 Retail Telecom Services and Equipment 4.09 Travel/ Hospitality/ Airlines 3.85 3.67 Utilities 3 72 3.5 4 4.5 Mastering Digital Feedback
  73. 73. Improving customer service: Two industries rated this higher than the other sectors: telecom and travel-related. Health care services/products and media and entertainment industries rated it the lowest among the sectors. Exhibit III-11: Industry Importance of Using Social Media to Boost Customer Service Q10 (Global Industries): Importance of Using Social Media to Improve After-Sale Customer Service (Scale of 1-5) Banking/ Financial Services 3.84 Consumer Packaged Goods 3.57 Health Care Services and Products 3.43 High Tech 3.92 3.68 Insurance Manufacturing 3.89 3.54 Media and Entertainment 3.74 Retail Telecom Services and Equipment 4.03 Travel/ Hospitality/ Airlines 4 3.71 Utilities 3 Mastering Digital Feedback 3.5 4 4.5 73
  74. 74. Improving marketing campaigns: Rated highest by the retail, telecom, CPG and manufacturing sectors and rated lowest by health care and insurance companies. Exhibit III-12: Industry Importance of Using Social Media to Improve Marketing Campaigns Q10 (Global Industries): Importance of Using Social Media to Improve Marketing Campaigns (Scale of 1-5) Banking/ Financial Services 3.89 Consumer Packaged Goods 4.02 Health Care Services and Products 3.53 High Tech 3.89 3.58 Insurance Manufacturing 4 3.85 Media and Entertainment 4.1 Retail Telecom Services and Equipment 4.03 Travel/ Hospitality/ Airlines 3.85 Utilities 3.86 3.2 74 3.4 3.6 3.8 4 4.2 Mastering Digital Feedback

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