Keynote: Social Business Forecast: 2011 The Year of Integration

1
LeWeb Keynote
December 9, 2010
Jeremiah Owyang
Industry Analyst
Social Business Forecast:
2011 The Year of Integration
Research reveals focus on integration, staffing, advertising, and measurement.

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What happened in 2010
What’s going to happen in 2011
What companies should do about it
Agenda:

Image by Slowtronused with Attribution as directed by Creative Commons http://www.flickr.com/photos/fuckr/91530309
2010 Overview
© 2010 Altimeter Group

Just 2 years in corporate social business, 2010 was the year of formation.

Most Social Media programs report under Marketing or Corporate Communications

Companies organize for social in 5 ways

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DECENTRALIZED
Organic growth
Authentic
Experimental
Not coordinated
e.g. Sun

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CENTRALIZED
One department controls all efforts
Consistent
May not be as authentic
e.g. Ford, Regulated

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HUB AND SPOKE
One hub sets rules and procedures
Business units undertake own efforts
Spreads widely around the org
Takes time
e.g. Red Cross

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MULTIPLE HUB AND SPOKE
OR “DANEDELION”
Similar to Coordinated but across multiple brands and units
e.g. HP, Microsoft, Tech Giants

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HOLISTIC OR “HONEYCOMB”
Each employee is empowered
Unlike Organic, employees are organized
e.g. Twelpforce, Zappos

Most companies organize into Hub & Spoke or Centralized
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Maturity drives Total Budget, Team Size, and Org Model
Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
We asked 140 Corporate Social Strategists their total strategy budget, number of full-time equivalent staff dedicated to social media, and organizational model:

Corporations who are just getting started have miniscule budget and are significantly understaffed in a centralized team –this does not scale.

Corporations who have formalized their programs have a cross-functional team that lead and serve many business units with a larger budget line–they may not deploy on their behalf.

Mature and Advanced corporations have only slightly large budgets but involve many more across the company and are formed in Hub and Spoke, and often “Dandelion”

Image by ronni44052 used with Attribution as directed by Creative http://www.flickr.com/photos/ronnie44052/2730239605
2011 Forecast

2011 is the Year of Integration

For Internal Goals In 2011, Social Strategists will focus on Measurement of ROI
We asked 140 Corporate Social Strategists: “What internal social strategy objectives will you focus most on 2011?”

Social Strategists struggle with relying on engagement data
We asked 140 Corporate Social Strategists: What measurements are most important to evaluating the success of your program?

In External ‘Go to market’ a focus will be on integrating social onto the corporate website
We asked 140 Corporate Social Strategists: “What external social strategy objectives will you focus most on 2011?”

2010-2011: Adoption of Social Business programs
We asked 140 Corporate Social Strategists their budget for 12 social business programs in 2010, and projected increases/decreases in 2011 to calculate adoption forecast:

2010-2011: Spending on Social Business programs
We asked 140 Corporate Social Strategists their budget for 12 social business programs in 2010, and projected increases/decreases in 2011 to calculate adoption forecast:
$278,000
$160,000 $129,000 $120,000 $108,000 $98,000 $90,000 $47,000 $47,000 $37,000 $23,000 $22,000

2011 top spending by Company Maturity
We asked 140 Corporate Social Strategists their budget for 12 social business programs in 2010, and projected increases/decreases in 2011 to calculate top spending by Company Maturity in 2011:

2011 top spending by Maturity
A small compartment of staff will be hired, scalable branded communities, and reliance on agencies which could help with monitoring.

Teams will continue to grow, but likely stymied by true ‘engagement’ brands may throw ad dollars and campaigns in order to scale –expect few to have maturity to truly engage.

Expect the advanced to customize social media software and data, and then focus on engagement with social media agencies of record (SMAOR) –with less focus on advertising than the mature

Image by zetsonused with Attribution as directed by Creative Commons http://www.flickr.com/photos/zetson/254608875
How You Should Invest in 2011

Invest in scalable social media programs
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Hire correctly (Gurus/Ninjas/Samurai need not apply) and properly train for scale
Integrate social media on the corporate website, then aggregate and curate
Invest in advertising that leverages social graph
Build an unpaid army of advocates –get your customers to do the work for you
Invest in scalable systems like SCRM and SMMS
Learn to measure using the ROI Pyramid
Invest in scalable social media programs
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Gurus, Ninjas, and Samurai need not apply
Hire a program manager rather than a social media “hot shot.”
Seek candidates with a track record of early technology adoption in their careers.
Look for a corporate entrepreneur, comfortable with “calculated risks.”
An internal resource to serve the entire enterprise.
1) Hire correctly and properly train for scale
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2) Pragmatically integrate social media on the corporate website, then aggregate and curate
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8. Seamless integration
7. Social log-in triggers sharing
6. Users stay on site with social log-in
5. Aggregate discussion on site
4. Brand integrated in social channels
3. Link away but encourage sharing
2. Link away with no strategy
1. No social integration
Source: http://www.web-strategist.com/blog/2010/05/19/slides-roadmap-for-integration-of-social-into-your-corporate-website/

3) Invest in advertising that leverages social graph
Advertising is the second highest social business program spend in 2010-2011 ($104,000 and $160,000)
48% of corporations plan to increase their spend in 2011
Focus on clear metrics
Make ads engaging and tie to social graph –not just banners
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Twitter’s advertising is a combination of both earned and paid –that results in WOM

Invest in Advocacy programs – they scale
Research indicates a 5 step process
Example: Microsoft has @4000 MVPs who are nominated by peers, employees and other MVPs; MVPs write books, articles, participate in user groups, host events, and answer community questions
4) Build an unpaid army of advocates –get your customers to do the work for you
34

SCRM connects the social web to your customer data bases, in 2010 to 1011 –budgets are small $19K to $37K (SCRM) but growing
Most corporations don’t know they are implementing SCRM, as brand monitoring integrated with CRM applies
Invest in Social Media Management Systems (SMMS) to help your brands scale.
Forecast: $14K to $22K (SMMS) in 2011 spending
Vendor short list: CoTweet, HootSuite, Sprinklr, Objective Marketer, Expion, SpredFast, or Seesmic
5) Invest in scalable systems like SCRM and SMMS
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Learn to measure correctly
Serve the right metrics to the right roles
See: The Social Media ROI Pyramid
6) Learn to measure using the ROI Pyramid
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ROI Pyramid: Roles View
Provide the right metrics to the right audience. A novice mistake is to provide ‘engagement metrics’ to executives

The ROI Pyramid: Metrics View
These metrics are formulas comprised of the tier below them. Currently, there is no industry standard.

The ROI Pyramid: Metrics Examples (there are more)
A junior mistake is providing ‘engagement data’ to executives –instead focus on business metrics.

The ROI Pyramid
Role: Metrics: Specific Data (examples)

2010 was the read of Foundational Investments.
In 2011, expect to see a focus on Measurement, Integration, Staffing and Advertising.
Invest in Scalable Programs that leverage your crowds –1:1 dialog does not scale.
Summary
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This research is published under the spirit of Open Research, use it, reference it, and build on it.
The more you share the more we can conduct, spread it widely.
Our papers are published under non-commercial Creative Commons – you are free to use our research, with attribution to Altimeter Group.
Open Research
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Jeremiah OwyangIndustry Analyst
jeremiah@altimetergroup.com
web-strategist.com/blog
Twitter: @jowyang
Research team includes significant contributions from Christine Tran, and Charlene Li, Altimeter Group

Keynote: Social Business Forecast: 2011 The Year of Integration

by Jeremiah Owyang on Dec 09, 2010

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