Unsexy Social: How Social Media Is Adding Value to Regulated Industries in Unexpected Ways
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Unsexy Social: How Social Media Is Adding Value to Regulated Industries in Unexpected Ways

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It’s not easy being regulated. For organizations operating within regulated industries, social media presents a range of unique challenges, ranging from legal to internal compliance and ...

It’s not easy being regulated. For organizations operating within regulated industries, social media presents a range of unique challenges, ranging from legal to internal compliance and organizational governance. The development of a meaningful social strategy that drives business objectives is no small task for any brand, regardless of industry.

POV by Annicka Campbell Manager, Marketing Strategy & Analysis, SapientNitro

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Unsexy Social: How Social Media Is Adding Value to Regulated Industries in Unexpected Ways Unsexy Social: How Social Media Is Adding Value to Regulated Industries in Unexpected Ways Document Transcript

  • © Sapient Corporation, 2013Unsexy Social:How Social Media Is Adding Value toRegulated Industries in Unexpected WaysBy Annicka Campbell, Manager, Marketing Strategy & Analysis, SapientNitroPOINT OF viewFDAMilestoneIndustryImpactA BRIEF HISTORY OF FDA GUIDANCE ON DTC MARKETING PRACTICESSources: ClickZ, 2009; comScore, 2009; TXState.Academia.edu, 2010; New England Journal of Medicine, 2011It’s not easy being regulated. For organizations operating within regulated industries, social mediapresents a range of unique challenges, ranging from legal to internal compliance and organizationalgovernance.The development of a meaningful social strategy that drives business objectives is no small task for anybrand, regardless of industry. In 2012, Deloitte and Forbes Insight surveyed 192 executives at top U.S.corporations (earning more than $1bn in revenue) about sources of risk posed by the marketplace overthe next three years. The study revealed that, alongside the global economic environment (41%), andchanges in government spending (32%), 27% of executives identified social media risk as a concern.As the space has matured, consumer-facing brands have grown more comfortable with the pace andtransparency of social. Brands operating within regulated industries, such as healthcare and financialservices have been markedly slower in their adoption, due in large part to government organizations likethe U.S. Food and Drug Administration (FDA) and Federal Trade Commission (FTC) that guide regulatedbusinesses.There also seems to be a pervasive misconception that consumers aren’t interested in engaging withcertain industries in social — that perhaps we’re less interested in having our bank start a conversationwith us on Twitter than our favorite cookie brand. From a purely quantitative lens, this theory issomewhat valid. SocialBakers’ weekly ranking of brand pages on Facebook (by fanbase) include CPG,beverage, retail, and technology organizations. Within the 50 largest brand pages on Facebook, not asingle business operating within a highly regulated industry is represented.
  • © Sapient Corporation, 2013POINT OF viewSocial metricswithout businesscontext are useless.Our goal is to tie itback to some keyoutcome.Adrian ParkerIntuit Social Lead, August 2012But as we’re learning as an industry, success in social is not measured solely by size of community,nor page likes, nor follow count alone. One of the fascinating things about social media is the myriad ofactions we can take as consumers to show brands positive or negative engagement.Historically, marketers have used metrics like presence performance and site referrals to understandsuccess in social. In recent years, we’ve learned that qualitative measures like passive and activesentiment, share of voice, and influence are integral metrics as well. This is an important point —success in social is best understood by a combined measure of engagement volume and quality,depending on a brand’s unique business objectives.It’s telling that a highly regulated brand is leading the charge to evolve our understanding of socialsuccess. Intuit has done an amazing job in building communities and relationships through social,providing valuable support to customers while driving conversation around Intuit products and services.The company has also implemented innovative methods of measurement, such as a profit attributionmodel for its Facebook content. When Intuit posts content on Facebook, it includes a URL trackingmechanism (such as Bit.ly), which can tie content engagement directly back to a key business objective,such as website conversion. Intuit has also socialized new perspectives on the value of social within theorganization. For example, Intuit measures traditional call center activity as a key measure of socialsuccess. This may seem unintuitive (pun intended), but there’s a real correlation between those twochannels.Say Intuit hosts a webinar educating its small business customersabout a new product, promoted through Facebook. After thewebinar, if Intuit begins to see a decrease in customer service callsregarding that product, they can begin to draw some conclusionsabout the impact of educational content communicated throughsocial media on other parts of their business.Let’s delve into two specific industries that are leveraging socialto add value, despite facing high levels of governmental regulation.PART 1: PHARMACEUTICALSDigital and social media have been incredibly impactful for the pharmaceutical industry’s complicated,competitive marketplace. The distribution of marketing spend within the pharma industry reflects thatimpact. According to eMarketer, digital advertising spending by the U.S. healthcare and pharmaceuticalindustry will hit $1.58 billion in 2012, and is projected to reach $2.48 billion by 2016.It should be noted that the industry’s shift of dollars from traditional to digital investment is also areflection of the ways many healthcare professionals and their patients have embraced digital andmobile media. The web is a key communication channel for healthcare conversations — 55% of adultconsumers in the U.S. use it to find medical information, and 38% use social to read about and reviewphysicians. As a result, pharmaceutical companies are experimenting with ways to insert their brandinto this new online healthcare dialog. We’ve seen pharma brands leveraging interactive, targeteddigital channels that hold more opportunity for relationship building — those that allow the brand to notjust market to physicians and consumers, but also to educate, influence, and engage those audiences.But the pharmaceutical industry has long been dependent on the FDA to provide guidance andregulation on appropriate (and legal) marketing and communication methods — and social is nodifferent.
  • © Sapient Corporation, 2013POINT OF viewPharmaceutical Regulation: A Brief HistoryThe FDA has been guiding the healthcare industry for the past 100 years, but it wasn’t until the 80s thatthe organization began to issue specific guidance to pharmaceutical companies marketing directly toconsumers via broadcast media. In 1985, the FDA began permitting direct-to-consumer advertising ofpharmaceutical products. In 1997, the FDA issued a Draft Guidance document, broadening permissionsto advertising within broadcast media, and in 1999 the organization began permitting broadcast media toinclude a toll-free number or website for adverse effect information. In the wake of these FDA rulings,direct-to-consumer ad spending grew from $579 million in 1996 to over 4 billion in 2008.Unfortunately, it wasn’t until November 2009 that the FDA organized a hearing on pharmaceuticalmarketing in social — two years after Facebook began offering Facebook Pages for brands.In the years that followed, the FDA has proven to be very hesitant to provide specific guidelinesaround social media marketing for the pharmaceutical industry. This lack of legal guidance, more thananything else, has been the major barrier to marketing investment. Development of a social mediastrategy — and the internal legal and compliance strategy — requires significant investment andcommitment, and making the case for that investment without specific legal guidance from the FDA hasbeen a difficult proposition. But despite these vagaries, some pharmaceutical companies are increasinglyusing social to improve care and help people educate themselves. And luckily, the FDA has increased itsefforts to provide more specific regulatory guidelines.Let’s look at some brands that have successfully integrated social into their strategies despite strictregulation constraints: NOVO NORDISK In 2009, Novo Nordisk createdone of the earliest successful Twitter accounts inpharmaceutical history for its “Race With Insulin”campaign, which leveraged IndyCar driver anddiabetic Charlie Kimball.It was a smart targeting move for Novo Nordisk —IndyCar fans are nearly a quarter more likely to bediagnosed with diabetes than the average U.S. adult,according to MRI. Charlie Kimball began using the@racewithinsulin handle to tweet about racing, lifewith Type 1 Diabetes, and Novo Nordisk’s products,creating a seamless conversation around sport,lifestyle, health, and brand.To avoid legal risks, Novo Nordisk included legalcopy on the bottom of the Twitter profile with anadverse event hotline, legal implications, and termsof use. For any pharmaceutical brand that wants tohave a public presence on social, this is a must.Source: http://www.time.com/time/health/article/0,8599,2037568,00.html#ixzz285D4vJP4 View slide
  • © Sapient Corporation, 2013ALLEGRA Allegra, an over-the-counter allergy medicine, is one of the biggest pharmaceuticalproducts in the U.S., and that’s precisely Facebook’s draw.In order to adhere to vague guidelines and mitigate risk, the Allegra team uses diligent communitymanagement practices. They create content months in advance so medical and legal complianceteams can pre-approve content and responses and then recycle that content on Twitter. And sincethe FDA requires pharmaceutical brands to monitor and store social media activity related toproduct use, Allegra uses LiveWorld to monitor for adverse events and other issues.The brand also uses coupons to drive engagement on its Facebook page. One of its first socialcoupons yielded 30,000 downloads from March to November 2011, with a 36% redemption rate.Best PracticesSanofi US is an arm of the European global healthcare leader focused on diabetes products anddevices. The brand’s successful social initiative illustrates a number of best practices in developing asocial strategy within a regulated industry:Best practice #1: Understand the communityMuch like other pharmaceutical companies, Sanofi US experienced un-moderated, negative chatteron social networks, but the vague guidelines offered by the FDA gave them pause to invest in social.After reevaluating the challenges and opportunities social could provide, they decided to moveforward.The company began a six-month research project dedicated to deep listening around diabetesmanagement against its own brand and product objectives. Sanofi US found a huge communitywithin social that was looking not for medication, but for the mediation of lifestyle and habits.Best practice #2: Assimilate and educateNext, Sanofi US created an internal social media task force, which served as a group tasked withdeveloping guidelines for participation in social media.This team includes legal counsel, compliance, customer care, marketing, IT, and C-suite who meetweekly to talk about issues with social presence, growth, and customer concerns. This task force,where everyone can have a seat at the table and talk about issues at an even keel, goes a long wayin terms of organizational investment and legal mitigation. It offers guidance and input for existingchannels and creates participation in new platforms and tactics.Best practice #3: Mediate risk and develop processesAfter listening and educating internally, Sanofi US launched on Facebook and Twitter. On Twitter,the terms of use are fairly simple, but on Facebook, things get more complicated.On their Facebook timeline photo and in the “About Me” section, they include very specific legal copy.If a user does post about treatment or adverse effects, the comment is often deleted and Sanofi USreaches out to that person privately. That interaction is then stored in case of an FDA audit.Best practice #4: Humanize the legal as much as possibleSanofi US also launched an owned community for education, support, and discussion —discussdiabetes.com — which includes regular Q&A sessions for their customers.The launch of this community didn’t have huge implications, but it succeeded in putting a humanface on the legal aspects of the brand.POINT OF view View slide
  • © Sapient Corporation, 2013Best practice #5: Add valueNo one wants to engage in a brand’s social media presence if it’s just treated as another broadcast channel.In 2011, Sanofi US realized that diabetes-related terminology wasn’t as universally understood as they thought,an insight they derived from social listening. In response, they launched a crowd-sourced website calleddiabetapedia.com, which includes standard definitions, complex terminology, and user-submitted entries.The brand also launched The DX in order to aggregate all their content. The DX is a more concerted socialnetwork where Sanofi US can post content related to their social presences and curate content fromprominent diabetes bloggers.Best practice #6: Let users guide growthSanofi US continues to engage its community by inviting users to set the company’s diabetes-relatedpriorities. This year, the company asked its social fan base to share aspects of life with diabetes that wereoften overlooked for its annual Data Design Diabetes Innovation Challenge, which creates new approachesto help others struggling with the disease.This helped Sanofi US understand the true issues and challenges that people with diabetes face.Best practice #7: Use social to innovateSanofi US also uses its social community to drive internal product innovation. After realizing just howopen users are to sharing and connecting, they launched their own product, the iBGStar, a personal bloodglucose monitor that plugs directly into an iPhone or iPod Touch. The iBGStar maps correlations betweenblood sugar levels and meal times, sugar intake, and physical activity and then saves that data. Users canshare results with their family or email them to their health care providers.This product hit the market in May 2012 and ensuing reviews and comments will help refine future updates.PART 2: FINANCIAL SERVICESThe financial services industry has long been active in digital. Financial services organizations now spend moreon interactive marketing than any other industry in the U.S. In fact, Forrester Research has predicted thatfinancial services will see a CAGR (compound annual growth rate) of 17% between 2011 and 2016. Moreover,financial services will continue to lead interactive spending, dedicating $15 billion online by 2016. As with the pharmaceutical industry, the financial services industry’s investment in emerging media reflects a significant shift in the behavior of that industry’s customers, who now expect seamless interactions with their financial services partners across multiple screens and channels. Social, in particular, will continue to see very significant growth in investment from the financial industry. Forrester predicts a 25% growth rate in investment between 2011 and 2016. Just four years ago, there weren’t a lot of banking brands that were using social. Since then, we’ve watchedfinancial organizations leverage social media to build (and in some cases, after the global economicrecession, rebuild) meaningful relationships with customers and drive business objectives.Research shows that social media has a definite influence on purchase decisions within financialservices. While these banking and investment companies may not receive the most Facebook Likes,they excel at using social to drive real business value, such as conversion or customer service.POINT OF viewBanks aren’t really themost trusted institutionsright now. We look to socialmedia to try to change thatperception, and we try to doit in a very human way.Frank Eliason,SVPof Social Media,Citi,2012
  • © Sapient Corporation, 2013Financial Services Regulation: A Brief HistoryUnlike consumer-facing, less-regulated industries like the travel and automotive industries, andsimilar to the pharmaceutical industry, financial institutions are constrained by strict regulations.Those put forth by the U.S. Congress, the FTC, and FINRA regulate communications to customers.These organizations govern how a company can promote products, engage with their customers,and retain personal information. Unfortunately, these organizations have been slow to introducespecific regulations and guidelines for how financial services can engage in social. And in response,financial services organizations have been slow to embrace and invest in social.However, in 2010, FINRA issued the first official social media guidelines for the industry, and sincethen the Insurance Marketplace Standards Association and the SEC have followed suit — leading toan explosion of social initiatives. In 2011, banks devoted less than 2% of marketing budgets to socialmedia, but one year later, 90% of financial services firms in the U.S. have a dedicated social mediabudget.Outside of regulation, social holds unique obstacles for financial organizations. And as a result,comfort levels with social remain low, despite significant investment in the space. A 2012 surveyconducted by Accenture found that 60% of retail banks consider themselves social medianovices. This discomfort represents a significant opportunity for marketers to partner with theseorganizations to craft social strategies that build both confidence and business value.Best PracticesDespite these challenges, a number of brands are successfully navigating and growing within social.Let’s take a look at five insights that can help drive success in social:Best practice #1: Listen and learnSuccess within social media begins with gathering the knowledge that will guide the developmentand outcome of any social strategy — whether that’s social listening, customer segmentation,competitive auditing, or stakeholder feedback — in order to create a benchmark for understandingcustomer behavior.USAA is a financial services provider for members of the U.S. Armed Forces that emphasizessupport and a family-based approach to banking. They took the time to listen to their customers(whom they call “members”) and were one of the first financial services brands to develop a socialmedia strategy.In 2008, the company began a year-long listening phase that included a deep analysis. They foundthat USAA member behavior was unique in comparison to competitor banks, that members wereforming forums and communities around financial advice, and that members were relying heavily onratings and reviews within those forums to inform their decisions.For USAA, that was a huge opportunity to integrate conversations, reviews, and discussions aroundtheir products into the USAA website experience. The brand invited customers to take thoseconversions within social forums onto their member portal and were able to integrate ratings andreviews into the site experience. In the first year of adding customer reviews to the member site,USAA claimed incremental sales of over 15,000 products.POINT OF view
  • © Sapient Corporation, 2013Best practice #2: Craft the visionEverything becomes moot if your efforts aren’t driven by real business goals. Develop a set of formalobjectives aligned with a well-defined corporate strategy and map them to specific areas in whichsocial media can generate business value. This can include defining objectives, creating a roadmap,identifying and mapping KPIs, and engaging legal and compliance.In 2009, after USAA’s listening phase, they developed a set of guidelines that defined the role ofsocial media within the company. Even today, USAA still identifies these four guidelines as driversfor all their social objectives:• Listening. Since 1922, USAA has been a company whose growth has been largely based on word of mouth from its members.• Engaging. USAA joins the conversation and answers members’ questions in their channel of choice.• Strengthening relationships. USAA’s social strategy includes tools and tactics to understand itsmembers better than anybody else and provide an experience no one else can duplicate.• Innovating. USAA looks to extend its social innovation by understanding member insights to make their lives easier.Best practice #3: Lay a solid foundationA strong base for managing rules and regulations around responsiveness — and knowing how torespond, acquire new technology, establish executive support, and identify organizational gaps —is mandatory in any social strategy development.Creating a response and engagement protocol is a key part of this phase as well, and can include flowcharts for customer response and flow charts to help key stakeholders understand how customerconcerns are currently triaged and managed.Investment firms have been even more hesitant than retail and insurance agencies to invest in social.But in 2012, the FTC laid out specific guidelines as to how investment and advisory firms could usesocial. Shortly after, Wedbush became the first investment firm that allowed and encouraged tradersto use social. This let them create devoted presences on Facebook, Twitter, and LinkedIn to engagetheir customers, humanize the conversation, and avoid standard canned responses. Wedbush wantedto comply with the FTC’s rules and regulations so they partnered with Socialware to set up social toolsand training for their investment agents.Best practice #4: Evolve with shifting consumer behaviorsSocial is an ever-evolving opportunity and the real-time nature of social requires constant thoughtabout shifting consumer behaviors.Charles Schwab has done a great job with their Twitter feed. They initially launched with a single handle,@charlesschwab. But they found that they were speaking to multiple distinct customer types and weren’table to effectively use that single feed to address every need. This resulted in three devoted twitter feeds:• @charlesschwab is the corporate PR channel that shares content relevant to investors• @schwabservice is devoted to customer service and is owned by the customer care team• @schwab4RIAs is a highly targeted channel, geared toward independent investment advisorsCharles Schwab approaches its social strategy as a continual effort to understand customer needs —and optimizes that strategy accordingly.POINT OF view
  • © Sapient Corporation, 2013ABOUT THE AUTHORAnnicka Campbell is a digital strategist and researcher with a backgroundin cultural anthropology. She is particularly interested in understandinghow communities emerge and evolve online. She serves as the operationallead for the Social Insights team, a globally distributed research capabilityleveraging multiple sources of social data (listening, secondary research,and primary research) to help drive business objectives and createinnovative customer experiences. Based out of SapientNitro’s Chicagooffice for the past three years, Annicka has developed, executed, andmanaged research programs for Fortune 500 clients within consumerpackaged goods, automotive, financial services, and healthcare, and hasserved as a panelist and speaker on topics such as consumer behavior,the ethics of online research, and applied anthropology.Best practice #5: Create better products and offerings that meet customer needsUse the social community to drive internal product creation and development.For example, Chase created a closed, online community of affluent consumers and tasked them withdesigning a credit card built to their specific wants and needs. After partnering with Communispace,Chase then created a social community for 300 of its most loyal cardholders and frequent travelersto conduct research. The brand used the community to have direct and ongoing conversations withcustomers, focusing on their needs and challenges as travelers to drive product development. Theresult was the Priority Club Select Visa card, which launched in 2011.The implications for pharmaceutical and financial industriesOrganizations can successfully navigate and operate a presence in social by developing internalcapabilities in three core areas:• Building a Social Governance Practice. Building a toolkit for escalating, managing andresponding to social issues or crises can help organizations to quickly and effectively mitigaterisk in social.• Developing a Social Monitoring Plan. Developing ongoing social reporting capabilities willhelp to drive social performance measurement and derive business intelligence from usercommunities and discussion in social.• Educating the Organization. Staying up-to-date on federal guidelines will help any organizationstay on top of legal and compliance implications in social. In addition, providing ongoingemployee compliance training is a very effective way to ensure that social media practitioners(and indeed, all employees) understand and adhere to key regulatory issues in the space.It is my hope that, after looking at these best-in-class approaches to social within the pharma-ceutical and financial markets, you better understand the challenges and opportunities inherentin leveraging social within highly regulated industries — and are more prepared to move forwardin today’s social world.This POV was originally published as a two-part webinar on October 3 and November 7, 2012.POINT OF view