Social Media: Transforming business, ROI and the role of public relations


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Aedhmar Hynes, CEO, Text 100, presentation to IABC Social Media Conference, 11/5/09

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  • Social media is popular but is it really impacting the bottom line? These are the people driving much of the visibility of social media. Information on popularity of social media Movie stars with greatest # of followers Ellen DeGeneres – 3.6+ million twitter followers Brittney Spears – 3.6+ million twitter followers Lance Armstrong – 2.1+ million twitter followers Barak Obama – 2.5+ million twitter followers Ashton Kutcher – 3.9+ million twitter followers Oprah Winfrey – 2.5+ million twitter followers Facebook Michael Jackson – 10.3+ million facebook fans Barak Obama – 6.8+ million facebook fans Ashton Kutcher – 3.2+ million facebook fans Facebook had 42,089,200 users from the United States as of January 2009, 13% of the US population. 2009 Facebook Demographics and Statistics Report ( 276% Growth in 35-54 Year Old Users The 25-34 year population on Facebook is doubling every 6 months The Web in Numbers: The Rise of Social Media (April 2009, In March, YouTube (YouTube) reached 100 million monthly viewers in the US. 6.3 billion videos were viewed on the site. Facebook (Facebook) has grown from 100 million to 200 million users in less than 8 months. If it were a country, it would be bigger than Brazil. Its traffic has grown immensely in one year’s period, especially in Europe where it grew 314%. According to comScore, it has grown a staggering 2,721% in Italy from February 2008 to February 2009. In other European countries, its growth was also immense: 999% in Spain, 607% in Belgium, 518% in France, 499% in Switzerland. Twitter itself is growing at a crazy rate; although it already has a very large audience, it grew 76.8 percent just from February to March. Its yearly growth rate? 1,382 percent . According to Nielsen, Twitter had 7 million unique monthly visitors in April. If it keeps growing at this rate, it’ll have nearly 100 million visitors same time next year. 6 of the top 15 web sites according to are social media sites (8 of the top 15 are search engines): Facebook, YouTube, Wikipedia,, Myspace, Twitter Digg’s monthly visitors increased from 26.6 million in September 2008 to 43.8 million in September 2009 ( Majority non-biz related
  • Most interesting is that the number of Americans over 35, 45, and 55 on Facebook is growing fast. It might surprise you that the fastest growing demographic on Facebook is still women over 55. 69% of B2B executives and managers use social networking for business purposes. (Forrester The Social Technographics of Business Buyers Report – Feb 2009) 55% of C-Suite Executives cite the Web as the most important source for business information. (Forbes Insights: The Rise of the Digital C-Suite Report June 2009) IT buyers trust social media more than any other source. Nearly two-thirds believe that social media has made for a more informed purchasing decisions. (PJA IT Social Media Index 2008) Social media/network users are 3X more likely to trust peer opinions over advertising in purchase decisions. (Jupiter Research)
  • Statistics with caveat that the financial performance may be correlated to the greater macro trends, not just SM engagement There is a business case for social media.
  • Don’t underestimate the importance of culture on social media adoption – it’s not surprising that the most proactive C-suite tweeters are typically from tech or Web companies that have open, transparent values. And the organizations where the CEO tweeting have more engaged employees bases in Twitter, and likely more brand prominence. Dell example Michael Dell’s direction: (see Dell example in this) 3 Million in Sales via Twitter
  • The impact of sitting on the sidelines or being a miscreant ( astroturfing judgments , FTC disclosure fines ) Need to be aware of what is being said about you whether or not in SM, can’t be caught blind sided, even if listening campaign put self in position to address or respond; down side to not paying attention can be highly detrimental The brand is public: companies no longer control their brand
  • Originally thought of SM as comm. Vehicle but is effecting all aspects of biz and constituencies Sales – know prospects better, be in the right place at the right time (Bristol Meyers Squibb example from social media for sales deck) Customer service – better serving the most vocal customers, reducing customer service costs, let them learn from one another CIO community: (Text 100 client example – can get more information from that team) Product development – harnessing knowledge inside the company, bubbling up the best ideas from anywhere and any level (Best Buy’s Blue Shirt Nation: In much the same way, Best Buy's Blue Shirt Nation has evolved over the last few years as the company has added new features in response to user requests. The biggest lesson has been the unexpected results from the BSN experiment. Sales associates have provided unique viewpoints and expertise to executives, in-store experiences are changing as a result of the intel shared from employees on the floor, and the feedback loop is stronger than ever before. It didn't happen overnight, but it was built over time. ) Partners and Channel - learn from one another Human resources - empower employees, reach prospective employees
  • From “McKinsey Global Survey Results: How companies are benefiting from Web 2.0” McKinsey report shows that organizations using social media are seeing gains in various business functions that ultimately impact the bottom line. According to the report: The heaviest users of Web 2.0 applications are also enjoying benefits such as increased knowledge sharing and more effective marketing. These benefits often have a measurable effect on the business. Increased speed, efficiency and access to knowledge is having an effect in all three areas in the survey. SM is primarily in mktg today, but if you step back and look at where it can lend efficiency, etc, it has applicability in all business functions. So now let’s talk about some examples of where SM is having an impact
  • Internal Product innovation Tapping into 300,000 minds to innovate and use resources of IBM to create something that will benefit the world. Yearly choose ideas and invest resources to make them a reality Lay the groundwork for the concept: Removes the bureaucracy of innovation that can exist in large companies A Jam is IBM's Web 2.0 tool for business collaboration focused on strategic, business-critical issues. It engages anyone and everyone in an organization—from the intern to the CEO—to speak their mind, surfacing the kind of ideas that improve business. During IBM's 2006 Innovation Jam™—the largest IBM online brainstorming session ever held—IBM brought together more than 150,000 people from 104 countries and 67 companies. As a result, 10 new IBM businesses were launched with seed investment totaling $100 million. InnovationJam 2008 sought to tap the collaborative insight of leading thinkers from thousands of companies to help advance the vision of IBM's CEO Study , "The Enterprise of the Future"—based on interviews with more than 1,100 CEOs—to reality. Held over a 90-hour period from October 5th through 9th, 2008, the Jam benefited from nearly 90,000 log-ins that generated over 32,000 posts. It tapped employees from more than 1,000 companies across 20 industries—including thousands of IBMers, as well as independent authorities from a variety of fields. Jammers concluded that the enterprise of the future must immediately begin doing three things: Embrace a new level of transparency for itself and across the systems we are seeking to make smarter, allowing customers and partners to engage more intimately, and on a variety of levels Increase efficiency in every aspect of its business operations, eliminate waste, and employ new and powerful monitoring and measuring techniques to make better business decisions; and Adopt corporate stewardship as a core business function, working closely with the public sector to build sustainable business practices that will improve global living conditions and drive positive social change. Sam Palmisano, CEO, IBM: “ You have to understand and accept some responsibility for an extended business ecosystem — a supply chain of companies, of individuals and communities you can’t control … but their actions and decisions can have a material impact on your results and on your company’s brand and reputation. No individual leader … no matter how big the company, can control such truly global consequences and contexts.”
  • Internal Key point: Started as social network and has become an education and career growth network to share best practices Best Buy created Blue Shirt Nation (BSN) in August 2006, a community and social network for their employees to communicate with each other. BSN was an idea from Steve Bendt and Gary Koelling, corporate marketers, who wanted to gain customer insight from employees on the sales floor. Instead of positioning it as a top-down initiative, Bendt and Koelling actually visited stores to build awareness and enthusiasm around the project for a “ground up” approach and within two months, the online site had grown to 14,000 members, mostly the “blue shirts” who work the retail floor, which represented 10% of all full time BB employees The initiative grew beyond its original intent and scope, with sales floor associates using the site to lobby for (and receive) their own email addresses as another way to sell to customers. The BSN has also become a support forum that has streamlined operational efficiencies for the company. Best Buy’s turnaround (or turnover) rate for employees is 60%; the Blue Shirt Nation community is 8-12%. (source: Gary Koelling, Best Buy)
  • B2B example Social Media for sales DO NOT MENTION GARTNER OR BRISTOL MEYER SQUIB B2B example Social Media for sales DO NOT MENTION GARTNER OR BRISTOL MEYER SQUIB Key takeaway: In the B2B space where the sales process can often be very complex, social media is being tapped to build stronger relationships with existing customers and potential buyers. Identifying, closely listening and diagnosing what these people are talking about in social media environments paints a valuable picture for sales forces. It gives them a view into what prospects think about relevant issues, the challenges they’re facing and the solutions/products they are considering. Armed with this information, sales teams are better equipped to be in the right place, at the right time, with the right value proposition. Example: we consult for an IT analyst firm that sells research into major pharmaceuticals, among other companies. We worked with this firm to determine where their existing prospects were participating in social media and then build social media profiles for those potential buyers which enable their sales teams to closely listen for opportunities to gather valuable details and share relevant insights. Why does it matter? This “right place, right time” approach will become vital for the sales efforts of B2B firms, particularly as potential buyers at all levels increasingly turn to their peers and other relevant people in social media for insight and buying advice – not company salespeople or even traditional media. It will be important for salespeople to have a presence in social media not to employ old school tactics and push products on buyers but to listen, evaluate and provide value when customers seek it. Some background points on BMS’ social media presence ( ): In Sept. 2008, BMS launched the Advanced Breast Cancer Community, an informational resource and online community for advanced breast cancer patients and their family/friends represents the collective thinking of a partnership among 13 of the leading breast cancer patient advocacy organizations in the United States, The Advocate Partners, and Inspire. This website is dynamic and changes to reflect new research, treatment, and clinical trials information; Bristol-Myers Squibb supported in the initial development of this web portal
  • Use social media and blogs to address dissatisfied customers CEO made policy decision based upon community feedback “ Nuts about Southwest” Blog was originally founded in April 2006 as a means of giving customers a look into Southwest’s operations and culture to allow interaction and relationship building with employees ( Features more than 30 employees that are from all departments of company Integrated social media platform that links to podcasts, newsfeeds, Flickr, Twitter, Facebook, personalization options, rankings, reader polls Within months of launching new interactive blog visits were up 25%, page views were up 40% and visitors stayed 26% longer Currently has over 84,000 Facebook fans, 825,500 Twitter followers, links to CEO’s LinkedIn Profile Video contest, polls and other interactive content through Facebook fan page The CEO announced on a blog that Southwest would change the open seating policy to assigned seating. His blog post received 700 comments from customers voicing their opinions, many of which opposed the change.  Therefore, he decided to keep the open seating policy. Another thing that Southwest learned from this was that travelers were unhappy with their boarding process so Southwest was able to adopt a new process. Southwest declared on their website, “You Spoke and We Listened – Southwest Airlines Says Open Seating is Here to Stay!” ( Video also plays an important role for Southwest. Perhaps you have seen the R apping Flight Attendant . This video has more than 525,000 views. A passenger took the video of flight attendant David Holmes and the video was featured on CNN. (
  • Drove $3mil in revenue from Twitter. Might be a drop in the bucket but it’s a start and think about how little needed to be invested to get that result. In October 2007, Michael Dell was quoted in BusinessWeek as saying, “"These conversations are going to occur whether you like it or not, O.K.? Well, do you want to be part of that or not? My argument is you absolutely do. You can learn from that. You can improve your reaction time. And you can be a better company by listening and being involved in that conversation." ( ) In June 2009, Dell Computers announced that it surpassed $3 million in sales via links from one of its Twitter accounts, making one of the most high profile examples of social media Return on Investment (ROI) all the more juicy. ( ) According to Richard Binhammer , a senior manager in corporate communications at Dell ( ) : “ Today, we see the power of the Web emerging from a static to interactive tool that’s as much about furthering direct connections with customers as it is about e-commerce. Our Twitter followers @DellOutlet are more than a million strong (representing more than $3 million in revenue), a robust community of people interested in refurbished units. Via platforms like IdeaStorm , more than 350 customer ideas have been implemented into product and business innovations.” “ After three years of experimenting, listening and learning, however, we have concluded that social media is ultimately about connecting and communicating across all aspects of our business. This means that while a core social media team remains, the marketing, sales, service and support, and product groups all need to have their own fingers on the pulse and arms around their customers. While social media started as a way for Dell to distribute news and special offers, it has evolved into a critical relationship builder, integrated into all business units.” Dell launched a Facebook fan page that provides social media advice to small businesses.
  • Joe to rework Mapping of Oracle-Sun acquisition media activity Social media is moving information between audiences Old view of influencer and media relations Understanding reach of social media through getting across to many different audiences Impact of one group on another, self-populating Geometric v. linear projection
  • As influencers and stakeholders become more intertwined, share information more efficiently and easily, and engage more with organizations via social media, we’re seeing more and more research correlating those interactions with business performance So what do we need to do about that? As the stakeholder ecosystem rapidly evolves to new social media technologies, companies must be aware of how business models must change to adapt to the new paradigm. The entire company at all levels has a stake in acknowledging the potency of SM and must organizationally adapt to SM because it will have impact across all functions Companies are communicating more effectively, efficiently, outside marketing to other areas of business, in the future impacts biz models and go to market strategies and all other things do to impact role in marketplace and compete; at the beginning of this and the examples should illustrate that this is starting to happen
  • But before companies can steer the ship toward the new horizon, leadership and execs must be convinced that there are sound business reasons to adopt new business models. To convey the potency of SM we as communications professionals must speak the language of the C-Suite: performance Performance=ROI There lies a big question/problem in this whole endeavor: Can we measure the performance/ROI of Social Media?
  • Understand the changing nature of influence Peers influencing each other more than companies
  • Know the technology Today, PR is much more than simply telling a good story. It’s like the proverbial tree falling in the woods: if you tell a great story but nobody sees or shares it, did it ever really happen?   The point is, technology continues to dramatically change the way people find and interact with information and people. We are all inundated with information and choices. Understanding technology has never been more vital for reaching people and understanding how they influence one another. The implications are far-reaching for not just PR but all business functions. Consider that:   Nearly 90% of US internet users use a search engine. ( Pew Internet & American Life Project ) 19% of US internet users now use Twitter or another service to share updates about themselves, or to see updates about others. ( Pew Internet & American Life Project ) Online video is perhaps the fastest growing medium ever. Americans’ online video usage is up more than 50% since last year ( Nielsen, May 2009 ).   Why does that matter? A few examples:   PR teams that don’t understand SEO will be hamstrung – again, driving visibility is much more than a good story. Creating, optimizing and spreading multimedia is critical. Images, video, audio and linking strategies that propel multimedia – they all add up to a trail of bite-sized digital content that help people find you. Understanding of web analytics and conversion rates – these are increasingly important facets of connecting PR to business in a digital way, and they all require a sound understanding of technology.   Takeaway: social media is more than just theory about relationship building and loss of brand control. Technology is key to execution. This is an opportunity for PR.    
  • Once you do those three things, you still need to prove it. How do you do it? Through measurement. Can you measure it? Yes! Why is it important? Tangible ROI is critical for speaking language of business execs. Proving ROI benefits PR people directly. Some measurement tools: Google Analytics Twitter Search Twitalyzer Alexa (traffic rankings) Nielsen Blogpulse (prominence in blogs) The Whuffie Bank (social capital measurement; Opportunity is the gap between awareness from Social Media and ultimate purchase decision
  • Doing a little bit of measurement puts you ahead of 85% of other companies From Mashable article at
  • Consumer facing financial services firm For example, a recent Context Analytics study of conversion rates of paid versus earned media found that: Paid Search only converted to sales 8.2% of the time Traffic from mainstream, unpaid media resulted in 10.5% conversion to sales Traffic from blogs converted 10% to sales Traffic from coupon sites converted 14.81% to sales Imagine the impact such statistics could have on directing your company’s marketing/comms budget. There are many sophisticated tools out there for every budget from Twitter search to analytics tools. The most important thing is to focus on metrics that make sense for your goals. So I want to propose three general steps to identifying your social media ROI.
  • Find the connection between social media and business metrics (use our talking points on integrated data here) Many tools out there to measure social media but remember to focus on traditional business metrics in setting goals: “set tangible business goals, not just how many followers you can get on Twitter” Conversion rates Reducing operational costs Decreasing travel costs Reducing time to market for products/services Reducing marketing costs Reducing communications costs Increasing number of successful innovations for new products/services Share of voice Lead generation
  • Look at the delta to see if you’re moving the delta
  • This doesn’t sound like traditional PR because… PR has been a siloed business function within the enterprise. But Social media opens the door for PR to play a role in the activities identified in the McKinsey report. Era of new forms of tools: the basic principles still apply but expands the role of the PR/Comms function; linked to other biz functions and drive metrics in other functions; ability to connect to other audiences to measure and influence Now have something to change behaviors; measure results in real time It’s all measurable now: used to measure people’s opinions with difficulty but now can follow the chain of influence to demonstrate the impact it is having
  • Social media has been a catalyst that has accelerated and provided a path for PR to become much more integrated across the business and not just as a mouthpiece for management How? Social media is extending the discipline’s reach across the business as sales, customer service, product development, etc.
  • Leveraging expertise in media and audience relations, PR can be the facilitator of social media engagement and take a more active, strategic and pragmatic role in the direction of the business. Examples of PR proficiencies: Build a credible authentic brand Cultivate connections vs. stories Facilitate conversations Harnessing power of the community Become a sharable content publisher Boost SEO (87% of all internet journeys start with a search) Advise on policy
  • PR already leads the majority of digital media communications PR leads digital communications at 51% of organizations, while marketing leads 40.5% of the time, according to the 2009 Digital Readiness Report from iPressroom, Korn/Ferry International, and PRSA. The study found that PR generally leads several aspects of digital communications, including blogging, where PR leads at 49% of organizations, compared to 22% for marketing. PR also leads microblogging (52% to marketing’s 22%), and social networking (48% to 27%). Marketing usually leads e-mail marketing and SEO aspects of digital communications.
  • Opportunity must be seized to be the hub of all business functions in regards to SM; applying tools and expertise to drive goals, strategies; a lot more to do to truly capitalize on SM Think about how go back to your job today: it’s not just about clips, reading the paper, reading blogs It’s about developing SM strategies and applying them to make things happen Need to operate at a higher level as an industry to seize the opportunity But what does that mean?
  • Recap slide on three calls to action
  • Gives PR a seat at the table because it is allowing PR to speak the language of business success. Re-remphasize opportunity that PR has never had more of an opportunity to play a role in the strategy and direction of companies as SM impacts how social media is changing biz models; much more integrated part of the biz team Why is it important? Tangible ROI is critical for speaking language of business execs. Proving ROI benefits PR people directly. Will accelerate your career growth The role of PR needs to be much clearer on how business and communications objectives are intertwined given the social media landscape Need to speak the language of execs Talk strategy not tools and tactics; helping define what success looks like
  • Social Media: Transforming business, ROI and the role of public relations

    1. 1. Social Media Transforming business, ROI and the role of public relations Aedhmar Hynes CEO, Text 100 Global Public Relations
    2. 2. Social media is Popular
    3. 3. But the view from the C-Suite… 70% of 271 marketing executives said they have never used social media feedback to improve and shape their products and services. -PRWeek
    4. 4. Over the past 12 months, Social media Mavens saw revenues grow an average of 18% ENGAGEMENTdb, Ranking the Top 100 Global Brands by the Altimeter Group and WetPaint
    5. 5. …while the Wallflowers saw revenues drop by 6% ENGAGEMENTdb, Ranking the Top 100 Global Brands by the Altimeter Group and WetPaint
    6. 6. Don’t be caught on the sidelines
    7. 7. Where is social media heading?
    8. 8. Online interaction is rapidly evolving and beginning to shape various business functions
    9. 9. Measurable gains from using Web 2.0 McKinsey Global Survey Results: How companies are benefiting from Web 2.0
    10. 10. Measurable gains from using Web 2.0 McKinsey Global Survey Results: How companies are benefiting from Web 2.0
    11. 11. Measurable gains from using Web 2.0 McKinsey Global Survey Results: How companies are benefiting from Web 2.0
    12. 12. IBM Culls Internal Innovation
    13. 13. Blue Shirt Nation Best Buy’s Internal Social Media Network
    14. 14. B2B Sales – Major Pharmaceutical
    15. 15. Southwest Customer Service
    16. 16. Dell wants to be part of the conversations that lead to buying decisions
    17. 17. Network Mapping
    18. 18. Network Mapping Customers Partners Consumers Investors Developers IT Influencers
    19. 19. More and more research is correlating social media engagement with business performance
    20. 20. Communications Pros must speak the language of business to make this transition happen
    21. 21. Peers influence each other more than companies
    22. 22. Know the technology
    23. 23. Measurement is a Must
    24. 24. Yet, only16% of professionals worldwide measure the ROI of their social media programs Do Not Measure ROI 84% Mzinga and Babson Executive Education
    25. 25. Measuring PR’s Effectiveness in Driving Sales Conversion Average Rate of Sales Conversion
    26. 26. 1. Determine which metrics matter most
    27. 27. 2. Set your baseline measurements.
    28. 28. 3. Compare back to determine change.
    29. 29. This doesn’t sound like traditional PR…
    30. 30. Social media is changing the role of PR… …and extending the discipline’s reach across the business
    31. 31. There is a MASSIVE OPPORTUNITY for PR as facilitator
    32. 32. PR leads digital communications at 51% of organizations 2009 Digital Readiness Report from iPressroom, Korn/Ferry International, and PRSA.
    33. 33. The opportunity MUST be seized
    34. 34. Ultimately, elevate the role of PR in the organization