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.

© 2010 Altimeter Group 2
1) What happened in 2010 2) What’s going to happen in 2011 3) What companies should do about it Agenda:

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

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

© 2010 Altimeter Group Most
Social Media programs report under Marketing or Corporate Communications

© 2010 Altimeter Group Companies
organize for social in 5 ways Centralized Distributed Coordinated Multiple Hub and Spoke Holistic

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

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

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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

© 2010 Altimeter Group Most
companies organize into Hub & Spoke or Centralized 12

© 2010 Altimeter Group Maturity
drives Total Budget, Team Size, and Org Model Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experi mental Formalized Mature/Advanced Average Total Budget Average Team Size Organizational Model We asked 140 Corporate Social Strategists their total strategy budget, number of full-time equivalent staff dedicated to social media, and organizational model:

© 2010 Altimeter Group Maturity
drives Total Budget, Team Size, and Org Model Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experi mental Formalized Mature/Advanced Average Total Budget $66,000 Average Team Size 3.1 Organizational Model Centralized 37% Corporations who are just getting started have miniscule budget and are significantly understaffed in a centralized team –this does not scale.

© 2010 Altimeter Group Maturity
drives Total Budget, Team Size, and Org Model Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experi mental Formalized Mature/Advanced Average Total Budget $66,000 $1,002,000 Average Team Size 3.1 8.2 Organizational Model Centralized 37% Hub & Spoke 49% 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.

© 2010 Altimeter Group Maturity
drives Total Budget, Team Size, and Org Model Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experi mental Formalized Mature/Advanced Average Total Budget $66,000 $1,002,000 $1,364,000 Average Team Size 3.1 8.2 20.8 Organizational Model Centralized 37% Hub & Spoke 49% Hub and Spoke 44% 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”

© 2010 Altimeter Group 2011
Forecast © 2010 Altimeter Group Image by ronni44052 used with Attribution as directed by Creative http://www.flickr.com/photos/ronnie44052/2730239605

© 2010 Altimeter Group 2011
is the Year of Integration

© 2010 Altimeter Group For
Internal Goals In 2011, Social Strategists will focus on Measurement of ROI Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 We asked 140 Corporate Social Strategists: “What internal social strategy objectives will you focus most on 2011?” 22.0% 24.6% 26.3% 29.7% 32.2% 34.7% 34.7% 37.3% 48.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Policies and Procedures Resources: Increasing budget/headcount Getting Tools and Technologies in Place Developing a Listening/Monitoring Solution Getting Buy-In from Stakeholders Applying Social Insights to Product Roadmap Determining an Organizational Model Internal Education and Training Creating ROI Measurements

© 2010 Altimeter Group 10.1%
21.8% 27.7% 33.6% 34.5% 39.5% 46.2% 65.5% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Other (please specify) Actual product revenue Share of voice or total mentions Customer satisfaction rates: Net promoter, survey satisfaction Conversions or leads Website Traffic Sentiment: Overall opinion of what people say Engagement data: Retweets, comments, fans, likes, followers, members Social Strategists struggle with relying on engagement data Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 We asked 140 Corporate Social Strategists: What measurements are most important to evaluating the success of your program?

© 2010 Altimeter Group In
External ‘Go to market’ a focus will be on integrating social onto the corporate website Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 We asked 140 Corporate Social Strategists: “What external social strategy objectives will you focus most on 2011?” 13.9% 16.4% 19.7% 20.5% 22.1% 24.6% 36.9% 37.7% 43.4% 46.7% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Enabling Peer-to-Peer Support Providing Direct Customer Support Collobarating with Customers Mobile/Location Social Commerce Formalizing an Advocacy Program Fostering Word of Mouth Listening/Learning about Customers Developing Ongoing Dialog with Customers Website Integration

© 2010 Altimeter Group 76%
71% 75% 65% 67% 55% 54% 52% 47% 47% 46% 26% 6% 7% 2% 10% 3% 9% 5% 6% 8% 3% 1% 8% 0% 20% 40% 60% 80% 100% Brand Monitoring Training Staff Ad Spend Research & Dev Influencer Community SMMS Custom Tech Dev Boutique Agencies Traditional Agencies SCRM 2010-2011: Adoption of Social Business programs Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 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 Altimeter Group $190,000
$104,000 $92,000 $104,000 $78,000 $63,000 $53,000 $31,000 $40,000 $19,000 $18,000 $14,000 $- $100,000 $200,000 $300,000 Staff to Manage Ad Spend Community Traditional Agencies Boutique Agencies Brand Monitoring Custom Tech Dev Influencer Research & Dev SCRM Training SMMS 2010 2011 2010-2011: Spending on Social Business programs Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 $278,000 $160,000 $129,000 $120,000 $108,000 $98,000 $90,000 $47,000 $47,000 $37,000 $23,000 $22,000 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 Altimeter Group 2011
top spending by Company Maturity Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experime ntal Mature Advanced First Second Third Fourth Fifth 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:

© 2010 Altimeter Group 2011
top spending by Maturity Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experime ntal Mature Advanced First Staff: $133,000 Staff: $303,000 Staff: $406,000 Second Community: $78,000 Ad Spend: $204,000 Custom Tech Dev: $272,000 Third Traditional Agencies: $51,000 Traditional Agencies: $162,000 Boutique Agencies: $238,000 Fourth Brand Monitoring: $42,000 Community: $126,000 Community: $198,000 Fifth Ad Spend: $36,000 Brand Monitoring: $108,000 Ad Spend: $195,000 A small compartment of staff will be hired, scalable branded communities, and reliance on agencies which could help with monitoring.

© 2010 Altimeter Group 2011
top spending by Maturity Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experime ntal Mature Advanced First Staff: $133,000 Staff: $303,000 Staff: $406,000 Second Community: $78,000 Ad Spend: $204,000 Custom Tech Dev: $272,000 Third Traditional Agencies: $51,000 Traditional Agencies: $162,000 Boutique Agencies: $238,000 Fourth Brand Monitoring: $42,000 Community: $126,000 Community: $198,000 Fifth Ad Spend: $36,000 Brand Monitoring: $108,000 Ad Spend: $195,000 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.

© 2010 Altimeter Group 2011
top spending by Maturity Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010 Beginner/Experime ntal Mature Advanced First Staff: $133,000 Staff: $303,000 Staff: $406,000 Second Community: $78,000 Ad Spend: $204,000 Custom Tech Dev: $272,000 Third Traditional Agencies: $51,000 Traditional Agencies: $162,000 Boutique Agencies: $238,000 Fourth Brand Monitoring: $42,000 Community: $126,000 Community: $198,000 Fifth Ad Spend: $36,000 Brand Monitoring: $108,000 Ad Spend: $195,000 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

© 2010 Altimeter Group How
You Should Invest in 2011 Image by zetson used with Attribution as directed by Creative Commons http://www.flickr.com/photos/zetson/254608875 © 2010 Altimeter Group

Invest in scalable social media
programs 29

1) Hire correctly (Gurus/Ninjas/Samurai need
not apply) and properly train for scale 2) Integrate social media on the corporate website, then aggregate and curate 3) Invest in advertising that leverages social graph 4) Build an unpaid army of advocates –get your customers to do the work for you 5) Invest in scalable systems like SCRM and SMMS 6) Learn to measure using the ROI Pyramid Invest in scalable social media programs 30

© 2010 Altimeter Group 
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 31

© 2010 Altimeter Group 2)
Pragmatically integrate social media on the corporate website, then aggregate and curate Source: http://www.web-strategist.com/blog/2010/05/19/slides-roadmap-for-integration-of-social-into-your-corporate-website/ 32 1. No social integration 2. Link away with no strategy 3. Link away but encourage sharing 4. Brand integrated in social channels 5. Aggregate discussion on site 6. Users stay on site with social log-in 7. Social log-in triggers sharing 8. Seamless integration

© 2010 Altimeter Group 
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 3) Invest in advertising that leverages social graph 33 Twitter’s advertising is a combination of both earned and paid –that results in WOM

© 2010 Altimeter Group 
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 Phase 1: Internal Readiness Phase 2: Identify Advocates Phase 3: Build Relation- ships Phase 4: Put Advocates First Phase 5: Foster Growth

© 2010 Altimeter Group 
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 35

© 2010 Altimeter Group 
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 36

© 2010 Altimeter Group ROI
Pyramid: Roles View Provide the right metrics to the right audience. A novice mistake is to provide ‘engagement metrics’ to executives

© 2010 Altimeter Group The
ROI Pyramid: Metrics View These metrics are formulas comprised of the tier below them. Currently, there is no industry standard.

© 2010 Altimeter Group The
ROI Pyramid: Metrics Examples (there are more) A junior mistake is providing ‘engagement data’ to executives – instead focus on business metrics.

© 2010 Altimeter Group The
ROI Pyramid Role: Metrics: Specific Data (examples)

© 2010 Altimeter Group 1)
2010 was the read of Foundational Investments. 2) In 2011, expect to see a focus on Measurement, Integration, Staffing and Advertising. 3) Invest in Scalable Programs that leverage your crowds –1:1 dialog does not scale. Summary 41

© 2010 Altimeter Group 
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 42

43 Jeremiah Owyang Industry Analyst
jeremiah@altimetergroup.com web-strategist.com/blog Twitter: @jowyang Research team includes significant contributions from Christine Tran, and Charlene Li, Altimeter Group