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

© 2010 Altimeter Group
7
DECENTRALIZED
- Organic growth
- Authentic
- Experimental
- Not coordinated
- e.g. Sun

© 2010 Altimeter Group
8
- One department controls all efforts
- Consistent
- May not be as authentic
- e.g. Ford, Regulated
CENTRALIZED

© 2010 Altimeter Group
9
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

© 2010 Altimeter Group
10
MULTIPLE HUB AND SPOKE
OR “DANEDELION”
- Similar to Coordinated but across multiple
brands and units
- e.g. HP, Microsoft, Tech Giants

© 2010 Altimeter Group
11
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