I’m going to talk about 3 trends that we see happening1) The first is that today’s web is about people -- our real friends making our experiences better online just as they do in thephysical world2) The second is that this shift creates an enormous opportunity for businesses to stay more connected to people andgenerate powerful word of mouth3) And the third is that when businesses reorganize around people, they are seeing really powerful results
As you all know, we are in the midst of a fundamental shift in the way we find and consume content online.The 90‘s was all about browsing, [click]and in the 2000‘s it was all about searching. [click]In this new decade, it is all about discovering things through our real friends. This is a shift from the what to the who - fromthe wisdom of crowds to the wisdom of friends.
Both old and new industries are transforming to take advantage of the popularity of experiences reorganized around people.The one’s you see here are just a few examples.
This is possible because we are living in an age of rapid technology innovation. If we think about the last 10 years many majorindustries have been disrupted not only by newcomers, but also by incumbents. Last year, the launch of the iPad was the mostsuccessful consumer electronics launch in history, selling 1M units in the first 28 days.Additional stats:•The iPad surpassed the iPhone and DVD player in adoption. Current sales rate is about 4.5M units per quarter which tops the1M per quarter from the original iPhone launch and 350,000 per quarter when DVD players were launched.•If the current rate persists, the iPad could become a $9 billion per year business, blowing right past game consoles and cellphones to become the fourth largest consumer electronics category. That would put the iPad right behind TVs, smartphonesand laptops. (source: cnn:http://articles.cnn.com/•According to Bernstein Research via CNBC, three million iPad units were sold in its first 80 days after launching in April, andthe current sales rate is approximately 4.5 million units per quarter.
As technology increasingly goes mobile, these social experiences are following us throughout our lives - I can see what myfriends recommended on Netflix, get in the car and find out where my friends are, check-in on my phone to find out whatdeals are available around us, and play games on my iPad while I wait for them to meet me.[Note: Facebook is part of all of these experience and could be the example, but we are intentionally trying to show differentbrands involved in these changes - feel free to substitute with Facebook if you chose].
The ability for brands to connect with people and their friends everywhere they go is a huge opportunity for businesses.
The savviest businesses are recognizing this shift and discovering how reorganizing around people is an incredibly powerfulway to achieve results. This is impacting everything from product development, to HR, customer service, customer insights,and marketing.These changes are not easy and often require internal changes, but the businesses who are embracing this shift are beingrewarded for their efforts. [click]A recent McKinsey study reinforced that technology-enabled collaboration with external stakeholders helps organizationsgain market share from competitors by forging closer marketing relationships with customers and involving them incustomer support and product development efforts.Additional data• Next year, four in five US businesses with at least 100 employees will take part in social media marketing, eMarketerestimates. That’s up from just 42% as recently as 2008, and the number of marketers using the channel will continue to risethrough 2012.• “…we believe, that technology-enabled collaboration with external stakeholders (fb, web 2.0) helps organizations gainmarket share from the competition. They do this, in our experience, by forging closer marketing relationships with customersand by involving them in customer support and product-development efforts. Respondents at companies that used Web 2.0to collaborate across organizational silos and to share information more broadly also reported improved market shares.”https://www.mckinseyquarterly.com/Organization/Strategic_Organization/The_rise_of_the_networked_enterprise_Web_20_finds_its_payday_2716?pagenum=3Agencies have reorganized positioning but not structure around people opportunity to build it from the ground up at scale
Threadless and Vitamin Water are great examples of businesses that have put people in the middle of their productdevelopment process with great results. Threadless, Inc’s most innovative company in 2008, has as many as 300 submissions aday for t-shirt designs and allows it’s large fan base to vote on their favorites. When Vitamin Water needed a flavor, name, andlabel for its newest flavor it enlisted it’s facebook community - let’s take a look [click]Additional data•Threadless: Inc's "Most Innovative Company in America" in 2008. Designers submit t-shirt designs, voted on by thecommunity. Only most popular 10 or so are printed each week. They also have fully integrated customer service on facebook.•Vitamin Water: - The Facebook users chose a tasty black cherry-lime flavor and a grand prize winner received $5000 forcoming up with the best name: Connect.•Business plan around people example-Kiva: Since it’s founding four years ago, it has now made possible $100 million inmicroloans between individual lenders and entrepreneurs all around the world. The company has brought together 573,000lenders (people like you and me putting in $25 or more towards a specific project), and 239,000 entrepreneurs. - TechCrunch
Zappos and Best Buy are leading the industry in new types of customer service. Best Buy has 25 super users who spend 8-12hours a week answering the questions of the 2.5M visitors to its it’s online community. And Zappos is legendary for customerservice because it encourages all of its employees to tweet and blog to help answer questions.Additional data•Best Buy, based in Richfield, Minnesota, started its online community in 2008 and says it now gets about 2.5 million visitors ayear, generating 100,000 conversations. On top of that, 25 super users spend 8 to 12 hours a week on the site answering about30 percent of all the questions asked, says Lisa Smith, vice president of enterprise customer care.•In 14 months, staffers have answered more than 36,000 questions via Twitter. More importantly, more than 36,000 consumershave clicked on the links included in those answers and landed on BestBuy.com, says• Zappos: 499 employees are on Twitter and Zappos CEO Tony Hsieh has created a how-to guide to help employees start usingTwitter.
When companies stay this close to people, they also collect real-time powerful insights about their customers. Starbucks asksit’s community for product, experience and involvement suggestions on the homepage of its website and has generated over100k suggestions. Sephora uses Facebook community to constantly stay in touch with their clients wants and desires byasking questions and listening. [click]•Quotes from Sephora (will be in video)• “I think what’s fascinating about Facebook is for those of us who’ve been working in the Internet for the last 10 years-plus,we’ve sort of separated from our customers,” says Julie. “We’re not in the stores day-to-day hearing what they’re saying. Butnow Facebook takes it to the next level. Not only can we hear what they’re saying but we hear it in real time.”•"We are obsessed with our Fans. We listen to them daily. We talk to them. We ask them questions. We take their input veryseriously. We make changes as a result of them. Given that the people who tend to interact with us are our more seriousbeauty mavens, they really know what’s going on. It makes us realize how in touch our consumer is! We send treats to some ofthem, thank you notes… and have some exciting (confidential) activities planned for them in the future. We want to make surethere is value in being our fan." (source: National Retail Federation: Feb 26, 2010 http://blog.nrf.com/2010/02/26/sephora-execdiscusses-the-roi-of-social-media/)
Last, but certainly not least is marketing. All aspects of marketing are evolving as there are new ways to communicate, buildcommunities, and have friends tell friends about your brand. Old Spice's viral video campaign that had 24M views and shot tothe 5th most watched video on YouTube in 2010. [click] play [click]Toyota invited real customers to tell their stories on Facebook and then turned these testimonials into a successful TVcampaign. [click] play [click]Let’s take a deeper look at why marketing organized around people is so powerful on Facebook...Additional data:•Old Spice: 5th most watched YouTube video in 2010 (excl. major label music videos); source: http://www.independent.co.uk/life-style/gadgets-and-tech/mostwatched-youtube-videos-in-2010-bed-intruder-song-old-spice-ok-go-2160091.html•After being put on YouTube, the commercials became viral, with the most popular one amassing nearly 24 million views sincethe beginning of February. (source: MSNBC)•Toyota: 10,589 videos were uploaded to fb (source: saatchi)
Fans are just the beginning. There are many benefits to having fans. You can learn from them and build deeper relationships.However, when you launch a marketing campaign, you typically have goals like announcing a new product, running apromotion to drive sales or trying to build awareness. Just engaging your fans with this message and the small amount ofbuzz that this may generate is not enough.
These Ads are so much more powerful because when someone see’s an Ad with their friend in it, it draws their attention andgive the message credibility. Ads with friends give brands the benefits of earned, at the scale of paid. [click]This is the NEW word of mouth and it’s marketing that is twice as effective at driving brand results.
When you activate your community through this new word of mouth, you can achieve amazing business results. Let’s seewhat this looks like in action.
As we said, connecting to people is just the beginning, when you leverage those relationships amazing things can happen.[Click]Our partners are achieving real business results every day with the help of their fans. For example, Levi’s Facebook campaignsdrove 4X the number of people expected into stores and doubled amount of online traffic.In a recent Facebook advertising campaign, alcoholic beverage maker Diageo proved that Facebook does drive real businessresults. As a result of its Facebook ad campaigns, the company drove a 5x increase across Diageo aggregate sales, meaning for every $1 they spend on FB ads, they got $5 back in sales (according to a Nielsen Homescan study).
Leading up to the 2010 World Cup, Nike ran Facebook ad campaigns in 20 countries to raise awareness of its “Write theFuture” film and engage with consumers. The campaign began with a two-day run of highly targeted Premium Event Adsinviting “football obsessed teens” to RSVP to watch “Write the Future” on Facebook on May 20. With the video airing broadlyon May 22, Nike followed up with a reach block, delivering Premium ads to 100% of Facebook users in a 24-hour period. Thesecampaigns helped make this video the #1 viral video in its debut week [according to Visible Measures], drove 169 M organicNews Feed and Profile Feed stories, 9.4 M engagements with ads, videos and other content, and 38% ad recall [#s still beingverified].Nike also received 2x as many mentions as the World Cup sponsor during the World Cup campaign… when Adidas was asponsor of world cup. [mentioned refers to mentions on the FB platform - wall posts, status updates, etc.
State of Facebook - SMW 02/2011
State of Facebook:Reorganizing Around PeopleFebruary 10, 2011<br />
Facebook users around the world<br />149 million+ active users<br />70% return daily<br />22 million+ active users<br />65% return daily<br />13 million+ active users<br />58% return daily<br />29 million+ active users<br />68% return daily<br />19 million+ active users<br />65% return daily<br />17 million active users<br />67% return daily<br />17 million active users<br />68% return daily<br />10 million+ active users<br />66% return daily<br />4 million+ active users<br />71% return daily<br />Source: Facebook internal data, Worldwide, January 2011<br />
Worldwide engagement<br />Daily<br />Source: Worldwide comScore July 2010 & Facebook Internal Data, November 2010<br />
U.S. demographic breakdown<br />Gender<br />Age<br />Source: Facebook internal data, January 2011<br />
Give people the power to share and make the world more open and connected.<br />11<br />
The web is<br />reorganizing<br />around people<br />Businesses are<br />reorganizing<br />around people<br />Reorganizing<br />around people<br />delivers results<br />12<br />
The web is being rebuilt around people <br />13<br />Search<br />Discover<br />Browse<br />90’s<br />10’s<br />00’s<br />
Industries are transforming by reorganizing around people<br />14<br />
This is all happening in an age of rapid technology innovation <br />Incumbent<br />Entrants<br />iPad, iPhone<br />iTouch, iTunes<br />Social graph, credits,<br />real-time communications<br />Android, Chrome,<br />Youtube, web Apps<br />Social gaming,<br />virtual goods, offers<br />Kindle, electronics &<br />general merch<br />Social group buying<br />Motion sensors in<br />gaming inputs<br />Location-awaremobile services<br />15<br />
These social experiences are following us throughout our lives <br />TV<br />Car<br />Phone<br />iPad<br />16<br />
The web is<br />reorganizing<br />around people<br />Businesses are<br />reorganizing<br />around people<br />Reorganizing<br />around people<br />delivers results<br />17<br />
Businesses are reorganizing around people<br />Product Development<br />Customer Service<br />Customer Insight<br />“…technology-enabled<br />collaboration with<br />external stakeholders<br />helps organizations gain<br />market share from the competition ”<br />- McKinsey & Co<br />Marketing<br />18<br />
Product development is beingreorganized around people<br />19<br />
Customer service is beingreorganized around people<br />20<br />
Customer insights are beingreorganized around people<br />21<br />
Marketing is beingreorganized around people<br />22<br />
Fans are just the beginning<br />brand<br />fan<br />23<br />
Facebook population<br />Fan base<br />Fans are more valuable whenthey impact their friends<br />My friend likes this brand<br />Friends of fans<br />500K fans<br />Ads with friends<br />US data<br />60M friends<br />24<br />
This is the NEW word of mouth -it is twice as effective<br />160%<br />lift in brand recall<br />VS<br />200% lift in message awareness<br />Erik Bahr, Tom Arrix and<br />14 other friends like Budweiser<br />400%<br />lift in purchase intent<br />25<br />
The web is<br />reorganizing<br />around people<br />Businesses are<br />reorganizing<br />around people<br />Reorganizing<br />around people<br />delivers results<br />26<br />
A focus on people delivers the results brands care about<br />+12%<br />+9M<br />awareness<br />5X<br />recommendation<br />2X<br />preference<br />4Xoffline2X online<br />27<br />intent<br />+7%<br />ROI<br />foot traffic<br />
2x#of mentionsover World Cup sponsor<br />28<br />
The web organized around people creates new opportunities<br />Businesses are transforming how they relate to people and operate<br />Companies recognizing this shift are gaining strategic advantage<br />