Booz & Company and Buddy Media conducted a study in 2011 on how leading companies are transforming their strategies, skills, and processes to leverage social media in their marketing efforts and businesses overall. The study found that while most companies are still experimenting with social media campaigns, leading companies are focusing on building capabilities in community management, content development, and real-time analytics. These capabilities allow companies to engage customers on social media, provide relevant content, and gain insights from social interactions. The study also found that marketing is playing a central role in most companies' social media strategies and efforts.

1. Perspective Christopher Vollmer
Karen Premo
From Campaigns
to Capabilities
The Impact of
Social Media on
Marketing and Beyond

2. Contact Information
New York
Christopher Vollmer
Partner
+1-212-551-6794
christopher.vollmer@booz.com
Karen Premo
Principal
+1-212-551-6683
karen.premo@booz.com
Booz & Company

3. EXECUTIVE Booz & Company and Buddy Media, the social enterprise
software leader, teamed up in 2011 to identify the capabili-
SUMMARY
ties that companies need to excel in social media. This study,
Campaigns to Capabilities: Social Media and Marketing
2011, incorporated a quantitative survey of 117 leading com-
panies and a series of in-depth interviews with senior execu-
tives from across the marketing and media ecosystem. The
study focused on how leading companies are transforming
their strategies, skills, and processes to enable social media
to play an expanding role in their marketing efforts and in
their enterprises as a whole. Unlike much of the research to
date, which has focused on the tactics that companies are
pursuing in social media, the Booz & Company/Buddy Media
study concentrated exclusively on the capability priorities
associated with social media, and the focused actions com-
panies need to take as their social and digital media activities
increase in scale. As more companies refine their use of social
media, it will dramatically transform how they connect their
brands with consumers, and how they define and build their
marketing capabilities.
Booz & Company 1

4. BURBERRY: A creativity that ensures its designs are
timeless, yet contemporary. Now
views and about 30,000 subscribers
as of February 2012). Partnering with
SOCIAL MEDIA there is a new defining element to Twitter, Burberry also created the
SUCCESS STORY Burberry’s success: the creation and
distribution of branded digital and
“Tweetwalk,” an innovative, real-time
social media experience where every
social media experiences. fashion show element was tweeted
before the models hit the runway.
Just look at how dramatically This gave Burberry’s Twitter followers
Burberry has reimagined its fashion (773,000 as of February 2012)
shows—once elite, exclusive, and unique “see it first” access ahead of
Burberry Group has a rich heritage effectively off-limits to the brand’s everyone including Vogue editor Anna
that would make many companies many fans—for the era of social Wintour. By leveraging the scale and
envious. Founded 156 years ago, media. In 2011, Burberry streamed a engagement of Facebook, Twitter, and
this global purveyor of luxury live video feed of its spring/summer YouTube, Burberry has effectively
apparel has long been defined by an and fall/winter shows, distributing its reinvented its fashion shows as
overt Britishness, a trio of instantly content directly to fans on Facebook content-rich social experiences that
recognizable icons (the trench (10.7 million as of February 2012) now engage millions of fans and
coat, the trademark check, and the and to video viewers on Google’s interested consumers, rather than just
“Prorsum” knight logo), and a deft YouTube (11.0 million unique video a few insiders.
A new defining element to
Burberry’s success is the creation
and distribution of branded digital
and social media experiences.
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5. The ability to tell stories directly to development, and real-time analytics and start, command and control”
consumers via social media is also has enabled the company to develop model of brand management is
reshaping how Burberry launches powerful, direct, and multiplatform morphing into a decidedly more
new products. When its fragrance connections with consumers who dynamic marketing model. It is
Body debuted in the fall of 2011, want to engage with the brand. always on. It is iterative. It is content-
Burberry’s Facebook fans were invited For Burberry, this strategic focus and people-intensive. It is social by
to a “fan-first” sampling promotion on marketing innovation has been design: focused on participation and
that generated more than 225,000 transformative. “Burberry is now activation, not just awareness and
requests in the first week alone. The as much a media-content company consideration. And as Burberry’s
Body video campaign, starring actress as we are a design company,” says example illustrates, this new model
Rosie Huntington-Whiteley and creative director Christopher Bailey. requires very different capabilities
shot by famed fashion photographer In short, Burberry has been successful from those that most companies
Mario Testino, premiered not on in social media because it rapidly put possess today.
broadcast TV but on Burberry.com in place a new and distinctive set of
and the brand’s YouTube channel, capabilities to support the digitization In Campaigns to Capabilities: Social
further supported by a launch day of its brand and the consumer Media and Marketing 2011, three
“takeover” of YouTube’s homepage experience around it. major capabilities come to the fore:
in 13 countries. Consumers could also community management, content
buy the scent with a simple click on Looking at Burberry’s moves—and development, and real-time analytics.
the Burberry Facebook Body tab; in those of other innovators like Audi, For companies in all sectors, the
this way, the brand closed the loop Coca-Cola, Diageo, Nike, Procter evolution of these capabilities,
with its community of fans, taking & Gamble, and Starwood Hotels & concentrated around the “big three”
them on the digital path to purchase. Resorts Worldwide—it is clear that social media platforms of Facebook,
social media, in just a few years, has Twitter, and YouTube, represents
What makes Burberry so successful in affected not just how decisions about a major opportunity to generate
social media? The deliberate building the media mix are being made, but business value by building powerful,
of specific capabilities around how brand marketing itself is being lasting relationships with consumers
community management, content prosecuted. The traditional “stop through digital communities.
Booz & Company 3

6. are the tools available to make it most influential medium,” says Ajaz
THE GROWTH OF happen: social media platforms such Ahmed, chairman and founder of
SOCIAL MEDIA as Facebook (850 million users), AKQA, one of the world’s leading
Twitter (300 million users), and digital advertising agencies. “Social
YouTube (where 100 million people networks are now the operating sys-
interact with one another by liking, tems for consumers’ lives. They have
sharing, or commenting on videos rapidly become indispensable.”
every week). Through social media,
companies can connect with consum- Many companies are naturally
Recommendations. Referrals. Buzz. ers directly at a global, national, or attracted by the promise of a large-
Marketers have long known that local level, expanding their reach scale media offering that aggregates
consumers value the recommenda- through a few well-designed moves or self-selected consumers—eager to
tions of a trusted friend or expert targeting specific groups of consumers share stories, content, and recom-
more than any form of advertising. based on more defined communities mendations about brands and
Since the emergence of social diffu- of interest. products—and enables the targeting
sion theory in the 1950s, marketers of these consumers based on actual
have sought to harness the power of The growth of social media among preferences and behaviors. Marketers
social networks and word of mouth consumers since Facebook’s launch in have responded by increasing their
to influence consumers’ decisions 2004 has been explosive. Consumers participation in social media, most
about what they like and what they now spend most of their digital time typically via a dedicated presence
purchase. The importance of social there. According to Nielsen, social such as a fan page, a newsfeed, or a
marketing is continually confirmed by media and blogs account for 23 per- branded channel and by incorporat-
research—most recently by Nielsen’s cent of all consumer activity online. ing social media elements into their
Global Online Consumer Survey, This is more than twice as much marketing campaigns. According to
which showed that 90 percent of con- as the next largest category, online eMarketer, 80 percent of companies
sumers trust recommendations from games, where consumers spend only are using some kind of social media
people they know. Nielsen found that about 10 percent of their time. Social platform or tool in their marketing
this social recommendation factor in media is becoming the hub of all today, nearly double the percentage
fact tops all other media sources and digital activity: as the starting point in 2008. Advertising on social media
advertising formats, including TV (62 for engaging with family, friends, and has grown 40 percent per year from
percent), newspapers (61 percent), acquaintances, and beyond that, as a 2008 to 2011, and now represents
and magazines (59 percent). way to discover content and connect US$5.5 billion in global advertising
with brands. Whether it’s a hot article spending, according to eMarketer.
Marketers have, however, histori- to read, a must-see video, or a brand This amount also represents only a
cally lacked the key ingredient for they adore, consumers look for it on fraction of marketers’ total social
social word of mouth to be a bigger Facebook, Twitter, or YouTube. media investment, as it generally does
part of their playbooks. They cannot not include the greater expense associ-
generate it at a scale comparable to “Digital technology has become ated with developing and maintaining
conventional mass media. Only now the most important, fastest, and a branded social media presence.
“Social networks are now the
operating systems for consumers’
lives. They have rapidly become
indispensable.”
4 Booz & Company

7. CAMPAIGNS spending to social media. Today,
Fortune 500 companies spend only
• Social media is a CEO agenda item
for 40 percent of the responding
TO CAPABILITIES a fraction of their digital marketing companies.
budget, which itself averages 15 to
20 percent of total marketing spend, • Social media is a top marketing
on social media. For example, 89 priority for 2012 for about 60
percent of respondents to the percent of the respondents.
Booz & Company/Buddy Media
Most companies to date have study spend less than 10 percent • 64 percent of companies have a
focused their social media efforts on of their digital marketing budgets dedicated team for social media.
Facebook, Twitter, and YouTube, on social media. The reality is
rather than on a broad range of social that though there have been some • 78 percent of companies believe
networks, blogs, and location-based high-profile campaigns—Coca- social media efforts enhance their
services. The dominance of these Cola’s Expedition 206, Nike’s marketing effectiveness.
“big three” platforms, especially Write the Future, and P&G’s Old
Facebook, is confirmed by the Spice Responses, for example—and • 95 percent of companies expect to
Booz & Company/Buddy Media there are some early leaders like invest more in social media.
research. Ninety-four percent of Burberry, most companies are still
respondents regard Facebook as at the early stages in terms of their • 96 percent of companies are devel-
one of their top three social media social media efforts. Our Campaigns oping a specific strategy for social
platform priorities. Seventy-seven to Capabilities study revealed that media.
percent include Twitter in this group. companies recognize the need to
And 42 percent say YouTube belongs expand their social and digital The leading companies are shifting
here too. marketing efforts significantly, and their focus from campaigns—exper-
many are taking concrete steps to do iments, tactics, or one-off efforts
Even as their investments grow, most so. Relevant findings from the that are challenging to replicate—to
companies have yet to allocate a Booz & Company/Buddy Media capabilities that enable them to more
significant amount of their marketing study include the following: reliably and consistently deliver a
Booz & Company 5

8. distinctive outcome, relevant to their target consumers, and in real-time sions that competitors cannot catch
business, through the right combina- insights to analyze consumer behavior up. To accomplish this, companies
tion of processes, tools, knowledge, and measure impact (see Exhibit 1). must actively transform their key
skills, and organization. Specifically, business functions. This transforma-
success in social media requires com- Leading companies are not just tion typically begins with marketing
panies to develop deep capabilities building these capabilities, but also but will ultimately expand to include
in new areas: in community manage- investing to make them distinctive: so customer service, consumer insight,
ment to grow and activate audiences, ingrained, proficient, and individually sales, and even product development.
in content development to engage tailored to their strategies and mis-
Exhibit 1
A Capabilities System for Social Media Success
Primary Capabilities
1. Community Management: Monitoring, engaging, servicing,
and activating a social media presence and fan base
1. Community
Management 2. Content Development: Creation and sourcing of brand-
and audience-relevant content
3. Real-Time Analytics: Ability to analyze and interpret social
media activity as it happens
c. Consumer a. Engagement
Insights Optimization
Supporting Capabilities
a. Engagement Optimization: Design and execution of the social
media experience to drive participation and activation
2. Content b. Content Management: Tracking, cataloging, storage, and serving
3. Real-Time
Development of content assets of all types
Analytics
c. Consumer Insights: Understanding of drivers of community
b. Content behavior and interest
Management
Source: Booz & Company
6 Booz & Company

9. MARKETING: the periphery to the center of most
marketing agendas.
An even more fundamental develop-
ment is the influence of social media on
THE FOCAL the marketing function itself at many
POINT FOR Marketers are owning the social media
agenda because in most companies they
companies. The adoption of social
media by companies is in fact changing
SOCIAL MEDIA own the brand or product positioning, the practice of marketing from one of
INNOVATION the market-facing value proposition,
and the composition of the marketing
“brand management,” where cam-
paigns are tightly controlled by brand
mix. They are also the executives most executives and dominated by paid
likely to be in the flow of consumer media, to one of “brand curation,”
conversations and insights. For many where campaigns are designed by mar-
brand-focused marketers, social media keters and characterized by a seemingly
Though social media may be used sits tantalizingly high on top of the less orchestrated and linked mashup of
broadly across an enterprise, it is the purchase funnel—in contrast to other paid, earned, owned, and shared media
marketers who effectively “own social” forms of digital advertising, such as (see Exhibit 2). This new model is also
in 81 percent of the companies that the search and display banners that more dynamic, real-time, and itera-
participated in the Booz & Company/ are more often associated with direct tive. Its core tenets are engagement,
Buddy Media study. Today, advertis- response marketing. In discussions with participation, and advocacy. It connects
ing is the dominant use case for social Booz & Company for this study, many brands directly to consumers, and also
media, with 96 percent of companies senior marketers who have not spent enables brands to connect consumers
using social media to support advertis- significantly on digital to date stressed to one another. Mark Parker, Nike’s
ing objectives. Significantly, companies that they are looking at social media CEO, described the positive impact of
are also prioritizing the integration of as more of a branding tool because of this new model on his business on a
social media into their overall market- its interactive nature and its ability to recent earnings call: “Social network-
ing efforts, rather than developing forge relationships between consumers ing and digital communication is
islands of specialized expertise. For and brands. Thus, when asked where helping us unify and expand the family
example, 65 percent of companies are they see the most benefit from social of sport. We’ve never been closer to
actively planning to integrate social media, 90 percent of respondents consumers as they continue to extend
media into all of their advertising and said “brand building,” 88 percent their reach and connect even more with
marketing activities—an important cited “buzz building,” and 81 percent each other, with their sports heroes and
sign that social media is moving from replied “consumer insights.” their favorite teams.”
Exhibit 2
Brand Management Moving to Brand Curation
Traditional Marketing Model New Marketing Model
Anchored around awareness Anchored around participation and activating fans
Focused on procuring paid media Focused on integrating paid, earned, owned and shared media
Emphasis on being in control of media messaging Emphasis on conversation and relationship value
Digital expertise anchored in specialists and COEs Brand managers are “universal soldiers” with digital expertise
Fixed, turn on/turn off, and long lead times Dynamic, always on, and iterative
Source: Booz & Company
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10. NEW Everyone knows that a key ingredient is a party and you’re the host. There
for a great dinner party is a switched- might be someone in the corner—be
CAPABILITIES on host who curates a fabulous mix of generous and gracious and invite him
REQUIRE NEW guests, stimulates lively and interesting in. There are stars who will flit in and
conversation, and graciously attends to leave. The whole point is to get people
MIND-SETS a variety of needs throughout the eve- together.”
ning. Terrific food, drink, and activities
enable people to connect, engage, and As anyone who has hosted a successful
linger. The host knows how to read dinner party knows, it takes planning,
the room, “analyze” the party in real effort, and care to create an appealing
time, and make rapid adjustments to social environment—a place where
improve it—a quick tweak to the seat- guests feel welcome and where they
ing chart, a personal introduction to comfortably engage in rich, interesting
ensure the right contact is made, or a conversations, sharing thoughts and
subtle change to the playlist to enhance views with friends, old and new. The
the evening’s ambience. All of this best hosts make it appear effortless, but
makes guests eager to return. they privately acknowledge how much
work it takes. As companies seek to
The ingredients of a successful dinner expand and strengthen the impact of
party—including the central role of their social media efforts, marketers are
the host—is a perfect metaphor for the learning to play the role of the “host”
skills and mind-sets that companies with increasing levels of sophistica-
need to build a distinctive social media tion. For the vast majority of them, it
capability. As one brand manager from requires building new capabilities that
a major cosmetics company puts it, have not been part of their traditional
“You have to realize that social media tool kit.
8 Booz & Company

11. CAPABILITY critical to ensuring that a brand’s
social media community is healthy,
• Curating: overseeing the editorial
experience; stimulating meaningful
PRIORITY 1: active, and growing. Furthermore, discussion; making content and
COMMUNITY once visitors become fans, companies
have the responsibility to listen to
conversation discoverable and
interesting; ensuring that the
MANAGEMENT them and reward their behavior brand’s voice and presence are
with an “always on” social media coherent and authentic
experience that is responsive,
interesting, and attentive. If not, • Responding: providing service to
companies may face disappointment the community; helping to resolve
and disfavor from many of their issues, questions, and problems;
most valued consumers. Companies connecting to advocates and
At most large companies, the also need to ensure that their social opinion leaders; creating emotional
cutting edge of marketing can be communities expand in directions connections with fans
found in social media communities that are coherent with their business
today. As companies begin building goals. For all of these reasons, strong • Measuring: analyzing fans’
brands via Facebook pages, Twitter community management has become activities and community behaviors;
feeds, YouTube channels, and even imperative for social media success. tracking effectiveness of campaigns
Google+ circles, they realize quickly against business and brand
that establishing a social media Most marketers know how to manage objectives; assessing community
presence is only the beginning. brands, not real-time communities. vibrancy, sentiment, and growth
It’s the equivalent of sending the The skills required for community
invitations to a dinner party. Thus, management stretch well beyond those • Innovating: anticipating what
community management—the art associated with traditional brand is next for a brand’s fan base in
and science of convening and hosting management. There are five core new content, tools, and social
fans in social media—has become a proficiencies: or digital media experiences (for
vitally important new capability for example, mobile, apps, and niche
companies and their marketers. • Listening: understanding what communities)
fans in the community are saying;
Community management involves identifying hot topics, what fans Not surprisingly, these new require-
engaging, monitoring, servicing, and are doing and sharing, and why; ments and their vital importance
activating a company’s social media creating a two-way feedback loop concern many companies. About 50
fan base across multiple social media that drives consumer insights percent of the survey respondents
platforms. This discipline has become said the lack of sufficient community
The skills required for community
management stretch well beyond
those associated with traditional
brand management.
Booz & Company 9

12. management resources in their orga- Community management is a described the ideal job spec this way:
nizations represents a major barrier to dynamic, complex, and people- “The guy who runs Facebook for us is
social media success (see Exhibit 3). intensive function, one that cannot be an über-fan. That’s the kind of person
Furthermore, their top concern around outsourced lightly. Senior executives you need.”
social media is the labor-intensity of recognize that community manage-
community management: 61 percent ment is central to social media success Successful community management
of the respondents expressed concern, and that they need dedicated in-house also requires a fusion of technical and
compared to only 13 percent who are expertise to make it happen sustain- creative expertise. Campaign updates
focused on social media’s overall cost. ably. Already, among the companies (such as stories, pictures, news,
Despite the meteoric growth of social surveyed by Booz & Company and videos, slide shows, and polls) must
media platforms, many companies Buddy Media that have their own ded- be drafted, scheduled, and posted
are still not fully comfortable with icated social media staffs, two-thirds with an awareness of engagement
the digital megaphone inherent in this have internal resources dedicated spe- and sharing potential. Conversations
medium; 58 percent are concerned cifically to community management. must be initiated. Fan responses
with negative word of mouth or PR, must be addressed. Multiple social
and 55 percent worry that they are Part brand champion, part chief media platforms—Facebook, Twitter,
losing control of their brand messages. listener, part Superfan, and always YouTube, company blogs, etc.—must
“mission control,” the community be managed with content sourced
“You have to be on 24/7,” noted a management professional brings a and tailored for each. Throughout
senior executive with a major apparel variety of skills to bear. Executives in all of this, campaign analytics and
brand. “You have to respond to community management need to be metrics must be reviewed and assessed
customers all the time. Issues escalate experts on their brands, audiences, to determine what is resonating and
so fast, you can be held hostage by and communities. They know them what is not, and community managers
someone in social media.” inside and out. A senior executive must make decisions on the fly to
with a major entertainment company continually enhance the community
Exhibit 3
Top Five Organizational Challenges for Social Media
PERCENTAGE OF SURVEY RESPONDENTS INDICATING THIS WAS A SIGNIFICANT
OR VERY SIGNIFICANT CHALLENGE
57%
52% 51%
48%
43%
Not Enough Insufficient Resources Lack of Difficulty of Not Core to
Cross-Departmental Dedicated to Understanding Among Proving ROI Overall Strategy
Collaboration Community Management Senior Leaders
Source: Booz & Company/Buddy Media Campaigns to Capabilities: Social Media and Marketing 2011 survey results
10 Booz & Company

13. experience and ensure that it is
connected to the brand’s objectives. Starwood: Where Social Means More Than Marketing
Even before the term “social media” was coined, Starwood Hotels
In addition to the technical and
& Resorts had a dedicated professional in the field. “He was called
creative requirements, community
the ‘Lurker,’” says Alyssa Waxenberg, the senior director of emerging
management must have a
platforms for the hotel chain. “He was on our customer service team,
demonstrable “human touch” that is
and he would engage our customers on travel forums like FlyerTalk. He
recognized as genuine and authentic
answered questions, resolved issues, and showed us complaints that
by the fans. There is no substitute
he came across online. He became something of a mini-celebrity in the
for strong person-to-person skills.
hotel industry and a real champion of our guests.”
Community managers will field
questions touching on all parts of Starwood’s Lurker was only an introduction to the impact of social
a business and therefore need to be media; it did not take long for senior management to catch on to the
well networked and empowered to value of this form of marketing. The owner of such major brands as
move across departments to respond Westin, St. Regis, Sheraton, and W, Starwood uses social media to get
effectively. Fifty-seven percent of in front of current and potential customers with information, offers, and
the survey respondents reported personalized experiences intended to surprise and delight guests—and
that insufficient cross-departmental to cement their loyalty to the company’s brands. “We are leveraging
collaboration is a major obstacle to social media in all we do,” says Waxenberg. “We have Facebook tabs,
social media success. In interviews Facebook walls, Twitter channels, and Foursquare tie-ins with our loyalty
conducted for this study, executives program. All of these enable us to broaden our reach, follow up in real
repeatedly stressed the need for “great time, and stay engaged with our guests,” she says.
conversationalists”—extroverts
who enjoy interacting with others But social media is not strictly seen as an advertising vehicle. “You can’t
and who are comfortable in a fluid, confine social media to the marketing department,” says Waxenberg.
spontaneous, and often unpredictable Perhaps the greatest change it has made for Starwood is in customer
environment. This new kind of service. “It’s very easy now for people staying in one of our hotels to
marketing talent, like that great post a comment on one of our Facebook pages or tweet something. We
dinner party host, must also be able can address that guest’s concern or compliment immediately while they
to process data quickly and make are staying with us. This digital approach to delivering a great service
decisions fast. Ninety-four percent experience has become differentiating for our business. And now we
of the responding executives stressed can do it faster and make it more personalized than ever.”
that the “ability to adapt and react
To make this happen consistently, Starwood has developed a networked
quickly” is the single most critical
approach to social media. A dedicated team within customer service
success factor in social media.
monitors social media channels in real time. This team connects directly
to social media champions at individual hotels, along with the loyalty
Many companies are on the hunt to
and marketing teams and other central departments. These connections
recruit managerial talent that can
are critical for rapid response. If someone posts, “Hooray, we’re going
support high-quality, high-impact
to the Westin in Maui for our 25th anniversary,” the team can reach out
community management. About 60
to that hotel and let them know to make that couple’s milestone an
percent of those investing in social
experience that is truly memorable, personal, and special—from a hotel
media are expanding their community
they will most likely recommend to others.
management resources through
additional hiring. Recognizing these
new and fast-changing requirements,
many companies are seeking
community management talent
outside the boundaries of traditional
brand marketing, in areas such as
journalism, direct marketing, event
planning, and public relations.
Booz & Company 11

14. CAPABILITY Like a party without the requisite For many companies, developing a
food or drink, a social media robust social media content develop-
PRIORITY 2: community without relevant content ment capability requires a complete
CONTENT can quickly become a stale, empty reboot of their approach to develop-
room. As a major wireless executive ing communications and campaigns.
DEVELOPMENT explained, “We have to constantly “Old-time brand managers only did
think about having the right content. TV,” said a major beverage marketer.
Facebook penalizes you if people “Now brand managers have to think
aren’t clicking—it forces you to about social in everything they do.
deliver something engaging.” Do they have sufficient content they
can share with their community?
A social media community without
relevant content can quickly
become a stale, empty room.
12 Booz & Company

15. They are trying many new things manager Arsène Wenger. The aspiring opportunity to compete at the most
in order to have content to share— athletes were encouraged to enter elite levels. Social media allowed
events, contests, videos—with their the competition by uploading their Nike to take that insight global,
communities.” “moment of glory” to Facebook, to transforming it into a compelling
promote themselves with videos and digital media experience for mil-
A powerful example of the impact photos, and to build a fan following. lions. AKQA’s Ahmed describes
of social media on brand storytelling Nike then used invitation-only the strategy behind “The Chance”:
is Nike’s “The Chance,” a global training events in 32 cities around the “There was no better way to tell the
Facebook- and YouTube-centric world to select 100 global finalists ‘Just Do It’ story than by empower-
competition developed by its agency who were chosen to compete for ing people to become better foot-
AKQA. Over an eight-month period, eight professional contracts under the ballers and rewarding the very best
75,000 young, undiscovered soccer eyes of Premier League scouts at the with a contract. Without the digital
players from 41 countries took Chance Final Trials in London. and social revolution, an idea like
“the chance” to compete for a life- this would have never been possible.
changing soccer contract with the Nike and AKQA zeroed in on the This campaign was seen by millions,
Nike Academy. Millions of Nike consumer insight that is true in every influenced tens of thousands, and has
fans followed the competition, which competitive sport: Young athletes changed the lives of many.” Indeed,
kicked off with a call to action want to prove themselves, they want 5.5 million fans actually pledged
on Facebook from famed Arsenal to be discovered, and they want the their support to various participants
Booz & Company 13

16. during “The Chance,” and millions Twitter, that means immediacy. the company’s relatively low empha-
more viewed various Nike- and With Facebook, it means making a sis on social media. “The celebrities
player-produced videos on Facebook creative, inspiring, and useful con- in these ads are looking to preserve a
and YouTube over the course of the tribution to the community.” Unlike certain mystique. They can’t do that
campaign. traditional advertising content, where in social, so it just doesn’t work.” In
the goal is often awareness or brand contrast, Nike’s social media con-
The story of “The Chance” highlights recall, the focus in social media is on tent is participatory, authentic, and
how brand storytelling and adver- content that stimulates real conversa- relevant, all by design. That’s the
tising need to be designed to take tions and gets the consumer moti- decisive difference.
advantage of the unique dynamics of vated to be involved and connected in
social media. “The most compelling the storytelling itself and in spreading Content is the glue in social media.
stories,” says Ahmed, “are told by it around. It creates the “sticky” social value
brands that use the inherent proper- and connection between a brand and
ties of social media to do something “We do a lot of magazine ads,” says its fan community. To be effective,
you cannot do in other media. With a major apparel retailer, explaining marketers need to become digital
The focus in social media is on content
that stimulates real conversations and
gets the consumer motivated to be
involved and connected.
14 Booz & Company

17. publishers, competing aggressively expanding range of creative resources is effectively a “prime time,” both
for consumers’ attention, engage- to accomplish all this. These include in time of day and day of the week,
ment, and loyalty with high-value external entertainment companies, when the engagement rate with
content just as media companies do. creative agencies, digital publishers, consumers is noticeably higher. For
Leading social media teams are there- independent producers, PR firms, example, consumer engagement for
fore taking steps to build publisher- and even their own internal creative auto-related social media content
like capabilities. They are rigorously resources. spikes on Sundays, when consumers
prioritizing content topics that will are researching cars and planning
resonate with their communities and Media executives have always showroom visits. The design of social
that align to their overall marketing understood that it matters how many media content and posts also matters.
and promotional programs. They consumers watch, read, or listen A random sample of users on Buddy
are developing “editorial calendars” to their content. Marketing execu- Media platforms in the fall of 2011
to emphasize specific storylines and tives should have the same mind-set showed that social media content
story types, and ensure a steady as they expand their social media with a clear “call to action”—either
stream month by month, week by efforts. As platforms like Facebook, online or offline—drove 30 percent
week, and hour by hour. They are Twitter, and YouTube become more more activation than more static, less
optimizing content for discovery and crowded, thoughtful distribution— action-oriented posts.
sharing—even elevating their brands including scheduling, packaging,
to act as trusted “filters” that aggre- and placement—is increasingly Finally, though many consumers
gate the most brand- and audience- important for breaking through the may “like” a brand, few brands are
relevant third-party articles and links. conversation clutter. Buddy Media’s in a position where they can attract
Finally, brands are working with an own research has shown that there a sizable, regular audience to their
Booz & Company 15

18. branded social media sites. The most these realities, companies must excel aggressively upgrade and expand
valuable real estate for a marketer is at developing brand-relevant con- their content development talent.
actually the newsfeeds of its brand’s tent that drives posting and sharing. The Booz & Company/Buddy Media
fans. On Facebook, according to Furthermore, by creating shared survey found that among companies
the digital measurement and busi- content, companies also increase their with dedicated social media staffs,
ness analytics provider ComScore, marketing productivity; they achieve 49 percent have dedicated in-house
consumers spend 27 percent of their a “multiplier effect,” whereby mes- creative talent. Another 35 percent
time—more than for any other single sages connect not just with fans, but are actively building their content
category—on their own homepage with a potentially much larger group teams. Among those planning to hire
or newsfeed. They are also at least of friends of fans as well. social media talent within a year,
40 times more likely to consume 72 percent are prioritizing creative
branded content in that newsfeed For all of these reasons, many resources—producers and editors—
than to visit the brand’s page. Given marketers say they plan to above all other needs.
Among companies planning to hire
social media talent within a year,
72 percent are prioritizing creative
resources above all other needs.
16 Booz & Company

19. CAPABILITY Marketers increasingly need real-
time insight into their audiences and
• Level 2: Engagement. Marketers
have moved beyond counting fans.
PRIORITY 3: the impact of their content to know They have insight into the activities
REAL-TIME whether their social media efforts
are on target or off the mark. How
in their communities. They analyze
the drivers of participation and
ANALYTICS much content is being shared and by amplification, studying the patterns
whom? Which social platforms are in comments, likes, shares, and
getting more traffic and engagement take rates.
than others? How are brand influenc-
ers and advocates behaving? What is • Level 3: Advocacy. Marketers can
the community saying about a brand? identify and encourage user behav-
And what actions are fans taking? iors that are associated with brand
Robust, well-structured social media commitment. These include such
analytics and metrics are fundamental metrics as intent to recommend,
to addressing these important ques- referral and reshare activity, com-
tions, and thus critical for a contem- ments and followers per user, and
porary digital marketing capability. brand favorability, consideration,
and preference.
The Booz & Company/Buddy Media
survey and related interviews indicate • Level 4: Return on Investment.
that there are four levels to a real-time The most sophisticated companies
social media analytics capability, with set out to achieve strategic business
progressively more sophistication: objectives with their social media
analytics. Most companies are still
• Level 1: Reach. Marketers under- not fully at this level. For example,
stand the social scale of their according to the survey, only about
brands. They know how many 40 percent of companies have
fans, followers, subscribers, visi- metrics in place today to measure
tors, and views they have, and how ROI-focused key performance
many discussions are taking place. indicators (KPIs) such as purchase
They have visibility into where, intent, leads generated, conversion
when, and in what context their rates, or actual sales.
brand is being discussed.
Booz & Company 17

20. The survey also confirmed that A few corporate trailblazers are Net Promoter Score (indicating how
marketers are concerned about the demonstrating that social media can likely a customer would be to recom-
quality of their social media metrics drive measurable results and busi- mend Dell to a friend or colleague)
and analytics. Sixty percent of the ness impact—in other words, they are and on the impact of social media
respondents said they are not satis- gaining a lot more than likes. Wendy experiences, including content around
fied in this area. Only 50 percent of Clark, senior vice president for inte- ratings and reviews, on Dell loyalty
companies have social media–focused grated marketing communications and and recommendation value.
KPIs and dashboards in place today; capabilities at Coca-Cola, has shared
another 47 percent are actively build- publicly that the beverage giant’s In addition to measuring business
ing them. Many companies view analytic capability is advanced enough outcomes, social media represents an
“expertise in social media measure- to know that Coke social media fans enormous opportunity for unfiltered,
ment, monitoring, and tracking” as are twice as likely to consume and 10 direct consumer insights into brand-
a core part of the value proposition times more likely to purchase than ing, customer service, and product
associated with third-party vendors, nonfans. In personal computers, Dell development. Fifty-six percent of
such as agencies, software providers, has focused relentlessly on analyzing companies surveyed are already using
media companies, or consultancies. the connection between social media social media to support their market
There is also a tension between the engagement and revenue generated in research and consumer insight activi-
broad goal (expressed by 60 percent physical as well as online stores. Dell’s ties. Eighty-one percent believe that
of respondents) to link social media leaders understand how social media they are capturing helpful consumer
metrics more closely to business out- impacts loyalty, product innovation, insights from social media today. Since
comes, and the more immediate need brand favorability, and even costs 56 percent are investing actively to
(expressed by 90 percent) for social (such as the cost of customer sup- improve the quality and quantity of
media metrics to be tailored to meet port). These insights into business consumer insights from social media,
the objectives of specific individual drivers and outcomes have led Dell to this analytic capability should become
campaigns. concentrate heavily on the health of its even more robust very soon.
Social media represents an
enormous opportunity for insights
into branding, customer service,
and product development.
18 Booz & Company

21. THE MIND- In addition to these three capabilities,
several soft factors—mind-sets—are
gized by uncertainty, who are tech-
and consumer-savvy, but also know
SETS OF SOCIAL equally important to social media and what they don’t know, and know
MEDIA SUCCESS digital marketing. The senior leaders
interviewed for this study repeatedly
how to pursue and test potential
solutions. Most important, they
pointed out that it takes a differ- analyze every experience, they learn
ent personality and a different set of from it, they seek out new sources of
behaviors to be successful now than it input and inspiration, and they keep
did in the traditional “command and moving forward.
control” brand marketing world. Of
course, classic management and brand The Booz & Company/Buddy Media
marketing skills still matter. But when study identified several other soft
a new product announcement from factors that are important to social
Google, Twitter, or Facebook can media success. Ninety-three percent
dramatically change the opportuni- of the respondents said that having
ties available to a marketer over- a clear set of champions and owners
night, companies need more flexible, for social media within the enterprise
dynamic, and entrepreneurial execu- is critical to building strong social
tive talent than ever before. media capabilities. A related element
is support within senior management.
Venky Balakrishnan, global vice Development of capabilities for social
president for marketing innovation at media cannot be perceived as a minor
Diageo, the world’s leading premium initiative for “just the young people”
spirits company, says next-generation in the company. Finally, education
marketers need to be “universal is critical. Today, two-thirds of the
soldiers: learning machines who companies surveyed have dedicated
move fast and who can constantly social media staffs in place, and one-
adapt to new situations, almost like third have an executive assigned to
Navy SEALs.” In an environment lead social media efforts. Nonetheless,
where developments occur quickly, about 50 percent of those surveyed
consumer behavior is dynamic, and said they still need more education
playbooks are rewritten constantly, in their executive ranks about social
companies need talent who are ener- media and its value.
Booz & Company 19

22. MOVING While many companies are still
catching up to their consumers in
Today two-thirds of the surveyed
companies dedicate 5 percent or less
FORWARD social media, the Booz & Company/ of their digital marketing spend to
Buddy Media study shows they are social media. Within three years,
indeed gaining. They are taking this proportion will reverse: 87
important steps to transform percent of these companies expect
their capabilities in community to cross that 5 percent threshold. In
management, content development, fact, 50 percent of the companies
and real-time analytics, and they surveyed expect social media to be
are bringing a more contemporary the fastest-growing portion of their
mix of hard and soft skills to their overall marketing spend. In three
marketing efforts. As this evolution years, 56 percent of companies
continues, they will also be in an expect to spend 10 percent or more
even better position to shift budgets of their digital marketing budgets
accordingly. on social media, with 28 percent
expecting the figure to exceed 20
Survey respondents expect their percent. Not a single respondent
spending on social media activities reported a plan to spend a smaller
to accelerate over the next three percentage of the digital marketing
years, with social media taking budget on social media moving
an expanding share of corporate forward (see Exhibit 4).
expenditures on digital marketing.
ot Core to Exhibit 4
rall Strategy Social Media Spend as a Percentage of Digital Marketing Spend
Today 3 Years from Today
7% 13%
5%
28%
22%
32%
67%
27%
< 5% 5-10% 10-20% > 20%
Note: Numbers may not add up due to rounding.
Source: Booz & Company/Buddy Media Campaigns to Capabilities: Social Media and Marketing 2011 survey results
20 Booz & Company

23. Within social media, where do The money for this investment is longer-term threat it poses to more
companies expect to spend their mostly coming out of existing digital established elements of the media mix.
money? Interestingly, despite budgets. That should be no surprise
the growing amount of clutter to the portals and publishers that Finally, companies are awakening
and crowding in social media have been steadily losing share to to the broader, enterprise-wide
advertising, they do not expect Facebook and YouTube over the last value of social media. Though
to focus on buying advertising 12 months. Only 22 percent of the marketing is the dominant focus
inventory on Facebook, YouTube, survey respondents have created new today, executives recognize that
or Twitter. Instead, they plan to dedicated budgets for social media; social media can significantly
spend more on their own social more than two-thirds are funding enhance how they connect with
media teams. Hiring full-time social media activities out of their suppliers, employees, and customers,
employees is their number one existing digital marketing budgets. as well as consumers. They expect
priority for investment in social While far fewer companies plan to to see executives in customer
media; hiring partners and vendors shift spending from television or service, market research, product
is the number two priority, followed magazines to support their social development, and sales taking a
by creating more content. Media media activities, the mere fact that greater social media leadership role
buys or paid social media is some are doing it highlights the in their companies as they pursue
number four. branding potential that executives digitally driven innovation in these
ascribe to social media and the functions too.
Rather than focus on buying
advertising inventory on sites like
Facebook, companies plan to spend
more on their own social media teams.
Booz & Company 21

24. THE DIGITAL social media and digital marketing company has invested in community
activities now represent 60 percent of management, content development,
FUTURE TODAY its marketing budget. The company and real-time analytics capabilities,
AT HORSEFERRY has managed this by holding its total betting big on the benefits of
marketing spend flat as a percentage leadership in social media.
ROAD of revenue, and strategically reducing
its expenditures on traditional This journey began shortly after
print media. It has also revamped Angela Ahrendts became CEO of
Burberry.com, turning it into a Burberry in 2006. She crafted an
Think back to the Burberry content-driven destination where aggressive plan to turn the company
experience. A venerable company consumers can engage, interact, and around, with digital marketing
and brand engaged in a radical purchase. Burberry has deployed innovation as one of the central
transformation: a strategically “retail theater” technology in its focus areas. Six years later, look at
focused and substantive digital stores to provide shoppers with a the results. Burberry has a Facebook
metamorphosis that goes far beyond rich audiovisual experience, blurring fan base that is larger than that of
slick marketing concepts dressed the line between the physical and all the major U.S. fashion magazines
up in trendy technology. Burberry’s the digital. Along the way, the combined (see Exhibit 5). The fan
Exhibit 5
Facebook Fans: Burberry vs. Major Fashion Magazines, U.S. Versions as of February 2012
10.70
2.17
0.42 0.32 0.14 0.11 0.10
Burberry Vogue Elle InStyle Marie Claire Harper’s Bazaar W
Note: Numbers represent millions of people who “like” each brand’s Facebook page, as of February 2012.
Source: Facebook; Booz & Company
22 Booz & Company

25. base, also active on Twitter, YouTube, statement (appropriately available
and Burberry.com, now constitutes on YouTube), Ahrendts elaborated Resources: Burberry’s
an interconnected, linked, and owned on this point. “You have to create Social Media Ecosystem
media ecosystem. This gives Burberry a social enterprise today,” she said.
The Facebook Burberry
unprecedented opportunities to build “You have to be totally connected
Page (content, community,
its brand, market its products, and with everyone who touches your
commerce): www.facebook.
engage with consumers directly across brand.” The Booz & Company/
com/#!/burberry
channels, platforms, and mediums. Buddy Media study confirms that
Not coincidentally, Burberry has this digital-social transformation Burberry’s YouTube Channel
continued to increase revenue and is occurring not just at Burberry’s (live streaming, campaigns,
strengthen its brand. Most recently, headquarters on Horseferry Road in how-tos): www.youtube.com/
the company announced a 21 percent London, but also in Atlanta, Austin, user/burberry?ob=4
rise in third-quarter 2011 total Beaverton, and many other places
revenue over that of the same period where forward-thinking executives Twitter’s Burberry Feed (live
in 2010, with same-store sales growth lead. For most companies, however, events, real-time news and
of 13 percent over the period. These their social media journey is just updates): twitter.com/#!/
most recent achievements have all beginning. By focusing on developing burberry
occurred during the most turbulent distinctive capabilities in community
Burberry’s own home
global economy since the Great management, content development,
page (content, product
Depression. and real-time analytics, they too
information, commerce):
can not only create rich new social
www.burberry.com
Ahrendts has repeatedly attributed the media experiences for their customers
company’s solid financial performance but, like Burberry, transform their Art of the Trench website
to its investments in digital marketing organizations and unlock market- (user generated and
as well as its innovative design leading performance. professional photographs)
and retail strategies. In a video artofthetrench.com
Booz & Company 23

26. L’Oréal: Developing Social Media Mind-Sets and Skill Sets Survey Methodology
“I’m an evangelist,” says Rachel Weiss, assistant vice president for In 2011, Booz & Company and
digital strategy and interactive marketing at L’Oréal. “Social media is Buddy Media surveyed 117
not just a new marketing tool; it’s so much more. It’s a fundamentally companies across a broad
different operating mind-set.” range of industries. The online
survey addressed social
As Weiss points out, getting social media channels up and running
media platform priorities,
is only the starting point for marketers who want to develop this
use cases, benefits and key
capability. From there, identifying the right talent to run these channels
success factors, challenges
and cultivating a social media–friendly mind-set inside the company
and concerns, resource
are key to success. “You have to embark on a campaign of constant
requirements, organization
education internally, not just with your digital teams, but across the
needs, spending trends, and
organization—executives and marketers and HR professionals and
metrics. Booz & Company and
consumer insights.” She explicitly sets out to demonstrate for these
Buddy Media supplemented
colleagues the power and reach of social media and how it can be
this quantitative survey with a
used to transform consumer relationships.
series of in-depth executive
Weiss has pursued multiple strategies for building traction for social interviews focused on the
media across L’Oréal. “I’ve found that reverse mentoring works very capability priorities, key areas
well,” she says. “If you have a social media evangelist sit down with for investment, evolving role
an executive to show her how Twitter works, what she can do on of partners, and major issues
Facebook—if you can get her engaging in a real hands-on experience related to organization, talent,
with consumers on these digital platforms, that’s a great start.” and metrics that companies
She also recommends drawing attention to the size of social media are confronting vis-à-vis social
audiences: “The other way to reach busy executives is through the media.
numbers. We’ve done studies on digital listening, and sharing the
sheer volume of conversations happening every day around our
products and brands—with or without our direct involvement—is very
eye-opening for senior executives.”
Social media requires not only a new mind-set but also new skills. This
means that companies need to develop different recruiting criteria.
“When I interview candidates, I’m looking for people from diverse
backgrounds who are willing to experiment. They have demonstrated
the ability to marry the left and right sides of their brain—the creative
and analytical,” says Weiss. “I also ask candidates to describe their
digital lifestyle—if they are not caught up in social media at home, they
are not going to bring that passionate engagement, hands-on attitude,
and curiosity that we know is essential.”
For Weiss, the ultimate end goal of social media marketing is to drive
consumer engagement that leads to measurable gains in revenue. “I
think most companies are still primarily focused on building fans and
followers, but we have our eyes on a greater prize. We want to cultivate
advocates and convert their insight and interest in our brands into
product purchases.”
24 Booz & Company

27. About the Authors
Christopher Vollmer is a Karen Premo is a principal
partner with Booz & Company in Booz & Company’s global
based in New York. He leads media and entertainment
the firm’s global media and practice. Based in New York,
entertainment practice, and she works with media and
has extensive experience consumer-facing businesses
advising clients in digital media, on digital and social media
consumer marketing and digital strategy, sales force and
technology. He is the author of marketing effectiveness,
the best-selling book Always capability building, growth
On: Advertising, Marketing and strategy, and organizational
Media in an Era of Consumer design.
Control (McGraw-Hill, 2008).
Booz & Company 25

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Booz & Company is a leading global management
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lished the first management consulting firm in 1914.
Today, with more than 3,300 people in 60 offices
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We work closely with our clients to create and deliver
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©2012 Booz & Company Inc.