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Business Case For Social Media 2008


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"The Business Case for Social Media" provides the business reasons for interacting with audiences and embracing social media.

Published in: Business, News & Politics

Business Case For Social Media 2008

  1. 1. The Business Case for Social Media <ul><li>Steve Latham </li></ul><ul><li>July 25, 2008 </li></ul>
  2. 2. Welcome to Social Media! What the #*%&!# ???
  3. 3. My goals for today… <ul><li>Provide some useful data points </li></ul><ul><li>Explain WHY social media should matter to you </li></ul><ul><li>Explain how to measure value from social media </li></ul><ul><li>Present a social media case study </li></ul><ul><li>If that doesn’t work… I’ll try to impress you with some cool screen shots (but they won’t be as cool as the Macs) </li></ul>
  4. 4. Consumer Behavior is Changing… <ul><li>Web accounts for >30% of media time (1) </li></ul><ul><li>Online is becoming the medium of choice </li></ul><ul><ul><li>#1 medium among under 30 (2) </li></ul></ul><ul><ul><li>15 million seniors online (growing fast) </li></ul></ul><ul><li>50% of online time = “communitainment” </li></ul><ul><ul><li>Community, Interaction, Entertainment </li></ul></ul><ul><ul><li>Enabled by Social Media </li></ul></ul><ul><li>(1) Credit Suisse, 2006 </li></ul><ul><li>(2) Forrester 2006 </li></ul>We’re #2!
  5. 5. Internet Usage Favors Social Media Watch Internet (streaming video) Buy or sell products from other consumers Read a blog Comment or forward online ad to someone Submit a rating or review of a product or service. Use social networking sites Publish a blog or personal journal Upload video you created to Internet 34% 10% 7% 20% 27% 26% 29% 31% Source: Forrester’s NACTAS Q3 2006 Media & Marketing Online Survey <ul><li>Social Media is platform for: </li></ul><ul><li>34% watching video </li></ul><ul><li>31% buying and selling online </li></ul><ul><li>26% submitting a rating </li></ul><ul><li>7% uploading a video </li></ul>% reflects all online users
  6. 6. Social Media is Here to Stay <ul><li>Social Media platforms are growing quickly </li></ul>
  7. 7. Threat or Opportunity? <ul><li>Social media  giving up control </li></ul><ul><li>While some are threatened… </li></ul><ul><li>… Others are excited! </li></ul><ul><li>Crisis = Danger + Opportunity (1) </li></ul><ul><li>Savvy marketers are embracing the new paradigm </li></ul>&quot;We've learned that the more in control we are, the more out of touch we are with our customers.&quot; - A.G. Lafley, CEO of P&G on how the consumer is in control of media and advertising consumption (1) The two characters for Weiji or “Crisis” in Mandarin are often said to represent “danger” and “opportunity.” Chinese dispute the translation.
  8. 8. <ul><li>1. Sales! Customers are swayed (but not by you) </li></ul><ul><ul><ul><li>90% of consumers seek advice before making a purchase </li></ul></ul></ul><ul><ul><ul><li>1 in 3 who read reviews rely on them for purchase decisions </li></ul></ul></ul><ul><ul><ul><li>Ratings / reviews in e-commerce sites produced 15-100% lift </li></ul></ul></ul>5 Reasons to Embrace Social Media 83% 60% 52% 63% 69% 75% Opinion of friend or acquaintance Review in newspaper, magazine or TV Information on the manufacturer’s Web site A review by a known expert Consumer reviews on a retailer’s site Consumer reviews by users of a content site Source: Forrester’s NACTAS Q3 2006 Media & Marketing Online Survey. * Trust in Peers Trumps All Others
  9. 9. <ul><li>2. UGC participants are better customers (1) </li></ul><ul><ul><li>Post readers: 30% more likely to purchase </li></ul></ul><ul><ul><li>Contributors: 80% more likely to purchase </li></ul></ul><ul><ul><li>Have higher loyalty and advocacy </li></ul></ul><ul><li>3. You are already Involved in Social Media </li></ul><ul><ul><li>Discussions about your brand are already happening </li></ul></ul><ul><ul><li>If you participate, you can shape outcomes </li></ul></ul><ul><ul><li>CoAir example: =786742 </li></ul></ul>5 Reasons to Embrace Social Media (1) Coremetrics study 2008
  10. 10. 5 Reasons to Embrace Social Media <ul><ul><li>4. Strengthen your brand & culture </li></ul></ul><ul><ul><li>Fosters culture of transparency and trust (and coolness!) </li></ul></ul><ul><ul><li>Adds progressive element to your brand </li></ul></ul><ul><li>5. Enhance communications </li></ul><ul><ul><li>Community relations </li></ul></ul><ul><ul><li>Investor relations </li></ul></ul><ul><ul><li>Crisis / corporate communications </li></ul></ul>
  11. 11. How Do We Value Engagement? <ul><li>Determine how Actions  Intent </li></ul><ul><li>Forecast how Intent  $$$ </li></ul><ul><ul><li>Forecast the % that will buy at each stage </li></ul></ul><ul><li>Do the math and apply across each set of actions </li></ul><ul><li>Use common sense to normalize results </li></ul>Indicates preference Participation Indicates loyalty Tell A Friend Indicates action Contribute Content Indicates consideration Registrations Indicates awareness Visits Value Action
  12. 12. Case Study <ul><li>Client: Stage Stores </li></ul><ul><li>Audiences : female teens in underserved markets </li></ul><ul><li>Objective: drive in-store purchases </li></ul><ul><li>Strategy: back-to-school social networking site </li></ul>Blog Comments
  13. 13. Campaign Results <ul><li>Significant traffic to the site </li></ul><ul><ul><li>25,000 visits in 6 weeks </li></ul></ul><ul><ul><li>NO AD BUDGET </li></ul></ul><ul><li>Deep level of engagement </li></ul><ul><ul><li>Registrations (20% of visitors) </li></ul></ul><ul><ul><li>Blog reviews (25% of visitors) </li></ul></ul><ul><ul><li>Comments / Postings (100+) </li></ul></ul><ul><li>Compelling Value </li></ul><ul><ul><li>500% ROI (based on npv) </li></ul></ul><ul><ul><li>8,000 opt-in emails </li></ul></ul><ul><ul><li>Feedback and validation </li></ul></ul>
  14. 14. In Closing… <ul><li>Social media is not the holy grail or a panacea for all ills… </li></ul><ul><li>… but it is a powerful force that WILL impact your business </li></ul><ul><li>Take a pragmatic approach that incorporates: </li></ul><ul><ul><li>Strategy </li></ul></ul><ul><ul><li>Analytical rigor </li></ul></ul><ul><ul><li>Creativity </li></ul></ul><ul><ul><li>Common sense </li></ul></ul><ul><li>Let’s stay in touch! </li></ul><ul><ul><li>Attend </li></ul></ul><ul><ul><li>Check out our blog </li></ul></ul><ul><ul><li>Join me on Facebook and LinkedIn </li></ul></ul><ul><ul><li>Email me [email_address] </li></ul></ul>