Twitter or Not – The Business Case for Social Media

Jake WengroffGlobal Director, Corporate Communications

Frost & SullivanOctober 27, 2009

Pop Quiz: How many tweets have appeared on Twitter?

A) 50 million

B) 100 million

C) 500 million

D) 1 billion

E) 5 billion

ANSWER: 5 billion. On October 19, 2009, Twitter announced that the 5 billionth tweet was sent on its network.

In the Game

• LinkedIn has over 48 million members in over 200 countries around the world• A new member joins LinkedIn approximately every second, and about

half of its members are outside the U.S. • Executives from all Fortune 500 companies are LinkedIn members

Source: the companies, Wikipedia, HubSpot, Mashable

• 6 million unique monthly visitors, about the same number of accounts• 55 million monthly visits

• More than 300 million active users • 50% of active users log on to Facebook in any given day • The fastest growing demographic is those 35 years old and older • Available in 69 languages on the site

• About 70% of Facebook users are outside the United States

How does your company use social media?

• Brand/corporate positioning

• Gain new product and service ideas

• Make new connections and grow business

• Engage with customers and receive feedback

• Internal communications and training

Why We Hate Social Media

• “Free” isn’t really free

• Time, time, time!

• Damage control

(or rather, how about any control in general?)

• Who will be the voice?

(and who will be the voice when the voice resigns?)

Potential Risks of Social Networking Sites to Your Organization

(N=1166)

29%

26%

24%

20%

17%

14%

28%

28%

30%

26%

27% 32%

31%

31%

25%

26%

25%

21% 8%

9%

9%

12%

12%

14%

11%

12%

12%

12%

14%

14%

0% 20% 40% 60% 80% 100%

Wasted Time by Employees/Loss of Productivity

Allow Malware (Viruses, etc.) to get onto Computer or

Network

Confidential Information Going to Unintended Outsiders

Slow Down the Computer Network Due to increased Use

Incur Legal Liability/Financial Penalty

Increase IT Support Cost

High Risk Moderate Low No Risk Don’t know / No opinion Mean Scores

2.9

2.8

2.8

2.7

2.6

2.5

Source: Frost & SullivanQ15.Please rate the following potential risks of Social Networking Sites to your organization?

Perceived Risks of Social Networking Sites

Gatekeeping

• Does your company have a social media policy?

• What’s the risk if you don’t?

Does Your Organization Have Written

Policies Regarding Access Social

Networking Sites?

(N=1439)

59%

29%12%

Yes No Don’t Know

Organization's Policy Regarding Social Networking Sites

(N=847)

26%

32%

42%

0% 10% 20% 30% 40% 50%

Access allowed for all

employees – no restrictions –

per stated policy

Access not allowed for any

employee, enforced by

filtering software

Access allowed for some

employees, per stated policy

Does Your Organization Allow Access to Social

Networking Sites? (N=422)

80%

13%8%

Yes No Don't Know

Source: Frost & SullivanQ3. Does your organization have written policies regarding use of company computers/networks to access social networking sites? Q3b. What is your organization’s policy regarding social networking sites? Q3c. Does your organization allow access to social networking sites, despite having no formal policy in place?

Policies Regarding Social Networking Sites

Unlikely Candidates

• In the struggle to find people willing to make worthy contributions to social networking sites, look to the group that wants to engage: salespeople.

• And yes: salespeople can be positioned as Thought Leaders!

Perceived Values of Social Networking

(N=952)

54%

54%

53%

53%

52%

51%

51%

50%

45%

42%

35%

35%

35%

35%

36%

38%

38%

42%

41%

7%

7%

7%

7%

9%

9%

6%

7%

10%

13%

34%

0% 20% 40% 60% 80% 100%

Gain Additional Customers

Increase Customer Satisfaction

Get Consumer/Customer/Client Feedback

Get Low-Cost Exposure/Public Relations

Reduce Operating Costs

Increase Revenues Per Customer

Increased Collaboration

Increase Staff Satisfaction

Reduce Staff Turnover

Recruit New Staff

Highly Valuable Moderately Valuable Low Value No Value At All Don’t KnowMean Scores

3.4

3.5

3.4

3.4

3.4

3.4

3.4

3.4

3.3

3.4

Source: Frost & Sullivan

Note: Proportions less than five percent not shown in above chart.

Q14. Please indicate the value you perceive your organization receives from any of the following benefit(s).

Perceived Value of Social Networking

Among Those Who Believe Corporate Social Networking Beneficial (Highly or Moderately)

Corporate Roles within Social Networking Communities by

Total Sample and Enterprise Size

49%

44%

44%

43%

34%

17%

2%

14%

45%

41%

40%

36%

30%

12%

2%

15%

61%

47%

53%

53%

43%

23%

1%

9%

47%

45%

41%

45%

33%

19%

2%

17%

0% 10% 20% 30% 40% 50% 60% 70%

Customer Support

Energizing

Formal Marketing

Market Research

Growth Platform

Sponsor Agreements

Other

None of the above

Total Sample (N=870) Small Enterprise (N=351) Medium Enterprise (N=190) Large Enterprise (N=329)

Source: Frost & SullivanQ9. Which of the following best describes the role(s) for the social networking communities that you use for corporate purposes with regard to client relations? (Multiple mention question)

Among Those Using Web 2.0 Tools for Client Relations

Corporate Roles in Social Networking Communities by Total Sample and Enterprise Size

/ Indicates significantly higher/lower than comparison group at the 95% level.

Anticipated Change in Organization’s Future Use of Social Networking

30%

28%

2%

15%

22%

29%

28%

3%

17%

30%

36%

23%

2%

1%

8%

23%

28%

30%

1%

1%

16%

1%

24%

1%

0% 10% 20% 30% 40% 50%

Significantly Increase Use Compared to the Last 12

Months (>25%)

Somewhat Increase Use Compared to the Last 12

Months (1%-25%)

Usage Will Remain About the Same

Somewhat Decrease Use Compared to the Last 12

Months

Significantly Decrease Use Compared to the Last 12

Months

Don’t Know

Total Sample (N=1439) Large Enterprise (N=607) Medium Enterprise (N=270) Small Enterprise (N=562)

Source: Frost & SullivanQ16. Thinking about the next 12 months, how do you anticipate your organization’s overall usage of social networking will change?

Anticipated Change in Corporate Use of Social Networking by Total Sample and Enterprise Size

/ Indicates significantly higher/lower than comparison group at the 95% level.

Remarks

• Don’t ignore social networking

• Keep it organic, genuine, and authentic

• Your customers, employees, and investors will feel empowered

• Read….learn….engage!

For Additional Information

Jake WengroffGlobal DirectorCorporate Communications(210) 247-3806jake.wengroff@frost.com Follow Frost & Sullivan on Twitter

@Frost_Sullivan@JakeWengroff