Justifying Social Marketing

7/28/2019 Justifying Social Marketing

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Making Leaders Successul Every Day

Fe 18, 2009

Jsiig Si MkeigSpeig Mihe Geee

Ieie Mkeig Pessis
http://www.forrester.com/


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2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Inormation is based on best availableresources. Opinions refect judgment at the t ime and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar,and Total Economic Impact are trademarks o Forrester Research, Inc. All other trademarks are the property o their respective companies. Topurchase reprints o this document, please [email protected]. For additional inormation, go to www.orrester.com.

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ExEcutIvE SuMMary

With economic turbulence causing executives to tighten marketing budgets, interactive marketing

proessionals have to go the extra mile to justiy their investments. While only 31% o social marketers

plan to increase their social marketing budgets by more than 10% in 2009, social media should be

part o all marketers plans, particularly tactics that are ree or require more time than budget. Social

marketers should concentrate on using the inexpensive and ree tools that energize their active and

inuential customers and create a personal engaging experience in an unsettling market, resulting insuccess toward the back o the traditional marketing unnel.

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2009, Fese reseh, I. repi PhiieFe 18, 2009

Jsiig Si Mkeig Speig

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Key QueSTIonS

Social marketing champions must be able to answer three key questions i they hope to justiy

investment in turbulent economic times:

Where does social media t into the media usage landscape, and how is that evolving?

What kinds o costs do social marketers ace?

Where in the marketing unnel should social marketers ocus in order to maximize theirROI?

SoCIaL MeDIa HaS BeCoMe MaInSTReaM

Although consumers may pull back rom some orms o paid content during a downturn, social mediaconsumption has become a mainstream part o Internet usage. Tree trends will remain, as ollows:

Social media has become imperative or reaching young adults. Adults, ages 18 to 24,overindex across the board on social activities. Tis should be no surprise given the act that

young adults spend nearly one-h o their online time using social networking sites (see

Figure 1). Although more ecient site navigation tools may make individual visits brieer,

network efects and the growth o third-party applications are creating lock-in that will keep

users coming back. However, 11% o online adults say they get what they need rom just one

social networking site, suggesting a desire or niche communities to serve diferent associations

and interests.

Social media isnt just or the young anymore. Older adults have embraced social media,making social marketing a viable tool or reaching more than just teens and young adults. While

adults over 45 have most deeply embraced mature types o social media such as blogs, 16% o

these older adults visit a social networking site at least monthly.

Social networks have emerged as the center o social activity. Oen social networks actas hubs or many orms o social media consumption, including sharing photos and video

and playing social games. While social networks inspire greater activity than other orms o

social media, a substantial number o social networkers ollow general trends in social media

consumption and remain relatively passive users (see Figure 2). Even as social networks become

an important center o viral activity, marketers should not ignore more traditional orms o

customer contact such as email especially when reaching out to older users.


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2009, Fese reseh, I. repi Phiie Fe 18, 2009


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Figr 1 as 18 t 24 Spe ne oe-Fih o thei oie time o Si newkig Sies

Source: Forrester Research, Inc.53562

Ages 55-plusAges 45 to 54Ages 35 to 44Ages 25 to 34Ages 18 to 24

19%

10%

6%5%

4%

In a typical week, what percentage of the time you spend online is spent on

each of the following activities?

Source: JupiterResearch/NPD Group Entertainment and Media Consumer Survey (8/08)

Base: 2,210 US online consumers

Scil Mrktig Bdgts ar Still erimtl

Social marketing has become an industry buzzword; however, it remains puny in dollar value

compared with other orms o marketing with hal o all social marketers spending less than 5% otheir online marketing budgets on social marketing (see Figure 3). Trow social into the mix with

high-cost V and print marketing, and social only accounts or ractions o a percent o marketing

spend or many major brands. Additionally, ew marketers are planning drastic increases in social

marketing spending in 2009 (see Figure 4). However, a large portion o marketers do use social

marketing tactics and tools, they just tend to gravitate toward those that dont have large media

buying costs associated with them, such as blogs (43%) and discussion orums (23%).

Social marketers arent spending a lot o money on their campaigns, but that doesnt mean that

social tools dont have costs. Social tools all into two main categories:

External development intensive. ools such as viral videos, widgets, and proprietarycommunities tend to require relatively high levels o investment in creative development and

technical maintenance while requiring relatively lower levels o input rom employees. In

many cases, agencies or specialized developers such as Clearspring (or widgets) or LiveWorld

(or communities) handle much o the work behind these social tools. With the exception o

communities, these tools generally require relatively small amounts o long-term, ongoing


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support rom marketers. Externally developed tools are ideal or marketers with relatively

thin internal expertise in social marketing who want to enter the social sphere by outsourcing

much o the efort. However, these tools will surpass the budgets o many social marketers with

marketers spending anywhere rom $10,000 or a widget to more than $100,000 a year or aproprietary community.

Time intensive. Creating tools such as blogs and podcasts and joining third-party communitiesare typically long-term marketing eforts that require deep employee time investment but relatively

low levels o monetary investment. For example, a company blog typically requires upront costs

or blogger training and a small yearly hosting ee, but most o the cost actually comes in the orm

o the bloggers time and thought. Tese time-intensive tools are ideal or marketers who are ready

to internalize social marketing and would rather invest in developing skill sets that employees can

leverage over the long term rather than generating one-of campaigns.

Figr 2 use api o Si Mei


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

Uploaded video

Created and maintained apersonal Web page

Posted comments on a mediaWeb site or portal

Created or updated a blog

Read comments on a mediaWeb site or portal

Viewed personal Web pagescreated by other individuals

Read a blog

Watched online video clipsproduced by other users

Created or updated a personalpage on a social network

Visited a social networking site

Thinking about your use of the Internet over the last year, which of the following activitiesdid you conduct online monthly or more frequently?

Source: JupiterResearch/NPD Group Individual User Survey (6/08)

Base: 3,730 US online users

Ages 18 to 24*

Total

*Base: 615 US online users


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Figr 3 regess o cmp Size, Si Mkeig reeies limie bge ai


0%

10%

20%

30%

40%

50%

60%

50% and more25% to 49%10% to 24%5% to 9%Under 5%

Source: JupiterResearch/ClickZ Social and Mobile Marketing Executive Survey (2/08)

What percentage of your 2008 online marketing budget is dedicated to social marketing?

One-half of all advertisers

spend less than 5% of their

online budget on social

marketing

Base: 238 US social marketers

$500 million or more

$15 million to $499 million

$1 million to $14 million

Less than $1 million

Figr 4 Si Mkee Pe bge Ieses F the ne 12 Mhs


Dont know/N/A13%

50% or more7%

25% to less than 50%9%

10% to less than 25%16% 5% to less than 10%

24%

Less than 5%21%

We do not plan to increaseour social marketing budget

10%

By how much do you plan to increase your spend on social marketing in the next 12 months?




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MaKInG THe CaSe FoR SoCIaL MaRKeTInG

In times o economic distress, marketers need to examine the efectiveness o their eforts.

Although short-term experimentation can help marketers discover best practices or long-term

implementation, marketers need to keep two basic goals in mind, as ollows:

Cutting costs. Social marketers should examine whether social marketing allows them to cutcosts by either reducing internal headcount or outsourced services or by decreasing traditional

marketing expenses incurred through media buys. Although social marketing campaigns

remain relatively inexpensive, they typically do not replace more traditional marketing

expenditures. Most social marketing campaigns require some sort o development and many

social media tools require promotion, only adding to media buying budgets. Social marketers

have ound more success in using social marketing tools to decrease headcount or outsourced

personnel-heavy services especially in industries that require lots o customer service.

Customers supporting each other can be a big cost saver. For example, Australian enterprisesoware company Atlassian set up an online orum so its users could help answer technical

questions, eliminating thousands o costly calls to its technical support center.

Creating revenues. Driving top-line growth is a distinct challenge. Marketers need to be ableto understand their social marketing eforts as part o their broader marketing campaigns and

use social tools not only to sell directly to consumers but to help consumers sell to each other

by energizing advocates and inuentials. For example, American Express created Te Dish, an

online community where cardholders could recommend restaurants that accept American

Express cards, reaching a consumer passion point (dining) while driving card use.

Scil Mrktrs Strggl T Fid RvGrtig RoI

Only 8% o social marketers are satised with the ROI o their social marketing campaigns. Tis is

no surprise, given that social marketers consistently ail to align their goals with the right execution

or the right measurement metrics. Tree key actors lie behind this challenge, as ollows:

Eective social marketing measurement remains elusive. Despite overwhelmingly avoringbrand goals, 53% o social marketers rely on clicks a traditional direct response metric to

measure their social marketing campaigns. Engagement metrics are catching on with more

sophisticated social marketers, but marketers must align back-end metrics they really care about

such as sales, li in brand awareness, or li in purchase intent with patterns in user engagement.

Efciency and scale are problematic when using social tools to build awareness. Sixty-threepercent o social marketers consider increasing brand awareness the primary goal o their social

marketing campaigns (see Figure 5). While some social tools such as viral videos and widgets

can be efective at increasing awareness, these tools are typically relatively expensive compared

with other social media tools and are very dicult to scale compared with traditional media buy

campaigns. Additionally, unlike ad buys, these tools come with no audience guarantees making

it dicult to set expectations and ultimately deliver ROI.


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Creating awareness virally is largely hit or miss and mostly miss. Contrary to the belieo many social marketers, going viral is not a type o campaign but a side efect o successul

social campaigns. While social marketers can increase the odds o viral pass-along by executing

a campaign with great creative, a well-targeted audience, and proper empowerment o

consumers to pass along messages, marketers should consider any viral pass-along as an added

bonus to their campaign impressions, not a primary objective.

Figr 5 Si Mkees chie Fse o Sh-tem, reie lw roI Gs


63%

28%

16%


When thinking about your recent social marketing campaigns, what are your primary goals?

To increasebrand loyalty

To increase wordof mouth around my

advertising campaign

To increaseawareness formy brand or

product


Scil Mrktrs Mst Fcs o Th ed of Th Fl

Most social marketers are applying the wrong tactics to the wrong objectives. Scalable media buys

are the more ecient way to raise awareness. Social marketers can nd greater success by ocusing

on three areas where consumers rely most on each other (see Figure 6):

Preerence. Building brand or product preerence is hard or a brand to do without the help ovocal inuentials, those category experts who serve as a trusted resource or their riends and

amilies. Social marketers should provide inuentials with the tools to help their riends makethe jump rom mere consideration to preerence by giving them the tools to close the gap and

keeping them actively involved in the brand. ools such as blogs and podcasts can help keep

active, inuential users engaged by providing them with deep inormation they can then use to

make their sales pitch to others. Marketers should then empower engaged inuentials to spread

the word by supporting product parties or supplying them with coupons to pass on to riends.


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Action. Creating a purchase is highly challenging or many brand social marketers; however,social marketers with an online retail element can efectively harness the power o social

media by enabling product reviews on their Web sites. Sixty-our percent o online buyers nd

user reviews important when making an online purchase, and 47% o online users overall say

that inormation provided by other consumers is more important to them than inormation

provided by marketers. While there is a risk that customers will be turned of by inevitable

negative reviews, many users have moved past the consideration and preerence phases by

the time they look at retail site reviews and are looking or social armation o their product

selection. Reviews help users eel comortable with their selections and rearm choice by

portraying social acceptance. Building this sense o condence in a users choice is essential,

especially as consumer budgets shrink with the declining economy.

Loyalty. Social marketers should not ignore the power o social marketing to build long-term

brand loyalty with current customers. Communities can help by allowing active customers tosupport each other and by making these consumers eel listened to and empowered. Marketers

who successully embrace product or marketing ideas popular in communities will be most

successul at reinorcing loyalty. For example, Mars created a community or its most passionate

customers, using their insights to rene marketing campaigns and develop new products. o

evaluate these eforts, social marketers should look to long-term metrics like lietime customer

value in order to understand how their eforts are afecting the bottom line.

Figr 6 aigig Si ts Wih Mkeig Fe


Time intensive

External development intensive

Note: Bubble size indicates level of consumer adoption.

Consideration Preference Action LoyaltyAwareness

Twitter

Third-partycommunities

Podcasts

Widgets

Proprietarycommunities

Customerreviews

ProductmicrositesAdvertisements

Viralvideos

Blogs


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SuppLeMenTaL MaTeRIaL

Mthdlg

In April 2008, JupiterResearch designed and elded the JupiterResearch/Ipsos-Insight RetailConsumer Survey to online consumers selected randomly rom the NPD Group US online

consumer panel. A total o 2,231 US individuals responded to the survey. Respondents were asked

approximately 30 closed-ended questions about their behaviors and preerences regarding online

travel. Respondents received an email invitation to participate in the survey with an attached

URL linked to the Web-based survey orm. Te samples were careully balanced by a series o

demographic and behavioral characteristics to ensure that they were representative o the online

population. Demographic weighting variables included age, gender, household income, household

education, household type, region, and market size. Additionally, JupiterResearch took the

unconventional step o weighting the data by AOL usage, online tenure, and connection speed

(broadband versus dial-up), three key determinants o online behavior. Balancing quotas are derived

rom JupiterResearchs Internet Population Model, which relies on US Census Bureau data and arich oundation o primary consumer survey research to determine the size, demographics, and

ethnographics o the US online population. Te survey data is ully applicable to the US online

population within a condence interval o plus or minus 3%.

In this survey efort, JupiterResearch worked with its research partner, NPD, on the technical tasks

o survey elding, sample building, balancing, and data processing. NPD is one o the largest market

research companies in the US and maintains a general research panel o 4 million individuals, o

which 750,000 are kept active. Te active panel receives surveys while inactive panelists are rested.

Tis rotation in and out o active status helps keep panelists resh and prevents burnout. Panel-based

market research enables researchers to have baseline knowledge o each survey respondent, increase

survey participation rates, and permit careul rationing o survey elding to reduce survey burnout.

In February 2008, JupiterResearch conducted the JupiterResearch/ClickZ Social and Mobile

Marketing Executive Survey, a ormal survey o online advertisers about their social marketing and

mobile marketing practices. A total o 313 qualied US social advertisers completed the survey.

Respondents received an email invitation to participate in the survey, with an attached URL linked

to the Web-based survey orm. As an incentive, respondents were entered into a sweepstakes to win

a $50 gi certicate rom Amazon.com and would also receive the aggregate survey results.

In this survey efort, JupiterResearch worked with Incisive Medias ClickZ network on the technical

tasks o sample building and survey elding. Incisive Media is a ast-growing specialist businessinormation provider operating in eight core markets, delivering key inormation to dened target

audiences across a variety o platorms including magazines, conerences and exhibitions, Web sites,

newsletters, contract publishing, and databases.

In August 2008, JupiterResearch designed and elded the JupiterResearch/NPD Group

Entertainment and Media Consumer Survey to online consumers selected randomly rom the

NPD Group US online consumer panel. A total o 2,210 US individuals responded to the survey.


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Respondents were asked approximately 30 closed-ended questions about their behaviors, attitudes

and preerences as they relate to consuming media and entertainment online. Respondents received

an email invitation to participate in the survey with an attached URL linked to the Web-based

survey orm. Te samples were careully balanced by a series o demographic and behavioralcharacteristics to ensure that they were representative o the online population. Demographic

weighting variables included age, gender, household income, household education, household type,

region, market size, race, Hispanic ethnicity, online tenure, connection speed, and student status.

Balancing quotas were derived rom JupiterResearchs Internet population model, which relies on

US Census Bureau data and a rich oundation o primary consumer survey research to determine

the size and demographics o the US online population. Te survey data is ully applicable to the US

online population within a condence interval o plus or minus 3%.








In June 2008, JupiterResearch designed and elded the JupiterResearch/NPD Group Individual User

Survey to online consumers selected randomly rom the NPD Group US online consumer panel. A

total o 3,730 US individuals responded to the survey. Respondents were asked approximately 40

closed-ended questions about their behaviors, attitudes, and preerences as they relate to general

online behaviors, paid content and services, online video, online advertising, social networkingsites, etc. Respondents received an email invitation to participate in the survey with an attached

URL linked to the Web-based survey orm. Te samples were careully balanced by a series o

demographic and behavioral characteristics to ensure that they were representative o the online

population. Demographic weighting variables included age, gender, household income, household

education, household type, region, market size, race, Hispanic ethnicity, online tenure, connection

speed, and student status. Balancing quotas were derived rom JupiterResearchs Internet population

model, which relies on US Census Bureau data and a rich oundation o primary consumer survey

research to determine the size and demographics o the US online population. Te survey data is

ully applicable to the US online population within a condence interval o plus or minus 3%.









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Documents

Justifying Social Marketing