How do the biggest and most successful corporations spend on social business? We aimed to find out.
These “wealthy” (which deemed by annual revenues) corporations spend comparatively more on customer facing social business efforts than most other corporations, yet the overall subtotal of spending is significantly small. First, recognize that social business has only been formalized in programs for about two and a half years (data), and most companies are intermediate but not advanced. The following data is of companies with over $10 billion dollars in revenues per year, and their expected spend as reported by the Corporate Social Strategist. This data is a cut from our recent reports on Social Business Spending, and clients can receive additional data from us as needed.
What You Should Know:
- Across nearly all efforts, the wealthy (deemed by revenues) spend over double than the average corporation in social business. This is in alignment with Altimeter’s Engagement DB study which shows a strong correlation (not causation) between how corporations are engaged with their customers and the size of company.
- These corporations spend significantly more on internal staff to manage, more than any other program, which is in line with this labor intensive program to get internal teams organized as well as to manage communities, blogs, advocacy programs. Sadly, the training and education programs to train this staff and line of business is incredibly low, under $70,000.
- Secondly, there’s a significant spend on advertising, which is often deemed a scalable marketing effort as you can just ‘throw dollars’ at it and hope to get a conversion return –without having to engage with customers in costly dialog.
- These wealthy corporations are spending slightly more on traditional agencies, yet social media boutiques are still grabbing a lion’s share over $221k per year and growing. To learn more how boutiques are evolving over traditional, read this data.
- In the software category, there’s continued spend on recurring SaaS providers like Brand Monitoring, Community Platforms (both nearly achieving 300k annual spending), and then programs to integrate and customize this content.
Average Spending on Social Business Companies by Companies with Over $10 Billion in Revenue:
Related Open Research
If this data was helpful, see our other research reports and data releases tied to this data
Thanks for sharing the info. For small companies that do not posses the resources this type of article provides great research. Keep up the great work and research.
Nice post and great data but find the use of the word “wealthy” to describe the companies a bit odd. Isn’t wealth more a function of net worth (net income, cash on hand, assets) vs. revenue? Just a thought…
This might be telling us that the social startups’ revenue are still very limited, at the moment at least.
I toyed with many terms, and wasn’t sure what was best. I figured any term would draw questions. It could be ‘high performing’ or “high revenues’ but that’s not very catchy.
I can’t be capital or cash on hand or assets as we didn’t run it against that. Thanks Robert
Interesting material as usual, Jeremiah. Thank you for it.
Has Altimeter compared organizations’ spending on social media-based marketing with that on traditional forms? It might be revealing to see if the ratio between the two also varies by organization size.
Roger
Agreed and it definitely got my attention:)
Agreed and it definitely got my attention:)
The golden ratio for us is:
– 40% Social Business Platform and Licenses (including 3rd party productivity apps)
– 30% Good Advice
– 20% Education
– 10% Rewards for Influencers and Star Employees, Launch Events.
That way there’s still room for creativity.
What type of company do you work at Mark? Interesting.
Consulting.
Consulting.
Consulting.
Very interesting as always – were the costs listed the whole costs of product or purely software/consulting?
Vladim for which line item?
For the software deal sizes that often includes install, service, and support in the overall package.
In some cases, agency spending includes brand monitoring, which is often run through as a cost in the overall monthly retainer.
What’s interesting is that in many cases both the agency and the corporate buyer both have their own listening tools, but they’re often different tools, with different methodologies, and different data. What a mess.
Thanks Mark.
Roger
We’re focused on disruptive technologies and are not comparing it right now to the traditional forms of marketing.
However, with that said, there’s plenty of secondary research out there you could compare this data to others for overall spending, although the methodologies would be different.
From a mix perspective, I assume social is a tiny fraction of the overall marketing mix.
Depends on how you look at it. The community platforms are pulling in $100-300k a year PER client. If they have 50 blue chip clients that’s 5 million-15million a year just on those larger brands.
Thanks Jeremiah,
The question wasn’t focussed on any individual item – I was more curious if the numbers came from purely external resources or both internal/external.
Messy indeed! It will be interesting to see the next generation of BI tools that emerge to handle this… is the total customer dashboard on it’s way?
> We’re focused on disruptive technologies and are not comparing it right now to the traditional forms of marketing.
But unless you know whether they’re producing markedly different results from traditional methods, you can’t know whether these technologies /are/ disruptive. To do that, you need a baseline of results from those older methods.
Without that information. all you can know is that these new methods are just that, new.
Do you mean “who are the respondents?” They are Corporate Social Strategists. Read all about them here
http://www.web-strategist.com/blog/2010/11/10/report-the-two-career-paths-of-the-corporate-social-strategist-be-proactive-or-become-social-media-help-desk/
Most are in customer facing programs, as they are the business decision maker, they may also be responsible for internal enterprise social programs too, likely coupled up with IT
The power of social media is huge right now, so you can expect companies to invest on marketing and as well as social media a lot too.
Great read! This information would really help people like me who is just starting to create a business… This is really informative post you have here Jeremiah… Thanks for sharing, love to hear more from you…
Social business often creates a good outcome. Sometimes when you go in to this event you might get informative information. And sometimes you can get a hint from some of your business partners, though this will spent you much but then in return to have received a useful idea.
That™s some interesting food for thought. It is indeed quite easy and very convenient to market products and services through social media without ever seeing clients face-to-face. Large corporations certainly love this approach.