If you haven’t read our report on How Corporations Should Spend on Social Business, start there. This data is a segment of the research panel over 140 global national corporations with over 1000 employees, which we deem enterprise class corporations.
[Predict the Future of Social Business by analyzing how the Advanced Corporations Spend Now]
We segment corporations into a variety of maturity phases to indicate how advanced they are, although there are more gradients we can apply, we’re focused on three major segments at this time ranging from novice, intermediate to advanced, we found that there’s a natural bell curve with the intermediate accounting for about half, and about a quarter that are novice as well as advanced. In the following data cut, we’ll explore how companies that self-identified as advanced are investing in social business.
Companies like Dell, Comcast, Wal-Mart, Adobe, HP, Microsoft, Wells Fargo, Ford, have characteristics of advanced corporations. What makes them advanced? They have formalized programs and charter, dedicated teams, line item budgets, and have likely been deploying for over 2.5 years. In my experience, a great deal of this market is likely to be the early adopter technology space (B2B first, followed by B2C) then retail/cpg, hospitality, and financial services.
Advanced Corporations Spend More of Staff, Boutiques, and Custom Efforts
These advanced companies (light blue) exhibit a few trends that the average companies (dark blue), don’t, in fact in all cases but traditional agencies they outspend. In fact, in total these advanced corporations are spending $1,857,000 per year. These advanced companies:
- Spend More on Staffing –But Underfund Training Them. These advanced corporations are spending 68% more on their staff to manage (headcount) than the average company. As a result, they have more feet on the ground to manage and respond to these programs. We know that social business is drastically impacted by the talent hired (a lot of soft costs) so no surprise these companies are outspending the average company on teams. With that said, $406k per year isn’t a large team (pending on location) but given that we’re only 2.5 years into social business, this is early. Sadly, these advanced companies spend very little on training and education, nor research and development. As a result, expect the social business team to be experimenting, self-learning, or relying on peers at other companies to glean knowledge.
- Rely Heavily on Boutique Social Media Agencies –Not Traditional Agencies. In customer-facing programs, we see a large spend on specialized boutique agencies who may focus on longer term engagements, rather than their counterparts the traditional campaign focused digital agencies. If you want to know more, read this analysis on boutique agencies overtaking traditional agencies and the many comments. Secondly, there’s an increased spend on advertising on social networks, although it’s assumed that traditional agencies are likely to absorb some of that spend to support campaign initiatives. In both cases, influencer programs remain about flat in spending, likely due to these advocacy programs being scalable and a limited number of influencers available in each market.
- Custom Tailor Their Efforts, Relying on Mainstay Community and Brand Monitoring. The social web is a fragmented disparate network of different data types, apis, and a myriad of fly-by-night startups. As a result, the corporations must constantly glue together these solutions to develop a common experience, which explains over $272,000 spending on custom work. Naturally, these may feed into the spending of the boutiques who will be leading this charge externally, coupled with internal web development and data teams. Secondly, the mainstay of social programs are community platforms with an annual average spend of about $200k and $150k spending on listening tools like brand monitoring. Expect that these tools will be cascaded to multiple business units, product sets, and spread across the enterprise, hence the larger spend. Not well understood or known by mainstream companies, SCRM remains a lower line item for average companies, but respectively balloons for advanced companies that are funneling customer social data into CRM databases to glean intelligence, reporting, and predictive analytics. The one year old Social Media Management System space has minute revenues, but expect six figure annual spending within years.
Expect spending to only increase over the coming years, as social business becomes a mainstay spending line item, but not just limited to marketing but every business unit. Yet over the next few years, I would expect the percentage on boutiques and custom efforts to decrease percentage wise as boutiques get swallowed by incumbents, and a suite of offerings emerges. On a related note, see how we also cut the data for “wealthy” corporations, those with over 10billion in revenues
Great article. To your point of under training people, I would be very interested in your writing about what a good training program looks like. I sent one of my people to a “Master Certificate in Social Media” program at an accredited university in the bay area. She said most of what they were teaching she already knew from reading Groundswell and other speakers we had some in to do talks.
Sorry I wasn’t clear – do you have a curriculum to bring someone from ground zero to competent and from competent to really good. I think of reading Groundswell as step 1 but that may be too advanced for a beginner.
We provide everyone with “guard rails” training, but some do’s and don’ts are sort of step 0 and don’t really approach how to effectively use/best practices.
Jeremiah – tip of the hat. Adrian – very nice reply & agree. Although there are differences, this stage of social media in the enterprise has some similarities to the early days of the dot com era (yes, I said it). Back then, agencies like Razorfish, Scient and Viant had the people with the skill sets (trained in-house by these agencies) in web development and e-commerce execution that the enterprises did not have. Thus, large sums of monies we’re made by those agencies. Over time, there was a shift from these agencies to the enterprise. The initial wave of competent/skilled social media agency folks who migrate to the Enterprise will be the ones who address the business hurdles en masse.
I’m not sure where you would classify social media analytics and data managagement, relative to your categorization? Where would you put it and what is the relative spend?