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
Thanks for these stats jeremiah! The revenues are definitely interesting to analyze!
Thanks Jeremiah. As always, a wonderfully thoughtful post. There is much to learn here for the providers and corporate communicators alike. I’m really glad you shared. – Amelia
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.
While a university is helpful for initial training, the first step should be internal training as policies, procedures, internal resources need to be factored in on the learning.
Also, every employee that may use these tools will need some level of social training –so this shouldn’t be limited to social media team alone.
While a university is helpful for initial training, the first step should be internal training as policies, procedures, internal resources need to be factored in on the learning.
Also, every employee that may use these tools will need some level of social training –so this shouldn’t be limited to social media team alone.
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.
Groundswell is really for the business stakeholders and the social strategist (those directly implementing and stakeholders) in my opinion. There may be at least for types of training required
1) 101 training needs to be provided to the rank and file (esp if the company plans on having employees participate), this needs to be done for existing employees and folded into new hire training.
2) Executive training requires it’s own special nuance, they need to understand it from a different perspective often around ‘letting go to gain more’, Charlene is an expert here.
3) More sophisticated training needs to be given to business stakeholders (the “spokes”) in the hub and spoke model.
4) Even more advanced training needs to be provided to the Social Strategy team (often in the “Hub”).
We’ve been involved in a lot of these types of programs, and are ramping up some new efforts around #1, the 2-3 we’ve done a few times. I think I’ll do a blog post on this topic alone!
Jeremiah, as always, thanks for sharing the amazing research you do! This should be a valuable resource to anyone evangelizing for social business (marketing, customer service, whatever) within organizations of all sizes.
Since the comments have been largely about training, I™ll put in my two cents. I teach a social media marketing class at Portland State University (just started the fourth session of that) and I™ve trained many clients, marketers and even government communications teams.
Here are a few helpful observations about social media training:
1. Most people I train THINK they know far more than they do. The folks in my class at PSU are typically middle-aged marketers (or they come from a media discipline such as publishing, web design, etc.) looking to upgrade their skill sets. We spend the first two hours on the first day of class doing a quickie crash course of all the top platforms or categories (social bookmarking, event sites, etc.). Most people are immediately overwhelmed because they had no idea all this stuff existed. They just think the class is going to be about Twitter, Facebook and blogging.
2. LOTS of people think they can learn about this stuff in the abstract and somehow be knowledgeable about integrating social media into work for employers or clients. They say things like I don™t have a personal Twitter account, but we do it at work. After a few horror stories (like the Chrysler F-Bomb) they realize they need to experiment on their own time (and dime). Client or employer projects are not the proper venues for newbies. I can™t tell you how many people tell me later they™re glad I convinced them they had to use the tools.
3. That said, knowledge and usage of tools isn™t enough. If you weren™t a marketer before you learned about social media, you™re probably not going to be a social media marketer after you figure out how to pull some levers and turn some dials. Thankfully, my class at PSU is part of a larger curriculum that includes a digital strategy class before social media marketing.
4. The best way to train people is to force them to apply what they™ve learned immediately to a project. It can even be a personal branding project, but they MUST use the tools and get their hands dirty. They won’t pick up anything by listening to a lecture.
5. Research (by the students) has to be a big component of training. They have to see what™s out there “ and not just in their own business categories. I always tell them that kids have been exposed to thousands of TV commercials, so it™s more likely a group of 10-year-olds can write a good TV spot (for a product they use) than a group of marketing directors could develop a social media campaign. It™s all so new, if you haven™t been eating, sleeping, and breathing it every day for a few years, you just haven™t seen enough of it to know what’s possible. It’s my personal belief that nobody should be “running” social media within a company unless he/she has already created thousands of posts and built up thousands of friends, fans or followers. Obviously, small businesses don’t have that luxury, but enterprises should be a lot more discerning.
6. Creating and updating training materials can represent a crushing workload because the stuff people need to know changes EVERY DAY. I™ve put hundreds of hours into it and I always think it could be better. I wouldn™t advise any business to create an internal training program unless they can afford to pay someone to devote a LOT of time to this “ on an ongoing basis. Most businesses should outsource it.
Sorry for the super-long comment! I could go on for days¦ 😉
It’s always great to hear from you Carri. You should write a post on this!
Interesting data above & dialogue below (as usual). Though RadioShack is a 90-year-old brand, our social media efforts would certainly fall in the “intermediate” category as we have adopted a test & learn approach that continues to bear fruit in both marketing & financial KPIs.
My 2 cents: Just because you can bake a cake doesn’t mean you can run a bakery. They are 2 separate, albeit related, things.
Bakery managers are key to the enterprise level integration of social media. In my experience, it’s rare to find someone truly “smart” in the business of social media. Agencies have mastered enough buzzwords and software to be competent in social media as a marketing vehicle (baking cakes) but very few have invested the diligence to offer a robust solution to the business hurdles (e.g., program ROI/analytics, media mix modeling, policies, influencer outreach, conversation planning, employee onboarding, etc.) In this sense, many are testing & learning as often as the clients.
From my vantage point, until social media truly reaches its tipping point as a business tool (vs. marketing vehicle) there will still remain a high demand for agencies and individuals who can integrate this approach into the corporate DNA. Ultimately, it may be easier for brands to build this expertise than buy it from a firm.
In my opinion, this corporate integration process is far less about executing social media campaigns and more about the ability to explain to the CEO and CFO how they break-even.
Agreed Adrian, the biggest challenges we found in this role is the internal ones, this is a cultural shift.
Hi Jeremiah,
I think Carri nailed it on the proverbial head… her entire response was spot but especially this stanza…
“It’s my personal belief that nobody should be “running” social media within a company unless he/she has already created thousands of posts and built up thousands of friends, fans or followers.”
Yes, yes a thousand times yes!
It happens to my personal belief that many companies, large and small alike, establish/fund/staff a social media team because they think they have to; they fear being left out… they can then announce to the world that yes, they have their own dedicated social media team… all sounds, operative word being sounds, fantastic.
In reality, however, these same companies are woefully equipped to deal with day-to-day, nuts and bolts and whatever other euphemism you want to throw out when it comes to social media.
Great post and lots of food for thought… thank you!
Steve O
Hi Jeremiah,
I think Carri nailed it on the proverbial head… her entire response was spot but especially this stanza…
“It’s my personal belief that nobody should be “running” social media within a company unless he/she has already created thousands of posts and built up thousands of friends, fans or followers.”
Yes, yes a thousand times yes!
It happens to my personal belief that many companies, large and small alike, establish/fund/staff a social media team because they think they have to; they fear being left out… they can then announce to the world that yes, they have their own dedicated social media team… all sounds, operative word being sounds, fantastic.
In reality, however, these same companies are woefully equipped to deal with day-to-day, nuts and bolts and whatever other euphemism you want to throw out when it comes to social media.
Great post and lots of food for thought… thank you!
Steve O
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?
I personally think that the only good thing about Dell is that they gave you a fair severance package. Otherwise they have done nothing for people. Those who had been there a while started to bail. But I was just reaching a year and didn’t want to mess up my resume with such a short duration job so I stuck it out and believed them when they said it would get better. But in fact it never did. Me and other workers didn™t see the promised bonuses. And the rumors became certainty larger when a memo was leaked to some of the teams that the company was not going to pay bonuses even though some people had made their numbers¦..So think carefully if you are planning to work there.