The 2010 FedEx/Ketchum Social Media Benchmarking Study

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1 The 2010 FedEx/Ketchum Socia Media Benchmarking Study

2 A Note from FedEx and Ketchum Dear Coeague, We are excited to present you with our findings and insights from the 2010 FedEx/Ketchum Socia Media Benchmarking Study a comprehensive exporation of how socia media impacts today s communications andscape. This document refects the input of eaders from over 60 top goba organizations across most major industries. Study participants answered the socia media reated questions keeping many of us up at night: How do we everage socia media to drive interna cuture, brand performance, and reputation management? What is the appropriate budget aocation to support socia media programming? How shoud we adapt interna structures to deveop and ro out socia media strategies? What is the best way to measure the ROI of socia media spend? It is our sincere hope that you find the trends and best practices we uncovered as hepfu as we do, and that we wi continue to buid our coective strength in this new communications frontier together. Thanks to a those organizations who committed their time to this effort. This study woud not have happened without your enthusiastic participation. Best, Bi Margaritis SVP, Goba Communications FedEx Corporation David B. Rockand, Ph.D. Partner Ketchum, Inc. 2

3 TABLE OF CONTENTS Study Background Executive Summary... 8 Defining Terms and Payers. 10 Externa Socia Media Programming Interna Socia Media Programming Operationa Impications 32 Measurement. 33 Budgeting Team Evoution & Agency Support. 38 Concuding Thoughts & Contact Detais

4 Study Background

5 Motivation & Methodoogy FedEx and Ketchum initiated this study to benchmark best practices in everaging socia media to drive interna cuture, brand performance, and reputation management. Both organizations recognized a ack of in-depth research regarding how socia media impacts the way companies program, budget, and set up their teams. Ketchum used a standardized interview protoco to guide 30 minute conversations with Chief Communications Officers or their Socia Media Leads at 62 eading companies across most major industries. Interviews occurred between August and October

6 Participating Companies 6

7 Demographics: a Wide Range of Industries 15% 7% 3% 8% 6% 6% 3% 3% 15% 7 13% 9% 12% Airine Consumer Products Energy Financia Services Food & Beverage Heathcare Manufacturing Other Professiona Services Retai Technoogy Teecommunication

8 The way the word communicates is changing. You can either adapt or become irreevant. Executive Summary (1/2) 100% of companies reported some degree of socia media engagement regardess of industry. Participants agreed that socia media is a channe (not a strategy) that shoud be part of a hoistic communication and marketing approach tied to business goas. Companies recognized that socia media is distinct from traditiona channes in its interactivity, transparency, and embrace of informaity. These characteristics demand unparaeed degrees of coaboration across businesses and functions incuding Communications, Marketing, Lega/Compiance, and IT. Participants repeatedy stressed the necessity for transparency and authenticity in every socia media program, no matter its simpicity or sophistication. Socia media eaders argue that the voice and tone that works in traditiona corporate communications doesn t work on the socia web. Conversationa means credibe. Evauation of participants steps to deveop socia media programs reveaed seven distinct phases: Listening, Recaiming, Coaborating, Strategy & Panning, Experimenting, Assessing, and Refining. Twitter, Facebook, and YouTube are the dominant socia media patforms, but participants repeatedy conveyed the need to stay on top of emerging toos and technoogy in order to remain reevant. 8

9 If you re not open to feedback, you re not ready to pay. Executive Summary (2/2) Organizations recognized the rise of citizen journaism and the need to engage boggers to support brand deveopment and reputation management. Participants conveyed significanty greater focus on externa rather than interna socia media appications, but expressed strong interest in ramping up capabiities primariy via enhanced intranets in 2011 and beyond. Participants most frequenty estimated spending between five and fifteen percent of their overa communications budgets on socia media programming in Organizations are trending towards more forma coaborative socia media oversight modes that are incusive of diverse business units and functions. Most organizations do not have forma interna earning programs estabished to promote the deveopment of socia media expertise. Companies continue to see the vaue in partnering with third parties to deveop and execute socia media programming. 9

10 Defining Terms & Payers

11 Defining Terms: Socia Media vs. Digita Assets Participants agreed that socia media and digita assets are equay important, fundamentay different, and often compementary. Socia media is most commony characterized as a means for twoway diaogue with interna and externa stakehoders. Digita Assets are most commony described as owned properties, toos, or rich media content (e.g., websites, apps, or video) that companies create to support onine programming. Companies use digita assets to enrich the conversations they participate in via socia media forums. Externay, the most commony everaged socia media patforms incude: 11 Digita assets and socia media go handin hand. They re the toos that power the socia web.

12 Who s Paying and Why? 100% of study participants reported some degree of socia media presence. The most common externa objectives incuded: Generating word of mouth advocacy Deveoping brand oyaty and coser reationships with customers Addressing customer care issues Educating costumers and media about company-reated issues Supporting product/service aunch/saes Each major channe (Twitter, Facebook, and YouTube) serves its own purpose and participants were hesitant to compare effectiveness across mediums. Twitter is the favored channe supporting customer care and media reations. Facebook and YouTube are most frequenty everaged to deveop brand oyaty and coser reationships with customers, and to share product/service information. If you re not there, you re noticeaby absent. It s here to stay and there s no use ignoring it. 12

13 Leadership, Participation, and Observation Participants fe into three distinct categories based on their degree of socia media engagement. Current socia media eaders are mosty B2C companies. Leadership Engrain socia media in every aspect of communication. Identify and integrate new socia media toos on an ongoing basis. Empoy in-house team of three or more socia media speciaists. Participation Engrain socia media in some aspects of communication. Expore integration of new socia media toos foowing vaidation from businesses eading in the socia space. Hire 1 speciaist and/or expand responsibiities of communicators to incude socia media competence and rey on agency support for expert counse. Observation Engrain socia media in few aspects of communication. Seek to buid awareness of the socia media andscape and how to pay effectivey. Expand responsibiities of communicators to incude socia media competence and rey on agency support for expert counse. 15% *Note: Percentages refect estimates based on evauation of participant profies deveoped via interviews % 75% You don t aways have to be a eader. Sometimes it s okay to be a cose foower. It a depends what you re trying to achieve.

14 We found a strong socia media advocate on the Compiance team, and that made a the difference in the word in terms of seing our ideas in to eadership. 4 What About Companies in Reguated Industries? Companies in reguated industries (heathcare, financia services, energy, etc.) reported socia media participation despite cear ega hurdes. Participant Insights ideas for socia media success in reguated industries 1. Research the rues regarding discosure and reporting. 2. Manage interna stakehoder expectations and identify interna champions from across the enterprise. 3. Estabish a business case and ongoing management pan with Lega/Compiance teams. 4. In particuary risk-averse cutures, consider focusing socia media outreach on a specific theme ike Corporate Responsibiity efforts. 14

15 The B2B Opportunity B2B companies aso reported significant socia media programming across the major channes. B2B participants agged behind their B2C counterparts in terms of the depth and sophistication of programming, but shared pans for ramping up participation. B2C companies are eading the socia space now but B2Bs are just waking up to these toos and the best wi earn how to everage them to win. Participant Insights 3 ideas driving B2B socia media trends 1. Even if buyers are senior and ess ikey to care about socia media, the managers who infuence them do. 2. As the prevaence of e-commerce continues to grow, so does the opportunity to drive traffic to websites through digita and socia media programming. 3. Video trumps words when it comes to expaining products and services in simpe, visuay compeing ways. 15

16 Externa Socia Media Programming

17 Strategy vs. Channe Participants agreed that socia media is a channe, not a strategy Socia media programming shoud be part of a hoistic communication and marketing approach tied to business goas. I reaize everyone is teing you socia media is a unicorn, but maybe it s just a horse? There was wide-spread agreement that socia media is not a Jay Baer, siver buet for communication and marketing effectiveness. Independent Socia Media Strategist Companies recognized that socia media is distinct from traditiona channes in its interactivity, transparency, and embrace of informaity. These characteristics demand unparaeed degrees of coaboration across businesses and functions incuding Communications, Marketing, Lega/Compiance, and IT. 17

18 Getting Started Evauation of participants steps to deveop socia media programs reveaed seven distinct phases. Craw. Wak. Run. Be very deiberate about what you re doing, and very conscious aong the way.. 18

19 Nai the Fundamentas: Participation & Panning Participant Insights Two ways to crash and burn out of the gate (and how to avoid them) LACK OF ONGOING PARTICIPATION Engaging in socia media demands ongoing participation the diaogue doesn t start or stop around a crisis or product aunch. LACK OF A CRISIS RESPONSE STRATEGY You ve got to have a socia media-oriented crisis management pan to protect against the risk of vira reputation chaenges. 19

20 The Twin Piars of Transparency & Authenticity Participants repeatedy stressed the necessity for transparency and authenticity in every socia media program, no matter its simpicity or sophistication. Socia media eaders argue that the voice and tone that works in traditiona corporate communications doesn t work on the socia web. CONVERSATIONAL = CREDIBLE That doesn t mean more buttoned-up organizations shoudn t be true to their brands it s a matter of estabishing a tone that s comfortabe and authentic for the company and its customers. You have to be genuine onine same as the rea word. Peope reaize when you re faking it. Organizations aso expressed awareness of the onine pubic s aversion for the overy-promotiona. Before aunching any new socia endeavor, ask yoursef: WHAT VALUE ARE WE ADDING TO THE COMMUNITIES WE SEEK TO ENGAGE? 20

21 Content What s Shareabe? is king the toos are important but they are ony toos. Authentic messaging is what s important. Participating companies characterized the content that is most often shared among target audiences in two ways: ENTERTAINING OR HELPFUL What makes content entertaining depends on the audience. Funny and cute were often used to describe highy regarded content. Hepfu content provides information about products or services that enhances the customer experience. Participants reported that breaking news or sneak peaks of new products or services shared via socia media channes received positive responses among customers. 21

22 Using the Big Three: Twitter, Facebook, and YouTube The socia media space is rapidy evoving and new technoogies and toos are consistenty emerging. Even if companies are not using the atest patforms, (e.g., Foursquare, Gowaa, Tumbr) most agree that keeping up with what s trending is important. At present Twitter, Facebook, and YouTube are the dominant patforms, and in the foowing sides we feature three ceebrated programs from participating companies. 22

23 Tacking Twitter with GM GM tackes reputation management using mutipe socia media channes incuding Twitter. Training empoyees to send a mix of both persona and professiona tweets and status updates buids perceptions of GM s softer, more human side even through times of crisis. To begin, GM deveoped an onine socia media training porta for novice users and offered advanced in-person courses for more web savvy team members. About 2,000 empoyees competed the onine introduction in its first two months aone and thousands more have participated since. GM is currenty updating its socia media poicy and training approach to require a empoyees to go through training whie creating two distinct groups of users those who are authorized to speak on behaf of GM and everyone ese. Empoyee driven socia media programming continues to support GM s emergence from bankruptcy and brand buiding efforts. Empoyee tweet exampes incude: Great weather for the bike commute today! Source: Mier, Lindsay. Can GM empoyees woo the country back through socia media? May 3, GM socia media training porta Repaying taxpayers ahead of schedue because we are designing, buiding, and seing the best cars and trucks ever.

24 Facebook Fantasy with PepsiCo and Doritos PepsiCo s Doritos Canada everaged Facebook to promote a contest where users were asked to name a mysterious new chip favor and create a 30-second video commercia advertising it. Doritos offered $25,000 and 1% of future consumer saes to the winning commercia and name. The contest drew over 75,000 participants, 14.5 miion page views, and 2.1 miion video views. More than 900,000 consumers visited the Doritos Facebook page over the course of the two-month campaign. Doritos' saes in Canada doubed during that time. Source: Wood, Cara. Creative soutions from Doritos, Cub ABC Tours, Meg Whitman. Direct Marketing News. October 12,

25 Utiizing YouTube with Ford Ford gave away 100 Ford Fiestas for six months compete with free gas, insurance, parking and a concierge service to 100 ucky recipients. Each one was sent on monthy missions which were documented for pubic consumption and shared across major socia media patforms. Officia Fiesta Movement content has drawn 6.5 miion YouTube views and 3.7 miion Twitter impressions. The program has eicited the interest of about 50,000 potentia buyers, 97% of which don t currenty drive a Ford. Ford sod 10,000 units in the first six days of saes. Source: McCracken, George. How Ford Got Socia Marketing Right. Harvard Business Review. January 7,

26 Navigating the Bogosphere Organizations recognized the rise of citizen journaism and the need to engage boggers to support brand deveopment and reputation management. Bogger outreach is now part of most participating companies genera media reations strategies. Most companies stressed the need to differentiate between boggers with rea infuence versus those with reativey sma foowings everaging monitoring services to determine the appropriate eve of engagement. Participant Insights 3 ideas supporting stronger bogger reationships 1. Invite boggers to on-site events and give them specia access to products and services. You can t be everywhere. Concentrate on where your consumers are. 2. Be transparent about reevant business goas and ensure boggers discose their association with the company. 3. Consider providing boggers deconstructed content (key facts and inks) rather than traditiona press reeases to enabe them to better use their unique voices in posts. 26

27 Interna Socia Media Programming

28 Growing Interest in Interna Socia Media Appications Participants conveyed significanty greater focus on externa rather than interna socia media appications, but expressed strong interest in ramping up capabiities primariy via socia media equipped intranets in 2011 and beyond. The most frequenty referenced intranet features incuded eadership bogs, wikis, and Facebook-ike interfaces. 40% of study participants aready have socia media equipped intranets 50% of study participants pan to redesign their intranets in the next one to two years to incude greater socia media capabiities 10% of study participants do not have significant socia media intranet capabiity and do not pan to add toos in the next one to two years *Note: Percentages refect estimates based on evauation of participant profies deveoped via interviews. 28 These toos present a whoe new way of coaborating across the enterprise.

29 Empoyees are using socia media a the time at home. Now, we re using the toos they re famiiar with in the workpace. Adding Vaue Inside the Enterprise The most common interna socia media objectives were: Enhancing knowedge management Supporting coaboration within and across teams, functions, and geographies Deveoping cuture and community Participants reported that investment in interna socia media appications is most strongy tied to too purchase and deveopment. Upkeep and ongoing management is not a major cost. 29 Organizations use intranet anaytics (bog deveopment, comments, discussion board activity, etc.) and broader engagement and communications survey resuts to monitor and measure the impact of interna socia media programming.

30 Three Keys to Effective Intranet Management Participants agreed on three critica steps guiding effective intranet deveopment and ongoing management: 1. Ensure proper eadership and empoyee buy-in. Create a business case to buid executive support. Begin and end deveopment with empoyee needs in mind not a corporate vision. Engage empoyees throughout the design process to deveop a user-centric experience. 2. Estabish strategic ro-out pans incuding piot programs. Leverage forma interna communications channes and informa infuencers to drive awareness and adoption. Ensure opportunities for training and diaogue about how to everage new toos. 3. Buid ongoing governance and moderation pans. Estabish cear roes and responsibiities to ensure effective content management at corporate and oca eves. Be patient and deveop thick skin. It takes a whie to get an effective intranet off the ground. 30

31 Deveoping Socia Media Poicies Participant Insights themes regarding empoyee socia media poicy deveopment: 4 1. Most companies either have, or pan to deveop socia media poicies in the next year, citing socia media s popuarity and the need to manage risk. 2. Effective poicies are natura extensions of existing codes of conduct. For exampe: Keep confidentia information private Ony speak on behaf of the company if authorized Identify yoursef as an empoyee if endorsing a product/service 3. Strong poicy deveopment is the resut of: Externa benchmarking many poicies are pubished Cross-functiona coaboration typicay Comms/ Marketing, Lega/Compiance, and HR pay eading roes 4. Empoyee buy-in and adoption of poicies is driven by cear interna communication and reevant earning opportunities. 31

32 Operationa Impications 32

33 Cracking the Code on Monitoring & Measurement Companies are distinguishing between monitoring of onine mentions and activity versus measuring the ROI of socia media spend. Participants cited Radian6 as the paid monitoring partner of choice, but competitors such as BuzzMetrics, Evove24, Focus, Symphony, and Sysomos (among others) were aso mentioned. The most common free services incude TweetDeck and Googe Aerts. Everyone is strugging to figure out how you determine the impact on the business. It might not be a doar figure. Participants generay agreed that there is no consistent, reiabe approach to measurement and determining ROI. There is widespread agreement that ooking soey at metrics ike foowers, friends, or views is not sufficient. Companies expressed the desire to improve the way they assess quaity of onine interaction, eve of user engagement, and utimatey impact on business performance. 33

34 Measurement Progress: The Barceona Principes Top experts from the Association for Measurement and the Evauation of Communication (AMEC), the Pubic Reations Society of America (PRSA), and other major industry organizations have estabished a set of seven principes to guide communications measurement. Principe six states that socia media can and shoud be measured and outines the foowing agreements to inform future socia media measurement efforts: Socia media measurement is a discipine, not a too; but there is no singe metric. Organizations need ceary defined goas and outcomes for socia media. Media content anaysis shoud be suppemented by web and search anaytics, saes and CRM data, survey data and other methods. Evauating quaity and quantity is critica, just as it is with conventiona media. Measurement must focus on conversation and communities not just coverage. Understanding reach and infuence is important, but existing sources are not accessibe, transparent or consistent enough to be reiabe; experimentation and testing are key to success. 34

35 How Much Does it Cost? Most participants don t ine-item socia media in annua budgets. Money is aocated on a project by project basis by different functions, divisions, or sub-brands, depending on type and need. Participants most frequenty estimated spending between five and fifteen percent of their overa externa communications budgets on socia media programming in Most organizations predicted budget increases in socia media spending in 2011, but participants were hesitant to quantify growth estimates. Socia media programming budgets may be off-set by investment in taent (FTEs) with specific socia media-reated roes (saary is a fixed cost). Typicay, there is more budget aocated to digita assets than socia media programming they re costy, but aso more estabished, better understood, and easier to measure. 35 There s a reason it s caed return on investment you have to put in to get out.

36 The Evoution of the Communications Team Structure Communications tends to oversee socia media programming and execution, but Marketing aso pays a eading roe particuary when socia media programming is oriented around product aunch and promotion. Lega/Compiance teams are more integray invoved in socia media programming in reguated industries. Organizations are trending towards more forma coaborative socia media oversight modes that are incusive of diverse business units and functions (Comms, Marketing, Lega/Compiance, Business Leaders). There are disparate approaches to evoving team structures. Some organizations have created new groups of 1-10 peope focused excusivey on socia media. Others rey on current staff to expand their expertise. The direction of choice depends on whether organizations see vaue in eading in this space or if they re content to be participants. Most organizations are either aready incuding or pan to incude a degree of socia media competency in job descriptions. Socia media is forcing business units to coaborate in ways they never have before. You reay have to be aigned across the enterprise. 36

37 Buiding Socia Media Capabiities Most organizations do not have forma interna earning programs estabished to promote the deveopment of socia media expertise. Participants everage the foowing earning soutions to support socia media competence buiding among communications team members: Peer-to-peer training: Many companies identified interna socia media experts and empowered them to bring coeagues up to speed. Reverse mentoring: Younger professionas are frequenty tapped to onboard more experienced team members. One-off courses provided by agencies: Most participants mentioned everaging agency-sponsored workshops to buid socia media knowedge. Many participants advocated attending socia media conferences, but highighted that many cover famiiar territory and the most effective ones are targeted at their particuar industries. 37 We ve found it works great to have a peer ead training sessions. Peope are more receptive to new ideas from someone they know.

38 You need an expert whether in-house or agency-based to reay make the most of socia media. Agencies & Vendors Most organizations continue to see vaue in partnering with third parties to deveop and execute socia media programming. Participants reported that PR and Advertising firms both have significant infuence as socia media counseors. Boutique digita and socia media shops aso provide vauabe insight to a smaer portion of study participants. Most companies did not share pans to significanty shift the nature or scope of agency engagement. 38

39 Concuding Thoughts & Contact Detais Socia media is disrupting the way the word communicates and companies must continue to evove how they interact with peope to remain reevant. The pace and scope of change as new toos and technoogy emerge demands an unparaeed degree of organizationa nimbeness. As digita and socia toos become the go-to resources for everything from news and information to friendship and ove, smart brands wi continue to figure out better ways to add vaue to the onine experience internay and externay. We ook forward to addressing your feedback, questions, or comments. Renee Horne Director, Digita & Socia Media Engagement FedEx Corporation Danie Dworkin Senior Consutant Ketchum Peon Change Discaimer: FedEx and Ketchum are providing this summary for informationa purposes ony. We are not providing advice, ega or otherwise. 39

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