From Campaigns to Capabilities - The Impact of Social Media on Marketing and Beyond

8/2/2019 From Campaigns to Capabilities - The Impact of Social Media on Marketing and Beyond

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Christopher Vollmer

Karen Premo

Perspective

From Campaignsto CapabilitiesThe Impact of

Social Media on Marketing and Beyond



Contact Information

New York Christopher Vollmer

Partner

+1-212-551-6794

[email protected]

Karen Premo

Principal

+1-212-551-6683

[email protected]

Booz & Company



1Booz & Company

EXECUTIVE

SUMMARY

Booz & Company and Buddy Media, the social enterprise

software leader, teamed up in 2011 to identify the capabili-

ties that companies need to excel in social media. This study,

Campaigns to Capabilities: Social Media and Marketing

2011, incorporated a quantitative survey of 117 leading com-

panies and a series of in-depth interviews with senior execu-

tives from across the marketing and media ecosystem. The

study focused on how leading companies are transforming

their strategies, skills, and processes to enable social media

to play an expanding role in their marketing efforts and in

their enterprises as a whole. Unlike much of the research to

date, which has focused on the tactics that companies are

pursuing in social media, the Booz & Company/Buddy Media

study concentrated exclusively on the capability priorities

associated with social media, and the focused actions com-

panies need to take as their social and digital media activities

increase in scale. As more companies rene their use of social

media, it will dramatically transform how they connect their

brands with consumers, and how they dene and build their

marketing capabilities.



2 Booz & Company

Burberry Group has a rich heritage

that would make many companies

envious. Founded 156 years ago,

this global purveyor of luxury

apparel has long been dened by anovert Britishness, a trio of instantly

recognizable icons (the trench

coat, the trademark check, and the

“Prorsum” knight logo), and a deft

creativity that ensures its designs are

timeless, yet contemporary. Now

there is a new dening element toBurberry’s success: the creation and

distribution of branded digital and

social media experiences.

Just look at how dramatically

Burberry has reimagined its fashion

shows—once elite, exclusive, and

effectively off-limits to the brand’s

many fans—for the era of social

media. In 2011, Burberry streamed a

live video feed of its spring/summer

and fall/winter shows, distributing itscontent directly to fans on Facebook

(10.7 million as of February 2012)

and to video viewers on Google’s

YouTube (11.0 million unique video

views and about 30,000 subscribers

as of February 2012). Partnering with

Twitter, Burberry also created the“Tweetwalk,” an innovative, real-time

social media experience where every

fashion show element was tweeted

before the models hit the runway.

This gave Burberry’s Twitter followers

(773,000 as of February 2012)

unique “see it rst” access ahead of

everyone including Vogue editor Anna

Wintour. By leveraging the scale and

engagement of Facebook, Twitter, and

YouTube, Burberry has effectively

reinvented its fashion shows ascontent-rich social experiences that

now engage millions of fans and

interested consumers, rather than just

a few insiders.

BURBERRY: A

SOCIAL MEDIASUCCESS STORY

A new defning element to

Burberry’s success is the creation

and distribution of branded digital

and social media experiences.



3Booz & Company

The ability to tell stories directly to

consumers via social media is also

reshaping how Burberry launchesnew products. When its fragrance

Body debuted in the fall of 2011,

Burberry’s Facebook fans were invited

to a “fan-rst” sampling promotion

that generated more than 225,000

requests in the rst week alone. The

Body video campaign, starring actress

Rosie Huntington-Whiteley and

shot by famed fashion photographer

Mario Testino, premiered not on

broadcast TV but on Burberry.com

and the brand’s YouTube channel,further supported by a launch day

“takeover” of YouTube’s homepage

in 13 countries. Consumers could also

buy the scent with a simple click on

the Burberry Facebook Body tab; in

this way, the brand closed the loop

with its community of fans, taking

them on the digital path to purchase.

What makes Burberry so successful in

social media? The deliberate building

of specic capabilities around

community management, content

development, and real-time analytics

has enabled the company to develop

powerful, direct, and multiplatformconnections with consumers who

want to engage with the brand.

For Burberry, this strategic focus

on marketing innovation has been

transformative. “Burberry is now

as much a media-content company

as we are a design company,” says

creative director Christopher Bailey.

In short, Burberry has been successful

in social media because it rapidly put

in place a new and distinctive set of

capabilities to support the digitizationof its brand and the consumer

experience around it.

Looking at Burberry’s moves—and

those of other innovators like Audi,

Coca-Cola, Diageo, Nike, Procter

& Gamble, and Starwood Hotels &

Resorts Worldwide—it is clear that

social media, in just a few years, has

affected not just how decisions about

the media mix are being made, but

how brand marketing itself is being

prosecuted. The traditional “stop

and start, command and control”

model of brand management is

morphing into a decidedly moredynamic marketing model. It is

always on. It is iterative. It is content-

and people-intensive. It is social by

design: focused on participation and

activation, not just awareness and

consideration. And as Burberry’s

example illustrates, this new model

requires very different capabilities

from those that most companies

possess today.

In Campaigns to Capabilities: SocialMedia and Marketing 2011, three

major capabilities come to the fore:

community management, content

development, and real-time analytics.

For companies in all sectors, the

evolution of these capabilities,

concentrated around the “big three”

social media platforms of Facebook,

Twitter, and YouTube, represents

a major opportunity to generate

business value by building powerful,

lasting relationships with consumers

through digital communities.



4 Booz & Company

Recommendations. Referrals. Buzz.

Marketers have long known that

consumers value the recommenda-

tions of a trusted friend or expert

more than any form of advertising.

Since the emergence of social diffu-

sion theory in the 1950s, marketers

have sought to harness the power of

social networks and word of mouth

to inuence consumers’ decisions

about what they like and what theypurchase. The importance of social

marketing is continually conrmed by

research—most recently by Nielsen’s

Global Online Consumer Survey,

which showed that 90 percent of con-

sumers trust recommendations from

people they know. Nielsen found that

this social recommendation factor in

fact tops all other media sources and

advertising formats, including TV (62

percent), newspapers (61 percent),

and magazines (59 percent).

Marketers have, however, histori-

cally lacked the key ingredient for

social word of mouth to be a bigger

part of their playbooks. They cannot

generate it at a scale comparable to

conventional mass media. Only now

are the tools available to make it

happen: social media platforms such

as Facebook (850 million users),

Twitter (300 million users), and

YouTube (where 100 million people

interact with one another by liking,

sharing, or commenting on videos

every week). Through social media,

companies can connect with consum-

ers directly at a global, national, or

local level, expanding their reach

through a few well-designed moves or

targeting specic groups of consumers

based on more dened communities

of interest.

The growth of social media among

consumers since Facebook’s launch in

2004 has been explosive. Consumers

now spend most of their digital timethere. According to Nielsen, social

media and blogs account for 23 per-

cent of all consumer activity online.

This is more than twice as much

as the next largest category, online

games, where consumers spend only

about 10 percent of their time. Social

media is becoming the hub of all

digital activity: as the starting point

for engaging with family, friends, and

acquaintances, and beyond that, as a

way to discover content and connectwith brands. Whether it’s a hot article

to read, a must-see video, or a brand

they adore, consumers look for it on

Facebook, Twitter, or YouTube.

“Digital technology has become

the most important, fastest, and

most inuential medium,” says Ajaz

Ahmed, chairman and founder of

AKQA, one of the world’s leading

digital advertising agencies. “Social

networks are now the operating sys-

tems for consumers’ lives. They have

rapidly become indispensable.”

Many companies are naturally

attracted by the promise of a large-

scale media offering that aggregates

self-selected consumers—eager to

share stories, content, and recom-

mendations about brands and

products—and enables the targeting

of these consumers based on actual

preferences and behaviors. Marketers

have responded by increasing their

participation in social media, most

typically via a dedicated presencesuch as a fan page, a newsfeed, or a

branded channel and by incorporat-

ing social media elements into their

marketing campaigns. According to

eMarketer, 80 percent of companies

are using some kind of social media

platform or tool in their marketing

today, nearly double the percentage

in 2008. Advertising on social media

has grown 40 percent per year from

2008 to 2011, and now represents

US$5.5 billion in global advertisingspending, according to eMarketer.

This amount also represents only a

fraction of marketers’ total social

media investment, as it generally does

not include the greater expense associ-

ated with developing and maintaining

a branded social media presence.

THE GROWTH OFSOCIAL MEDIA

“Social networks are now the

operating systems for consumers’

lives. They have rapidly become

indispensable.”



5Booz & Company

Most companies to date have

focused their social media efforts on

Facebook, Twitter, and YouTube,

rather than on a broad range of social

networks, blogs, and location-based

services. The dominance of these

“big three” platforms, especiallyFacebook, is conrmed by the

Booz & Company/Buddy Media

research. Ninety-four percent of

respondents regard Facebook as

one of their top three social media

platform priorities. Seventy-seven

percent include Twitter in this group.

And 42 percent say YouTube belongs

here too.

Even as their investments grow, most

companies have yet to allocate a

signicant amount of their marketing

spending to social media. Today,

Fortune 500 companies spend only

a fraction of their digital marketingbudget, which itself averages 15 to

20 percent of total marketing spend,

on social media. For example, 89

percent of respondents to the


study spend less than 10 percent

of their digital marketing budgets

on social media. The reality is

that though there have been some

high-prole campaigns—Coca-

Cola’s Expedition 206, Nike’s

Write the Future, and P&G’s OldSpice Responses, for example—and

there are some early leaders like

Burberry, most companies are still

at the early stages in terms of their

social media efforts. Our Campaigns

to Capabilities study revealed that

companies recognize the need to

expand their social and digital

marketing efforts signicantly, and

many are taking concrete steps to do

so. Relevant ndings from the


study include the following:

Social media is a CEO agenda item•

for 40 percent of the responding

companies.

Social media is a top marketing•

priority for 2012 for about 60

percent of the respondents.

64 percent of companies have a•

dedicated team for social media.

78 percent of companies believe•

social media efforts enhance their

marketing effectiveness.

95 percent of companies expect to•

invest more in social media.

96 percent of companies are devel-•

oping a specic strategy for social

media.

The leading companies are shifting

their focus from campaigns—exper-

iments, tactics, or one-off efforts

that are challenging to replicate—to

capabilities that enable them to more

reliably and consistently deliver a

CAMPAIGNS

TO CAPABILITIES



6 Booz & Company

distinctive outcome, relevant to their

business, through the right combina-

tion of processes, tools, knowledge,skills, and organization. Specically,

success in social media requires com-

panies to develop deep capabilities

in new areas: in community manage-

ment to grow and activate audiences,

in content development to engage

target consumers, and in real-time

insights to analyze consumer behavior

and measure impact (see Exhibit 1).

Leading companies are not just

building these capabilities, but also

investing to make them distinctive: so

ingrained, procient, and individually

tailored to their strategies and mis-

sions that competitors cannot catch

up. To accomplish this, companies

must actively transform their keybusiness functions. This transforma-

tion typically begins with marketing

but will ultimately expand to include

customer service, consumer insight,

sales, and even product development.

Source: Booz & Company

Exhibit 1 A Capabilities System for Social Media Success

c. Consumer Insights

a. Engagement Optimization

b. Content Management

1. Community Management: Monitoring, engaging, servicing,and activating a social media presence and fan base

2. Content Development: Creation and sourcing of brand-and audience-relevant content

3. Real-Time Analytics: Ability to analyze and interpret socialmedia activity as it happens

1. CommunityManagement

2. ContentDevelopment

3. Real-TimeAnalytics

Primary Capabilities

a. Engagement Optimization: Design and execution of the socialmedia experience to drive participation and activation

b. Content Management: Tracking, cataloging, storage, and servingof content assets of all types

c. Consumer Insights: Understanding of drivers of communitybehavior and interest

Supporting Capabilities



7Booz & Company

Though social media may be used

broadly across an enterprise, it is the

marketers who effectively “own social”

in 81 percent of the companies that

participated in the Booz & Company/

Buddy Media study. Today, advertis-

ing is the dominant use case for social

media, with 96 percent of companiesusing social media to support advertis-

ing objectives. Signicantly, companies

are also prioritizing the integration of

social media into their overall market-

ing efforts, rather than developing

islands of specialized expertise. For

example, 65 percent of companies are

actively planning to integrate social

media into all of their advertising and

marketing activities—an important

sign that social media is moving from

the periphery to the center of most

marketing agendas.

Marketers are owning the social media

agenda because in most companies they

own the brand or product positioning,

the market-facing value proposition,

and the composition of the marketing

mix. They are also the executives most

likely to be in the ow of consumer

conversations and insights. For many

brand-focused marketers, social media

sits tantalizingly high on top of the

purchase funnel—in contrast to other

forms of digital advertising, such as

the search and display banners that

are more often associated with direct

response marketing. In discussions with

Booz & Company for this study, many

senior marketers who have not spentsignicantly on digital to date stressed

that they are looking at social media

as more of a branding tool because of

its interactive nature and its ability to

forge relationships between consumers

and brands. Thus, when asked where

they see the most benet from social

media, 90 percent of respondents

said “brand building,” 88 percent

cited “buzz building,” and 81 percent

replied “consumer insights.”

An even more fundamental develop-

ment is the inuence of social media on

the marketing function itself at many

companies. The adoption of social

media by companies is in fact changing

the practice of marketing from one of

“brand management,” where cam-

paigns are tightly controlled by brand

executives and dominated by paid

media, to one of “brand curation,”

where campaigns are designed by mar-

keters and characterized by a seemingly

less orchestrated and linked mashup of

paid, earned, owned, and shared media

(see Exhibit 2). This new model is also

more dynamic, real-time, and itera-

tive. Its core tenets are engagement,

participation, and advocacy. It connects

brands directly to consumers, and also

enables brands to connect consumersto one another. Mark Parker, Nike’s

CEO, described the positive impact of

this new model on his business on a

recent earnings call: “Social network-

ing and digital communication is

helping us unify and expand the family

of sport. We’ve never been closer to

consumers as they continue to extend

their reach and connect even more with

each other, with their sports heroes and

their favorite teams.”

MARKETING:THE FOCALPOINT FORSOCIAL MEDIA

INNOVATION

Source: Booz & Company

Exhibit 2 Brand Management Moving to Brand Curation

Traditional Marketing Model New Marketing Model

Anchored around participation and activating fans Anchored around awareness

Focused on integrating paid, earned, owned and shared mediaFocused on procuring paid media

Emphasis on conversation and relationship valueEmphasis on being in control of media messaging

Brand managers are “universal soldiers” with digital expertiseDigital expertise anchored in specialists and COEs

Dynamic, always on, and iterativeFixed, turn on/turn off, and long lead times



8 Booz & Company

Everyone knows that a key ingredient

for a great dinner party is a switched-

on host who curates a fabulous mix of guests, stimulates lively and interesting

conversation, and graciously attends to

a variety of needs throughout the eve-

ning. Terric food, drink, and activities

enable people to connect, engage, and

linger. The host knows how to read

the room, “analyze” the party in real

time, and make rapid adjustments to

improve it—a quick tweak to the seat-

ing chart, a personal introduction to

ensure the right contact is made, or a

subtle change to the playlist to enhancethe evening’s ambience. All of this

makes guests eager to return.

The ingredients of a successful dinner

party—including the central role of

the host—is a perfect metaphor for the

skills and mind-sets that companies

need to build a distinctive social media

capability. As one brand manager from

a major cosmetics company puts it,

“You have to realize that social media

is a party and you’re the host. There

might be someone in the corner—be

generous and gracious and invite himin. There are stars who will it in and

leave. The whole point is to get people

together.”

As anyone who has hosted a successful

dinner party knows, it takes planning,

effort, and care to create an appealing

social environment—a place where

guests feel welcome and where they

comfortably engage in rich, interesting

conversations, sharing thoughts and

views with friends, old and new. Thebest hosts make it appear effortless, but

they privately acknowledge how much

work it takes. As companies seek to

expand and strengthen the impact of

their social media efforts, marketers are

learning to play the role of the “host”

with increasing levels of sophistica-

tion. For the vast majority of them, it

requires building new capabilities that

have not been part of their traditional

tool kit.

NEW

CAPABILITIESREQUIRE NEWMIND-SETS



9Booz & Company

At most large companies, the

cutting edge of marketing can be

found in social media communities

today. As companies begin building

brands via Facebook pages, Twitter

feeds, YouTube channels, and even

Google+ circles, they realize quickly

that establishing a social mediapresence is only the beginning.

It’s the equivalent of sending the

invitations to a dinner party. Thus,

community management—the art

and science of convening and hosting

fans in social media—has become a

vitally important new capability for

companies and their marketers.

Community management involves

engaging, monitoring, servicing, and

activating a company’s social mediafan base across multiple social media

platforms. This discipline has become

critical to ensuring that a brand’s

social media community is healthy,

active, and growing. Furthermore,

once visitors become fans, companies

have the responsibility to listen to

them and reward their behavior

with an “always on” social media

experience that is responsive,

interesting, and attentive. If not,

companies may face disappointment

and disfavor from many of their

most valued consumers. Companies

also need to ensure that their social

communities expand in directions

that are coherent with their business

goals. For all of these reasons, strong

community management has become

imperative for social media success.

Most marketers know how to managebrands, not real-time communities.

The skills required for community

management stretch well beyond those

associated with traditional brand

management. There are ve core

prociencies:

Listening:• understanding what

fans in the community are saying;

identifying hot topics, what fans

are doing and sharing, and why;

creating a two-way feedback loopthat drives consumer insights

Curating:• overseeing the editorial

experience; stimulating meaningful

discussion; making content and

conversation discoverable and

interesting; ensuring that the

brand’s voice and presence are

coherent and authentic

Responding:• providing service to

the community; helping to resolve

issues, questions, and problems;

connecting to advocates and

opinion leaders; creating emotional

connections with fans

Measuring:• analyzing fans’

activities and community behaviors;

tracking effectiveness of campaigns

against business and brand

objectives; assessing communityvibrancy, sentiment, and growth

Innovating:• anticipating what

is next for a brand’s fan base in

new content, tools, and social

or digital media experiences (for

example, mobile, apps, and niche

communities)

Not surprisingly, these new require-

ments and their vital importance

concern many companies. About 50percent of the survey respondents

said the lack of sufcient community

CAPABILITYPRIORITY 1:COMMUNITYMANAGEMENT

The skills required for community

management stretch well beyond

those associated with traditional

brand management.



10 Booz & Company

management resources in their orga-

nizations represents a major barrier to

social media success (see Exhibit 3).

Furthermore, their top concern around

social media is the labor-intensity of

community management: 61 percent

of the respondents expressed concern,

compared to only 13 percent who are

focused on social media’s overall cost.

Despite the meteoric growth of social

media platforms, many companies

are still not fully comfortable with

the digital megaphone inherent in this

medium; 58 percent are concerned

with negative word of mouth or PR,

and 55 percent worry that they are

losing control of their brand messages.

“You have to be on 24/7,” noted a

senior executive with a major apparelbrand. “You have to respond to

customers all the time. Issues escalate

so fast, you can be held hostage by

someone in social media.”

Community management is a

dynamic, complex, and people-

intensive function, one that cannot be

outsourced lightly. Senior executives

recognize that community manage-

ment is central to social media success

and that they need dedicated in-house

expertise to make it happen sustain-

ably. Already, among the companies

surveyed by Booz & Company and

Buddy Media that have their own ded-

icated social media staffs, two-thirds

have internal resources dedicated spe-

cically to community management.

Part brand champion, part chief

listener, part Superfan, and always

“mission control,” the community

management professional brings a

variety of skills to bear. Executives incommunity management need to be

experts on their brands, audiences,

and communities. They know them

inside and out. A senior executive

with a major entertainment company

described the ideal job spec this way:

“The guy who runs Facebook for us is

an über-fan. That’s the kind of person

you need.”

Successful community management

also requires a fusion of technical and

creative expertise. Campaign updates

(such as stories, pictures, news,

videos, slide shows, and polls) must

be drafted, scheduled, and posted

with an awareness of engagement

and sharing potential. Conversations

must be initiated. Fan responses

must be addressed. Multiple social

media platforms—Facebook, Twitter,

YouTube, company blogs, etc.—must

be managed with content sourced

and tailored for each. Throughout

all of this, campaign analytics andmetrics must be reviewed and assessed

to determine what is resonating and

what is not, and community managers

must make decisions on the y to

continually enhance the community

Source: Booz & Company/Buddy Media Campaigns to Capabilities: Social Media and Marketing 2011 survey results

Exhibit 3Top Five Organizational Challenges for Social Media

Lack ofUnderstanding Among

Senior Leaders

Insufficient ResourcesDedicated to

Community Management

Not EnoughCross-Departmental

Collaboration

57%52% 51%

48%43%

Not Core toOverall Strategy

Difficulty ofProving ROI

PERCENTAGE OF SURVEY RESPONDENTS INDICATING THIS WAS A SIGNIFICANTOR VERY SIGNIFICANT CHALLENGE



11Booz & Company

Starwood: Where Social Means More Than Marketing

Even before the term “social media” was coined, Starwood Hotels

& Resorts had a dedicated professional in the eld. “He was called

the ‘Lurker,’” says Alyssa Waxenberg, the senior director of emerging

platforms for the hotel chain. “He was on our customer service team,

and he would engage our customers on travel forums like FlyerTalk. Heanswered questions, resolved issues, and showed us complaints that

he came across online. He became something of a mini-celebrity in the

hotel industry and a real champion of our guests.”

Starwood’s Lurker was only an introduction to the impact of social

media; it did not take long for senior management to catch on to the

value of this form of marketing. The owner of such major brands as

Westin, St. Regis, Sheraton, and W, Starwood uses social media to get

in front of current and potential customers with information, offers, and

personalized experiences intended to surprise and delight guests—and

to cement their loyalty to the company’s brands. “We are leveraging

social media in all we do,” says Waxenberg. “We have Facebook tabs,

Facebook walls, Twitter channels, and Foursquare tie-ins with our loyaltyprogram. All of these enable us to broaden our reach, follow up in real

time, and stay engaged with our guests,” she says.

But social media is not strictly seen as an advertising vehicle. “You can’t

conne social media to the marketing department,” says Waxenberg.

Perhaps the greatest change it has made for Starwood is in customer

service. “It’s very easy now for people staying in one of our hotels to

post a comment on one of our Facebook pages or tweet something. We

can address that guest’s concern or compliment immediately while they

are staying with us. This digital approach to delivering a great service

experience has become differentiating for our business. And now we

can do it faster and make it more personalized than ever.”

To make this happen consistently, Starwood has developed a networked

approach to social media. A dedicated team within customer service

monitors social media channels in real time. This team connects directly

to social media champions at individual hotels, along with the loyalty

and marketing teams and other central departments. These connections

are critical for rapid response. If someone posts, “Hooray, we’re going

to the Westin in Maui for our 25th anniversary,” the team can reach out

to that hotel and let them know to make that couple’s milestone an

experience that is truly memorable, personal, and special—from a hotel

they will most likely recommend to others.

experience and ensure that it is

connected to the brand’s objectives.

In addition to the technical and

creative requirements, community

management must have a

demonstrable “human touch” that is

recognized as genuine and authentic

by the fans. There is no substitute

for strong person-to-person skills.

Community managers will eld

questions touching on all parts of

a business and therefore need to be

well networked and empowered to

move across departments to respond

effectively. Fifty-seven percent of

the survey respondents reported

that insufcient cross-departmental

collaboration is a major obstacle to

social media success. In interviewsconducted for this study, executives

repeatedly stressed the need for “great

conversationalists”—extroverts

who enjoy interacting with others

and who are comfortable in a uid,

spontaneous, and often unpredictable

environment. This new kind of

marketing talent, like that great

dinner party host, must also be able

to process data quickly and make

decisions fast. Ninety-four percent

of the responding executives stressedthat the “ability to adapt and react

quickly” is the single most critical

success factor in social media.

Many companies are on the hunt to

recruit managerial talent that can

support high-quality, high-impact

community management. About 60

percent of those investing in social

media are expanding their community

management resources through

additional hiring. Recognizing these

new and fast-changing requirements,many companies are seeking

community management talent

outside the boundaries of traditional

brand marketing, in areas such as

journalism, direct marketing, event

planning, and public relations.



12 Booz & Company

Like a party without the requisite

food or drink, a social media

community without relevant contentcan quickly become a stale, empty

room. As a major wireless executive

explained, “We have to constantly

think about having the right content.

Facebook penalizes you if people

aren’t clicking—it forces you to

deliver something engaging.”

For many companies, developing a

robust social media content develop-

ment capability requires a completereboot of their approach to develop-

ing communications and campaigns.

“Old-time brand managers only did

TV,” said a major beverage marketer.

“Now brand managers have to think

about social in everything they do.

Do they have sufcient content they

can share with their community?

CAPABILITY

PRIORITY 2:CONTENTDEVELOPMENT

A social media community without

relevant content can quickly

become a stale, empty room.



13Booz & Company

They are trying many new things

in order to have content to share—

events, contests, videos—with theircommunities.”

A powerful example of the impact

of social media on brand storytelling

is Nike’s “The Chance,” a global

Facebook- and YouTube-centric

competition developed by its agency

AKQA. Over an eight-month period,

75,000 young, undiscovered soccer

players from 41 countries took

“the chance” to compete for a life-

changing soccer contract with theNike Academy. Millions of Nike

fans followed the competition, which

kicked off with a call to action

on Facebook from famed Arsenal

manager Arsène Wenger. The aspiring

athletes were encouraged to enter

the competition by uploading their“moment of glory” to Facebook, to

promote themselves with videos and

photos, and to build a fan following.

Nike then used invitation-only

training events in 32 cities around the

world to select 100 global nalists

who were chosen to compete for

eight professional contracts under the

eyes of Premier League scouts at the

Chance Final Trials in London.

Nike and AKQA zeroed in on theconsumer insight that is true in every

competitive sport: Young athletes

want to prove themselves, they want

to be discovered, and they want the

opportunity to compete at the most

elite levels. Social media allowed

Nike to take that insight global,transforming it into a compelling

digital media experience for mil-

lions. AKQA’s Ahmed describes

the strategy behind “The Chance”:

“There was no better way to tell the

‘Just Do It’ story than by empower-

ing people to become better foot-

ballers and rewarding the very best

with a contract. Without the digital

and social revolution, an idea like

this would have never been possible.

This campaign was seen by millions,inuenced tens of thousands, and has

changed the lives of many.” Indeed,

5.5 million fans actually pledged

their support to various participants



14 Booz & Company

during “The Chance,” and millions

more viewed various Nike- and

player-produced videos on Facebookand YouTube over the course of the

campaign.

The story of “The Chance” highlights

how brand storytelling and adver-

tising need to be designed to take

advantage of the unique dynamics of

social media. “The most compelling

stories,” says Ahmed, “are told by

brands that use the inherent proper-

ties of social media to do something

you cannot do in other media. With

Twitter, that means immediacy.

With Facebook, it means making a

creative, inspiring, and useful con-tribution to the community.” Unlike

traditional advertising content, where

the goal is often awareness or brand

recall, the focus in social media is on

content that stimulates real conversa-

tions and gets the consumer moti-

vated to be involved and connected in

the storytelling itself and in spreading

it around.

“We do a lot of magazine ads,” says

a major apparel retailer, explaining

the company’s relatively low empha-

sis on social media. “The celebrities

in these ads are looking to preserve acertain mystique. They can’t do that

in social, so it just doesn’t work.” In

contrast, Nike’s social media con-

tent is participatory, authentic, and

relevant, all by design. That’s the

decisive difference.

Content is the glue in social media.

It creates the “sticky” social value

and connection between a brand and

its fan community. To be effective,

marketers need to become digital

The focus in social media is on content

that stimulates real conversations and

gets the consumer motivated to be

involved and connected.



15Booz & Company

publishers, competing aggressively

for consumers’ attention, engage-

ment, and loyalty with high-valuecontent just as media companies do.

Leading social media teams are there-

fore taking steps to build publisher-

like capabilities. They are rigorously

prioritizing content topics that will

resonate with their communities and

that align to their overall marketing

and promotional programs. They

are developing “editorial calendars”

to emphasize specic storylines and

story types, and ensure a steady

stream month by month, week byweek, and hour by hour. They are

optimizing content for discovery and

sharing—even elevating their brands

to act as trusted “lters” that aggre-

gate the most brand- and audience-

relevant third-party articles and links.

Finally, brands are working with an

expanding range of creative resources

to accomplish all this. These include

external entertainment companies,creative agencies, digital publishers,

independent producers, PR rms,

and even their own internal creative

resources.

Media executives have always

understood that it matters how many

consumers watch, read, or listen

to their content. Marketing execu-

tives should have the same mind-set

as they expand their social media

efforts. As platforms like Facebook,Twitter, and YouTube become more

crowded, thoughtful distribution—

including scheduling, packaging,

and placement—is increasingly

important for breaking through the

conversation clutter. Buddy Media’s

own research has shown that there

is effectively a “prime time,” both

in time of day and day of the week,

when the engagement rate withconsumers is noticeably higher. For

example, consumer engagement for

auto-related social media content

spikes on Sundays, when consumers

are researching cars and planning

showroom visits. The design of social

media content and posts also matters.

A random sample of users on Buddy

Media platforms in the fall of 2011

showed that social media content

with a clear “call to action”—either

online or ofine—drove 30 percentmore activation than more static, less

action-oriented posts.

Finally, though many consumers

may “like” a brand, few brands are

in a position where they can attract

a sizable, regular audience to their



16 Booz & Company

Among companies planning to hire

social media talent within a year,

72 percent are prioritizing creative

resources above all other needs.

branded social media sites. The most

valuable real estate for a marketer is

actually the newsfeeds of its brand’sfans. On Facebook, according to

the digital measurement and busi-

ness analytics provider ComScore,

consumers spend 27 percent of their

time—more than for any other single

category—on their own homepage

or newsfeed. They are also at least

40 times more likely to consume

branded content in that newsfeed

than to visit the brand’s page. Given

these realities, companies must excel

at developing brand-relevant con-

tent that drives posting and sharing.Furthermore, by creating shared

content, companies also increase their

marketing productivity; they achieve

a “multiplier effect,” whereby mes-

sages connect not just with fans, but

with a potentially much larger group

of friends of fans as well.

For all of these reasons, many

marketers say they plan to

aggressively upgrade and expand

their content development talent.

The Booz & Company/Buddy Mediasurvey found that among companies

with dedicated social media staffs,

49 percent have dedicated in-house

creative talent. Another 35 percent

are actively building their content

teams. Among those planning to hire

social media talent within a year,

72 percent are prioritizing creative

resources—producers and editors—

above all other needs.



17Booz & Company

Marketers increasingly need real-

time insight into their audiences and

the impact of their content to know

whether their social media efforts

are on target or off the mark. How

much content is being shared and by

whom? Which social platforms are

getting more trafc and engagement

than others? How are brand inuenc-

ers and advocates behaving? What is

the community saying about a brand?

And what actions are fans taking?

Robust, well-structured social media

analytics and metrics are fundamental

to addressing these important ques-

tions, and thus critical for a contem-

porary digital marketing capability.

The Booz & Company/Buddy Media

survey and related interviews indicatethat there are four levels to a real-time

social media analytics capability, with

progressively more sophistication:

Level 1: Reach.• Marketers under-

stand the social scale of their

brands. They know how many

fans, followers, subscribers, visi-

tors, and views they have, and how

many discussions are taking place.

They have visibility into where,

when, and in what context theirbrand is being discussed.

Level 2: Engagement.• Marketers

have moved beyond counting fans.

They have insight into the activities

in their communities. They analyze

the drivers of participation and

amplication, studying the patterns

in comments, likes, shares, and

take rates.

Level 3: Advocacy.• Marketers can

identify and encourage user behav-

iors that are associated with brand

commitment. These include such

metrics as intent to recommend,

referral and reshare activity, com-

ments and followers per user, and

brand favorability, consideration,

and preference.

Level 4: Return on Investment.•The most sophisticated companies

set out to achieve strategic business

objectives with their social media

analytics. Most companies are still

not fully at this level. For example,

according to the survey, only about

40 percent of companies have

metrics in place today to measure

ROI-focused key performance

indicators (KPIs) such as purchase

intent, leads generated, conversion

rates, or actual sales.

CAPABILITYPRIORITY 3:REAL-TIMEANALYTICS



18 Booz & Company

The survey also conrmed that

marketers are concerned about the

quality of their social media metrics

and analytics. Sixty percent of the

respondents said they are not satis-

ed in this area. Only 50 percent of

companies have social media–focused

KPIs and dashboards in place today;

another 47 percent are actively build-

ing them. Many companies view

“expertise in social media measure-

ment, monitoring, and tracking” as

a core part of the value proposition

associated with third-party vendors,

such as agencies, software providers,

media companies, or consultancies.

There is also a tension between the

broad goal (expressed by 60 percent

of respondents) to link social media

metrics more closely to business out-comes, and the more immediate need

(expressed by 90 percent) for social

media metrics to be tailored to meet

the objectives of specic individual

campaigns.

A few corporate trailblazers are

demonstrating that social media can

drive measurable results and busi-

ness impact—in other words, they are

gaining a lot more than likes. Wendy

Clark, senior vice president for inte-

grated marketing communications and

capabilities at Coca-Cola, has shared

publicly that the beverage giant’s

analytic capability is advanced enough

to know that Coke social media fans

are twice as likely to consume and 10

times more likely to purchase than

nonfans. In personal computers, Dell

has focused relentlessly on analyzing

the connection between social media

engagement and revenue generated in

physical as well as online stores. Dell’s

leaders understand how social media

impacts loyalty, product innovation,brand favorability, and even costs

(such as the cost of customer sup-

port). These insights into business

drivers and outcomes have led Dell to

concentrate heavily on the health of its

Net Promoter Score (indicating how

likely a customer would be to recom-

mend Dell to a friend or colleague)

and on the impact of social media

experiences, including content around

ratings and reviews, on Dell loyalty

and recommendation value.

In addition to measuring business

outcomes, social media represents an

enormous opportunity for unltered,

direct consumer insights into brand-

ing, customer service, and product

development. Fifty-six percent of

companies surveyed are already using

social media to support their market

research and consumer insight activi-

ties. Eighty-one percent believe that

they are capturing helpful consumer

insights from social media today. Since56 percent are investing actively to

improve the quality and quantity of

consumer insights from social media,

this analytic capability should become

even more robust very soon.

Social media represents an

enormous opportunity for insights

into branding, customer service,

and product development.



19Booz & Company

In addition to these three capabilities,

several soft factors—mind-sets—are

equally important to social media anddigital marketing. The senior leaders

interviewed for this study repeatedly

pointed out that it takes a differ-

ent personality and a different set of

behaviors to be successful now than it

did in the traditional “command and

control” brand marketing world. Of

course, classic management and brand

marketing skills still matter. But when

a new product announcement from

Google, Twitter, or Facebook can

dramatically change the opportuni-ties available to a marketer over-

night, companies need more exible,

dynamic, and entrepreneurial execu-

tive talent than ever before.

Venky Balakrishnan, global vice

president for marketing innovation at

Diageo, the world’s leading premium

spirits company, says next-generation

marketers need to be “universal

soldiers: learning machines who

move fast and who can constantly

adapt to new situations, almost likeNavy SEALs.” In an environment

where developments occur quickly,

consumer behavior is dynamic, and

playbooks are rewritten constantly,

companies need talent who are ener-

gized by uncertainty, who are tech-

and consumer-savvy, but also know

what they don’t know, and knowhow to pursue and test potential

solutions. Most important, they

analyze every experience, they learn

from it, they seek out new sources of

input and inspiration, and they keep

moving forward.

The Booz & Company/Buddy Media

study identied several other soft

factors that are important to social

media success. Ninety-three percent

of the respondents said that havinga clear set of champions and owners

for social media within the enterprise

is critical to building strong social

media capabilities. A related element

is support within senior management.

Development of capabilities for social

media cannot be perceived as a minor

initiative for “just the young people”

in the company. Finally, education

is critical. Today, two-thirds of the

companies surveyed have dedicated

social media staffs in place, and one-

third have an executive assigned tolead social media efforts. Nonetheless,

about 50 percent of those surveyed

said they still need more education

in their executive ranks about social

media and its value.

THE MIND-

SETS OF SOCIALMEDIA SUCCESS



20 Booz & Company

While many companies are still

catching up to their consumers in

social media, the Booz & Company/

Buddy Media study shows they are

indeed gaining. They are taking

important steps to transform

their capabilities in community

management, content development,

and real-time analytics, and they

are bringing a more contemporary

mix of hard and soft skills to their

marketing efforts. As this evolution

continues, they will also be in an

even better position to shift budgets

accordingly.

Survey respondents expect their

spending on social media activities

to accelerate over the next three

years, with social media takingan expanding share of corporate

expenditures on digital marketing.

Today two-thirds of the surveyed

companies dedicate 5 percent or less

of their digital marketing spend to

social media. Within three years,

this proportion will reverse: 87

percent of these companies expect

to cross that 5 percent threshold. In

fact, 50 percent of the companies

surveyed expect social media to be

the fastest-growing portion of their

overall marketing spend. In three

years, 56 percent of companies

expect to spend 10 percent or more

of their digital marketing budgets

on social media, with 28 percent

expecting the gure to exceed 20

percent. Not a single respondent

reported a plan to spend a smaller

percentage of the digital marketing

budget on social media movingforward (see Exhibit 4).

MOVINGFORWARD

Exhibit 4Social Media Spend as a Percentage of Digital Marketing Spend

Today 3 Years from Today

5-10%

67%

22%

5%7%

28%

27%

32%

13%

< 5% 10-20% > 20%

Note: Numbers may not add up due to rounding.

Source: Booz & Company/Buddy Media Campaigns to Capabilities: Social Media and Marketing 2011 survey results



21Booz & Company

Within social media, where do

companies expect to spend their

money? Interestingly, despite

the growing amount of clutter

and crowding in social media

advertising, they do not expect

to focus on buying advertising

inventory on Facebook, YouTube,

or Twitter. Instead, they plan to

spend more on their own social

media teams. Hiring full-time

employees is their number one

priority for investment in social

media; hiring partners and vendors

is the number two priority, followed

by creating more content. Media

buys or paid social media is

number four.

The money for this investment is

mostly coming out of existing digital

budgets. That should be no surprise

to the portals and publishers that

have been steadily losing share to

Facebook and YouTube over the last

12 months. Only 22 percent of the

survey respondents have created new

dedicated budgets for social media;

more than two-thirds are funding

social media activities out of their

existing digital marketing budgets.

While far fewer companies plan to

shift spending from television or

magazines to support their social

media activities, the mere fact that

some are doing it highlights the

branding potential that executives

ascribe to social media and the

longer-term threat it poses to more

established elements of the media mix.

Finally, companies are awakening

to the broader, enterprise-wide

value of social media. Though

marketing is the dominant focus

today, executives recognize that

social media can signicantly

enhance how they connect with

suppliers, employees, and customers,

as well as consumers. They expect

to see executives in customer

service, market research, product

development, and sales taking a

greater social media leadership role

in their companies as they pursue

digitally driven innovation in these

functions too.

Rather than focus on buying

advertising inventory on sites like

Facebook, companies plan to spend

more on their own social media teams.



22 Booz & Company

Note: Numbers represent millions of people who “like” each brand’s Facebook page, as of February 2012.

Source: Facebook; Booz & Company

Exhibit 5 Facebook Fans: Burberry vs. Major Fashion Magazines, U.S. Versions as of February 2012

Burberry

10.70

Vogue

2.17

InStyle

0.42

Marie Claire

0.32

Harper’s Bazaar

0.14

W

0.11

Elle

0.10

Think back to the Burberry

experience. A venerable company

and brand engaged in a radical

transformation: a strategically

focused and substantive digital

metamorphosis that goes far beyondslick marketing concepts dressed

up in trendy technology. Burberry’s

social media and digital marketing

activities now represent 60 percent of

its marketing budget. The companyhas managed this by holding its total

marketing spend at as a percentage

of revenue, and strategically reducing

its expenditures on traditional

print media. It has also revamped

Burberry.com, turning it into a

content-driven destination where

consumers can engage, interact, and

purchase. Burberry has deployed

“retail theater” technology in its

stores to provide shoppers with a

rich audiovisual experience, blurringthe line between the physical and

the digital. Along the way, the

company has invested in community


and real-time analytics capabilities,betting big on the benets of

leadership in social media.

This journey began shortly after

Angela Ahrendts became CEO of

Burberry in 2006. She crafted an

aggressive plan to turn the company

around, with digital marketing

innovation as one of the central

focus areas. Six years later, look at

the results. Burberry has a Facebook

fan base that is larger than that of all the major U.S. fashion magazines

combined (see Exhibit 5). The fan

THE DIGITAL

FUTURE TODAYAT HORSEFERRYROAD



23Booz & Company

base, also active on Twitter, YouTube,

and Burberry.com, now constitutes

an interconnected, linked, and ownedmedia ecosystem. This gives Burberry

unprecedented opportunities to build

its brand, market its products, and

engage with consumers directly across

channels, platforms, and mediums.

Not coincidentally, Burberry has

continued to increase revenue and

strengthen its brand. Most recently,

the company announced a 21 percent

rise in third-quarter 2011 total

revenue over that of the same period

in 2010, with same-store sales growthof 13 percent over the period. These

most recent achievements have all

occurred during the most turbulent

global economy since the Great

Depression.

Ahrendts has repeatedly attributed the

company’s solid nancial performance

to its investments in digital marketing

as well as its innovative design

and retail strategies. In a video

statement (appropriately available

on YouTube), Ahrendts elaborated

on this point. “You have to createa social enterprise today,” she said.

“You have to be totally connected

with everyone who touches your

brand.” The Booz & Company/

Buddy Media study conrms that

this digital-social transformation

is occurring not just at Burberry’s

headquarters on Horseferry Road in

London, but also in Atlanta, Austin,

Beaverton, and many other places

where forward-thinking executives

lead. For most companies, however,their social media journey is just

beginning. By focusing on developing

distinctive capabilities in community


and real-time analytics, they too

can not only create rich new social

media experiences for their customers

but, like Burberry, transform their

organizations and unlock market-

leading performance.

Resources: Burberry’s

Social Media Ecosystem

The Facebook Burberry

Page (content, community,

commerce): www.facebook.

com/#!/burberry

Burberry’s YouTube Channel

(live streaming, campaigns,

how-tos): www.youtube.com/

user/burberry?ob=4

Twitter’s Burberry Feed (live

events, real-time news and

updates): twitter.com/#!/

burberry

Burberry’s own home

page (content, product

information, commerce):

www.burberry.com

Art of the Trench website

(user generated and

professional photographs)

artofthetrench.com



24 Booz & Company

Survey Methodology

In 2011, Booz & Company and

Buddy Media surveyed 117

companies across a broad

range of industries. The online

survey addressed socialmedia platform priorities,

use cases, benets and key

success factors, challenges

and concerns, resource

requirements, organization

needs, spending trends, and

metrics. Booz & Company and

Buddy Media supplemented

this quantitative survey with a

series of in-depth executive

interviews focused on the

capability priorities, key areas

for investment, evolving role

of partners, and major issues

related to organization, talent,

and metrics that companies

are confronting vis-à-vis social

media.

L’Oréal: Developing Social Media Mind-Sets and Skill Sets

“I’m an evangelist,” says Rachel Weiss, assistant vice president for

digital strategy and interactive marketing at L’Oréal. “Social media is

not just a new marketing tool; it’s so much more. It’s a fundamentally

different operating mind-set.”

As Weiss points out, getting social media channels up and running

is only the starting point for marketers who want to develop this

capability. From there, identifying the right talent to run these channels

and cultivating a social media–friendly mind-set inside the company

are key to success. “You have to embark on a campaign of constant

education internally, not just with your digital teams, but across the

organization—executives and marketers and HR professionals and

consumer insights.” She explicitly sets out to demonstrate for these

colleagues the power and reach of social media and how it can be

used to transform consumer relationships.

Weiss has pursued multiple strategies for building traction for social

media across L’Oréal. “I’ve found that reverse mentoring works verywell,” she says. “If you have a social media evangelist sit down with

an executive to show her how Twitter works, what she can do on

Facebook—if you can get her engaging in a real hands-on experience

with consumers on these digital platforms, that’s a great start.”

She also recommends drawing attention to the size of social media

audiences: “The other way to reach busy executives is through the

numbers. We’ve done studies on digital listening, and sharing the

sheer volume of conversations happening every day around our

products and brands—with or without our direct involvement—is very

eye-opening for senior executives.”

Social media requires not only a new mind-set but also new skills. This

means that companies need to develop different recruiting criteria.“When I interview candidates, I’m looking for people from diverse

backgrounds who are willing to experiment. They have demonstrated

the ability to marry the left and right sides of their brain—the creative

and analytical,” says Weiss. “I also ask candidates to describe their

digital lifestyle—if they are not caught up in social media at home, they

are not going to bring that passionate engagement, hands-on attitude,

and curiosity that we know is essential.”

For Weiss, the ultimate end goal of social media marketing is to drive

consumer engagement that leads to measurable gains in revenue. “I

think most companies are still primarily focused on building fans and

followers, but we have our eyes on a greater prize. We want to cultivate

advocates and convert their insight and interest in our brands intoproduct purchases.”



25Booz & Company

About the Authors

Christopher Vollmer is apartner with Booz & Company

based in New York. He leads

the rm’s global media and

entertainment practice, and

has extensive experience

advising clients in digital media,

consumer marketing and digital

technology. He is the author of

the best-selling book Always

On: Advertising, Marketing and

Media in an Era of Consumer

Control (McGraw-Hill, 2008).

Karen Premo is a principalin Booz & Company’s global

media and entertainment

practice. Based in New York,

she works with media and

consumer-facing businesses

on digital and social media

strategy, sales force and

marketing effectiveness,

capability building, growth

strategy, and organizational

design.

About Buddy Media

Buddy Media is the socialenterprise software of choice

for eight of the world’s top 10

global advertisers, empowering

them to build and maintain

relationships with their

consumers in a connections-

based world. The Buddy

Media social marketing suite

helps brands build powerful

connections globally with its

scalable, secure architecture

and data-driven customer

insights from initial point

of contact through point ofpurchase. Buddy Media is the

most award winning social

enterprise software company,

winning the prestigious

TechCrunch “Crunchie” Award

for Best Enterprise application,

named to the Advertising Age

2011 “Digital A-list,” and CEO

and founder Michael Lazerow

was selected as 2011 New

York Entrepreneur of the Year®

by Ernst and Young. For more

information, visit http://www.

buddymedia.com.



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consulting rm, helping the world’s top businesses,

governments, and organizations. Our founder,Edwin Booz, dened the profession when he estab-

lished the rst management consulting rm in 1914.

Today, with more than 3,300 people in 60 ofces

around the world, we bring foresight and knowledge,

deep functional expertise, and a practical approach

to building capabilities and delivering real impact.

We work closely with our clients to create and deliver

essential advantage. The independent White Space

report ranked Booz & Company #1 among consult-

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For our management magazine strategy+business,

visit strategy-business.com.

Visit booz.com to learn more about

Booz & Company.

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Documents

From Campaigns to Capabilities - The Impact of Social Media on Marketing and Beyond