A greater percentage of consumer companies with bigger results from social media have been taking it seriously for far longer than the followers have. Nearly three-quarters of the leaders (69%) have been engaging consumers via social media since before 2011, compared with less than half (49%) of the followers. And before 2009, twice as many leaders (32%, as against 14% of the followers) had at least one full-time equivalent on social media. (See Exhibit V-2.)
Exhibit V-2: Leaders Have Been at the Social Media Game Longer
Social media leaders appear to be more serious about their consumer social media initiatives. The vast majority (91%) have specific, measurable goals for their social media activities, which was the case with less than half the followers (45%).
Exhibit V-3: Twice as Many Leaders Than Followers Have Measurable Goals for Social Media
Leaders were also more serious about achieving their goals. We asked respondents to rate the importance of 15 social media goals. On every one of them, leaders placed greater importance on our 1-5 scale than did followers. (See Exhibit V-4) Leaders regarded these social media goals as much more important than followers:
- Increasing revenue
- Improving products and services
- Identifying new product and service opportunities
- Improving sales and service processes
- Reducing the costs of marketing, sales, service and product development
In other words, consumer companies that are getting greater value from social media see its value as much more than a marketing tool – a tool for getting more consumers to view a message and buy their products and services. While the leaders do use social media to do that, they are also more likely to use social media to identify customer needs that could turn into whole new offerings, as well as improve current offerings. And leaders believe that social media could do a great deal to help them make marketing, sales, service and R&D more efficient.
Exhibit V-4: Leaders Have Much Bigger Plans for Social Media
Given that the leaders had much bigger ambitions for their social media activities, it should be no surprise that they also invested more on them. In fact, leaders will spend twice what followers will this year on social media: an average $28 million per respondent, compared to $14 million for followers. (See Exhibit V-5)1 The willingness to spend aggressively is likely to continue through 2015. Asked to estimate their social media spending in 2015, leaders’ investments averaged $32.5 million per respondent as against $18 million for followers, a considerable difference.
Exhibit V-5: Leaders Put More Money Into Their Social Media Activities
Perhaps a big reason why leaders will spend twice what followers will on social media this year is that leaders are nearly four times as likely to have generated positive returns on their investments to date. (See Exhibit V-6) Approximately 62% of our leaders reported a positive ROI on social media to date, compared with only 17% of the followers.
These numbers show the importance of measuring the ROI on social media: Only about a fifth of the leaders hadn’t measured the return on social media, in contrast to two-thirds (67%) of the followers. With proof of the financial value of social media, perhaps it is far easier for consumer companies that are leaders in social media to ask for greater funding.
Exhibit V-6: Compared to Followers Nearly 4x the Number of Leaders Have Positive ROI on Social Media
Looking at the industry data, we found five industries that are more likely than the other six to have leaders in social media: media and entertainment, high tech, telecom, travel and retail. (See Exhibit V-7.) Why these industries? We believe it’s in part because of the nature of the products and services they sell: consumers show a lot more positive passion toward their offerings. The media industry is a great example. In the U.S., TV shows such as ‘Mad Men,’ ‘American Idol,’ and ‘NCIS’ have millions of loyal customers who watch their shows every week. A similar trend exists in telecom: big fans of Apple, Samsung and other smartphones, as well as in travel (particularly resort destinations) and retailing (e.g., U.S. grocery store chains Whole Foods Market and Trader Joe’s). ‘Mad Men’s’ Facebook page has nearly 2.5 million ‘likes.’
In contrast, two industries finished lowest on the benefits of social media: insurance and healthcare products and services. These industries sell necessities, but most consumers don’t get excited about them.
While we believe that every consumer company must use social media to plug in continually to its consumer base, we also see certain industries having bigger opportunities to create huge fan bases through social media – those in which it’s easier for consumers to have passion for their products or services. Thus industries such as media, retail, consumer electronics and others should be taking an exceptionally aggressive stand on social media.
Yet industries such as insurance and health care have opportunities to create tribes through social media as well. Their challenge is to determine the issues that their products and services address that are passionate issues for consumers. Consider the auto insurance industry. While drivers can’t get excited about auto insurance, parents with teenage drivers are rightfully concerned about teaching their children safe driving habits. (According to State Farm, auto crashes are the main cause of death of U.S. teens who drive.) State Farm Insurance, a major U.S. auto insurer, launched a campaign called ‘Celebrate My Drive’ in April 2012 that leverages Facebook and Twitter to attract teens and their parents (see www.celebratemydrive.com).
Exhibit V-7: Media, Telco, High Tech, Travel and Retail Have the Highest % of Social Media Leaders
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What Leaders in Social Media Do Better Than Followers
- The median spending numbers show an even bigger difference: leaders are spending a median $5 million in 2013 compared to $1 million for followers, and plan to spend a median of $7 million in 2015 against $1 million for followers. [↩]