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The Untapped Value of the Social Economy

Recently, the McKinsey Global Institute released a report called The Social Economy: Unlocking Value and Productivity Through Social Technologies. The report explains how social technologies have evolved as well as the opportunities they offer to brands to connect with consumers and companies to boost internal productivity.

The report offers five key pieces of data to describe the power of social technologies today:

  • Number of social networking users globally = More than 1.5 billion
  • Proportion of total online users who interact with social networks regularly = 80%
  • Proportion of companies using social technologies = 70%
  • Proportion of companies using social technologies that report some business benefit from them = 90%
  • Time each week spent by knowledge workers writing e-mails, searching for information, and collaborating internally = 28 hours

The report also offers five key pieces of data to describe the untapped potential of social technologies for the future:

  • Annual value that could be unlocked by social technologies in four sectors = $900 billion – $3 trillion
  • Share of consumer spending that could be influenced by social shopping = 33%
  • Potential value from better enterprise communication and collaboration compared with other social technology benefits = Double
  • Share of companies that derive substantial benefit from social technologies across all stakeholders: customers, employees, and business partners = 3%
  • Potential improvement possible in knowledge worker productivity = 20-25%

Furthermore, the report identifies ten ways social technologies can create value for businesses (referred as “value levers”). The tactics are divided into four segments of the value chain: product development, operations and distribution, marketing and sales, and customer service. Two additional enterprise-wide tactics create value by improving productivity across the enterprise. You can see them in the chart from the report below.

mckinsey chart

The report concludes that adopting social technologies at the enterprise-level does include risks, but the benefits across the entire value chain far outweigh the potential risks. You can read the full report and get all the details here.

Image: McKinsey Global Institute

Brands Should Be Connecting with Moms on Blogs

There has been study after study showing that women, particularly mothers, are active on the social web and make purchase decisions based on the information they find online. That information can come from online acquaintances, strangers, or brands, and while most brands are trying to leverage the hot sites like Pinterest and Facebook to connect with the lucrative mom audience, they’re forgetting about the power of connecting with the consumer audience through blogs.

Five years ago, blogs were the it way for brands to connect with consumers on the social web. Today, brands are too often leaving blogs out of their social media and content marketing plans. That’s a big mistake, and research from BlogHer confirms it. According to an August 2102 study by BlogHer, more U.S. mom internet users trust blogs as a source for parenting advice, including advice related to products and services, than any other form of social media.

Here is the breakdown of the percentage of U.S. mom internet users who trust various social media content for parenting advice from the BlogHer study:

  1. Blogs = 67%
  2. Facebook = 64%
  3. YouTube = 36%
  4. Pinterest = 31%
  5. Twitter = 28%
  6. Instagram = 22%
  7. Tumblr = 16%

Even more interesting is how U.S. mom internet users act after reading advice and information about parenting on blogs. Approximately half purchase products based on what they read on blogs. Here are the specific results from the BlogHer study that show actions taken by U.S. mom internet users after reading a recommendation on a mom blog:

  • Read a book = 63%
  • Purchased food product = 56%
  • Watched a TV show = 54%
  • Purchased baby product = 48%
  • Purchased toy = 45%
  • Forwarded post to a friend = 44%

When it comes to accessing those blogs, 99% of U.S. mom internet users have a laptop or desktop computer. 83% have a smartphone, and 56% have a tablet device. That means moms are accessing blog content from a variety of places and at all times of the day and night.

Brands that work with mom blogs to create meaningful content and develop their own branded blogs and mobile content are the ones that will succeed in the future. There is no arguing the fact that moms turn to the internet, particularly mom blogs, for trusted advice, product recommendations, and support. It’s a perfect opportunity for brands to build relationships with that lucrative audience.

Image: agastecheq

Fewer than Half of Companies Are Prepared for a Social Media Threat

twitter social mediaIs your company ready to respond to a social media threat that could damage your company and brand reputation? Surprisingly, research from eMarketer found that only 40% of corporate communications professionals believe their companies are prepared to respond to a social media-based threat effectively.

As if that’s not bad enough in 2012, only half of companies included in eMarketer’s research used social media to track and respond to consumer conversations and feedback.

First, take a look at the statistics related to the preferred method of sharing negative experiences about a brand or product according to U.S. internet users by age:

18-34 year olds

  • Social network such as Facebook or Twitter = 32%
  • Calling the company directly = 24%
  • Emailing friends, family and colleagues = 21%
  • Third-party site such as Consumer Reports or CNET = 19%
  • Other = 4%

47-65 year olds

  • Social network such as Facebook or Twitter = 9%
  • Calling the company directly = 42%
  • Emailing friends, family and colleagues = 23%
  • Third-party site such as Consumer Reports or CNET = 20%
  • Other = 6%

Clearly, if your target audience is 18-34 year olds, your brand needs to be spending time in the social media space both tracking conversations and engaging consumers.

Now, take a look at the top 5 reasons U.S. internet users use social media for customer service (all ages):

  • Seeking an actual response from a company about a service issue = 50%
  • Praising a company for great service = 48%
  • Sharing information about a service with a wider audience = 47%
  • Venting frustration about poor service = 46%
  • Asking other users how to get better service = 43%

Based on those numbers, consumers are saying positive and negative things about brands via social media, and they expect answers from companies. Those conversations also affect companies’ bottom-lines because they can have a direct influence on buying decisions.

The content and conversations published via social media has a direct effect on consumer purchase decisions as follows:

  • “Positive information I’ve read online has reinforced my decision to purchase a product or service recommended to me” = 87% (up from 80% a year earlier)
  • “Negative information I’ve read online has made me change my mind about purchasing a product or service recommended to me” = 80% (up from 68% a year earlier)

Despite the fact that social media content and conversations are directly affecting consumers’ satisfaction with brands and companies as well as buying decisions, the majority of companies are not involved in social media enough.

According to the eMarketer study, preparedness of companies to deal with a social media-based threat is surprisingly low:

  • Prepared = 40% (up from 33% a year earlier)
  • Not Prepared = 30% (down from 33% a year earlier)
  • Neither Prepared Nor Unprepared = 29% (down from 34% a year earlier)

Consumers have been talking about brands and venting frustrations for years via the social web. The fact that so many companies are unprepared to respond to social media-based threats and that so many aren’t even effectively tracking and participating in social media conversations is shocking. These conversations certainly aren’t going to stop. What are the waiting for?

An infographic from Larry Buchanan was published on Adweek, which displays the highlights from the study visually. Follow the preceding link to take a look.

Image: Bernard Goldbach

Quantifying and Visualizing Logo Trends

color_samplesThinking of using a leaf in your brand’s new logo design? You might want to think twice about that decision, because it’s not unique. That’s according to data from the U.S. Patent and Trademark Office as analyzed in James I. Bowie’s new blog, Emblemetric, which uses quantitative analysis from USPTO data to decipher and report logo design trends.

Nearly 3.8% of logos use a leaf in their designs (that includes generic leaves only, not specific types of leaves such as maple leaves or elm leaves). The trend of using leaves in logo design picked up steam in 2000, and today, leaves are considered a visual shorthand of an eco-friendly brand message. However, the use of leaves in logo design is even more popular in specific industries such as agriculture, chemicals, pharmaceuticals, and beverages (approximately 10%-13% of logos in these industries use leaves in their logos). Even the advertising industry is above average in its use of leaves in their own logos (approximately 4%).

Bowie also researched the use of color in logo design. He found that most logos include the colors blue, red, or green. Red took the top spot in the beverages and hospitality industries while blue is most popular in the chemicals, insurance, medical, and pharmaceutical industries.

More interested in the geography of logo trademarks? Bowie has analyzed that, too. He wanted to learn if logos differ based on the location of the companies and organizations they represent, and his research found the following geographic breakdown of U.S. logo trademark share:

  • West = 23.5%
  • East = 21.6%
  • South = 20.3%
  • Non-U.S. = 18.1%
  • Midwest = 16.5%

Bowie found that logos in the west are far more likely to use basketballs than any other region while logos in the east are more likely to use marijuana plants and surfboards. In the south, logos are more likely to include tobacco leaves, and logos in the midwest are more likely to include corn stalks. Foreign logos are more likely to include alcohol bottle labels than in any U.S. region. You can get all the details about these logo color trends by region here.

So far, Bowie’s blog is interesting and entertaining. I’m patiently waiting for the swoosh and circle analyses – two of the most overused elements in logo design, in my opinion. What trend in logo design is most intriguing to you? Leave a comment and share your opinion.

Image: Joanna Kopik

How Much Do Brands Spend on Social Media Marketing?

budget investmentThere is no set rule related to how much brands should invest in social media marketing, but currently, the majority spend less than 20% of their market budgets on social media. That’s according to a study by Advertising Age and Citigroup that found 49.5% of U.S. marketers spent between 1%-10% of their marketing budgets on social media and another 19.0% spent between 11% and 20% of their budgets on social media.

The most surprising discovery from the study is the 9.7% of U.S. marketers who spend nothing on social media marketing. The specific breakdowns for social media marketing and digital marketing budgets follow:

  • 0% of the Marketing Budget = 9.7% social media; 3.0% digital
  • 1%-10% of the Marketing Budget = 49.3% social media; 24.3% digital
  • 11%-20% of the Marketing Budget = 19.0% social media; 19.3% digital
  • 21%-30% of the Marketing Budget = 8.5% social media; 11.4% digital
  • 31%-40% of the Marketing Budget = 4.3% social media; 7.4% digital
  • 41%-50% of the Marketing Budget = 3.6% social media; 6.2% digital
  • 50% or More of the Marketing Budget = 5.3% social media; 17.2% digital
  • Not Sure = 0% social media; 11.1% digital

On a positive note, respondents to the June 2012 survey did indicate that their budgets are increasing. In fact, 72.9% of respondents indicated that their social media budgets would go up in the next year. Of course, the biggest problems for marketers are getting executive buy-in to gain approval for a social media budget and tracking results effectively. Companies that aren’t investing in social media yet (the 9.7% mentioned above) are falling way behind and will have a hard time catching up.

I’m actually surprised by the digital marketing investment numbers, too. According to the survey, 27.3% of U.S. marketers are investing 10% or less of their marketing budgets in digital marketing. Given the fact that consumers and businesses typically turn to the web for product, service, and brand information first, it’s hard to believe that there are still companies that don’t invest in digital marketing or invest such a small percentage of their budgets into digital marketing. Let’s hope their digital marketing budgets will be going up in the near future.

What do you think? Will your social media marketing and digital marketing budgets increase in the next year? Leave a comment and share your thoughts.

Image: Sufi Nawaz