Perspective

Christopher Vollmer
Karen Premo

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

Contact Information
New York
Christopher Vollmer
Partner
+1-212-551-6794
christopher.vollmer@booz.com
Karen Premo
Principal
+1-212-551-6683
karen.premo@booz.com

Booz & Company

EXECUTIVE
SUMMARY

Booz & Company

Booz & Company and Buddy Media, the social enterprise

software leader, teamed up in 2011 to identify the capabilities 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 companies and a series of in-depth interviews with senior executives 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 companies need to take as their social and digital media activities
increase in scale. As more companies refine their use of social
media, it will dramatically transform how they connect their
brands with consumers, and how they define and build their
marketing capabilities.

BURBERRY: A
SOCIAL MEDIA
SUCCESS STORY

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 defined by an
overt 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 defining element to
Burberrys success: the creation and
distribution of branded digital and
social media experiences.
Just look at how dramatically
Burberry has reimagined its fashion
showsonce elite, exclusive, and
effectively off-limits to the brands
many fansfor the era of social
media. In 2011, Burberry streamed a
live video feed of its spring/summer
and fall/winter shows, distributing its
content directly to fans on Facebook
(10.7 million as of February 2012)
and to video viewers on Googles
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 Burberrys Twitter followers
(773,000 as of February 2012)
unique see it first 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 as
content-rich social experiences that
now engage millions of fans and
interested consumers, rather than just
a few insiders.

A new defining element to

Burberrys success is the creation
and distribution of branded digital
and social media experiences.

Booz & Company

The ability to tell stories directly to

consumers via social media is also
reshaping how Burberry launches
new products. When its fragrance
Body debuted in the fall of 2011,
Burberrys Facebook fans were invited
to a fan-first sampling promotion
that generated more than 225,000
requests in the first 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 brands YouTube channel,
further supported by a launch day
takeover of YouTubes 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 specific capabilities around
community management, content

Booz & Company

development, and real-time analytics

has enabled the company to develop
powerful, direct, and multiplatform
connections 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 digitization
of its brand and the consumer
experience around it.
Looking at Burberrys movesand
those of other innovators like Audi,
Coca-Cola, Diageo, Nike, Procter
& Gamble, and Starwood Hotels &
Resorts Worldwideit 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 more
dynamic marketing model. It is
always on. It is iterative. It is contentand people-intensive. It is social by
design: focused on participation and
activation, not just awareness and
consideration. And as Burberrys
example illustrates, this new model
requires very different capabilities
from those that most companies
possess today.
In Campaigns to Capabilities: Social
Media 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.

THE GROWTH OF
SOCIAL MEDIA

Recommendations. Referrals. Buzz.

Marketers have long known that
consumers value the recommendations of a trusted friend or expert
more than any form of advertising.
Since the emergence of social diffusion theory in the 1950s, marketers
have sought to harness the power of
social networks and word of mouth
to influence consumers decisions
about what they like and what they
purchase. The importance of social
marketing is continually confirmed by
researchmost recently by Nielsens
Global Online Consumer Survey,
which showed that 90 percent of consumers 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, historically 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 consumers directly at a global, national, or
local level, expanding their reach
through a few well-designed moves or
targeting specific groups of consumers
based on more defined communities
of interest.
The growth of social media among
consumers since Facebooks launch in
2004 has been explosive. Consumers
now spend most of their digital time
there. According to Nielsen, social
media and blogs account for 23 percent 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 connect
with brands. Whether its 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 influential medium, says Ajaz

Ahmed, chairman and founder of
AKQA, one of the worlds leading
digital advertising agencies. Social
networks are now the operating systems for consumers lives. They have
rapidly become indispensable.
Many companies are naturally
attracted by the promise of a largescale media offering that aggregates
self-selected consumerseager to
share stories, content, and recommendations about brands and
productsand 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 presence
such as a fan page, a newsfeed, or a
branded channel and by incorporating 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 advertising
spending, 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 associated with developing and maintaining
a branded social media presence.

Social networks are now the

operating systems for consumers
lives. They have rapidly become
indispensable.

Booz & Company

CAMPAIGNS
TO CAPABILITIES

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, especially
Facebook, is confirmed 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
significant amount of their marketing

Booz & Company

spending to social media. Today,

Fortune 500 companies spend only
a fraction of their digital marketing
budget, which itself averages 15 to
20 percent of total marketing spend,
on social media. For example, 89
percent of respondents to the
Booz & Company/Buddy Media
study spend less than 10 percent
of their digital marketing budgets
on social media. The reality is
that though there have been some
high-profile campaignsCocaColas Expedition 206, Nikes
Write the Future, and P&Gs Old
Spice Responses, for exampleand
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 significantly, and
many are taking concrete steps to do
so. Relevant findings from the
Booz & Company/Buddy Media
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 developing a specific strategy for social
media.
The leading companies are shifting
their focus from campaignsexperiments, tactics, or one-off efforts
that are challenging to replicateto
capabilities that enable them to more
reliably and consistently deliver a

distinctive outcome, relevant to their

business, through the right combination of processes, tools, knowledge,
skills, and organization. Specifically,
success in social media requires companies to develop deep capabilities
in new areas: in community management 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, proficient, and individually
tailored to their strategies and mis-

sions that competitors cannot catch

up. To accomplish this, companies
must actively transform their key
business functions. This transformation typically begins with marketing
but will ultimately expand to include
customer service, consumer insight,
sales, and even product development.

Exhibit 1
A Capabilities System for Social Media Success

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

c. Consumer
Insights

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

a. Engagement
Optimization

3. Real-Time Analytics: Ability to analyze and interpret social

media activity as it happens

Supporting Capabilities
a. Engagement Optimization: Design and execution of the social
media experience to drive participation and activation
2. Content
Development

3. Real-Time
Analytics
b. Content
Management

b. Content Management: Tracking, cataloging, storage, and serving

of content assets of all types
c. Consumer Insights: Understanding of drivers of community
behavior and interest

Source: Booz & Company

Booz & Company

MARKETING:
THE FOCAL
POINT FOR
SOCIAL MEDIA
INNOVATION

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, advertising is the dominant use case for social
media, with 96 percent of companies
using social media to support advertising objectives. Significantly, companies
are also prioritizing the integration of
social media into their overall marketing 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 activitiesan 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 flow of consumer
conversations and insights. For many
brand-focused marketers, social media
sits tantalizingly high on top of the
purchase funnelin 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 spent
significantly 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 benefit 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 development is the influence 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 campaigns are tightly controlled by brand
executives and dominated by paid
media, to one of brand curation,
where campaigns are designed by marketers 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 iterative. Its core tenets are engagement,
participation, and advocacy. It connects
brands directly to consumers, and also
enables brands to connect consumers
to one another. Mark Parker, Nikes
CEO, described the positive impact of
this new model on his business on a
recent earnings call: Social networking and digital communication is
helping us unify and expand the family
of sport. Weve 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.

Exhibit 2
Brand Management Moving to Brand Curation
Traditional Marketing Model

New Marketing Model

Anchored around awareness

Anchored around participation and activating fans

Focused on procuring paid media

Focused on integrating paid, earned, owned and shared media

Emphasis on being in control of media messaging

Emphasis on conversation and relationship value

Digital expertise anchored in specialists and COEs

Brand managers are universal soldiers with digital expertise

Fixed, turn on/turn off, and long lead times

Dynamic, always on, and iterative

Source: Booz & Company

Booz & Company

NEW
CAPABILITIES
REQUIRE NEW
MIND-SETS

Everyone knows that a key ingredient

for a great dinner party is a switchedon host who curates a fabulous mix of
guests, stimulates lively and interesting
conversation, and graciously attends to
a variety of needs throughout the evening. Terrific 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 ita quick tweak to the seating chart, a personal introduction to
ensure the right contact is made, or a
subtle change to the playlist to enhance
the evenings ambience. All of this
makes guests eager to return.
The ingredients of a successful dinner
partyincluding the central role of
the hostis 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 youre the host. There

might be someone in the cornerbe
generous and gracious and invite him
in. There are stars who will flit 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 environmenta place where
guests feel welcome and where they
comfortably engage in rich, interesting
conversations, sharing thoughts and
views with friends, old and new. The
best 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 sophistication. For the vast majority of them, it
requires building new capabilities that
have not been part of their traditional
tool kit.

Booz & Company

CAPABILITY
PRIORITY 1:
COMMUNITY
MANAGEMENT

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 media
presence is only the beginning.
Its the equivalent of sending the
invitations to a dinner party. Thus,
community managementthe art
and science of convening and hosting
fans in social mediahas become a
vitally important new capability for
companies and their marketers.
Community management involves
engaging, monitoring, servicing, and
activating a companys social media
fan base across multiple social media
platforms. This discipline has become

critical to ensuring that a brands

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 manage
brands, not real-time communities.
The skills required for community
management stretch well beyond those
associated with traditional brand
management. There are five core
proficiencies:
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 loop
that drives consumer insights

Curating: overseeing the editorial

experience; stimulating meaningful
discussion; making content and
conversation discoverable and
interesting; ensuring that the
brands 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 community
vibrancy, sentiment, and growth
Innovating: anticipating what
is next for a brands fan base in
new content, tools, and social
or digital media experiences (for
example, mobile, apps, and niche
communities)
Not surprisingly, these new requirements and their vital importance
concern many companies. About 50
percent of the survey respondents
said the lack of sufficient community

The skills required for community

management stretch well beyond
those associated with traditional
brand management.

Booz & Company

management resources in their organizations 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 medias 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 apparel
brand. 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 peopleintensive function, one that cannot be
outsourced lightly. Senior executives
recognize that community management is central to social media success
and that they need dedicated in-house
expertise to make it happen sustainably. Already, among the companies
surveyed by Booz & Company and
Buddy Media that have their own dedicated social media staffs, two-thirds
have internal resources dedicated specifically 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 in
community 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 ber-fan. Thats 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 platformsFacebook, Twitter,
YouTube, company blogs, etc.must
be managed with content sourced
and tailored for each. Throughout
all of this, campaign analytics and
metrics must be reviewed and assessed
to determine what is resonating and
what is not, and community managers
must make decisions on the fly to
continually enhance the community

Exhibit 3
Top Five Organizational Challenges for Social Media

PERCENTAGE OF SURVEY RESPONDENTS INDICATING THIS WAS A SIGNIFICANT

OR VERY SIGNIFICANT CHALLENGE
57%

Not Enough
Cross-Departmental
Collaboration

52%

Insufficient Resources
Dedicated to
Community Management

51%

Lack of
Understanding Among
Senior Leaders

48%

Difficulty of
Proving ROI

43%

Not Core to
Overall Strategy

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

10

Booz & Company

experience and ensure that it is

connected to the brands 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 field
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 insufficient cross-departmental
collaboration is a major obstacle to
social media success. In interviews
conducted for this study, executives
repeatedly stressed the need for great
conversationalistsextroverts
who enjoy interacting with others
and who are comfortable in a fluid,
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 stressed
that 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.

Booz & 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 field. 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. He
answered 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.
Starwoods 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 guestsand
to cement their loyalty to the companys 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 loyalty
program. 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 cant
confine social media to the marketing department, says Waxenberg.
Perhaps the greatest change it has made for Starwood is in customer
service. Its 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 guests 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, were 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 couples milestone an
experience that is truly memorable, personal, and specialfrom a hotel
they will most likely recommend to others.

11

CAPABILITY
PRIORITY 2:
CONTENT
DEVELOPMENT

Like a party without the requisite

food or drink, a social media
community without relevant content
can 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
arent clickingit forces you to
deliver something engaging.

For many companies, developing a

robust social media content development capability requires a complete
reboot of their approach to developing 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 sufficient content they
can share with their community?

A social media community without

relevant content can quickly
become a stale, empty room.

12

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They are trying many new things

in order to have content to share
events, contests, videoswith their
communities.
A powerful example of the impact
of social media on brand storytelling
is Nikes 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 lifechanging soccer contract with the
Nike Academy. Millions of Nike
fans followed the competition, which
kicked off with a call to action
on Facebook from famed Arsenal

Booz & Company

manager Arsne 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 finalists
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 the
consumer 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 millions. AKQAs Ahmed describes
the strategy behind The Chance:
There was no better way to tell the
Just Do It story than by empowering people to become better footballers 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,
influenced tens of thousands, and has
changed the lives of many. Indeed,
5.5 million fans actually pledged
their support to various participants

13

during The Chance, and millions

more viewed various Nike- and
player-produced videos on Facebook
and YouTube over the course of the
campaign.
The story of The Chance highlights
how brand storytelling and advertising 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 properties 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 contribution 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 conversations and gets the consumer motivated 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 companys relatively low emphasis on social media. The celebrities

in these ads are looking to preserve a
certain mystique. They cant do that
in social, so it just doesnt work. In
contrast, Nikes social media content is participatory, authentic, and
relevant, all by design. Thats 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.

14

Booz & Company

publishers, competing aggressively

for consumers attention, engagement, and loyalty with high-value
content just as media companies do.
Leading social media teams are therefore taking steps to build publisherlike 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 specific storylines and
story types, and ensure a steady
stream month by month, week by
week, and hour by hour. They are
optimizing content for discovery and
sharingeven elevating their brands
to act as trusted filters that aggregate the most brand- and audiencerelevant third-party articles and links.
Finally, brands are working with an

Booz & Company

expanding range of creative resources

to accomplish all this. These include
external entertainment companies,
creative agencies, digital publishers,
independent producers, PR firms,
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 executives 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 placementis increasingly
important for breaking through the
conversation clutter. Buddy Medias
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 with
consumers 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 actioneither
online or offlinedrove 30 percent
more 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

15

branded social media sites. The most

valuable real estate for a marketer is
actually the newsfeeds of its brands
fans. On Facebook, according to
the digital measurement and business analytics provider ComScore,
consumers spend 27 percent of their
timemore than for any other single
categoryon 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 brands page. Given

these realities, companies must excel

at developing brand-relevant content that drives posting and sharing.
Furthermore, by creating shared
content, companies also increase their
marketing productivity; they achieve
a multiplier effect, whereby messages 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 Media
survey 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
resourcesproducers and editors
above all other needs.

Among companies planning to hire

social media talent within a year,
72 percent are prioritizing creative
resources above all other needs.

16

Booz & Company

CAPABILITY
PRIORITY 3:
REAL-TIME
ANALYTICS

Marketers increasingly need realtime 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 traffic and engagement
than others? How are brand influencers 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 questions, and thus critical for a contemporary digital marketing capability.
The Booz & Company/Buddy Media
survey and related interviews indicate
that there are four levels to a real-time
social media analytics capability, with
progressively more sophistication:
Level 1: Reach. Marketers understand the social scale of their
brands. They know how many
fans, followers, subscribers, visitors, and views they have, and how
many discussions are taking place.
They have visibility into where,
when, and in what context their
brand is being discussed.

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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
amplification, studying the patterns
in comments, likes, shares, and
take rates.
Level 3: Advocacy. Marketers can
identify and encourage user behaviors that are associated with brand
commitment. These include such
metrics as intent to recommend,
referral and reshare activity, comments 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.

17

The survey also confirmed that

marketers are concerned about the
quality of their social media metrics
and analytics. Sixty percent of the
respondents said they are not satisfied in this area. Only 50 percent of
companies have social mediafocused
KPIs and dashboards in place today;
another 47 percent are actively building them. Many companies view
expertise in social media measurement, 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 outcomes, and the more immediate need
(expressed by 90 percent) for social
media metrics to be tailored to meet
the objectives of specific individual
campaigns.

A few corporate trailblazers are

demonstrating that social media can
drive measurable results and business impactin other words, they are
gaining a lot more than likes. Wendy
Clark, senior vice president for integrated marketing communications and
capabilities at Coca-Cola, has shared
publicly that the beverage giants
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. Dells
leaders understand how social media
impacts loyalty, product innovation,
brand favorability, and even costs
(such as the cost of customer support). 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 recommend 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 unfiltered,
direct consumer insights into branding, customer service, and product
development. Fifty-six percent of
companies surveyed are already using
social media to support their market
research and consumer insight activities. Eighty-one percent believe that
they are capturing helpful consumer
insights from social media today. Since
56 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.

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Booz & Company

THE MINDSETS OF SOCIAL

MEDIA SUCCESS

In addition to these three capabilities,

several soft factorsmind-setsare
equally important to social media and
digital marketing. The senior leaders
interviewed for this study repeatedly
pointed out that it takes a different 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 opportunities available to a marketer overnight, companies need more flexible,
dynamic, and entrepreneurial executive talent than ever before.
Venky Balakrishnan, global vice
president for marketing innovation at
Diageo, the worlds 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 like
Navy SEALs. In an environment
where developments occur quickly,
consumer behavior is dynamic, and
playbooks are rewritten constantly,
companies need talent who are ener-

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gized by uncertainty, who are techand consumer-savvy, but also know

what they dont know, and know
how 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 identified several other soft
factors that are important to social
media success. Ninety-three percent
of the respondents said that having
a 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 onethird have an executive assigned to
lead 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.

19

MOVING
FORWARD

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 taking
an 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 figure to exceed 20
percent. Not a single respondent
reported a plan to spend a smaller
percentage of the digital marketing
budget on social media moving
forward (see Exhibit 4).

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

ot Core to
rall Strategy

Today

5%

3 Years from Today

13%

7%
28%

22%
32%
67%
27%

< 5%

5-10%

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

20

Booz & 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 significantly
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.

Booz & Company

21

THE DIGITAL
FUTURE TODAY
AT HORSEFERRY
ROAD
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 beyond
slick marketing concepts dressed
up in trendy technology. Burberrys

social media and digital marketing

activities now represent 60 percent of
its marketing budget. The company
has managed this by holding its total
marketing spend flat 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, blurring
the line between the physical and
the digital. Along the way, the

company has invested in community

management, content development,
and real-time analytics capabilities,
betting big on the benefits 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

Exhibit 5
Facebook Fans: Burberry vs. Major Fashion Magazines, U.S. Versions as of February 2012
10.70

2.17
0.42
Burberry

Vogue

Elle

0.32

0.14

0.11

0.10

InStyle

Marie Claire

Harpers Bazaar

Note: Numbers represent millions of people who like each brands Facebook page, as of February 2012.
Source: Facebook; Booz & Company

22

Booz & Company

base, also active on Twitter, YouTube,

and Burberry.com, now constitutes
an interconnected, linked, and owned
media 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 growth
of 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
companys solid financial performance
to its investments in digital marketing
as well as its innovative design
and retail strategies. In a video

Booz & Company

statement (appropriately available

on YouTube), Ahrendts elaborated
on this point. You have to create
a social enterprise today, she said.
You have to be totally connected
with everyone who touches your
brand. The Booz & Company/
Buddy Media study confirms that
this digital-social transformation
is occurring not just at Burberrys
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
management, content development,
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 marketleading performance.

Resources: Burberrys
Social Media Ecosystem
The Facebook Burberry
Page (content, community,
commerce): www.facebook.
com/#!/burberry
Burberrys YouTube Channel
(live streaming, campaigns,
how-tos): www.youtube.com/
user/burberry?ob=4
Twitters Burberry Feed (live
events, real-time news and
updates): twitter.com/#!/
burberry
Burberrys own home
page (content, product
information, commerce):
www.burberry.com
Art of the Trench website
(user generated and
professional photographs)
artofthetrench.com

23

LOral: Developing Social Media Mind-Sets and Skill Sets

Survey Methodology

Im an evangelist, says Rachel Weiss, assistant vice president for

digital strategy and interactive marketing at LOral. Social media is
not just a new marketing tool; its so much more. Its a fundamentally
different operating mind-set.

In 2011, Booz & Company and

Buddy Media surveyed 117
companies across a broad
range of industries. The online
survey addressed social
media platform priorities,
use cases, benefits 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--vis social
media.

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 mediafriendly 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
organizationexecutives 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 LOral. Ive found that reverse mentoring works very
well, 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
Facebookif you can get her engaging in a real hands-on experience
with consumers on these digital platforms, thats 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. Weve done studies on digital listening, and sharing the
sheer volume of conversations happening every day around our
products and brandswith or without our direct involvementis 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, Im 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 brainthe creative
and analytical, says Weiss. I also ask candidates to describe their
digital lifestyleif 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 into
product purchases.

24

Booz & Company

About the Authors

About Buddy Media

Christopher Vollmer is a
partner with Booz & Company
based in New York. He leads
the firms 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).

Buddy Media is the social

enterprise software of choice
for eight of the worlds top 10
global advertisers, empowering
them to build and maintain
relationships with their
consumers in a connectionsbased 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 of
purchase. 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.

Karen Premo is a principal

in Booz & Companys 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.

Booz & Company

25

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