INSIGHT Despite the Hype, B2B Social Marketing Is Still in Its

INSIGHT

Despite the Hype, B2B Social Marketing Is Still in Its Infancy: 2012 Guidance for New Investment Dollars and Staff

Joseph A. Ferrantino Michael Gerard Richard Vancil Kathleen Schaub Gerry Murray

IDC OPINION

Few media shifts have received more attention from marketers than the use of social media — but are social marketing practices living up to the hype? Social marketing is still in its infancy but has moved beyond the experimentation phase and started to find roots and value in B2B marketing. Currently, IDC's CMO Advisory Service recommends the following:

 Don't rush the listening process. IDC is seeing good usage of social marketing for the key activity of "listening and monitoring." In fact, "just listening" to the conversations about your company — without even "saying" anything — is an excellent way to step into this new media. Many companies are rushing this step, which has limited their ability to meaningfully engage with their targets. Data from IDC's 2012 Buyer Experience Study shows that buyers are most commonly found in communities and blogs, making them an excellent source of relevant conversations.

 It's not only about presence, it's about influence. Although 84% of buyers leverage social networks to keep up with trends and stay connected, only 18.6% believe that social networks have influenced how they interact with vendors and make purchase decisions. Thus vendors and buyers inhabit the same spaces, but social marketing as a more intentional effort to influence buyers still needs work. While vendors want influence, buyers want value; companies must give before they expect to receive and focus on creating social marketing interactions that are highly relevant and provide value to buyers.

 Invest and evolve. Continue to invest in social marketing and increase proficiency. At year-end 2011, marketing departments were allocating 1.3% of total program spend and 0.7% of staff to social marketing. IDC has been tracking social marketing proficiency for the past few years, and many companies are now reporting success in internal support/adoption and scaling/integration — if your company is not at this level, you are lagging. Cost per impact is a huge benefit of social marketing because it is capable of providing high impact at a relatively low cost. Invest and increase proficiency to achieve higher levels of

G l o b a H e d q u r t s : 5 S p n F m i g h , M A 0 1 7 U P . 8 2 9 3 4 w c impact. Refer to IDC's 2012 Social Marketing Maturity Model to gauge your company's social marketing maturity and find the required steps to increase both maturity and market impact.

Filing Information: April 2012, IDC #234025, Volume: 1 CMO Advisory Service: Insight IN THIS INSIGHT

This IDC Insight evaluates social marketing from two perspectives: the buyer and the vendor. The document begins by focusing on the buyer side to assess how social marketing influences buyers and how they leverage social networks to stay connected. Next, IDC discusses general social marketing investment benchmarks on the vendor side, including operational insights on program spend and staff allocations. An evaluation of top vendor social marketing successes and challenges follows as well as a description of IDC's 2012 Social Marketing Maturity Model. The document ends with a discussion of the future outlook and some essential guidance that will help put marketers on the path to best practitioner status. Clients of IDC's CMO Advisory Service should refer to the Related Research section of this document as well as www.idc.com/eagroup/cmo.jsp for additional insight and guidance on increasing the impact and productivity of marketing.

SITUATION OVERVIEW

IDC' s CMO Advisory Service Social Marketing Taxonomy

Please note that IDC defines Social Media as a mechanism designed for sharing through social interaction and using the Internet as a highly scalable and highly accessible method of distribution. IDC defines a Social Network as a group of individuals or organizations, either public or private, that are connected to each other in some way, share information with one another, and collaborate on topics of interest. Thus a 'tweet' is considered Social Media, and Twitter is a Social Network.

Social Marketing Program Spend

IDC segments social marketing program spend into three categories:

 Social marketing software and social marketing automation: Program dollars spent on tools such as software for communities and blogs, or software specifically designed to automate social marketing functions

 Socialytics (Social data analytics applications): Program spend designated to "listening software," software that measures and monitors social marketing impact

 Outsourced social marketing spend: Program dollars spent on agency services specifically for social marketing

Social Marketing Staff

Social marketing staff are internal staff that develop, monitor, and maintain social networks. IDC segments social marketing staff into four main categories (please note, one staff member may spend a portion of his/her time on multiple categories):

 Infrastructure: These staff are responsible for deploying, maintaining, and evaluating the social marketing infrastructure.

 Responding: These staff are tasked with responding to users on social networks.

 Social marketing campaigns: These staff are focused on designing and executing social marketing campaigns.

The Buyer Side: Social Marketing Just Beginning to Influence IT Buyers

IDC's Executive Advisory Group, which is made up of the CMO and Sales Advisory Services, completed its annual Buyer Experience Study in March 2012. This survey asked IT buyers a series of questions about the value of social media, the influence of social networks, and how the buyers are leveraging social networks.

Despite the hype, B2B social marketing is in its infancy based upon vendor dollars invested as well as buyer influence. Figure 1 illustrates buyer responses in both 2011 and 2012 to the question: "Using the following scale, please rate how valuable each of the following information delivery formats are to help you consume and learn about technology in support of your purchase decisions (Scale: 1 = low value, 10 = strongly prefer)." Social media scored relatively low in this evaluation, with the average participant scoring it at 4.5 out of 10 in 2012. This is similar to the social media score of 5.1 fielded in the 2011 version of the Buyer Experience Study.

Figure 2 reveals a similar lukewarm reception to social networks from buyers. In 2012, only 18.6% of respondents stated that social networks have influenced how they interact with vendors and make purchase decisions. Moreover, buyers' response to the same question in 2011 was similar at 19.5%. IDC does not believe the slight decrease year over year here is statistically significant enough to be considered an actual decrease. IDC has seen no progress in social marketing value (see Figure 1) or influence (see Figure 2) year over year, which suggests that vendors are still not successfully engaging buyers.

Social Media' s Value in Educating Buyers and Influencing Their Purchase Decisions, 2011 and 2012

Q. Using the following scale, please rate how valuable each of the following information delivery formats are to help you consume and learn about technology in support of your purchase decisions. Scale: 1=Low Value, 10=Strongly Prefer

n = 199 Source: IDC's 2011 Buyer Experience Study and 2012 Buyer Experience Study

FIGURE 2

Social Networks ' Influence o n How Buyers Interact with Vendors and Make Purchase Decisions, 2011 and 2012

Q. Have social networks influenced how you (buyers) interact with vendors and make purchase decisions?

n = 199 Source: IDC's 2011 Buyer Experience Study and 2012 Buyer Experience Study

4 #234025 ©2012 IDC Figure 3 takes a deeper look at how buyers engage through social networks, and the results clearly show which channels they leverage most. Sixty-two percent of buyers visit a business or technology blog at least once per month, and 58% do the same with communities. Buyers frequent blogs and communities, and vendors must incorporate this fact into their social marketing strategies. LinkedIn is also a popular social medium for buyers to explore, with 52% of respondents visiting at least once per month. Perhaps the most powerful finding here, however, is that only 16% of buyers stated that they do not leverage any of the social networks in the ways described in the chart. Thus 84% of buyers are using social networks in one way or another, which is a clear indicator that opportunity exists.

FIGURE 3

How Buyers Leverage Social Networks, 2011 and 2012

Q. Please indicate how you are leveraging social networks to keep up with business and/or technology trends or to stay connected with peers and other business contacts.

n = 199 Source: IDC's 2011 Buyer Experience Study and 2012 Buyer Experience Study

The Vendor Side: Investment and Proficiency Still Limited, But on the Rise

Social marketing accounts for only a small portion of total program spend and staff within the marketing organization. As shown in Figure 4, 1.3% of all program spend and 0.7% of total staff were dedicated to social marketing as of year-end 2011. However, research from IDC's 2012 Tech Marketing Barometer Study suggests that these allocations are on the rise in 2012 as companies push their social marketing proficiency forward.

Social Marketing Program Spend and Staff Allocations in Marketing Organizations, Year- End 2011

n = 85 Source: IDC's 2011 Tech Marketing Benchmarks Study

Social Marketing Program Spend Benchmarks

Social marketing accounts for 1.3% of the total program spend mix, but that allocation is expected to increase in 2012. Data from IDC's 2012 Tech Marketing Barometer Study reveals that social marketing is the top program spend category expected to increase in 2012 (see Figure 5). Although it is still too early to tell by what percentage social marketing program spend will increase in 2012, 65% of respondents are expecting an increase in investment to some degree. Moreover, only 2% of respondents are anticipating any decrease in social marketing investment.

IDC's CMO Advisory Service also tracks specific subcategory allocations within social marketing program spend. According to IDC's Worldwide Sales, Marketing, and Market Intelligence Taxonomy, 2012: Guidelines for Cost Control and Resource Allocation (IDC #231252, November 2011), social marketing program spend is broken into three components: social marketing software and automation, socialytics (measuring and monitoring), and outsourced social marketing spend.

Expected Changes to the Program Spend Mix, 2012

Q. Please indicate if investment in the following program spend categories will increase, stay the same, or decrease in 2012 as compared to 2011.

n = 61 Source: IDC's 2012 Tech Marketing Barometer Study

Figure 6 shows the year-end 2011 benchmarks of these specific social marketing program spend allocations alongside respondents' thoughts on which categories are most important in 2012. At year-end 2011, companies were allocating 33.2% of social marketing program spend to social marketing software and automation, 26% to socialytics (measuring and monitoring), and 40.8% to outsourced social marketing spend. In IDC's 2012 Tech Marketing Barometer Study, the CMO Advisory Service asked respondents to "Please allocate 100 'importance points' to the following three social marketing program spend categories in 2012: socialytics (measuring and monitoring), social marketing software and automation, outsourced social marketing, and other." As shown in the right-hand chart of Figure 6, companies are placing the most importance on socialytics in 2012, and thus IDC would expect the 26% socialytics allocation to increase this year. The 17 average importance points dedicated to the "other" category are also interesting in this chart. Conversations with participants have revealed that this category is made up of initiatives such as social marketing training and evangelism.

Detailed Social Marketing Program Spend Allocations: Year- End 2011 Versus Expected Changes in 2012

Source: IDC's 2011 Tech Marketing Benchmarks Study and 2012 Tech Marketing Barometer Study

Social Marketing Staffing Benchmarks

At the end of 2011, an average of 0.7% of marketing staff were in a social marketing role. In 2012, this allocation is expected to increase. As shown in Figure 7, 42% of respondents to IDC's 2012 Tech Marketing Barometer Study stated that they anticipate social marketing staffing increases.

IDC's CMO Advisory Service also tracks more detailed social marketing staffing benchmarks. According to IDC's Worldwide Sales, Marketing, and Market Intelligence Taxonomy, 2012: Guidelines for Cost Control and Resource Allocation (IDC #231252, November 2011), social media staff distribute their time between four main areas: infrastructure, measuring and monitoring, responding, and social marketing campaigns.

The chart on the left in Figure 8 details the average allocations to each of these staffing subcategories at the end of 2011, while the right-hand chart shows which tasks are expected to be most important to respondents in 2012. Staff members already spend the largest portion of their time on social marketing campaigns, and this category scored most important with respondents in 2012, suggesting further increase. Measuring and monitoring also scored important as a staffing category, and we expect that this allocation will increase in 2012, perhaps at the expense of infrastructure. Among the least important staffing areas to respondents in 2012 is infrastructure, which suggests that companies have advanced beyond infrastructure and are focusing on the more tactical uses of staff such as campaigns and measuring and monitoring.

8 #234025 ©2012 IDC Companies must evaluate their own social marketing aptitude against IDC's benchmarks and guidance and decide where it is most appropriate to direct new funds. For instance, if your company has not yet established an expansive listening infrastructure with staff that are capable of gleaning valuable information, that might be an area of investment. If that has been achieved, then perhaps responding and campaigns are the next areas of focus.

FIGURE 7

Expected Staffing Increases, 2012

Q. Please indicate if investment in the following staffing categories will increase, stay the same, or decrease in 2012 as compared to 2011.

n = 61 Source: IDC's 2012 Tech Marketing Barometer Study

Detailed Social Marketing Staff Allocations: Year- End 2011 Versus Expected Changes in 2012

Source: IDC's 2011 Tech Marketing Benchmarks Study and 2012 Tech Marketing Barometer Study

Social Marketing Challenges and Successes

In IDC's 2012 Tech Marketing Barometer Study, participants were asked to describe both their greatest successes and their greatest challenges with respect to social marketing.

The top 3 social marketing successes are:

 Customer/influencer engagement

 Internal support and adoption

 Scaling and integration

The top 3 social marketing challenges are:

 Measuring ROI and linking to the funnel

 Internal support and adoption

 Scaling and integration

These qualitative responses are an excellent indicator of social marketing maturity in the tech industry. Starting at the top, we see the most often achieved success is customer/influencer engagement, which is one of the first key achievements that

10 #234025 ©2012 IDC companies strive toward with social marketing. It appears that companies are very competent at this. As we have seen in the buyer data, however, what vendors classify as "engagement" is not synonymous with "influence" — companies still need to work on influencing buyer purchasing decisions through social marketing.

Next, we move into the swing factors, numbers 2 and 3, which are the same on both lists — internal support and adoption and scaling and integration. While some companies reported these as challenges, a nearly equal number reported them as key successes. This suggests a midpoint — companies that can report significant successes in internal support and adoption and scaling and integration have passed the divide and are in the leading category. Those that still consider these to be the biggest challenges are lagging. Measuring ROI and linking social marketing to the funnel is currently the biggest challenge and also the next frontier for companies as they push their social marketing proficiency further.

IDC's 2012 Social Marketing Maturity Model

To assist marketing executives in recognizing their company's social marketing maturity level and then increase their social marketing effectiveness, IDC has created a social marketing maturity model (see Figure 9).

FIGURE 9

IDC' s 2012 Social Marketing Maturity Model

Source: IDC, 2012

©2012 IDC #234025 11 IDC's 2012 Social Marketing Maturity Model describes five stages that companies progress through on their journey to increase both social marketing maturity and market impact. The five stages are:

 Experimenting: In this phase, social marketing enthusiasts emerge within marketing departments and begin to experiment with social marketing. These enthusiasts have no formal social marketing budgets or dedicated staff at their disposal, along with no defined corporate strategy, policies, guidelines, or executive sponsorship. Instead, they utilize free tools and attempt to achieve initial success, and their social marketing impact is low.

 Developing: Social marketing enthusiasts evolve into evangelists in this stage and push their companies to embrace social marketing. Collaboration is difficult because there are isolated pockets of strategy in various departments and little or no formal processes. Marketers have some automation tools but budgets are small and marketers are rarely supported by IT. Initial successes in this stage help drive broader adoption.

 Formal Listening and Formal Communicating: IDC segments Formal Listening and Formal Communicating into two separate but equal stages. Chronologically, IDC finds that companies can achieve the most impact by not rushing the inbound aspect of social marketing, or listening. In the Formal Listening and Formal Communicating stages companies invest in social marketing staff and training while usage spreads. Marketing departments achieve corporate-level executive sponsorship, and guidelines and policies have been defined. IT is engaged in social marketing and companies invest in socialytics (social data analytics applications) to enable Formal Listening. Formal Listening provides intelligence on markets, prospects, and customers, and market feedback assists in product development. Armed with intelligence gleaned from inbound social marketing, companies insert their voices into outbound communications through planned campaigns. These outbound communications elevate awareness, have increased impact, and begin to influence buyers.

 Optimizing: Optimizing is currently the final stage of IDC's Social Maturity Model. Companies that have achieved this level of proficiency are characterized by a knowledge sharing culture, an organizational structure that supports social marketing, and continued investment in dedicated staff, training, and tools. Socialytics are embedded to support executive decisions, predictive analytics are in use, and social marketing is integrated with traditional marketing and sales strategies. The impact of social marketing in this phase is high, and social marketing asserts its value by providing new leads/customers and increased loyalty. Although elusive, social marketing ROI is within reach.

Marketing executives should conduct a deep evaluation of their company's social marketing capabilities and then honestly plot themselves on IDC's 2012 Social Marketing Maturity Model. This model not only describes the characteristics of each stage but also provides guidance on the factors that must be achieved in order to move forward. IDC's CMO Advisory Service can also offer more customized guidance based on specific company circumstances. Please contact Joseph Ferrantino at [email protected] for more details.

Social marketing will continue to increase in popularity and importance in the next few years, which means that companies will need to evolve and keep pushing their social marketing proficiency forward. Eighty-four percent of buyers are currently utilizing social networks, and that number is only expected to increase. Social marketing has the capability to help bridge the information gap between buyers and vendors, and as investment and proficiency continue to increase in 2012, perhaps this will be the year that vendors more widely capture buyers' attention.

ESSENTIAL GUIDANCE

Results from IDC's 2012 Tech Marketing Barometer Study and 2012 Buyer Experience Study clearly show that vendors and buyers are inhabiting the same social media spaces. Yet there seems to be a disconnect — while vendors increased their social marketing proficiency in 2011, buyers' views on the value and influence of social marketing remained flat. IDC presents the following essential guidance:

 Don't rush the listening process. IDC is seeing good usage of social marketing for the key activity of "listening and monitoring." In fact, "just listening" to the conversations about your company — without even "saying" anything — is an excellent way to step into this new media. Many companies are rushing this phase, which has limited their ability to meaningfully engage with their targets. Data from IDC's 2012 Buyer Experience Study shows that buyers are most commonly found in communities and blogs, making them an excellent source of relevant conversations.

 Invest and evolve. Continue to invest in social marketing and increase proficiency. At year-end 2011, marketing departments were allocating 1.3% of total program spend and 0.7% of staff to social marketing. These numbers are expected to increase in 2012. IDC has been gauging social marketing proficiency for the past few years, and many companies are now reporting success in internal support/adoption and scaling/integration — if your company is not at this level, you are lagging. Cost per impact is a huge benefit of social marketing because it is capable of providing high impact at a relatively low cost. Invest and increase proficiency to achieve higher levels of impact. Refer to IDC's 2012 Social Marketing Maturity Model to gauge your company's social marketing maturity and find the required steps to increase both maturity and market impact.

Related Research

 Social Collaboration for Sales: Cutting Through the Hype (IDC #233340, March 2012)

 Hot Topic Call Summary: Preparing for Marketing Automation (IDC #233125, February 2012)

 The Failure of Marketing ROI (IDC #232661, February 2012)

 What's Killing the Traditional Funnel? (IDC #232511, January 2012)

 Vendor Profile: Qvidian Sales Enablement Playbooks and Proposal Automation (IDC #231889, January 2012)

 Leveraging Sales Enablement to Improve Sales Productivity: A Best Practice Case Study at T-Systems (IDC #232490, January 2012)

 A Cohesive Sales and Marketing Strategy: Real Key Performance Indicators to Assess Your Investment and Process Alignment (IDC #WC20111208, December 2011)

 Sales and Marketing Leadership Meeting Highlights, October 2011: Customer Panels, Sales Enablement, Lead Management, and IDC Productivity Benchmarks (IDC #231281, November 2011)

 Transforming Lead Management: How the New Buyer Is Killing Your Funnel (and What to Do About It) (IDC #WC20111117, November 2011)

 IDC's Worldwide Sales, Marketing, and Market Intelligence Taxonomy, 2012: Guidelines for Cost Control and Resource Allocation (IDC #231252, November 2011)

 Sales Enablement — 90% Process, 10% Technology: A Best Practice Case Study of Sales Enablement at Oracle (IDC #230546, October 2011)

 IDC's Social Business Taxonomy, 2011 (IDC #230541, October 2011)

 Best Practices in Customer Data Management and Customer Record Management (IDC #229931, August 2011)

 The State of Social Software Adoption, An Enterprise View (IDC #229775, August 2011)

 The Buyer Speaks: IDC's 2011 Buyer Experience Survey — Guidance for Sales and Marketing (IDC #228987, July 2011)

 Social Business Maturity Model (IDC #229292, July 2011)

This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or [email protected] for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights.