Social Media Analytics Benchmark Report

1. Social Media Analytics Benchmark Report Benchmark Report Social Media Analytics: Sponsored By: © 2014 Demand Metric Research Corporation. All Rights Reserved.

2. PREFACE Today's connected consumer has access to an insane amount of information, all at their fingertips, thanks to the ubiquity of smartphone and tablet access to the web. This change of direction when it comes to the research part of any purchase has resulted in brands playing catch up to try to make sense of this new paradigm. To enable this, technologies and companies have sprung up to provide marketers with all the data they need, and more. However, this now presents a new and far more dangerous problem from the perspective of the brand and marketer: How can the right data be filtered when there is so much of it? Failure to extrapolate the right data will only make the job tougher for any brand looking to truly understand their customers' mindset and, by doing so, how to impact their choices when they're at crucial decision-making points in the purchase life cycle. As this benchmark study from Demand Metric shows, there is no shortage of buy-in for using social media and analytics when it comes to brand collection of data. However, while it's encouraging to see the importance of data being used as a key component in understanding your brand's audience - whether they're customers, stakeholders, constituents or otherwise - it's clear that access to more data doesn't necessarily mean the data is useful. As the findings of the report show, the reason for increased knowledge not equating to sales and increased ROI can be attributed to both vendors and users of the technology. Competing vendors use different terminology to promote the same solution, leading to confusion in the marketplace, while end users simply aren't experienced enough to filter automated findings into human behaviors and what that means for a brand's marketing message. While technology continues to improve, the understanding of how the relationship between consumer and brand is changing also needs to improve. We can't expect the data available to us through technology to answer all our questions; we need the insights that come with understanding people and the tipping point that sees them make a particular choice over another. Demand Metric's findings reinforce my belief that the next key position at brands using data and analytics to understand their customer won't be more experienced data analysts, but people analysts. I await the next stage of the industry's progress intently. - Danny Brown, Research Director PREFACE Today's connected consumer has access to an insane amount of information, all at their fingertips, thanks to the ubiquity of smartphone and tablet access to the web. This change of direction when it comes to the research part of any purchase has resulted in brands playing catch up to try to make sense of this new paradigm. To enable this, technologies and companies have sprung up to provide marketers with all the data they need, and more. However, this now presents a new and far more dangerous problem from the perspective of the brand and marketer: How can the right data be filtered when there is so much of it? Failure to extrapolate the right data will only make the job tougher for any brand looking to truly understand their customers' mindset and, by doing so, how to impact their choices when they're at crucial decision-making points in the purchase life cycle. As this benchmark study from Demand Metric shows, there is no shortage of buy-in for using social media and analytics when it comes to brand collection of data. However, while it's encouraging to see the importance of data being used as a key component in understanding your brand's audience - whether they're customers, stakeholders, constituents or otherwise - it's clear that access to more data doesn't necessarily mean the data is useful. As the findings of the report show, the reason for increased knowledge not equating to sales and increased ROI can be attributed to both vendors and users of the technology. Competing vendors use different terminology to promote the same solution, leading to confusion in the marketplace, while end users simply aren't experienced enough to filter automated findings into human behaviors and what that means for a brand's marketing message. While technology continues to improve, the understanding of how the relationship between consumer and brand is changing also needs to improve. We can't expect the data available to us through technology to answer all our questions; we need the insights that come with understanding people and the tipping point that sees them make a particular choice over another. Demand Metric's findings reinforce my belief that the next key position at brands using data and analytics to understand their customer won't be more experienced data analysts, but people analysts. I await the next stage of the industry's progress intently. - Danny Brown, Research Director

3. TABLE OF CONTENTS 4 Introduction 17 Measurement Challenges & ROI 5 Executive Summary 20 Social Media Advertising 6 Social Media Analytics Use 22 The Future of Social Media 9 Social Media Applications & Insights 23 Analyst Bottom Line 12 Social Media Influence 24 Acknowledgements 15 Social Media Command Centers 25 About Netbase & Demand Metric 16 Evaluating Social Tools 27 Appendix – Survey Background TABLE OF CONTENTS 4 Introduction 17 Measurement Challenges & ROI 5 Executive Summary 20 Social Media Advertising 6 Social Media Analytics Use 22 The Future of Social Media 9 Social Media Applications & Insights 23 Analyst Bottom Line 12 Social Media Influence 24 Acknowledgements 15 Social Media Command Centers 25 About Netbase & Demand Metric 16 Evaluating Social Tools 27 Appendix – Survey Background

4. INTRODUCTION Social media ROI remains elusive for organizations without analytics and tools that help marketers link social data directly to revenue impact and strategic decision-making. Despite the difficulties measuring ROI, social media analytics help organizations monitor and understand the implications of the social conversation, which is valuable in a variety of use cases. In a study sponsored by NetBase, Demand Metric investigated how companies are enabling and optimizing their social media efforts through the use of analytics. Specifically, the following aspects of social media and analytics were explored:  The extent to which social media analytics tools are currently in use  The use cases for social media analytics and which are providing the most valuable insights  The influence social media has on customer revenue  The extent to which insights and intelligence gained through social media analytics influence executive decision-making  The use of and budget for social media advertising  The challenges organizations are having measuring the impact of their social media efforts  The ROI of social media efforts and how social media use will evolve in 2014 These study results provide insights and best practices that will help organizations measure the results of their efforts and enable more effective use of social media. 4 INTRODUCTION Social media ROI remains elusive for organizations without analytics and tools that help marketers link social data directly to revenue impact and strategic decision-making. Despite the difficulties measuring ROI, social media analytics help organizations monitor and understand the implications of the social conversation, which is valuable in a variety of use cases. In a study sponsored by NetBase, Demand Metric investigated how companies are enabling and optimizing their social media efforts through the use of analytics. Specifically, the following aspects of social media and analytics were explored:  The extent to which social media analytics tools are currently in use  The use cases for social media analytics and which are providing the most valuable insights  The influence social media has on customer revenue  The extent to which insights and intelligence gained through social media analytics influence executive decision-making  The use of and budget for social media advertising  The challenges organizations are having measuring the impact of their social media efforts  The ROI of social media efforts and how social media use will evolve in 2014 These study results provide insights and best practices that will help organizations measure the results of their efforts and enable more effective use of social media. 4

5. EXECUTIVE SUMMARY Primary research for this study was done using a survey, and the data analysis provides these key findings:  Almost two-thirds of organizations are using social media analytics, with medium-sized companies leading the way (medium companies defined by revenues between $26 million and $500 million annually).  While demonstrating ROI remains elusive, almost 30% of organizations that are actively monitoring and measuring their efforts report some level of ROI.  Social media is most often used to optimize or enable: campaign tracking, brand analysis and competitive intelligence.  Social media analytics focused on customer engagement deliver the most valuable insights.  Almost one-third of organizations don’t know how much of their revenue was influenced by or attributed to social media.  Almost three-fourths of study participants report that their executive decision-making is influenced to some extent by insights and intelligence gained through social media.  Organizations that are most aggressively evaluating and adding new social media analytics tools have the best understanding of social media’s influence on revenue.  70% of organizations in this study don’t know what kind of ROI their social media efforts are delivering. This report details the results and insights from the analysis of the study data. For more detail on the survey participants, please see the Appendix. EXECUTIVE SUMMARY Primary research for this study was done using a survey, and the data analysis provides these key findings:  Almost two-thirds of organizations are using social media analytics, with medium-sized companies leading the way (medium companies defined by revenues between $26 million and $500 million annually).  While demonstrating ROI remains elusive, almost 30% of organizations that are actively monitoring and measuring their efforts report some level of ROI.  Social media is most often used to optimize or enable: campaign tracking, brand analysis and competitive intelligence.  Social media analytics focused on customer engagement deliver the most valuable insights.  Almost one-third of organizations don’t know how much of their revenue was influenced by or attributed to social media.  Almost three-fourths of study participants report that their executive decision-making is influenced to some extent by insights and intelligence gained through social media.  Organizations that are most aggressively evaluating and adding new social media analytics tools have the best understanding of social media’s influence on revenue.  70% of organizations in this study don’t know what kind of ROI their social media efforts are delivering. This report details the results and insights from the analysis of the study data. For more detail on the survey participants, please see the Appendix.

6. SOCIAL MEDIA ANALYTICS USE Figure 1: Most organizations use analytics to understand and enhance social media marketing. The starting point for understanding how organizations are using analytics to help manage their social media marketing efforts is simply to know how many are using an analytics solution. As the data in Figure 1 shows, most organizations are doing something with social media analytics. Usage, however, is not the same as proper or effective usage. This report will examine other data that supports the conclusion that many users of social media analytics need a greater understanding of how to use the tools and what to do with the data. There was no uncertainty about the use of social media analytics, as none of the study participants chose the “I don’t know” response option. Social Media Analytics Benchmark Report, Demand Metric, February 2014, n=125 6 SOCIAL MEDIA ANALYTICS USE Figure 1: Most organizations use analytics to understand and enhance social media marketing. The starting point for understanding how organizations are using analytics to help manage their social media marketing efforts is simply to know how many are using an analytics solution. As the data in Figure 1 shows, most organizations are doing something with social media analytics. Usage, however, is not the same as proper or effective usage. This report will examine other data that supports the conclusion that many users of social media analytics need a greater understanding of how to use the tools and what to do with the data. There was no uncertainty about the use of social media analytics, as none of the study participants chose the “I don’t know” response option. Social Media Analytics Benchmark Report, Demand Metric, February 2014, n=125 6

7. SOCIAL MEDIA ANALYTICS USE Use of social media analytics did vary based on the size of the organization. Annual revenues were used to gauge company size, where small companies had annual revenues of $25 million or less, medium companies ranged from $26 million to $500 million, and large companies were over $500 million: Figure 2: Medium-sized companies are adopting social media analytics at a greater rate than small or large companies. Social Media Analytics Benchmark Report, Demand Metric, February 2014, n=125 7 SOCIAL MEDIA ANALYTICS USE Use of social media analytics did vary based on the size of the organization. Annual revenues were used to gauge company size, where small companies had annual revenues of $25 million or less, medium companies ranged from $26 million to $500 million, and large companies were over $500 million: Figure 2: Medium-sized companies are adopting social media analytics at a greater rate than small or large companies. Social Media Analytics Benchmark Report, Demand Metric, February 2014, n=125 7

8. SOCIAL MEDIA ANALYTICS USE Figure 3: Adoption of social media analytics is accelerating, and much of it has occurred in the past 2 years. The penetration of social media analytics tools has occurred in almost two-thirds of organizations using social media, and it has been rapid, with over half of it occurring in 2012 and 2013 (see Figure 3). This adoption pattern follows the introduction and maturation of social media analytics tools. While social media is still relatively young, the analytics and management tools are younger still. This rapid adoption represents the need recognized by those who use social media as part of their brand strategy. Social media certainly provides a wonderful, opt-in channel for people to follow and interact with a brand, but professional marketers have, since the beginning, wanted better tools and information about how the social media channel performs, as well as ways to extract insights from the unstructured data stored in these networks. As solutions became available and matured, marketers were quick to adopt them. Social Media Analytics Benchmark Report, Demand Metric, February 2014, n=125 8 SOCIAL MEDIA ANALYTICS USE Figure 3: Adoption of social media analytics is accelerating, and much of it has occurred in the past 2 years. The penetration of social media analytics tools has occurred in almost two-thirds of organizations using social media, and it has been rapid, with over half of it occurring in 2012 and 2013 (see Figure 3). This adoption pattern follows the introduction and maturation of social media analytics tools. While social media is still relatively young, the analytics and management tools are younger still. This rapid adoption represents the need recognized by those who use social media as part of their brand strategy. Social media certainly provides a wonderful, opt-in channel for people to follow and interact with a brand, but professional marketers have, since the beginning, wanted better tools and information about how the social media channel performs, as well as ways to extract insights from the unstructured data stored in these networks. As solutions became available and matured, marketers were quick to adopt them. Social Media Analytics Benchmark Report, Demand Metric, February 2014, n=125 8

9. ABOUT NETBASE NetBase enables business leaders to manage marketing and content strategies with real-time, fast and accurate social media analytics. Clients include AMC Networks, American Airlines, Coca-Cola, National Geographic, Ogilvy, SAP, WalMart and Taco Bell. NetBase was awarded in January 2014 the CGT Reader’s Choice Best in Class consumer goods technology award as voted by its customers. ROI figures calculated by IntelliCap, an independent research firm, show that we deliver hard ROI for our customers. Among other benefits, we can reduce costs to capture social media insights by 34% over traditional methods, reduce time spent managing PR issues by 20%, and boost productivity for many functions. Please contact us to learn more or to schedule a custom demo where you can see our social guide in action: call 1-855SOCMROI (762-6764) or email info@netbase.com. NetBase Solutions, Inc. 2087 Landings Drive Mountain View, CA 94043 1-855-SOCMROI (1-855-762-6764) @netbase www.netbase.com ABOUT NETBASE NetBase enables business leaders to manage marketing and content strategies with real-time, fast and accurate social media analytics. Clients include AMC Networks, American Airlines, Coca-Cola, National Geographic, Ogilvy, SAP, WalMart and Taco Bell. NetBase was awarded in January 2014 the CGT Reader’s Choice Best in Class consumer goods technology award as voted by its customers. ROI figures calculated by IntelliCap, an independent research firm, show that we deliver hard ROI for our customers. Among other benefits, we can reduce costs to capture social media insights by 34% over traditional methods, reduce time spent managing PR issues by 20%, and boost productivity for many functions. Please contact us to learn more or to schedule a custom demo where you can see our social guide in action: call 1-855SOCMROI (762-6764) or email info@netbase.com. NetBase Solutions, Inc. 2087 Landings Drive Mountain View, CA 94043 1-855-SOCMROI (1-855-762-6764) @netbase www.netbase.com

10. . ABOUT DEMAND METRIC Demand Metric is a global marketing research & advisory firm serving a membership community of over 38,000 marketing professionals, CEOs, and business owners with advisory services, custom research & benchmarking reports, vendor studies, consulting methodologies, training, and a library of 500+ practical tools and templates. Using Demand Metric resources, members complete projects faster and with greater confidence, boosting respect for the marketing team and making it easier to justify needed resources. Our 1,000+ corporate clients range from start-ups to consulting firms to members of the Global 1000. To learn more about Demand Metric, please visit: www.demandmetric.com. To read the rest of this Benchmark Report, become a Demand Metric member today!