PR and Marketing Blog | CP Communications: Sydney Marketing & Public Relations Agency

Australian businesses are becoming significantly more social

More than ever Australian businesses are allocating additional funds to social media and are now using it as a way to build customer relationships rather than simply a marketing tool.

The Nielsen-Community Engine 2011 Social Media Business Benchmarking Study found 72 percent of businesses in 2010 participating in social media allocated 10 percent, or more, of their marketing budget to it. This is an increase from 57 percent of businesses in 2009.

The Australian study, commissioned by social business software and community engagement solutions company Community Engine and run by research company Nielsen, investigates how businesses use, measure and budget for social media.

One of the major shifts this year was organisations increasing marketing budgets as opposed to last year when they reallocated it from traditional media. This year 44 percent of participating businesses expanded their marketing budgets to fund a social media strategy.

The greatest proportion of businesses, 40 percent, allocated the most of their social media budget to display advertising or maintaining a presence on Facebook, which is the most popular social network platform with one in four Australian businesses having a Facebook presence.

Community Engine Director of Social Stephen Johnson said, “Attitudes are changing towards social media with more businesses embracing it and becoming more knowledgeable about online platforms. A shift from last year now shows only 35 percent of businesses lack knowledge and expertise to implement social media activities, down from 53 percent in 2009.”

“A significant proportion of businesses want control of the online platforms with one in five saying they would much prefer to create their own social network than to utilise external social networks.”

The barriers relating to ROI and establishing KPIs have declined significantly. The benefits of a social media strategy are now being acknowledged by more businesses with only 16 percent of businesses finding it difficult to measure the ROI of social media activities, down from 28 percent in 2009.

What are they using it for?
Businesses have significantly changed what they use social media for. This year, businesses have shifted from using social media for branding to customer relationships. 43 percent see social media as a way to build a relationship with customers and stakeholders, with 33 percent for branding, a significant drop from 61 percent in 2009.

Mr Johnson said businesses had developed a deeper understanding and appreciation for the true power of social media. “At the end of the day social media is about engagement. Through social media businesses can create an emotive link with consumers and build a two-way relationship with them in a way they have never been able to do before.”

Nielsen research director Melanie Ingrey said it is reassuring to see that an increasing number of businesses are taking a considered approach to social media, creating dedicated budgets to fund these activities and feeling far more confident in their knowledge and expertise in the area. This points toward creating a thoughtful, valuable and meaningful experience and interaction with customers, which is a positive overall.

With Australian businesses the most popular social media activities included:

Presence in social media networks: 28 percent.
Tracking/monitoring what is said about your brand/organisation/staff: 26 percent.
Responding to/acting on comments: 25 percent.

Who is leading the charge?
Private companies have more confidence when it comes to a social media strategy and 51 percent of public sector feels their organisation lacks the knowledge and expertise to implement social media activities.

But the public sector have come out on top as more active in facilitating discussion and interaction with 56 percent giving the audience the opportunity to ask questions within a social networking platform.

Also leading the way is large businesses which are participating more than SMEs (less than 100 employees) in social media networks, 35 percent of large organisations have a social networking presence, as opposed to 22 percent of SMEs. Of this group 40 percent of large businesses are tracking/monitoring what is said compared with only 16 percent of SMEs.

Large businesses are also putting more money behind it with 30 percent using online display advertising on social networking sites compared to 14 percent of SMEs.

“This is not a surprising statistic to come out of the study as large businesses will generally have a bigger budget to work with, but sometimes having the right strategy can be just as effective. Social networking can work for all kind of businesses - if they know what they are doing,” Mr Johnson said.

This is the second year the survey has run and within 12 months it has already shown a marked change in the way businesses view social media as a business platform and how and why they are going about it.

Social:
Hashtag: #B2Bsocialstudy

-ends-

Methodology
The Nielsen Community Engine 2011 Social Media Business Benchmarking Study was designed to deliver quantitative data about the perspective of Australian businesses on social media, their past, present and intended behaviours, their attitudes towards this media and investment levels. The research was commissioned by Community Engine and conducted by Nielsen in April 2011 among a sample of 417 respondents, of which 83 were businesses in the private sector employing 100 or more staff.

About Community Engine
Launched in 2007, Community Engine provides social media, membership management and community engagement technology, products and services for all types of organisations, including business government and the not-for-profit sector. Community Engine provides clients with their own proprietary social network and community engagement platform. For more information, please visit www.communityengine.com

About The Nielsen Company
The Nielsen Company (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related assets. The company has a presence in approximately 100 countries, with headquarters in New York, USA. For more information on The Nielsen Company, visit www.nielsen.com.

KEY FINDINGS FROM THE SURVEY

Australian business investment in social media

During 2010, 72 percent of participating businesses allocated 10 percent or more of their marketing budget to social media activity, up from 57 percent in 2009.
26 percent of participating businesses allocated 20-39 percent of the marketing budget to social media activities an increase from 13 percent last year.
This year 42 percent of organisations already allocating budget to social media or intending to implement it will dedicate a greater proportion of the marketing budget to social media and only 8 percent said they would use less.
Public vs. private: 42 percent of private companies would be allocating a greater proportion of the marketing budget to social media compared to 21 percent of companies in the public sector.
In 2010, among those investing in social media activities, 44 percent of marketing budgets were expanded to fund social media activities, up from 33 percent in 2009.
This year direct marketing was the strongest target for budget redeployment, 41 percent. Last year it was print which was at 47 percent but has dropped to 37 percent this year.
More than half (54 percent) of businesses use their social media investment for marketing, followed by customer relationship marketing, customer service/support and public relations (30 percent each). The least used activity was employee engagement at 12 percent.
Business’ social media budgets were most commonly allocated to display advertising or maintaining a presence on Facebook (21 percent each). This was followed by social media monitoring (17 percent) and using a corporate blog (15 percent).
Fewer businesses were allocating the most of their social media budget to YouTube or Twitter (both 5 percent), Flickr (2 percent) and MySpace (1 percent).
Businesses are embracing and formalising their social media activities with 17 percent of businesses having a formal social media strategy and 24% have social media guidelines in place.

Social media activities conducted by businesses in 2010

The 5 most popular social media activities include:
a. Presence in social media 28 percent
b. Social media monitoring 26 percent
c. Respond to/act on comments made via social media 25 percent
d. Gain consumer insight/use social media as a research tool 23 percent
e. Display advertising on social networking sites 21 percent
The social media activities businesses engaged in the least are inclusion of social media share buttons on their site (14 percent) and facilitating social shopping in some way (17 percent). However, the use of ‘share’ buttons is expected to increase to 22% of businesses this year.
Large businesses (35 percent) have a higher presence in social media networks than SMEs (22 percent).
Also 40 percent of large businesses are tracking/monitoring what is said about them as opposed to 16 percent of SMEs.
Private and public sector are on par across most areas but the public sector has been slower to uptake some core activities including tracking and monitoring (26 percent private, 14 percent public), responding/acting on comments (25 percent private, 16 percent public) and gaining consumer insights (23 percent private to 9 percent public).
54 percent of Australian businesses agree they should be asking how to do social media rather than if they should do it.
42 percent said they risk losing touch with their customers if they don’t employ social media.
One in four Australian businesses have a presence on Facebook.
Of the content offered by social media a majority (56 percent) is knowledge sharing but only 9 percent was optimised for mobile/offered via mobile phone.
Among the 33 percent conducting social media monitoring and/or using social media for research or insights, 72 percent use a specific monitoring tool.
Of the 17 percent facilitating social shopping 33 percent offer it by Facebook and 29 percent use group buying offers.

Barriers to business investment in social media

There was a significant drop in the difficulty of measuring ROI of social media activities, 28 percent last year down to 16 percent this year.
Last year 15 percent of businesses said they were unsure how to establish KPIs around this form of marketing but the number dropped to 8 percent this year.
Only 8 percent of businesses have dedicated, full-time staff for social media activities, 67 percent said they would never consider it.
Last year 36 percent of respondents said they felt as though their organisation was scared to implement social media activities, down to 25 percent this year.
More than half (56 percent) of those yet to implement social media activities feel as though it won’t serve their needs.
Of those who have implemented social media activities 16 percent said the results were not measurable enough and couldn’t be tied into their KPIs

Experience and outcomes to date

Participating businesses are growing more knowledgeable of social media activities with 13 percent of respondents this year saying they still didn’t have enough knowledge, down from 23 percent last year.
Only 9 percent of participating businesses said they did not have enough buy-in from senior management, compared to 14 percent last year.
The marketing objectives achieved through social media activity include customer feedback (53 percent, same as last year) and relationship building (up from 35 percent last year to 43 percent)
37 percent saw a strong or reasonable ROI from their social media activities
ROI on social media activities is quantified mainly via improved engagement with customers/stakeholders (46 percent), followed by sales/revenue directly attributed to the activity (41 percent)
One in five businesses said they would prefer to create their own social network.