Altimeter’s latest Open Research Report (download at will, share with attribution) is embedded below. This report features how large companies have scaled social business across their enterprise. Specific case studies include:
- Whole Foods puts local social engagement into the hands of store managers.
- General Motors organizes for social business internally, then supports regions.
- Amway empowers distributors yet maintains brand consistency
- PUMA scales limited headcount for worldwide engagement
I co-authored this report with my colleague Senior Researcher, Andrew Jones, who’s been involved in several reports with me and knows the market which we cover in a detailed way, and provides unique insights. His deep understanding of the space, tireless research, and pattern analysis was key to this report being published. Please keep us both updated in your industry updates.
Scalable Social Business Tension Dynamics
The interesting thing about this research is that corporations are beyond the ‘why’ social but are now focusing on integration and tying together with all customer interactions. We often see tension dynamics in companies across the following opposing forces:
Six Common Tension Dynamics as Companies Scale Social
|Comprehensive Software Suites
||Specialized Point Software
||Established program managers
||Organic social growth
Companies seeking to scale, should read this report on how advanced companies are scaling, and glean insights. Altimeter has published a number of reports from industry trends, vendor segmentations, market definition and more, and are pleased to bring a more detailed case study on how integration at scale is starting to blossom, find all my reports on the research tab. The report is embedded below:
I’ll cross link to all coverage of this report
Market Positioning Signals Company Capability and Market Maturity
Messaging is often the first thing prospects, investors and analysts see, so it’s important to focus on it as much as core capabilities as we’ve done in our research report which has been viewed 164k times on the vendor landscape. Over a year ago, I conducted the same exercise to compare the positioning of this same space, and wanted to compare the changes in the space based on data and then draw insights.
Method: Visiting Each Vendor’s Website, Like a Buyer
This exercise was conducted in the mindset of the buyer (heuristic review as a social marketer and executive) using the following method: First, I built a list of vendor names, working with Altimeter’s Andrew Jones, then, I put myself in the place of the buyer and imagined their task of sorting through this new space and short listing it. Then, a researcher and I went to each website homepage to glean the keyword set, graph on worksheets and conduct data analysis. We looked at tag lines, slogans, keywords, browser title tags.
After some data modeling, here’s the positioning each of the 27 vendors, including: Actiance, Argyle, Awareness Networks, Buddy Media (Salesforce), Context Optional (Adobe Social), ConverSocial, CoTweet (Exact Target), Engage Sciences, Expion, FALCON Social, Friend2Friend, HearSay Social, Hootsuite, HYFN8, Liveworld, Shoutlet, SocialVolt, Spredfast, Sprinklr, SproutSocial, Syncapse, Targeted Group, TigerLily, Tracx, UberVU, Vitrue (Oracle) and WildFire (Google).
Here’s a list of all the positioning statements. Two of the positioning statements had vendor names included in them, which I changed below to “vendor”.
- One Platform to Manage All Your Communications & Collaboration
- Professional Social Media Management
- Acquire customers, socially
- The world’s only unified social marketing suite
- It’s time to take the guesswork out of social media.
- Powering Social Customer Service
- Create Exceptional Social Media Marketing Programs
- Empower, Centralize, and Localize Your Social Presence
- Complete Social Media Management for Teams and Enterprises
- Vendor Powers Social Engagement
- Succeed with the leading enterprise social sales, marketing, and compliance software
- Social Media Management
- Do Social. Better.
- Vendor is a user content management company providing technology and services to help brands scale social media.
- The only do-it-yourself, all-in-one social marketing platform
- Manage Social Media Across Networks, Accounts, Staff and Brands
- Social Media Management
- Social media management for exceptional companies.
- Enterprise social media marketing, management, measurement and platform solutions
- Social Media Marketing Agency
- Stand out on the social web
- Social intelligence
- Solutions for social media marketing
- Build brands on social with Vendor
- Complete enterprise social media marketing software
- NA: There was one vendor where the market positioning was not clear
Above: Even after over a year, the market still focuses on keyword terms like Social Marketing, SMMS there was increased deviation in market. Last time 40% used SMMS (10/25) or Social Marketing (10/25 or 40%) as the highest frequency. This year, 8/27 used Social Marketing in taglines, which is just about 30%. What was interesting is that we’re seeing some unique identifiers used by just a few vendors, showing that they’re slight differentiation from player to player.
Above: Ironically, most of these SMMS vendors were not integrating social onto their own corporate websites. While 25 of the 27 would link away and promote their social media accounts, only 7 were aggregating discussions from their own market place and a few were explicitly encouraging sharing of content. None had Social Sign On (SSO) which I consider is a sign of social maturity.
Above While not an indicator of much, there was a strong preference for white and blue brand colors. Those that didn’t take to this could potentially stand out if all logos were listed on one page. In my experience, blue tends to be a dominant color in tech field, so there isn’t that much of a surprise.
There’s a number of smaller, interesting findings that I wanted to include from the study.
- There were multiple acquisitions resulting in the influx of the parent brand (Oracle, Adobe, Salesforce, ExactTarget)
- We found that 21 of the 27 vendors had business value messaging (offers to improve customer value, business value) and 8 of the 27 had feature and function capability offerings. Tracx and Falcon were able to pull off both at same time.
- In the last study, SMB was marketed as a keyword set, but was not in this current finding set.
- Since being acquired by Salesforce, Buddy didn’t use campy tagline “everyone needs a buddy”
- We found that Syncapse and Hearsay had a much larger keyword set indicating that they have wider capabilities. Our research in previous reports correlated with this as Syncapse scored strong in multiple categories and Hearsay has a strong foothold in Legal, Risk, Compliance, and Financial Services, a unique market to manage.
- The research team was confused by CoTweet’s lack of positioning on the page, and would expect that prospects would be left scratching their head and either look for additional information, or leave.
- Sprinklr had a unique message “Social@Scale” which is both plays to their identifiable capabilities, unique, and marketable beyond a campy slogan.
- Awareness provided a verb based tag, “Acquire customers, socially”, but didn’t say what would happen afterwards (management, growth, support, etc)
- For kicks, there are fewer than expected animal logos, with Hootsuite owl, Tracx primate, Tigerlily grinning feline, and a wing from Falcon. Had Seesmic been around, we would have added a crook eyed Raccoon.
- Spelling-wise, this market is still plagued with oddly spelled vendors names. I find myself frequently have to tell clients how to correctly spell it out, slowing down inquiry calls. This includes vendors like HYFN8, Sprinklr, Spredfast, Tracx, UberVU and Vitrue (Oracle).
Overall the market is still pinning on social marketing and SMMS as a category. There was slight market differentiation matching the deviation as the market continues to mature. Some vendors are finding some unique categories to market their offerings, while some are still going broad to appeal to a larger set. Expect to see more M&A this coming spring as incumbent software vendors need to quickly get in the game, I’ll post more on this in future.
Credits to third party researcher Julie George for the data collection via TaskRabbit.
It’s at the end of the night on the dance floor, do brands know where their social software providers are? Like the end of a dance, social software vendors are understanding who they can partner with –or be confident on going it alone.
Once the lights go on in the next few quarters, the ecosystem will emerge in a new day, with brands stuck answering “Do I buy a suite?” or “Do I invest in integration?”. This post is intended to provide illumination on what’s happening behind the scenes –and who dance stars will be.
Above: Here are the options brands have when it comes to integration social software and services, the ideal scenario is upper right, but at this time, this promise is a lofty one.
I first alluded to this metaphor on an interview on Techcrunch, where we saw acquisitions occurring in spring of many of social vendors to create Social Software Suites (see the growing list).
- Consolidation in a Fragmented Market a Sign of Maturity. In prior posts, we’ve found over 100 vendors in community, brand monitoring, and the recent social media management vendor list is upwards of 40. We saw an increase in M&A announcements in spring from Oracle, Salesforce, Google, esp as fall conference season picks up for these software giants. Up and down highway 101 in Silicon Valley, there are business development meetings where there’s shopping, dating, flirting, and discussions around larger companies seeking to acquire more focused startups who’re seeking an exit. Buyers and sellers are all speaking to multiple potential suitors to see who will be a good fit into their Social Software Suite.
- Two Forces: Top Down Suites Offer it All vs Agile Point Provider Community. The largest impacts will be to the buyers, who will have to re-establish their software integration strategy. Will they go for the one-size-fits all vendor that offers all the needed use cases, or focus in on investing on a point provider that can deliver the best experience for the required job. Each offers benefits and draw backs. Vendors who offer the larger suite will tackle at the C-suite level and go down (longer deal sizes, larger scope, with potential larger pie) vs more agile point players that can quickly pivot, innovate, and partner with system integrators to get the job down.
- New Innovation as Ecosystem Reforms, Services Come to Forefront. For specific software innovators that plan to go-it-alone after the lights come on, they can still be very innovative by developing in the next phase of the social web “Performance Social” that focuses on analytics, data driven decision, and automation of these technologies. Furthermore, we continue to see new case studies emerge from social engagement command centers that bring together service and software players, to new mobile and augmented reality platforms spurred by Google. Expect this to be a booming opportunity for system integrators and digital agencies to partner with both sides to craft experiences for brands. The savvy system integrators and digital services providers will offer playbooks, methods, and teams that can integrate at all levels.
The good news is, there’s another dance the next night, as the market continues to grow and evolve –this is just a new session in the continued evolution of the social software space. In 2008 I hosted an event for software vendors (while at my former employer), social networks, and brands to discuss the future of the market, if you think it would be valuable for me to host again (including service providers), please let me know.
This week, Altimeter (myself and Andrew Jones, researcher) hosted a webinar stemming from the the recent report on Social Media Proliferation, which you can download the full report on this blog post. In the embedded slides and video below, you’ll be able to get additional insights on how we perceive how this market will change in the coming years:
- We’ll see a vendor shakeout, although expect pure play vendors of each of the five uses cases to remain
- Consolidation will occur from market forces of email marketing, web analytics, CMS, marketing automation, brand monitoring, support software and beyond
- These tools, in the long run, will marry into existing communication tools to become a new form of a unified digital marketing platform
Altimeter Webinar: A Strategy for Managing Social Media Proliferation, with Jeremiah Owyang from Altimeter Group on Vimeo.
Above: Video Recording, Listen in
Above: Slides, download on slideshare
I’ll continue to cover this space, and have a series of blog posts with more data that we’ll be sharing, and am happy to help brands with vendor selection based on their specific business needs.
Get account control now –or risk a career of continual social media sanitation. To match the growing consumer adoption of social media, many companies have launched social media efforts with little planning. As social media spreads beyond corporate communications and marketing, business groups are deploying social media without a standardized process. In fact, enterprise class corporations (those with over 1,000 employees) have an average of 178 social media accounts and this number will only grow if left unchecked. Companies that don’t control these accounts are at risk of having abandoned accounts, lack of consistent experience, or untrained employees creating a crisis.
Join Altimeter’s webinar to discuss this report.
We’ll cover the market trends, industry problems, provide new data not in this report, give insight to the future of this growing space. We’ll also be featuring case studies of success of how top brands are showing success, please submit case studies for review. Register for the webinar on Feb 7th, 2012, and we’ll dive in deeper.
This report puts companies in control based on business needs.
Buyers are confused by the number of vendors claiming similar offerings, and as a result spend months making decisions on who to short list. To fast forward the industry, this report serves to accelerate the process, this report contains the following elements:
- A Thorough Methodology: including 71 interviews, a survey to 144 buyers, a survey to 27 vendors, and analysis from a dedicated research team. Read page 4 for more details
- Five Business Use Cases: Based on interviews with buyers, we sought to find out their needs, rather than focus on software features.
- Altimeter Radar: a decision-making matrix that will help buyers to determine which vendors are best for them.
- Pragmatic Guide: At the end of the report, we feature 11 steps with examples and pitfalls to avoid guide all buyers must complete.
- A resource checklist: buyers should use to ensure that they make the best decision with regard to their social media.
Above is the full report, feel free to read, download and share.
This is just the start of this growing space.
We coined the Social Media Management Systems market and started the first industry list in March, 2010 (read all the posts on this topic). Over the past few quarters, we worked closely with Altimeter Research’s Andrew Jones, and we’ve compiled over 13,000 pieces of data about vendors and what buyers need, case studies, and dozens of interview notes. Our experience helping 3 global companies make decisions on these SMMS vendors has helped us to realize the struggle the entire industry is going to have when it comes to keeping track of this fast-moving space. This report, which is a snapshot in time, documents the industry, and we’ll continue to publish changes in this space over the coming years.
Above Graphic: First, Align by the Five Use Cases for Social Media Management.
Above Graphic: Then, Choose The Right Social Media Management Systems based on Business Needs.
Open Research: Use it, share it, and we’ll publish more.
While there are many types of decision-making reports on the market, this one is unique for the following reasons: 1) We realize that one size does not fit all and we do not lump all vendors into one diagram; instead we segment by use case to show different capabilities, 2) Rather than focusing on enterprise class only, we include those that can serve medium-size companies, as this space is dynamically changing, 3) We publish under Open Research so it can be read by all, rather than sold by subscription, and 4) We disclose our client relationships, including vendors that are clients that were in this report, so you have the utmost confidence in our recommendations.
During the editing process, we pulled out pages and pages of content in the editing process, so expect many future blog posts, webinars, and speeches to continue this discussion.
In the following section, we cross-link to thoughtful reviews of the research report. We look forward to comments from those in the community.
- Marketing Pilgram says it’s time to “Take out the social media trash”
- Jay Baer discusses “Taming the chickens”
- Shel Holtz advises companies to get control of their social media now
- Jason Falls says this report will help help your brand, and offers critiques
- David Deal notices that vendors need to mature
- Kyle-Beth Hilfer provides an important legal view, and warns of dangers
- Peter Kim, former colleague at Forrester, discusses “Herding cats”
- Erik van Roekel notes it’s not about the tools only
- The report also reviewed in Dutch, by Erik van Roekel
- Joe Chernov asks: So You Wanna Launch a Global Social Media Program?
- Eloqua: 5 Wows from Altimeter’s A Strategy for Managing Social Media Proliferation
- Bazaarvoice discusses the dangers of proliferation
- Angela Hausman, warns of social media risks
- Stuart Bruce reviews the findings
- Adi Gaskell reviews the report
- Vidar ‘blacktar’ Andersen reviews the report
- Gemma Went says the report was “Handy”
- Steve MacAlpine notes many have to navigate the social media maze
- Jon Gatrell reminds of Solutions, Integration, Fragmentation and Governance
- Customer Think covers the report
- MT Business says this is a “must read”
- Marshall Sponder reviews the pros and cons of the report
- Gerald Hensel of Blast Radius reviews the report
- Todd Defren discusses the numbers from the report
- Jesse Stay, the head of social at LDS reviews the report and provides more context
- Mediatel discusses the report
- Social IRL covers the report, and discusses the upcoming webinar
- Slidescene shares the report
- Aseem Badshah hopes to see consolidate of accounts
Software Vendor Reviews
Update Jan 5th end of day: We corrected the report to notate a correct total of 71 interviews, not 70.
We’re measuring how companies are using social media technologies to connect with their customers and have data back from the field of over 140 enterprise class corporations, many of which have the coveted social strategist role and formalized programs. To find out how far reaching the social media programs stretch into the enterprise we asked two questions: 1) “Approximately how many employees post content to official social accounts?” and then to derive some ratios for cross-tab analysis 2) “How many employees are in your company?”.
We wanted to pose these specific set of questions as it helps us to better understand the proliferation of social business of customer engagement within the hub and spoke model, “Dandelion” and “honeycomb” models. If you’ve not read our report on how companies organize in social media, read the report, and 2011 data.
How Does Your Company Stack Up?
The data set is enterprise class companies, most who are reporting have the social strategy function in a marketing function in global national and US national companies, across multiple survey sets and sample size is 140 respondents. Additional breakdown: So to crunch down the math here’s what it breaks down to for how many are publishing at a company I’ll take the medium of each range of employee set then divide by publisher ratio:
- Companies with 2,500 employees have about 13 employees publishing on the official accounts.
- Companies with 7,500 employees have about 22 employees publishing on the official accounts.
- Companies with 30k employees have about 83 employees publishing on the official accounts.
- Companies with 75,000 employees have about 182 employees publishing on the official accounts.
- Companies with 100k plus average have about 280 employees publishing on the official accounts.
Over Time, Expect More Employees to Publish On Official Social Media Accounts
Here’s my take on what this data means, while we’re seeing a broad ratio now, that ratio will decrease over time, as more employees are anointed to use official accounts, and as the internal culture relaxes, giving more access to publish.
- On average, 1 out of 330 employees uses “official” social media accounts. Overall, few people are publishing on official social media accounts, only 1 out of 330 employees posts to official accounts. One important caveat is the assumption is many are using for their own personal uses, and I would expect the average to be in the ranges of 70-90% as consuming the social content with variations on different production activities. I expect, over time, that more employees over time will use “official” accounts, and connect with customers as processes slowly allow for safe distribution of these roles. Expect that social inbox, and social media management system tools will start to merge with email inbox systems, a push that we already see Salesforce with Chatter and Cisco’s Quad, and IBM’s push into the social enterprise (all are clients btw).
- Smaller companies have more employees publishing, ratio-wise. We found that smaller companies in the 1-5k range had one out of 200 employees publishing, more likely due to a more flexible culture, less regulatory concerns, and well, less red tape. For medium sized companies, we know that social media is an opportunity as a force multiplier as successful content can be amplified many times over at lower cost, and support costs can be reduced by leveraging the customer crowd base. While smaller companies that have more feet on the social street ratio wise, they are likely still at a 1:1 battle with the larger companies with over 100k employees.
- Over time, expect all ratios to drop, as prolific next generation rises into senior roles. We’ll be measuring this over periodically, but for now, I would assert that more employees will be using the official accounts over time, as the younger generation learns their way around the business, climbs up the ladder, and is granted ability to publish. With that said, we already know that employee personal accounts can quickly be associated with a corporate brand, even if they have all the disclosure and polices in place. As you might expect, this all ties into our Social Media Management System research, where we’ll be looking closely at how software, service, and solutions, will help companies coordinate and measure their customer engagements in many social channels.
Thanks to Andrew Jones, Christine Tran, researcher team for their ongoing contributions, see the rest of the “Social Media Management Systems” posts to learn more about this space.
Just 6 quarters in and this space continues to heat up with nearly 30 vendors. We’ve done over four due diligence calls with VCs in this space in last 30 days, and Altimeter are helping a couple of brands short list their vendors for RFP inclusions –brands know they need an enterprise solution.
This scope of this post is for the pure play vendors and does not include the numerous entrants that will explode into this space from the incumbent software category. To help move the industry forward, here’s my perspective on the space, all which I’m telling buyers as well as investors.
Matrix: Challenges and Opportunities Abound for Social Media Management Systems
-VC Funding for Rapid Growth
-Demand increases as brands adopt more accounts
-Overall small space, with 30 vendors, few enterprise incumbents, yet
-Low switching costs: easy to unplug now.
-Lack of market differentiation
-Rapidly changing data sets and APIs, hard to measure
-Commodity feature set
-M&A in incumbents move in, rapid exit.
-Integration yields new value
-Future state is customer intelligence platform or multi communications tool
-New entrant can ramp in 5 quarters, or incumbents can quickly build
-Incumbents will move in from many sectors: CRM, Brand Monitoring, Web Analytics, BI, Support Software, Email Marketing, Community Platform
Buyers Must Understand This Rapidly Changing Market
Corporations who are seeking to buy in this space must place their bets carefully, they need to factor in the following three future trends that are starting out now, buyers must:
- Expect only a handful of Enterprise class “Pure Plays” to Remain Standing. In most emerging technology categories there’s only enough room for three vendors: First, better, and different, and that will come to be true here as well. In the long run there will only be a handful of true enterprise pure plays that will stand the test of time. Compare to the community platform space where we see dominance from just two players now –the rest have gone into niche verticals, or platform integration strategies. Buyers must be very careful on who they choose now as unplugging these systems will be difficult as the ‘seats’ will roll out across the enterprise, and if your business units don’t like your choice, they will adopt another vendor without your agreement.
- Expect Pricing To Remain Low Until Brands Move Into Multiple Hub and Spoke “Dandelion”. Altimeter’s data indicates that the average enterprise company now has 178 corporate social media accounts,Vendors know to keep pricing low in this rapid market, given the number of entrants and VC injections, ‘growth’ is the primary goal. Buyers need to be aware that switching costs increase considerably as the company moves from centralized to hub and spoke to “dandelion”, and the SMMS tool spreads into many business units (see all five org models). Expect pricing strategies to change as your company moves into a higher adoption rate, and check contracts now. Seek packages for ‘all you can eat’ packages as your company moves into this model.
- Look Carefully at Partnerships and Investors to See How They Will Integrate. System integration will be a deciding factor for buyers, as most are realizing the need to integrate these systems into legacy support, email, CRM systems. In fact, Altimeter’s data indicates that integration is one of the top spends ($272k annually) for self reported advanced companies indicating that this will be the primary goal as the market integrates social as a horizontal. To understand, ask your vendors to show their roadmap, indicate their partnerships. Look further by understanding who their investors are, who will often broker partnerships and even foster M&A marriages. Lastly, ask about the SMMS’ platform strategy to connecting to existing APIs and how they’ll offer their own for partners to use.
To learn more, read all my posts tagged Social Media Management Systems.
How many social media accounts does an advanced social business have? Well, when we look at mature companies like Microsoft, we find large indexes, or CPG giants like Coca-Cola each deploy their own, then even regionalize, or any large retail or hospitality brand that has regional stores with their own specific accounts like each hotel at Four Seasons with their own Twitter accounts.
Altimeter’s continued research on the Social Media Management System (read all posts) space has found some interesting findings. In fact, our recent survey out to corporate marketers at large corporations yielded a surprising number of social media accounts.
Above: Companies average an overwhelming number of corporate owned accounts: 178. Note: This does not include personal accounts that an employee would take with them if they left the company.
Number of Accounts To Increase as Social Business Matures
The above data is a sample of the data we recently got back from the field on the growth from 140 global national corporations with over 1000 employees averaged. Large corporations have dozens to hundreds of products, and each can be regionalized spurring on the number of accounts, plus corporate level accounts, as well as campaign focused accounts created by agency partners. While 178 seems like a lot now, it’s only going to increase, what’s spurring this growth? This is an indicator that companies are shifting into hub and spoke and multiple hub and spoke, also known as “Dandelion“, which our research on maturity models indicate this a growing trend. Beyond the data, it’s just common sense as each business unit beyond corporate communications wants their own account.
While Only 6 Quarters In, Number of Vendors Nearly 30 -Expect Over 100
In fact the number of vendors continues to increase, just yesterday I added Webtrends, Targeted, and SproutSocial onto The List of Social Media Management Systems. While only about 30 vendors now, this will continue to grow, I expect the category set to reach 100 vendors just as I saw the same patterns with the community platform space, also a commodity marketplace. In fact, expect more software incumbents that help to manage communications (email, marketing auto, crm, analytics, customer support apps and beyond) to integrate these features by building or buying in rapid succession. In fact, the Financial Times just published a piece on the growth of this space, and cited our research on spending.
Corporate Social Strategist at Risk Falling into a Role of Sanitation
So what does this mean for the Corporate Social Strategist, who we conduct research on frequently? This is an indicator that if they don’t have a strategy to safely manage growth they are going to head into the ever reactive sanitation role of social media helpdesk soon. What does the Helpdesk look like? It’s simple: they are constantly responding (but falling behind) on requests from stakeholders who want their own social accounts. If they don’t provide a strategy, the business units deploy it on their own. The end state? the strategist still has to clean this up or close down accounts –it never ends.
We’ve found that savvy Corporate Social Strategists have deployed the following strategy:
- Get Ready Internally: First, got their company ready by setting up internal requirements checklist for Business Units before they asked. This would include needs, education, process, policy and continual training and communication
- Develop and Audit Process: Internal inventory and audit of all accounts, and a ‘certification’ program to ensure business units agree to the above item, then they are listed on the official index lists as sanctioned.
- Enterprise Workflow: Deploy an enterprise wide process on how information will be listened for, triaged, tagged, accounted for, and reported in a daily routine as customer data flows across the enterprise and beyond
- Provide Software: Finally purchase an enterprise wide Social Media Management System that meet the business needs listed above, and integrate with customer software platforms
- Rollup Reporting: Provide enterprise wide reporting to executive heads by aggregating data from the disparate business units.
Currently we (Brian Solis, Andrew Jones, Christine Tran, Zak Kirchner and myself) helping brands with vendor selection, and will be publishing a report on this topic, and are happy to provide additional data and analysts perspective to press and media.
Up front disclosure: Altimeter believes in fostering trust with the market, and we disclose who our clients are, providing they agree. Some of the vendors listed below are clients.
Summary: Nascent Market Appears Similar, Confusing Buyers
Overall, the Social Media Management System (SMMS) space lacks market differentiation when it comes to market positioning, which is often reflective of feature set. Furthermore, many of these low-barrier technologies are being developed rapidly, and a feature war has set in. As a result, buyers are often confused, resulting in longer evaluation and consideration phase, and heterogenous mix of vendors in an RFP processes. Furthermore, the lack of market differentiation hurts vendors, who may have greater sales costs, and longer sales cycles during a convoluted RFP process. This is normal in an emerging market, and expect the maturity of the nascent SMMS space to follow similar patterns to the maturing Community Platform space.
Buyers often indicate they are very confused by the vendors in the Social Media Management Systems space, let’s probe to find out why. One initial observation is the explosion of over 25 vendors in a short period of time, the following analysis is based of the following vendors: Argyle Social, Awareness Networks, Buddy Media, Constant Contact, Context Optional, Conversocial, CoTweet, Engage Sciences, Expion, Hootsuite, MediaFunnel, Moderation Marketplace, Mutual Mind, Objective Marketer, Postling, Seesmic, Shoutlet, SocialVolt, SpredFast, Sprinklr, StrongMail, Syncapse, Vitrue, and Wildfire.
Why Positioning Is Important
Messaging is often the first thing prospects see and as a result, where I will focus today. Why? This is the first thing that buyers see (positioning) before even evaluating the feature set. Furthermore, I’ve done a similar exercise before with the community platform space a few years ago, a space I draw clear parallels as the SMMS space follows suit. Clearly this isn’t a comparison of features or offerings (we may do this in our next report), but a sampling of what prospects see as they first glance at this emerging and growing market.
Method: Visiting Each Vendor’s Website, Like a Buyer
Here’s how I conducted this process: First, I put myself in the place of the buyer and imagined their task of sorting through this new space and short listing it. Then, I went to the website homepage and sought to find the dominant messaging that would resonate from the vendor: tag lines, descriptors or even the HTML title at top of browser. If they didn’t have this, I had to go to About page or even Product page in some examples. To show my work, I’ve also provided a Google sheet where you can see my tallies across the 25 vendors.
List of Positioning Statements from 25 SMMS Vendors
Here’s what I found (vendor names removed) can you identify which of the messaging applies to which vendor? (answers in link below).
- Social Media Marketing
- Offers you the most comprehensive suite of features designed to take your social media campaigns to the next level.
- Social Media Management System and Content Aggregator for publisher and Developers
- Social Media Management for Business
- How Business Gets Social
- SocialVolt Social media management software for Businesses and Agencies
- Social CRM Enterprise Software for Social Media Marketing
- Social Marketing Software
- Every Brand needs a Buddy
- “Vendor” is a social media management system (SMMS) that helps businesses get closer to customers to create online engagement where it matters most.
- Build and monetize your Facebook and Twitter following through social campaigns
- We make brands social
- Interactive promotions for brand marketing by “Vendor”
- Social media marketing for small business
- Enterprise Social Media Management
- The Social Marketing Suite is the leading fully integrated, software as a service platform for managing social media presences
- Social Media Management System
- Is a social media publishing solution that enables marketers to monetize their investment in the channel through the proper application of proven direct marketing principles.
- Your Social Media Management & Technology Partner
- Engage Everybody. Everywhere. Easily. Create on brand identity, managed from one place, living simultaneously, on many sites and devices
- Power your brand on Facebook + 100 other social sites Create, manage, and measure all of your social media marketing communication with one powerful but intuitive tool.
- Social media applications for web, mobile, and desktop
- Provides small businesses with the tools, alerts, and insights to get the most out of social media.
- Social Media Dashboard for the Social Enterprise
- Social Media Dashboard
See Answer Sheet with Vendor Names
To see the name of the vendor and the associated messaging above, see the answer sheet.
Above Graphic: Most vendors have centralized their messaging around “SMMS’ (10/25) or “Social Marketing” (10/25) yet few have evolved messaging to either specific markets, verticals. There were stronger mentions in differentiation around market purpose: with more focus on Business (4/25), Enterprise (3/25), and even SMB (2/25). However, there is differentiation in terms of channel with a peppering of mentions around Mobile, SCRM, Facebook/Twitter. Overall, when removing company name from taglines, most taglines (aside from Buddy Media) were indistinguishable from the next.
- Market Positioning Centered on variations of “SMMS” and “Social Marketing”. High adopt of category term, Most vendors (10/25 vendors), adopted the term Social Media Management System or Dashboard in their primary messaging. Secondly followed by high adoption of permutations on the phrase “Social media Marketing (10/25 vendors). While I certainly encourage the adoption of the term SMMS (which I use as the category name since March 2010), the term Social Media Marketing isn’t fully representative of the overall use case, which can include support and customer service. Furthermore, four of those those that did use the terms SMMS, didn’t have follow up descriptors helping to differentiate.
- Some Vendors Lacked Appropriate Descriptors. During my visit to all 25 vendors pages, not all of them had consistent taglines, descriptors, or positioning. In some cases, I had to go to the product pages to find out exactly what they do, which can be a turn off for buyers. I’m sure that many vendors will suggest that I got the wrong messaging they were trying to convey, but I treated each experience the same, acting like a buyer, if I didn’t get your intended message, that in itself should be evaluated, as likely your prospects may be experiencing the same.
- Despite a Market of 25 Vendors, Few stood out from Pack. Take a look at that list above, these positioning statements are pretty much the same, there’s no doubt why buyers are so confused. This space is confusing, they all look alike, except for Buddy Media. yet despite being the sole stand out, their tag line isn’t descriptive of what they offer, nor a value statement. Traditionally, marketing tag lines require years of investment and market awareness before shifting to a non value-statement tag line. While cute, I don’t think it’s as helpful compared to their title statement “Facebook Marketing | Social Media Marketing | Power Tools for Facebook” which is descriptive, if Buddy could merge both catch line and descriptor, they could be a contender to stand apart.
What It Means:
- Lack of Market Positioning is a sign of lack of Product Differentiation. While we’ve not made a direct causation between similar features and positioning statements, we know from vendor briefings and client meetings that the offerings are often the same. As a result, buyers rely on WOM between each other, as well as viability and vision crafted by each of these vendors.
- Immature Market Lacks Educated Buyers –and Vendors Not Sure Future Vision. The market confusion isn’t just stemming from the vendors, buyers are still getting educated on this space as we know that adoption is growing –slowly.
- Rapidly Changing Feature Set Will Continue Confusion. This space is early, it’s just over a year old from category naming and it continues to evolve. Expect the vendors to ever battle over features, matching what other competitors beat them in bids. Like the community platform space, we saw similar confusion and then market clarity as winners emerge.
Continuing Altimeter Coverage on the SMMS Space
We’re currently doing data cuts on a survey to 140 enterprise buyers on the SMMS space, and about a similar amount for the SMB space, and have data on: number of accounts companies have to manage, number of business accounts, top feature desires, feature satisifaction, adoption rates. Altimeter clients have access through advisory opportunities. Also Brian Solis is helping with vendor selection for a global national brand, as do I short list for buyers. Altimeter Group will be producing a report on the SMMS space, follow me on Twitter, and Andrew Jones to learn more.
Front and center industry analyst disclosures: Your trust is important to us, as such, we strive to disclose our client relationships, some which are listed in the following post, read Altimeter’s disclosures page.
Research Summary: Growth in Vendors and Market Demand –Yet Space Is Immature
Social Media Management Systems, like CMS systems for websites, these SMMS systems (see list of all vendors) help companies manage, maintain, and measure thousands of social media accounts, are the next growth market for the social business category. While saturation is at 58% of corporate buyers, the average deal size is a meager $22,000 but will expect to grow to six figure annual deals in coming quarters to meet market demand. This growing space has low barriers to entry, which result in a flood of clones, but expect only a handful to remain after a shakeout to serve enterprise-class buyers. Buyers and investors should focus on vendors that understand business –not just technology, offer services and reliable SLA, and deep integration with other social systems. In the future, this technology set will mature to grow into a data company that will extend it’s scope beyond simple Facebook and Twitter and impact how marketers approach the market, product innovation, and supply chain.
[Although the nascent Social Media Management System space is only one year old, 58% of corporations have adopted at least one of these 28 vendors]
Altimeter is conducting a formal research report on the SMMS topic (see research agenda for 2011), However, I wanted to give a year end state, after coining this category 12 months ago and listing out vendors, read the List of Social Media Management Systems
Above Graphic: Market Saturation and Average Deal Size of the Social Media Management Systems (SMMS) by Corporate Buyers in 2010-2011
Year One in Review: New Entrants, Acquisitions, and Growing Deal Sizes.
Just a year ago, we saw the rise of the new category Social Media Management Systems, (I must give credit to Cisco’s Social Strategist LaSandra Brill for giving me the kick to start it). To understand the macro trends of this industry, read with the Social Business Stack, which shows SMMS as only a component of the overall purchase set for corporations. Here’s a breakdown of what’s occurred in the past 12 months:
SMMS By the Numbers:
- Growth rates rose 11% from corporate buyers. In 2010, adoption of SMMS systems by corporate buyers was already at the 52% and in 2011 buyers indicated they will be at the 58% adoption rate.
- Deal sizes grew 57% in last year. While there was significant relative increase in deal sizes the overall average annual deal size per corporate was $14,000 in 2010 and rose to $22,000 in 2011 according to our research of 140 corporate buyers.
- Large corporations spend $68,000 per year. For corporations with over $10 billion in revenues, the deal sizes ballooned to $68,000 per year on average, demonstrating that the larger corporations need these tools in order to manage their hundreds of accounts. (more data here)
- 65% Increase in vendors in last 12 months and growing. When I started this list, there was 15 vendors after launching the list after the first week. Today, the list has grown to 23 vendors (and I’m continuing to add vendors, with a market growth rate of 65% increase in new entrants, this will only continue this year.
- Growth markets in consumer facing and large corporations. While I noticed that Telecom and Tech were early adopters, I’m seeing growth opportunities in Retail, Hospitality, Restaurants, Consumer Tech, CPG, and all Regulated Industries.
- Consolidation: at least three acquisitions. CoTweet was recently acquired about a year ago by marketing platform ExactTarget, months later Objective Marketer was acquired by Email Vision, and just in this past Feb Constant Contact acquired SCRM company Bantam Live which has some SMMS features, all which are email/direct marketing solutions. Among all these acquisitions, we’re seeing these tools tie into greater marketing platforms for additional value.
- Some early forerunners –but don’t expect a clear winner. I’ll do more detailed analysis on these vendors later, but right now I’m hearing from buyers the following vendors: CoTweet, Hootsuite, Sprinklr, Spredfast and newer entrant Expion. Interestingly, former Community Platform vendor with enterprise experience Awareness Inc has double downed on this market and shifted away the saturated community platform market by launching Hub.
- Early vertical focuses have emerged and partnerships. We’ve already started to see verticals appear, such as GOSO for the Automotive dealer space, and expect this to continue in specific markets like hospitality, restaurants, travel, CPG, and Retail. Another new entrant was an entry by initially a consumer tool Seesmic, who received funding by Salesforce –the first enterprise vendor now with integration with social aggregation tool Chatter, and now Yammer. There was only misfire, as KeenKong changed their product strategy and never launched in this market.
Market Demand: Six Forces Spur On This New Category
There are a handful of forces that are increasing the demand for this year old category, among them (but not limited to) include:
1) Corporations Struggle to Manage Hundreds and Thousands of Accounts
The target market is hospitality, retail, and CPGs. Each of these corporations has dozens to hundreds of unique brands, and then regional rollouts. For example, some hotels could have up to 15 brands, and each having 4,000 hotel locations (half being distributed franchises), each with 10 social media accounts (there’s more to the social web that Facebook and Twitter, across a variety of languages. Furthermore, there’s high turnover in the localizes marketing and sales manager, who also lacks a background in online communications.
2) Kenneth Cole and Chrysler Debacles Prove Need for Parental Controls
In the last few months, we’ve seen some severe examples of mis uses of corporate social accounts which could have been prevented by having a process and toolset to support (see the long list of “punkings“). In particular, Kenneth Cole’s ill-fated tweet tying the Egypt situation with spring sales was met with a riotous reaction, and last week’s Chrysler’s F-Bomb tweet resulted in firing of an entire agency. As a result, expect that many regulated companies will demand compliance regulations with social media, and be mandated to invest in SMMS systems to preview, flag, an process content before it’s published. Of course, this brings forth a few challenges such as less real-time approach, and a more sanitized corporate approach to discussions that will ultimately decrease credibility as authenticity may waver.
3) Expect Regulatory Industries to Require This Safeguard System
Similar to the mess-ups listed above by Kenneth Cole and Chrysler will cause regulatory industries to give pause on how employees will use these technologies. As a result, expect healthcare, pharma, insurance, auto, finance and beyond to start looking at using these tools for all employees and even corporate accounts. Expect a keyword filtering system and workflow to be put in place to monitor then recommend a course-of-action to correct deviant tweets and Facebook messages. The downside? The rapid pace of the real world conversation will be slowed for many, but expect seasoned veterans to unleash the SMMS shackles for open conversations.
4) Direct/Email Marketers Want a Piece of Social Marketing to Blast in New Channels
This toolset is an attractive addition to existing direct marketing platforms like email marketing suites that are used to publish thousands of emails to customers on a daily basis. Direct marketers, who want to get on the social bandwagon are finding religion and are now blasting content on social channels to networks comprised of news, deals, and offerings with mixed engagement and interaction.
5) Agencies Know SMMS Provides Client Lock-in and Recurring Revenues
The social media service industry knows they must be value added beyond strategy and community management. They are seeking recurring revenues for accounts on a monthly basis in order to glean the hundreds of thousands per client, see data to learn more. By using SMMS systems, often coupled with brand monitoring and reporting services, they are now able to be full-service to listen, engage, and measure how companies are interacting with their customers on social channels. By partnering with SMMS systems some are white labeling the service, and using this in front of clients as a value added software, suggesting a perceived lock in with data and reporting –giving agencies the opportunity to become the Social Media Agency of Record (SMAoR).
6) A Complementary Toolset for Social Platforms, Social Commerce, Brand Monitoring Vendors, Marketing Automation
First, understand how SMMS fits into the overall Social Business stack. You’ll notice it’s a sister technology to the technology “aggregation” displayed to the left of it. You’ll also notice that it’s below brand monitoring firms, and sits on top of Social Platform technologies. To the left of it you’ll find it is part of the data story in infrastructure and to the right of it services. Other places to watch for acquisitions will be social commerce platforms, as well as marketing automation platforms as they must spread into this space at a rapid pace to glean the revenues.
Predictions: Vendors Move-out-of-Garage to Meet Buyer Needs
These companies are young and early, and lack maturity like the established community platform space, here’s a few closing thoughts:
- This One-Year Old Space Shows Parallels to the 5 Year Old Community Platform Space Similar to how in 2007, how we saw trends for the Community Platform market, labeled it, and went on to research the space, I’m seeing similar trends (entrepreneur styles, deal sizes, market saturation) in this early SMMS market, just one year in.
- Vendors startup mentality clash with real buyers needs. Many of these garage startups lack understanding of corporate buyers. Not uncommon to seed, angel, and A round vendors, a majority of these vendors lack corporate buyer perspective. To learn more about the buyers of SMMS read the report about the Career Path of the Corporate Social Strategist.
- Vendors will finally offer and enterprise class service level agreements. Mainly focused on platform development, and also being discouraged by investors to add services to the mix, most of these vendors lack the staff to serve a corporate buyer who needs a high degree of hand holding in social business. Better yet, read Petra Neiger, one of Cisco’s Corporate Social Strategists perspective on what’s needed for buyers.
- Analytics and reporting to be a core focus on 2011-2012. These early platforms are focused on management of the social channels, and most do not have strong analytics and reporting technologies. Furthermore, they are often not connected to other reporting systems, and are data silos.
- Expect corporate adoption to reach 90% within three years . Expect market saturation to hit 90% range in three years, and average deal sizes to exceed $100k per year on average corporation –just as the Community Platform space have experienced over the past five years. Vendors that can align their product roadmap to the SMMS maturity roadmap stand to be one of the standing contenders.
- Deal sizes will reach six figures on average. I saw this trend before with the $25-50k deal sizes with community platforms about 5 years ago and have watched them balloon to $200k-300k for advanced and larger corporations on an annual basis. I expect similar patterns to emerge here as new functionality is offered and as the SMMS connects to other systems for lock in. Right now the average SMMS deal size is a mere $22k, yet as we segment out corporations with high revenues (over 10 billion, annually) they are already clinching $68,000 deal sizes –remember it’s only year one. Read more about how corporations should spend on social business.
- Market will reach over 100 vendors. Just like the crowded brand monitoring space (150 vendors) and community platform space (125+) vendors expect this category go balloon due to low barriers to entry, VC funding, and commodity technologies. In the long run, only a half of dozen will matter to the enterprise, as market consolidation will occur. Expect the 90+ that don’t become first of mind to corporate buyers to head into specific market verticals and SMB focus.
Well that’s my perspective after watching this space for the last 12 months, while I’ll continue to give updates, expect another wrap-up next March in 2012.
Update: This is cross-posted on RWW