Major advertising holding companies are creating dedicated social media units to cater to growing demand from marketers. Direct marketing professionals — and direct tactics — are taking center stage in these new divisions, which are calling measurement and analytics their key strengths.
“I’m not surprised. Holding companies follow the patterns of innovation,” said Sean Corcoran, senior analyst at Forrester Research. “[It is] obvious to look to social media as a very hot topic; it’s high in demand from the marketer side. It makes sense to say, ‘Here is a potential way to make more money.’ They see the writing on the wall, in terms of where marketing is headed and how it’s changing.”
WPP Group has gathered a 17 employee-strong unit, known as Ninja, from direct agency Wunderman and media firm Mindshare, to create social media initiatives for clients. In development for a year, the London-based unit began work in May for brands including Ford, Nokia and Land Rover. Jon Wade, digital strategy director at Wunderman, and Catherine Hornby, the agency’s business director, are leading the group.
Interpublic Group also launched Rally@UM, a boutique-style social media agency, after culling members from Universal McCann.
Heidi Browning, EVP and global digital officer at Universal McCann, is leading the unit. Browning has promised analytics and customer relationship building will be among the unit’s core competencies.
CRM agency Merkle has also launched its Integrated Social Marketing offering this month, with the goal of giving marketers more tools to attract and engage customers within the space.
Although many brands have dabbled in social media, the new organizations aim to give marketers the ability to monetize their social media outreach. Brendan Tansey, CEO of Wunderman UK, said one of Ninja’s priorities is to help brands create revenue from their social media work. The group will create analytics dashboards for clients to demonstrate how social media initiatives are performing and how they compare to other investments.
“First and foremost, it’s about a dialogue, which is what direct marketing was originally designed to do. The way we are doing it is [through] measureable dialogue,” he said. “So we’re not just looking at positive or negative sentiment.
Most people tend to be looking at that at the moment. We’re looking at how we can match this activity through to sale or intent to purchase.”
Richard Dance, business director at Mindshare, said Ninja is giving clients additional expertise in media analytics and reporting as well as influencer outreach skills, site side analytics, listening tools and creative and production capabilities. At this point,
Ninja’s efforts are UK-focused, but it will consider expanding them to other regions in the future.
For eTrade, which operates an online discount stock brokerage, matching social media interaction with intent to purchase or sale is a near-term goal. Nick Utton, CMO of eTrade, said the company currently measures social media expertise in numerous ways, including through platforms such as social media management system Buddy Media. He added that Facebook, Twitter and YouTube are mainstays in its social media marketing mix, and noted that eTrade has 20,000 Facebook fans. Therefore, analytics are a priority in every company social media undertaking.
“Ultimately, it’s the acquisition, retention and engagement model that is critical to the foundation of what we’ve got,” he said.
Paul Verna, senior analyst at market research firm eMarketer, said the marketing industry is seeing more partnerships among agencies and service providers than in the past. Part of the reason that holding companies are creating these units is to formalize their social media expertise, which is still a fairly new part of the integrated marketing tool kit. “The key for companies is not just executing a campaign, it’s measuring it,” he emphasized.
Rally, meanwhile, has designed a suite of solutions focused on social measurement, including social media monitoring, earned media reporting and conversation mining.
“Rally’s team of dedicated social marketing experts complements UM’s media and analytics prowess to create value for consumers, cultivate customer relationships and drive business results for our clients,” said Browning, in a statement. A Rally representative could not be immediately reached for comment.
Fellow holding company Publicis Groupe will also reportedly expand its social media capabilities in coming months. The company’s digital umbrella group, Vivaki, will open a social media practice by the end of this year, according to The Wall Street Journal. The group is expected to pool the holding company’s social media tools, then beef up individual agencies’ social media capabilities, according to the Journal.
While growing in influence, social media marketing is also expected to gain a larger piece of budgets in coming years. Online advertising spending will rise from nearly $50 billion and less than 11% of the global advertising spend in 2008, to $82.7 billion and 17.1% of the total in 2012, and social media spending is expected to account for a growing portion of that, according to ZenithOptimedia. Mobile and social media are expected to make up nearly one-third (32%) of online advertising spending by 2012, according to ZenithOptimedia.
