September 27-28, 2012

Family Wealth Conference

Family Wealth Conference

Why Businesses “Like” Facebook and Other Social MediaJeff Marshall NBCUniversalDigital Media

Ralph Schackart William Blair & Company

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of William Blair & Company.

Introduction• Overview of how local businesses are using social media platforms to target customers, build brands, and drive engagement

Pandora•Leading Internet

Radio Service

•56 million active users

Facebook•Largest Social

Network

•955 million active users

Twitter•Most Active Micro-blog

•140 million active users

LinkedIn•Online Professional

Network

•174 million members

1

Pandora• Estimated 160 million

users

• 56 million active users

• Nearly 14 billion listener hours in 2012

2

• Why do businesses use Pandora?

• Pandora, a leading internet radio provider, offers local businesses a unique advertising platform and ability to target specific demographic and geographic markets

• 56 million active users on Pandora (U.S. only)

• Target users based on age, gender, and geography (Zip Code)

• Multiple advertising mediums with audio ads (only 3 per hour) and display ads

• Allows businesses to run national and local advertising campaigns with a specific focus on audio or video ads

• National campaigns: Netflix, LivingSocial, Starbucks

• Local campaigns: Gibson’s, RCN Cable, car dealerships

Pandora Overview

3

Pandora: Customer Example

Campaign 1 Campaign 2

Impressions Delivered 250,000+ 1,250,000+Impressions above/below contracted amount unknown aboveAd type triple (audio + tile + banner) triple (audio + tile + banner)Click-through-rate above 1.50% above 2.00%Contracted eCPM rate unknown ~$10Calculated cost-per-click unknown ~$0.50Campaign time Spring 2012 Summer 2012Campaign length less than 1 week about 2 weeks

Pandora Local Customer Advertising Campaign Metrics

Click‐throughrate (CTR) was 2%+,

significantly betterthan traditional Web rates of 0.1% and mobile rates near

0.5%‐0.6%

• We have spoken with a local car dealer who has had success with the platform

• Dealer has completed two campaigns (data below)

• Average cost around $4,000

• Will likely run more in the future

•Key Takeaway: Four times better click-through-rate for car sales event than traditional internet advertising because Pandora was able to target specific demographic, at a specific time, in a specific location

Source: William Blair and Company

4

Facebook• 955 million monthly active

users

• 552 million daily active users

• 543 million mobile monthly active users

• 3.2 billion likes and comments per day

• Over 125 billion friend connections

• 45% of users have been active the last six of seven days

5

• Why do businesses use Facebook?

• Facebook has the largest reach of any social media outlet

• 186 million monthly active users in the U.S.

• 955 million monthly active users globally

• Advertisers have the ability to cost-effectively target a very specific audience

• Local Business Example:

• A wedding photographer could purchase ads (about $0.40 per thousand)

• Only serve ads to: 1)women, 2)in a certain age range, 3) that live in a given market, 4)that are engaged

Power of Facebook

Precise Targeting Capabilities

Source: Facebook

6

•Advertisers have the ability to cost-effectively target a very specific audience

• Big Brand Example:

• A comScore study conducted found that Facebook users that “Liked” Target and were exposed to a brand impression were more likely 19% more likely to purchase at Target

• Friends of Fans that were exposed to a brand impression were 27% more likely to purchase at Target

Power of Facebook (cont.)

3.3%3.0%

3.3%

4.0% 3.8% 3.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Fans Friends of Friends Combined

Buye

r Pen

etra

tion

Control Test

+19% +27% +21%

Source: comScore

Lift In Online/Offline Buyer Penetration

7

Twitter• 140 million active users

• 340 million tweets per day

8

Building an Identity on Twitter• Why do businesses use Twitter?

• Twitter has enormous scale and reach with over 140 million active users that “tweet” over 340 million times per day

• Businesses are building a local identity on twitter – for free

•Consumers feel attached to businesses when following it on Twitter

•Users can interact with business over Twitter – business become engaged with customers

RunningAway tweets about upcoming races, new products, and exercise groups

Whole Foods tweets about specials going on at store and recipe ideas

9

Case Study: AJ Bombers’• AJ Bombers‘ is a Milwaukee restaurant that built

its brand and customer base through social media outlets

• Restaurant stays active on Twitter – posts 5 to 20+ times per day

• Tweets food deals on given nights

• Continually posts pictures of products

• Interacts with its customers on Twitter “@kustjt Excellent! Next time you're in try it on a #pretzelbun or with a fried egg!”

• Runs promotions on Twitter – Could have followers retweet a promotional message to be entered in a drawing

• Twitter was a key social media outlet that helped build the company’s brand and local presence

10

LinkedIn• 174 million members

11

LinkedIn: Expanding Small Business’ HR Capabilities• Why do businesses use LinkedIn?

•LinkedIn has about 174 million members worldwide

• Gives small businesses additional human resources capabilities it normally would not have

•Ability to recruit new employees more efficiently by identifying prospects that hold similar role at a competitor

•Ability to post jobs that are targeted toward candidates with a specific / desired skillset

•Depending on type of work, a very powerful tool to identify and target potential clients

•Ability to build a “professional identity” for business on Company Profile page

12

LinkedIn: Reconverse Cast Study• Reconverse – a human resources company – successfully used LinkedIn to reach

a professional audience

•Found Facebook advertising was successful in marketing products to consumers but didn’t reach professionals

•Used status updates on LinkedIn to raise awareness among professionals

•Encouraged others to “like” updates – incentivized by offering prizes

•Found marketing campaign was able to go “viral”

•100 likes in first few hours on status updates

•1,403 likes within a week and 87 new followers

•Conversation started among professionals – 120 comments on status update

•Those that “liked” were in the target industry – all qualified leads – all free leads

•Company noted that 90% of revenue coming from LinkedIn community

• Reconverse was able to find unique voice and reach target audience through LinkedIn

Source: LinkedIn

13

Biography

Jeff Marshall NBCUniversalDigital Media

Jeff Marshall oversees NBCUniversal digital sales in the Midwest and is responsible for generating multi-platform client solutions and driving digital revenue for NBCUniversal entertainment properties, including NBC, Bravo, Syfy, USANetwork, Oxygen, and AccessHollywood. Before joining NBCUniversal, Mr. Marshall was at AOL managing the Pulicis agency relations. He previously worked at Rishad Tobaccowala to launch Starcom IP. Education: bachelor’s, Indiana University; M.B.A., Kellogg School of Management.

Biography

Ralph Schackart William Blair & Company

Ralph Schackart is an equity research analyst at William Blair & Company specializing in the digital media and Internet sectors. Before joining William Blair in 2000, he worked as a management consultant at Andersen in its strategy group. Mr. Schackart served four years of active duty as a commissioned officer in the U.S. Marines after receiving an NROTC scholarship. Education: B.S., Purdue University; M.B.A., Webster University.