Benefits include “tapping into new talent, helping design products and services, providing customer support and, most importantly, building the brand with the customer.” But the true value of online communities has yet to be realized.
A Deloitte survey of companies sponsoring online communities shows that they are using social media tools and online communities to engage with customers and employees for brand discussions, idea generation and product discovery. Communities can extend the edge of the corporation in truly transformative ways -- tapping into new talent, helping design products and services, providing customer support and, most importantly, building the brand with the customer," said Ed Moran, director of product innovation, Deloitte Services LP. "The survey data points to some growing pains, but companies are starting to see that online communities should be nurtured and leveraged for real business gain."
But while these online initiatives are having a positive impact, they haven’t yet reached their true potential.
Deloitte's '2008 Tribalization of Business Survey,' conducted in conjunction with Beeline Labs and the Society for New Communications Research, says building community critical mass is the primary barrier to reaching their true impact; most communities have less than 500 active members. Fifty percent of respondents said the biggest obstacle to making communities work is getting people engage.
In spite of this challenge, 35% of companies surveyed said they have seen an increase in word-of-mouth for their brands, 28% have seen their overall brand awareness increase and 24% say they’ve seen increased loyalty and quicker adoption of outside ideas. According to survey respondents, the community features that most contribute to community effectiveness are:
-- Ability for community members to connect with like minded people: 53 %
-- Ability for members to help others: 43%
-- Community focus around a hot topic or issue: 41%
Conversely, poorly managed online communities are a critical barrier to their effectiveness. Forty-five percent of respondents recognize that finding enough time to manage the community is one of the biggest obstacles to making communities work. Survey respondents also see facilitation (25%) and quality of the community manager (34 %) as two features that greatly impact the community's effectiveness, making it critical for companies to devote the necessary resources to this important role.
How Communities are Driving Innovation
The respondents recognized that communities can be used as a seedbed for innovation: 39% of the companies that participated cited "idea generation" as the purpose of their online communities, and 19% cited "new product development" as the key goal.
A leading technology company is also using communities as a means of
customer support by monitoring communities as an early warning system for
product issues that can be expected to hit the help desk and prepares to
respond accordingly.
"Communities provide insight into new features and opportunities, identify customer needs, and enable open innovation," added Moran. "By participating in these communities and facilitating a bi-directional
conversation, companies can help engage top prospects and influence
purchase decisions."
The rich interaction and knowledge sharing typical within communities also allows for talent development and retention within organizations. Social media tools offer unparalleled visibility into employee sentiment
and expertise, thereby helping organizations to better leverage and develop
their talent.
CMO 2.0: The Chief Marketing Officer's Office Has Become the Community Manager's Office
The survey indicates that the role of the CMO is being revolutionized through communities, with the CMO often becoming the lead transformative agent, empowering the sales, customer service, and product development functions with the community's intelligence and participation.
According to 42% of the survey respondents, the marketing organization is now responsible for driving online communities. With communities becoming a central focus, marketing is now required to participate in non-traditional functions such as customer support, idea generation and employee communications.
Communities Require New Thinking by Management
While the Internet has produced unprecedented levels of insight into the size and demographic makeup of audiences, the survey reveals significant gaps between community goals and how success is being measured. For instance, while the top business objectives of the communities were "generate more word of mouth" (60%) and "increase product/brand awareness" (48%), what is most measured to assess success are less helpful metrics like "number of visitors" and "page views."
Not surprisingly, marketers often remain hard-pressed to identify areas where online communities are achieving their goals. Management also needs to rethink in some cases how business value can be extracted from sponsored communities.
"The survey reveals that there are several disparities between companies' goals, how to measure success, and appropriate investment," said Francois Gossieaux, a partner at Beeline Labs. "The companies that commit the dedicated talent and resources to driving customer centric communities will be the winners."
The survey measured the responses of over 140 companies, including Fortune 100 organizations, which have created and maintain online communities today. Participating companies include leading computer manufacturers, software, insurance, online auction, media companies, hotel chains, and start ups. The communities ranged from fewer than 100 members to more than 10,000 members.
Source: Deloitte
Intent to Purchase is a key metric for analyzing the success of online or offline media spending based on ROI. “It is becoming very important because we constantly have to be able to say if investing in [certain] types of media will drive towards a response,” says an agency researcher in AdAge.
One way to increase intent to purchase is to diversify your media mix---adding print or online to TV for example, according to a study by market researcher Advertiser Perceptions. Their research showed that consumers were more likely to express an intention to buy with multiple media across categories such as consumer electronics, apparel, automobiles, beer and toiletries.
It's happened before and it will happen again---the inappropriate pairing of an ad and content---in this case an ad for two upscale communities at website "PutYourFeetUp.com", inadvertently paired with a grisly story of severed human feet washing up on a beach in British Columbia.

Contextual advertising is the analysis of keywords and page content to match a page with relevant ads. Unfortunately, the algorithms that govern the placement of advertising versus page content can only filter out so much, and the result is the occasional creepy pairing seen above.
The companies offering contextual advertising, among them Google AdSense, Overture's ContentMatch, and Adsdaq as well as news and information sites and others are surely trying to find away to avoid these unfortunate placements. It's not an easy problem to solve.
So---does this mean you shouldn't use contextual advertising. Not at all. Just be aware that sometimes s**t happens.
Critics of online surveys say the respondents don’t represent the larger population, are not chosen randomly and because of that, results can vary widely from poll to poll. The Director of Polling at ABC (DIS) News calls them “poll-taking clubs.” Ouch.
However, despite the criticism, more companies are relying on the web to poll “multitudes” of people in part because it can be done “quickly and cheaply.”
Source: BusinessWeek
The leaderboard, that ubiquitous 728 x 90 banner, is, well, the leader in online ad sizes, garnering 61.2% of all impressions. In distant second place is the medium rectangle, garnering 23.1% of all impressions. Source: Center for Media Research
| Top Ad Sizes |
|||
| |
Dimensions |
Impressions (000) |
Share of all Impressions |
| Leaderboard |
(728x90) |
129,289 |
61.2% |
| Medium Rectangle |
(300x250) |
48,757 |
23.1% |
| Non-Standard Dimension |
|
22,118 |
10.5% |
| Vertical Banner |
(120x240) |
7,265 |
3.4% |
| Rectangle |
(180x150) |
1,859 |
0.9% |
| Wide Skyscraper |
(160x600) |
830 |
0.4% |
| Square Button |
(125x125) |
598 |
0.3% |
| Button #1 |
(120x90) |
218 |
0.1% |
| Skyscraper |
(120x600) |
120 |
0.1% |
| Large Rectangle |
(336x280) |
107 |
0.1% |
| Full Banner |
(468x60) |
90 |
0.0% |
| Half Banner |
(234x60) |
80 |
0.0% |
| Button #2 |
(120x60) |
47 |
0.0% |
| Micro Bar |
(88x31) |
17 |
0.0% |
| Total |
|
211,395 |
100.0% |
| Sources: Nielsen Online, AdRelevance, May 2008 | |||
Audience Accumulation refers to the total number of people exposed to the advertising messaging of an advertising campaign, 1 or more times, across all media.