The 2010 B-M Thought Leadership Highlights by Burson-Marsteller EMEA

Burson-Marsteller Evidence-Based Thought Leadership: 2010 Highlights

Contents

………………………………………………………………………………………………………………………………………………………………………………………………………….

• Message Gap Analysis

• The PR Effect • Fortune Global 100 Social Media Survey

• The State of Mobile Communications • CSR Branding Research

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Message Gap Analysis

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Message Gap Analysis

The Message Gap Analysis is a measurement methodology that helps identify the differences and similarities between corporate and media messages, analyze term usage, and provide concrete recommendations to strengthen message integrity in media coverage.

48% Gap

Company Message

Mainstream Media Message

Research Methodology: Burson-Marsteller conducted a Message Gap Analysis on 158 messages from 16 companies from the Financial Times Global 100 companies (four companies from each of the following regions: U.S., Latin America, EMEA and Asia-Pacific). BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

The Message Gap: Mainstream Media by Region

Mainstream Media Global Gap: 48%

Europe Gap: 40%

U.S. Gap: 45%

Asia-Pacific Gap: 58%

Latin America Gap: 53%

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The Message Gap: Bloggers by Region

Blogger Global Gap: 69%

Europe Gap: 59%

U.S. Gap: 76%

Asia-Pacific Gap: 63%

Latin America Gap: 82%

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Research Insights

“Aspirational” language needs to be supported by concrete facts and messages or it will be ignored

Tell the whole story – or the media will tell it for you

Avoid jargon and make it accessible.

Press releases are being reprinted extensively, which affects the strategy for the communications professional

Bloggers are more likely to make comparisons to competitors and to speculate

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Sample Message Gap Analysis

Children’s Product Recall by Major Retailer Company content v. Mainstream media

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Benefits of the Message Gap Analysis

• Enables continuous measurement and prescriptive recommendations • Is versatile and leads to a range of implications • Quantifies the qualitative effectiveness of the messaging • Optimizes PR messaging and budget allocation

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The PR Effect

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Investment is Shifting Towards PR

Advertising has traditionally dominated the media landscape, but other forms of marketing are taking center stage, such as digital media, social media and public relations. Marketing dollars are moving towards PR…

In 2005, for every $56 spent on advertising, only $1 was spent on PR. Today, $44 are spent on advertising for every $1 spent on PR. In 2012, the ratio will be $40 for ads to every $1 spent on PR.

This amounts to a 35% increase in PR spend compared with an 3% decrease in advertising spend from 2005 to 2012. BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

Why Is this Shift Happening?

The data proves PR’s effectiveness… • A well-communicated corporate mission and purpose can impact a company’s financial performance by up to 17%. • Companies with the most effective internal communications programs have 47% higher returns to shareholders. …and measurement of business outcomes contributes to driving those returns.

• Highly effective communicators are 3 times more likely to have a formal measurement program. • 53% of highly effective communicators are increasing use of outcome metrics - only 34% of low-effective communicators are. BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

Case Studies Prove PR’s Effectiveness

Case 1: Real estate website casa.it increased the number of paying agencies on its website by 24% after optimizing its digital and social media communications channels.

Case 2: The World Wildlife Foundation awarded the green light to Norwegian cod fishing and exports increased by up to 34% after a public relations program restored public opinion about the sustainability of cod fishing in Norwegian waters.

Case 3: Research-based messaging about the ease of bypassing common home security systems increased the sales of home insurance products 44% for a leading regional insurance company.

Case 4: A New York City Board of Elections public education campaign resulted in 84% of New Yorkers reporting that they were confident about how to use a newly-implemented voting system.

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The Key is To Avoid Common Measurement Mistakes

• Focus on measurable objectives at the beginning • Measure impact of the organization’s objectives – not the just the program’s objectives • Measure during the program, not just at the end

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Fortune Global 100 Social Media Survey

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Global Companies Find Value from Engaging in Social Media

Twitter is the most popular social media tool among Fortune Global 100 companies, with almost two-thirds (65%) having a presence on the social network. At least one-half reach out to audiences through Facebook (54%) and YouTube (50%). One-third maintain corporate blogs.

Percentage of Fortune Global 100 Companies with... 65% 54%

50% 33%

Twitter accounts

Facebook fan pages

YouTube channels

Corporate blogs

Burson-Marsteller assessed the presence of the Fortune Global 100 on Twitter, Facebook, YouTube and corporate blogging. Results were published in February 2010. BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

Companies Recognize Value in Frequent and Sustained Engagement

Many companies have high activity levels on social networking sites. The vast majority with active Twitter accounts (82%) tweeted in the past week and at a high volume (average of 27 tweets each). Fifty-nine percent posted on their Facebook fan pages in the past week, while 68% posted YouTube videos and 36% blogged in the past month.

Frequency and Volume of Social Media Participation Social Media site

Frequency of Activity

Percent with Activity

# of posts

Twitter

Past week

82%

27 tweets

Facebook

Past week

59%

3.6 posts

YouTube

Past month

68%

10 videos

Blog

Past month

36%

7 blog posts

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Companies are Responding to Others on Twitter

While some companies just use social media as a channel to disseminate information, many participate in dialogues with stakeholders. Thirty-eight percent of companies respond to people’s tweets. About one-third (32%) retweet comments from others, particularly U.S. companies (41%).

Corporate Responses and Retweets

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Implications

1. Monitor your own – and competitors’ - social media presence

2. Get top management buy-in 3. Develop a social media strategy 4. Define and publish a social media policy 5. Develop an internal structure 6. Contribute to the community 7. Participate in good times and in bad 8. Be prepared to respond in real time 9. Measure the impact of your social media engagement

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The State of Mobile Communications

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Top Trends in Mobile Communications

1. Mobile is Here - and Growing Quickly 2. Mobile is Transactional 3. Apps are Where It’s At 4. Mobile Users are Social 5. Mobile Users are Diverse 6. Location, Location, Location 7. Mobile Ads, Applications and SMS Drive Revenue 8. Businesses are Behind the Curve

9. Mobile In - and Out Of - the Workplace 10. QR Codes Move West BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

Consumers are Using Mobile Devices for More Than Just Phone Calls

Mobile is now even bigger than desktop use, and data/video usage exceeds voice calls. • 80% of the U.S. population will have a mobile phone by 2010. • 35% of American adults are using their mobile devices for wireless Internet access. • The average iPhone user only spends 45% of his on-device time making voice calls – the rest is spent browsing the web or using applications. • Video accounts for 69% of mobile data traffic.

Flickr @tak

Access to the web and applications via mobile is growing and will soon be universal. • Smartphone usage of both browser and applications has increased more than 110% in the last year.

• By 2011, 99% of mobile phones will be data-capable devices – at minimum they can do basics like sending and receiving SMS text messages. BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

Mobile Use is Growing Much More Quickly Than PCs or Internet Services Did

…………………………………………………………………………………………………………………………………………………………………………………………………………. Adoption of New Technologies (number of users in millions)

Mobile adoption is growing exponentially and will soon be an ubiquitous part of daily life. •The growth rate of iPhone use is 10 times faster than the growth rate of AOL was. (see top chart) •In 2012, shipments of Smartphones will exceed shipments of PCs. (see bottom chart)

•Even now, 40% of iPhone/iTouch users access the Internet more on their mobile devices than on their desktops.

Sources: Morgan Stanley and Nielsen

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Mobile Users are Access Web-Based Mobile Applications

However, only 12% of the top 500 internet retailers have sites optimized for mobile phones.

Source: comScore

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Businesses Need to Build the Right Application for Their Target Customer

“Native Applications” are programmed for specific mobile phones to be downloaded and live on the phone. “Web-based Applications” live on the company’s website and are accessible through a mobile browser.

Advantages of “Native” Applications

Advantages of WebBased Mobile Applications

Creates stickiness with the brand, because the app lives on the stakeholder’s phone

Can be more easily updated because it does not live on the user’s phone

Is very marketable

Can be used on any phone (i.e., Native apps are programmed differently for different phones)

Easy for the user to access

Less costly to update

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CSR Branding Research

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Treating the Environment and Employees Well are the Top Ways to be Socially Responsible …………………………………………………………………………………………………………………………………………………………………………………………………………. What Companies Should Do to Be Socially Responsible

Burson-Marsteller and PSB conducted 1001 online interviews with the general public in the U.S. (ages 18+) from February 10-12, 2010. Overall, the margin of error is +/- 2.53%, and greater for subgroups. All numbers shown in percentages unless otherwise noted. BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

CSR is Importance and Performance Varies by Industry

…………………………………………………………………………………………………………………………………………………………………………………………………………. Industries where CSR is Less Important but that have Performed Well

Industries where CSR is Important and that have Performed Well Food

Has Performed Well

Beverages

Apparel

Technology - Computer Hardware & Software/ Technology - Electronics Technology – Online Services

Consumer Goods Retailers

Energy

Telecom Services

Media

Automotive Healthcare

Financial Services

Industries where CSR is Less Important that have Performed Poorly

Importance BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

Industries where CSR is Important that have Performed Poorly 28

Some Industries Where CSR is Most Important Perform Worst

Has Performed Well

Importance

Industry

(in past 5 years)

2010

2009

Change

2010

2009

Change

Healthcare

-2

-10

Energy

-1

Food

-1

-2

Automotive

-4

Financial Services

-1

Consumer Goods

-3

-1

Media

-2

Retailers

-4

-2

Technology - Electronics

-4

-3

Technology - Computer Hardware & Software

-4

Beverages

-3

-4

Technology - Online Services

-2

-5

Telecom Services

-3

Apparel

-3

-1

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Other Key Findings

1. Social Responsibility remains important to consumers despite the recession. •

More than 75% of consumers say that responsibility is important for each tested industry.

2. Social responsibility remains a differentiator for products and brands. •

55% are more likely to choose a product that supports a certain cause when choosing between otherwise similar products.

3. Some consumers are willing to pay more for products with added social benefits, despite the recession. •

38% of respondents still plan to spend the same or more on products or services from socially responsible companies, compared to 2009.

4. Communications about social responsibility have significant impact on favorability and purchase intent, though they don’t consistently break through. •

75% of those who have read about a company’s social responsibility agenda on its website say it made them more likely to purchase products or services from the company in the future – but just 13% of all respondents have done so.

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B-M’s Thought Leadership Drives Our Evidence-Based Approach

• Programs are measured against organization’s objectives (sales, votes, transactions), not just tactics (media hits, reach).

Development (beginning)

Measurement (end)

• All components of the communications program are justified by evidence, not by guesswork.

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Monitoring (on-going)

Thank You

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