Thought Leadership Rewired: How Consulting Firms are Using Social Media to Market Their Ideas

A Research Report by The Bloom Group, BlissPR and the Association of Management Consulting Firms (AMCF)

Social media is at the center of marketing discussions in a growing number of consulting firms, both large and small. Taking the lead from clients who have been blogging, forming LinkedIn and Facebook groups, Tweeting, and launching online communities, many consulting firms are following suit. They are feverishly exploring the latest wave of online techniques for attracting clients, prospects and key market influencers such as journalists, investors, and market analysts. A solid and growing number of consulting firms has gone far beyond the exploration stage and taken the plunge.

Their interest in social media appears to be matched only by their fears. On the surface, social media seems to be a far less expensive, less onerous and much faster way to attract clients than publishing articles in management journals, writing white papers, producing books, running seminars and activities that increasingly fall under the moniker of “thought leadership marketing.” But social media, of course, can have a downside: Readers can and do talk back to what you post – to you and their peers. Negative reviews of an article, study or presentation can go public in minutes and around the world.

So with such risks, should consulting firms make social media a key piece of the thought leadership marketing mix? And, if so, what do firms need to do so that social media marketing can be effective?

Key Findings

1. Consulting firms are quickly expanding their budgets for social media. While social media represented only an estimated 5% of the thought leadership marketing budget five years ago, spending has climbed rapidly in the last five years to an estimated 18% today. Five years from now, social media is projected to be about a third of that budget – about the same amount as consultancies will spend on offline and “traditional” online thought leadership marketing programs.
2. Social media will increasingly complement traditional thought leadership marketing channels. The two most effective thought leadership marketing activities are still “offline”: seminars run by consultancies and speeches they give at conferences organized by other parties. But company microsites or online communities, a relatively new social media channel, are close behind, ranked third in effectiveness (tied with search engine optimization.)
3. Other social media tools are gaining on traditional techniques. For instance, company pages on social networking sites and participation in third-party social networks both already surpass white paper syndication sites – an old staple of content marketing – in effectiveness.
4. Running out of content and determining how to use it as a marketing tool are the two biggest concerns about social media. The two biggest barriers to using social media in thought leadership campaigns are worries about regularly refreshing online content and determining how to best market it.
5. The consulting firms with the most effective thought leadership marketing programs are much more likely to use research-based content, and they invest much more in social media than consulting firms with the least effective programs. The “leaders” of thought leadership marketing (firms generating more than 30 leads per month) are more than twice as likely as the “laggards” (firms generating 10 or less leads per month) to develop research-based content. In addition, the leaders dedicate three times the proportion of their budgets to social media than do the laggards. However, the leaders still apportion more than three-quarters (77%) of their budgets to offline and traditional online marketing.

Consulting Firms are Fast Expanding Their Marketing Budgets for Social Media

In 2005, thought leadership marketing budgets were dominated by “offline” activities: print publications, in-person seminars, public speaking presentations at external conferences, books, firm-bylined articles placed in third-party print publications, print and broadcast advertising, and so on. Such offline marketing constituted 68% of the thought leadership marketing budget. “Traditional” online marketing activities (e.g., email newsletters, webinars, podcasts, website articles, and search engine optimization) commanded only 27% of the marketing budget. Only 5% was spent on social media: company blogs, company pages in social networking sites, online forums, etc.

This year, those percentages will look quite different. Consulting firms estimate that offline thought leadership marketing activities will fall from 68% of the budget in 2005 to 46% this year, and that traditional online will rise from 28% to 36%. In the meantime, social media will swell from 5% to 18% of the budget.

Those trends are expected to continue five years from now. Consulting firms project social media to capture 33% of their thought leadership marketing budgets by 2015 – nearly double their share of 2010 and about the same amount they expect to spend on traditional online (33%) and offline marketing activities (35%). (See Exhibit 1.) (For social media, this would mean a 13% average annual growth rate, assuming no change in the overall thought leadership marketing budget.)

Exhibit 1: Social Media's Growing Share of the Thought Leadership Marketing Budget

Nonetheless, several signs suggest that consulting firms are in the early stages of using social media to market their ideas:

• Only 31% have company-sponsored blogs
• Less than half (48%) post comments on the blogs of influential parties outside the firm (e.g., professional bloggers)
• A little more than half (55%) use social networking message services such as Twitter to communicate their expertise and direct their followers to websites where they have published their ideas

Online Channels (Including Social Media) are Displacing Many (But Not all) Traditional Marketing Techniques

The two most effective marketing channels still involve physical presence. But social media and other online channels are not far behind.

We asked survey respondents to rate 29 thought leadership marketing activities on a five-point scale of effectiveness. (The scale points ranged from “not at all effective” to “very highly effective”). The two highest-rated activities are still ones consulting firms have done for decades: conducting their own seminars and other in-person marketing events, and giving public speaking presentations at industry and other external conferences. (See Exhibit 2.)

But the next three most effective marketing activities are all online and didn’t exist only a few years ago. Search engine optimization is third, firm microsites – a pure social media channel – is fourth, and articles authored by consulting firms and published in third-party online channels are fifth. Webinars rank sixth in effectiveness. A group of social media activities rank in the middle of the pack: consulting firm pages on social networking sites, discussion forums on firm microsites and other online forums. The remaining social media activities, including Twitter and company blogs, fall toward the bottom of the ranking, just edging out print and online advertising.

Many of the most effective activities that do not involve social media are nonetheless online and have only emerged in recent years: email newsletters, online video clips, eBooks and podcasts, to name a few. A number of traditional marketing activities continue to be important: articles in print publications books by consultants, and meetings with journalists, for example.

Clearly, consulting firms have big expectations for social media, and channels such as microsites and webinars (if they count) are already important components of the marketing mix. However, many others still get uncertain returns. We believe this is because many consulting firms have not yet figured out which channels are most important to them, how to get good returns from them, and how to integrate them into their overall marketing strategy. As firms gain more experience, some of these may disappear from firms’ portfolios, while others gain traction and are integrated into the mix.

Exhibit 2: The Effectiveness of Thought Leadership Marketing Activities
(Click to enlarge)

The Rise of the Topic Microsite

We asked consulting firms whether they had topic microsites – i.e., websites devoted to a single topic (or multiple topics), which allow them to display their expertise and build an audience interested in that subject. (McKinsey & Company has such a website, called McKinsey “What Matters” and so do Cognizant and Palladium Group.) Microsites can be open to all Web viewers (like McKinsey’s), or they can be exclusive communities with privileged access (like Cognizant’s and Palladium’s). Only about half (53%) of consulting firms have such microsites. In comparison, many more consultancies have email newsletters (84%) or optimize their websites for search engines (91%).

However, consulting firms with microsites said they were highly effective at generating leads and awareness, relative to other thought leadership marketing activities – a 3.23 on our scale of 1 to 5, just behind marketing events and speeches at external conferences.

Some 55% market their content through their microsites sites frequently or all the time, while 45% do so infrequently. Asked how they use their microsites:

• 46% use them to communicate and further develop their content after posting it
• 38% use them to convene an initial market discussion and foster debate on a topic
• 15% use them to test and refine a point of view before communicating it more broadly

Why are consulting microsites more effective at generating awareness and leads than most other marketing channels? We believe it’s in part because the sites enable a consulting firm to build a dedicated group of followers who are deeply interested in an issue. As well, a microsite enables a consulting firm to provide a great deal of informative content on an issue in one place, which makes it easier for viewers to find information than searching the Web. In addition, a thought leadership microsite helps a consulting firm keep its content “in play” – continually findable on the Web, as opposed to offline marketing activities like seminars, print publications, and teleconference calls, which come and go. (If you didn’t attend the seminar or teleconference call, or if you discarded the print publication, the information becomes harder to retrieve.)

When the content of a thought leadership marketing campaign resides on a microsite, it can shift the very notion of a marketing campaign as a program with a start and end date. When microsites are continually updated with fresh content and allow the audience to participate in the discussion (through online forums, comments on blogs, and other means), they can become marketing campaigns that don’t have to end.

How Consulting Firms Use Blogs and Social Networks

Only 31% of the firms we surveyed have company-sponsored blogs (vs. blogs by individual consultants that are not necessarily endorsed by the firm.)

Of those with blogs sponsored by the firm or authored by consultants on their own:

• 39% use those blogs to convene an initial market discussion and foster debate
• 32% test and refine their points of view before communicating them more broadly
• 29% use their blogs to further develop a point of view

We also asked consulting firms how extensively they use social networking sites such as LinkedIn and Facebook to market their content – e.g., by participating in industry discussion groups and providing links to articles. Of those that market their ideas this way, the majority (56%) only does so infrequently. About a third (37%) does it frequently, but only 7% does it all the time. And asked how they use social networking sites to market their ideas, 42% said to convene an initial discussion and foster debate; 26% to test and refine a point of view before broader communication; and 32% to further develop a point of view.

Key Barriers to Using Social Media Effectively: Having a Strong Supply of Content and Deciding How to Market It

There are numerous hurdles inside a consulting firm to blogging, using social networking sites, creating and maintaining microsites and getting involved in other forms of social media. To assess what barriers were bigger than others, we asked consulting firms to rate nine barriers on a scale of 1 to 5. We also let them add other barriers that weren’t listed.

None of the nine barriers is rated a high or very high barrier, and only two are rated more than moderate barriers. (See Exhibit 3.) The biggest barrier is concern about the ability to regularly refresh online content. Maintaining an audience for a blog, microsite or group on a social networking site requires a firm to regularly post new content.

The second biggest barrier is determining how to use social media to market the firm’s content. Is blogging the best way? Twitter? Posting links to articles on LinkedIn or Facebook? Creating a topic microsite? Can one help the other? And what about a consulting firm’s other online marketing activities – its website, email newsletters, marketing events, PR program and others?
Perhaps it is of little surprise that the third biggest barrier is closely related to the second: the lack of a marketing plan to stage and synchronize all these activities.
 

Exhibit 3: Key Barriers to Using Social Media in Thought Leadership Marketing

The open-ended comments from survey participants shed additional light:

• “Convincing all that social media is where a significant portion of marketing activity is migrating.”
• “Lack of time and bandwidth - i.e., need to put someone on this to conceive and execute strategy”
• “Managing the risk of social media for promoting professional services; determining if this is how our target audience wants to hear from us”
• “No time”
• “Highest barrier is debate on whether we need to do it at all, given few clients and large sales force”
• “Time -- our consultant utilization is already very high and this is one more thing on their plates”

Overall, there are two big issues for consulting firms: determining what channels make sense for them, and finding time to exploit those channels. We expect that firms will quite quickly resolve which channels to pursue; many of the leaders have already made some clear commitments. As firms make these decisions, the new channels will generally displace some more traditional channels, freeing resources and – at least partially – solving the issue of not having enough time to do everything. In other words, the current concerns about not having enough time are a direct result of having a rich new set of opportunities that most firms have yet to fully prioritize within a limited marketing budget.

The other big barrier, we suspect, is that consulting firms are generally risk-averse. Consulting is a fairly conservative profession, serving (in many cases) a conservative client base. Social media is not a “safe” choice; it’s difficult to control messaging and predict outcomes. In its use of social media, the profession lags many other sectors. However, as the benefits become more widely appreciated, with time we expect this wariness will largely evaporate.

Key Success Factors: Spending on Content Development and Social Media

Earlier, we explained how we identified two sets of survey respondents whose firms were on opposite ends of a spectrum on thought leadership marketing effectiveness (measured by number of leads per month generated). “Leaders” (11 respondents whose firms generate more than 30 leads per month) and “laggards” (12 respondents which generate 10 or fewer leads/month) were quite different in at least four ways:

• Leaders are more than twice as likely as laggards to develop their content through research (through internal research groups, outside parties, etc.).
• Leaders devote a greater share of their thought leadership budget than laggards to developing content than to marketing it. Leaders spend 59% of their budgets on developing content and 41% on marketing it; laggards spend 48% of their budget on content development and 52% on taking that content to market.
• Leaders dedicate three times the proportion of their budgets to social media than do laggards. (However, the leaders still apportion more than three-quarters (77%) of their budgets to offline and traditional online marketing.)
• Leaders are much more likely to have topic microsites than laggards. In fact, 91% of leaders had such sites while only 58% of laggards had them.

Implications: Putting Social Media in its Proper Place

Our survey indicates that consulting firms are keenly interested in social media and that they plan to make it a key part of their marketing mix for the foreseeable future. But the survey also shows that consulting firms aren’t sure about how to incorporate social media into that mix – where and how to best use it to generate demand for their services, or how to find the resources to address a rich new set of channel opportunities.

There are several indications that social media is a powerful complement to other marketing activities, and that some traditional ones will continue to play important roles. For instance, one company with a very active online community tells us that it serves as a powerful complement to their offline meetings, helping them stay in touch with their clients and prospects between live events. Our survey found that in-person marketing events and conferences remain the most effective marketing activities, suggesting that personal contact is still critical to building credibility. Consulting can be a high-price, high-risk proposition for clients. Most need to experience a consulting firm and the individuals who would work on a project on a personal level before entrusting them with the resolution of a business problem. The bigger the business problem, the more trust a consulting firm must build.

But social media has an important role to play because it allows a continual level of interaction and interchange without the expense and logistics of in-person meetings. It can attract prospective clients to a consulting firm’s substantive content. Because clients need evidence that a consultant has deep expertise on the problem at hand, the need for white papers, research studies, books and seminars – marketing content designed to educate – remains. Social media can drive many more people to click on a firm’s white papers, studies, podcasts, videos, and recorded webinars. If they like what they read, that in turn will increase the odds that they go to its marketing events, hear its speakers at the industry conferences they attend, or call for a meeting. The ability to seed ideas online in the right LinkedIn, Facebook and other social networking groups, gain a following through an informative blog, and build an online interest group have made it far easier for consulting firms to attract prospects to their ideas and services.

Social media allows a consulting firm to touch a much bigger audience of potential influencers, creating virtual scale. This is a huge advantage, especially for smaller firms, allowing the ROI on good ideas to escalate considerably.

While social media can be a great way to attract prospects, we must issue a word of caution: It can be powerful but only if a consulting firm has compelling content to socialize. Bloggers, social networking groups and other influential online parties are not likely to respond to a consulting firm’s pitch to provide a link to their content if they don’t think it’s interesting. In turn, a consulting firm’s point of view on a topic is not likely to be compelling unless it has invested the time to research and develop it. All to say that social media can be a highly effective awareness-generation tool for consulting firms with compelling content – and an ineffective tool for those that don’t possess it.

One of the most striking findings of the survey is that social media can actually help develop compelling content. Almost half of the firms we surveyed develop content through their microsites, either to convene an initial discussion, to refine and test a point of view before publishing it, or to refine it post-publication. Additionally, 45% of firms promote online surveys through social networking sites and 47% pore through readers’ comments on their consulting blogs as a way to gain new insights on a topic. Leaders are more than twice as likely as laggards to use social media to develop content. We expect that many more consulting firms will soon discover the value of social networking sites, microsites and blogs for this purpose.

We are also struck by the fact that consulting firms are experimenting with social media and even getting results with little coordination between online and offline marketing activities, scant overarching strategy and limited expertise. Social media is in its infancy in consulting, and for a number of reasons from our collective experience:

• Consultants are in the business of making sense of the world, which can sometimes mean maintaining order, hierarchy and control. Social media requires a two-way dialogue, a non-hierarchical, “open source” and difficult-to-control conversation.
• Many consulting firms operate on a doer-seller model, with lean, dedicated marketing resources. Rainmakers often can be subject-matter experts, customer service staff, salespeople and marketers. That makes it difficult for them to find time for social media, as well as to coordinate their social media activities with other subject experts in their firms.
• Many consulting firms are risk-averse. It’s a fairly conservative profession serving (in many cases) a very conservative client base. Social media is not a “safe” choice in marketing activities because it’s difficult to control a conversation with a group and to predict outcomes. However, over time the impact of social media and other online marketing activities is easier to measure than is traditional media.  That will appeal to many consulting firms’ desire for quantifying the return on ther marketing investment.

To get the full potential return from social marketing, consulting firms must take a more strategic approach to social media. They need to draw on social networks for all stages of marketing, not simply as a broadcast channel for proprietary content they control. The ability to collaborate, stress-test ideas, spur vigorous debates and reach a broad range of opinion leaders has never been greater. Consultants have a new opportunity to reach beyond their tried-and-true networks, touch more leaders with their thinking and ideas, and shape that thinking at multiple touch points (senior, mid-level, influencers) in an organization.

For more information on this report, contact Tim Parker at The Bloom Group (tparker@bloomgroup.com) or Meg Wildrick at BlissPR (meg@blisspr.com).