Social media – crack cocaine for marketers
In this guest post from SXSW, Douglas Nicol says that for all the hype around social media, too few people are asking the hard questions.
It was a slightly awkward moment. We are assembled at SXSW, arguably the worlds leading interactive conference and birthplace of Twitter and Foursquare. We are listening to top social media marketers from some of the biggest brands in the country: PepsiCo, General Mills and Samsung. There is standing room only.
The session is called ‘Marketing budgets have gone social – is it working?’ The marketers spent most of the session talking about what they do rather than the ‘is it working?’ topic. There was some mutual backslapping around the fact that social media budgets have grown on average 30% this year. Then someone goes and spoils the fun and asks how they all measure the sales impact of their activities.
There was lots of shuffling of papers and anecdotes but then an admission that they don’t know. That’s right – by and large they don’t know if social media is driving sales for their brand. They think it is.
The problem is that social media has become a sort of crack cocaine habit for some marketers – with an obsessive focus on pushing random consumers to rack up as many Like’s and Followers for their brands as possible.
Building Followers on Twitter is not difficult – you just buy them through promoted tweet or trends. But is that where the social media strategy ends? For the majority of brands that’s precisely where it ends. And many senior marketers are happy with this, because size seems to be the only thing that counts in social media.
One of the speakers, Julie Hamp, Senior VP of marketing at PepsiCo believes that “if you don’t have social media scar tissue, you probably aren’t trying hard enough”. In other words go out and make some mistakes. She is responsible for the high profile ‘Pepsi Refresh’ social media program.
In 2010, Pepsi Refresh gave out more than a million dollars in grants each month, for great, ‘refreshing’ ideas in categories like Arts & Music, Communities, and Education. Ideas are posted on the site and Americans vote on which ideas they like best. Voting happens through all the major social media platforms to decide how the grants are distributed – in 2010 some 87 million votes were cast. No evidence was offered as to how the program moved brand preference or sales.
Sometimes the evangelists claim that social media ROI comes through listening and understanding customers better –a kind of new age research group with unfiltered feedback. This idea is seriously on the nose at this years’ SXSW. The problem is that the typical social media sample is massively biased to extreme lovers or haters of a brand whereas in fact marketing opportunity lies in understanding the middle ground of consumers who feel neutral about a brand.
The clearest real world evidence of social media ROI sits outside the marketing department in customer service – US brands like Comcast have reduced costs and improved customer access using platforms like twitter.
Many marketers now have a smart looking social media dashboard report, jam-packed with engagement metrics but few that link to sales. Part of the problem is allocating a meaningful dollar value to a given engagement – a vote, a recommendation or feedback. The other part is tracking the consumer through to sale.
Recent US research from Altimeter shows that in the US, 66% of marketers only use social media engagement metrics to measure the success of social media investment. Just 22% measure actual conversion to sales (typically because this type of sale is linked to an on line transaction such as an e commerce purchase).
If social media is about building relationships we need to move beyond one off engagement metrics to a more holistic measure of how social media grows the customer relationship. There are some potential solutions like using the Net Promoter Score system or better integration with CRM systems, both of which create a link back to company revenue and sales
It is clear that despite all the hype (and there is plenty at SXSW) marketers continue to struggle with social media ROI, relying on anecdote and case studies rather than real data.
Social media is out of the incubator in 2011 and if we don’t crack the code with a more ambitious ROI measure soon, we will never move beyond fluff and puffery.
Crack cocaine analogy suggests social media delivers very good initial returns and then rapidly diminsihing returns. Is that what the writer is saying, or was he just desperate to use the latest cliche?
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Ah, the old social media ROI chestnut.
Of course, as always, half the issue is what to measure, and this is going to be different depending on the individual goals and scenarios. Yes, any kind of word of mouth marketing – and SM definitely falls into that bucket – creates an issue around tracking. There’s only so much data a ‘how did you hear about us’ form field can provide.
But it still amazes me that so much more discussion happens around SM ROI than it does around a billboard advertisement – for example. There it’s simply a case of advertising and tracking any upward trend in sales over the appropriate period.
Hence the oft-quoted “Half my advertising budget is wasted. The trouble is, there’s no way of knowing which half.”
As true now as it was when first coined. Why is SM held to a different yardstick?
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“…The problem is that the typical social media sample is massively biased to extreme lovers or haters of a brand whereas in fact marketing opportunity lies in understanding the middle ground…”
Excellent article, I do hope all the social media gurus are reading!
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Social Media? Here comes a boner!
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I use a ruler to measure mine
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@Kimota – Traditional media campaigns, based on R&F measures, have a proven track record of delivering on brand metrics such as preference etc. I think the point of the article is that it’s time to start providing some of the rigour around social media which exists for all other areas in order to determine if it does, in fact, deliver a tangible benefit to brand or sales metrics.
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There are ways for the right client offering the right product to easily track ROI for their SM efforts. Of course you just need to know how, why and when.
If you are offering a coupon or similar across your Social Media platforms which is a tangible offering, any one with half a brain and a knowledge of analytics will be able to prove ROI through your SM efforts. If the idea of this is new to you and you run a SM campaign, I recommend you look for alternative employment – You are waaaaay behind.
Conversion management is a much more rewarding marketing crack habit by the way. Get involved.
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You can easily track where your sales and leads are coming from you just need to setup you system to track your leads / conversions through your CRM system. I highly recommend Hubspot tools combined with Sales Force to track your leads are coming from.
Also an important metric to focus on is how much traffic is coming back to your website from facebook, twitter etc. If this is on the up you know your content is engaging your readers enough to click through to read more.
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get some decent back-end analytics in place as well as pre and post benchmarking and then the effects of social can be more easilly measured.
amazing how marketers don’t spend up to 20% of their budgets on decent tracking mechanisms/analysis to ensure that the time and dollars they actually spend on marketing are in fact measureable!
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If there was a *like* function on this article, I would select it!
Tim – Thought about Facebook Connect functionality for mUmBRELLA to make this so? 😉
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Interesting point regarding CRM integration.
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Nice anecdotes from SXSW-http://managinggreatness.com/2011/03/14/best-of-sxsw-interactive-2011/
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@Brownbear. My husband and I would be delighted to assist.
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Nice update thanks Douglas, very interesting.
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Nice piece Douglas.
I haven’t been this much rubbish around a topic since WAP
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ROI on social media,as with all advertising,is a thorny issue.
Kinda reminds me of Hitchhikers Guide to the Galaxy when Super-mega computer Deep Thought computes that the answer to ‘life, the univers and everything…’ is 42
DT announces: “I`ve checked it very thoroughly, and that quite definitely is the answer. I think the problem, to be quite honest with you is that you’ve never actually known what the question was.”
Let`s all ponder this……
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The question, “which half of my ad budget is wasted,” applies to advertising, SoMe, P.R. — everything.
http://admajoremblog.blogspot......of-my.html
http://admajoremblog.blogspot......udget.html
http://admajoremblog.blogspot......ts-of.html
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hey unfortunately named post but very insightful -good wrap of SXSW and love the concept of social media scar tissue ,i feel a blog post coming on 🙂
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Great article, much more refreshing than the pepsi campaign
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Agree with Kimoto, seems to be different yardstick applied to digital marketing vs traditional solid state e.g. billboards, print media, free to air etc. (surely people involved in traditional “marketing” are not fearful of being ignored or becoming redundant?)
One element of marketing that should never change (versus short term promotion and sales), or must be used if not already, is to focus upon your customers and ask them, they generally know how they found you, i.e. constant market research, versus “campaigns”.
Further, what still remains as one of the most important marketing and analysis tools and reosurces is, asking questions of your customers, not just telling people stuff…..
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I spend a lot of time on the train.There is no advertising there ??
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I am not sure where to start with these types of posts!
I am beyond the point of frustration at the significant lack of understanding, misinformation and ill-informed opinions on the subject of Social Media Marketing or what many of my experienced peers and I call Social Influence Marketing. So, I’ve finally bitten the bullet and uploaded my Social Influence Marketing Framework to SlideShare – http://slidesha.re/hNHbao to simply try and improve the understanding and execution of this discipline and counter some of the very poor advice and commentary out there.
This framework is based on real, local and global practical experience across organisations like Microsoft, Dell, Pepsi, Ford, Best Buy, IBM and many, many others in my capacity as Head of Digital Marketing. Previously I’d only shared this document privately and on request.
There needs to be a serious reboot on this tactic, particularly across Australian marketers, media, agencies and many of the so called ‘expert’ commentators. However, most of my blame goes towards the agencies who simply tick a box called ‘social media marketing’ capability and then provide uniformed and misguided advice without any direct, practical experience.
1. Social Networking is not Social Media Marketing. Social media* are the tools, social networking* is what you do in the communities and social media marketing is the strategy, plans, tactics and resources etc you use to achieve your overall business and or marketing goals and objectives. *You can use one to enhance the other, but they are not the same.
2. Social Media Marketing is a commitment, not a campaign. This is about conversational marketing and building and influencing relationships takes time.
3. The overwhelming reason why social media marketing is not ‘driving ROI’ and why 83% of efforts over the past few years have failed is because agencies and ‘experts’ are providing bad advice and because 81% of organisation don’t have any, or a clear strategy. FYI, hope is not a strategy, establishing a Facebook page is not a strategy and a timeline with a list of tactics is not a strategy.
4. Social Media Marketing is a single tactic in the whole marketing arsenal and it has always worked best when supported by other ATL and BTL marketing tactics and when part of a 360 degree integrated campaign.
5. Social media marketing is not about the tools / technology. It is fundamentally about the underlying social behaviour of your intended audiences and for some reason this basic marketing tenant and foundational discipline has been lost in place of a misguided focus on the latest bright shiny object.
6. Social Media Marketing can and has been measured successfully for the past 4 years by many organisations who really understand both Social Media Marketing and Marketing Measurement. I cover this in my Digital Marketing Measurement Framework, now on SlideShare – http://slidesha.re/hb3jpR.
7. Reading blogs and books and knowing how to use social technologies (ie. Twitter, Facebook) does not make you an ‘expert’ or a valid commentator. Only practical experience makes you anything close to being an ‘expert’.
8. Popularity does not equal influence, in fact there have been four major studies now demonstrating this fact and that in many cases in can be counterproductive. Influence is the ability to influence another person’s sentiment, the volume of conversations or the ability to influence another person to take some action.
9. Social Media Marketing is nothing and everything about PR / Online Reputation Management. There is far too much emphasis on this goal / objective / executional element. This is only one small part of this discipline and once again it depends on what your business / marketing goals and objectives are.
10. Social CRM is real – for example social selling and social relationship management. Many organisations like Dell are driving millions of dollars in sales and revenue through social selling and others are using Social CRM for use cases such as customer service / experience management. I cover this in my Social CRM PowerPoint on SlideShare – http://slidesha.re/PrBbC
I’ve chosen to upload and share a lot of my own knowledge and experiences on SlideShare for only one reason; I am passionate about marketing, digital marketing, measurement and social influence marketing and I hate seeing marketers, agencies and organisations continue to get, or give out poor advice.
P.S. Sorry for the long comment post!
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Douglas, thanks for raising the key questions about SMM. And @Martin, thanks for providing some answers despite your frustration.
Seems we confuse a campaign (execution of a strategy) with the strategy itself. Fundamentally, one of the challenges with digital in all areas is a lack of strategy with clear objectives that are to be achieved over time. The pace of change has led many to believe that instant gratification is both possible and the main measure of success.
A great discussion here and I hope more and more of us remember the difference between strategy and tactics/execution. They both have their place and you can deploy tactics without a strategy, but it works better to use them together and to the same ends. (which I hope you’re all agreeing is obvious).
Thanks again Douglas!
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@Martin Walsh – 420 slides?!!! Thanks a lot – I just lost my social media boner!
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@Cap’n Salad – can i recommend you try a social media dysfunctional nasal spray?
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@Cap’n Salad there are no shortcuts to good marketing and in fact this is one of the principle reasons marketers, agencies and organisations are failing in not just Social Media Marketing but also the successful execution and integration of traditional and digital marketing.
Here is a great report from Boston Consulting outlining that the biggest imperatives right now for CMO’s are for integration of digital and traditional marketing and that Agencies are not helping CMO’s make the right trade-offs between traditional & digital marketing (1MB .PDF) http://bit.ly/hBLdRb Here is the Ad Age article about the report titled, ‘It’s Time to Put Communications Planning Back on Agencies’ To-Do List’ http://bit.ly/fMs3zk
The first question I get asked when I go to speak with other organisations is ‘How do I get there (executional excellence)?’ ‘Do you have a playbook?’ Well, this document is it and you won’t get this practical information anywhere else.
The deck is the whole Social Media Marketing framework and it provides detailed insights into the different components of Social Media Marketing which can and should be rolled out in stages. This way the document can be used depending on where your organisation is and what its maturity level is with an overarching context. If you just want more about Engagement then that’s where you can start. This is why I put in the Table of Contents! 😀
The reason why this framework works is because it goes to the heart of operationalising it across an organisation. Marketing excellence can never be achieved unless you work out who does what, how, when, playbooks, policies, centres of excellence, strategy, principles – basically crossing all the T’s and dotting all the i’s (operationalising it).
P.S. If you just want a summary, you could also skip to slides 88-102 which provide a high level view of the framework.
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@Martin Walsh – I think I just kissed my Social Media Boner goodbye for good. Why can’t you be flaky, glib, condescending and unaccountable like the rest of the social media crowd?
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@Mish – your Cap’n thanks you for the Saladacious advice, yet he wishes to report that Cowboy Boots, Face-Palming, Dell Laptops and Wookie noises work much better than any nasally administered Social Media fluffing. Keep up the good work!
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@Martin if Marketing Managers had brains, you’d surely be taking work off every agency in the country. The Cap’n’s right though, brevity is a powerful tool!
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