The Cluetrain Manifesto claims
There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.
Well, not everyone. Sometimes people have no ‘news’ at all about the products or services they have bought. This is probably the case for the majority of business transactions. According to the Urban Dictionary, ‘meh’ is an interjection that is used to express indifference, to be used ‘when one simply does not care’. Flickr user Ken Murphy (obeyken) designed an alternative icon for Facebook’s ‘thumbs up’, which became so popular that people bought it as a t-shirt.
The market for the indifferent is probably bigger than we thought. Or as programming instructor and game developer Kathy Sierra stated it in her January 25, 2005 post "Creating Passionate Users: Be brave or go home":
Creating passionate users is NOT about finding ways to make everyone like you. It's about finding ways to use your own passion to inspire passion in others, and anything with that much power is bound to piss off plenty of status-quo/who-moved-my-cheese people.
The inspiration for this slide deck was Do you know the top FMCG brands on Facebook? by socialbakers.com. In these slides, I look at the social media strategy of a couple of big (mainly U.S.) brands in the Fast Moving Consumer Goods category: Coca-Cola, Oreo, Red Bull, Skittles, Pringles, Monster Energy, Dr Pepper, Nutella, Ferrero Rocher, and Starburst. My main focus: what social media tactics and channels do they use? And what can we learn from their success cases and mistakes?
In my first slides, I mention "t-shirt brands". From "The Conversity Model":
If you want to know about people’s favourite brands, the brands that are at the very top of their list, the easiest way is to check which brands they are a ‘fan’ of. This is an example of explicit data: by filling in details of their favourite movies, music, products, services, etc., people are (more or less) aware that are leaving behind proof of the brands which form part of their ‘preset’.
Some people, especially young adults, use brand names as guideposts, as a method of orienting themselves in the world. They are dependent on brands for their self-presentation. This is why some companies seek to provide consumers with ways to find meaning in the meaningless, thereby allowing them to forge identities in a faceless modern world.
Some of these brands have even become credible sources of communities (because they create a sense of belonging). I call them ‘t-shirt brands’, because the ‘fans’ of these brands would (if they could) happily wear a t-shirt with the logo of their favourite, defining brand.
In his book ‘Crowd Surfing’, author Martin Thomas writes:
For many people, this sense of community is reinforced through the brands that they choose to align themselves with. Our relationships with brands may not be as deep and meaningful as those we have with people, but they share many of the same characteristics, especially the desire to belong.
Brands play an important role in people’s lives by providing both a sense of community that comes from being aligned to a particular group, and a feeling of superiority over the masses. This is, after all, the way that trends start.’
The following was once overheard at an advertising agency: ‘So this marketing manager tells me we should do a fanpage on Facebook. And he tells me not to ask for extra budget, because he knows that Facebook is free!’
Social media are, obviously, not free. Their development requires resources – real people spending real time and real money – for planning, creative insight and actual product management. These costs may be hidden costs, but they are costs nonetheless, and need to be calculated.
The excellent How Corporations Should Prioritize Social Business Budgets by Jeremiah Owyang and Charlene Li sees three major social business spending areas:
- Internal Soft Costs: Staff to Manage the program, Education and Training, and Research and Development.
- Customer-Facing Initiatives: Ad/Marketing Spend on social networks, Traditional Agencies (deploying social media), Boutique Agencies (specializing in social media), and Influencer/Blogger Programs.
- Technology Investments: Brand Monitoring, Community Platform, Custom Technology Development, Social CRM (SCRM), and Social Media Management Systems (SMMS).
Their seven key trends for 2011 are:
- All corporations will gear up on Staff to manage social business, yet investment in Training and Education will be low.
- Corporations will invest heavily in Ad and Marketing on social networks, though fail to truly engage or leverage the social graph.
- Advanced buyers will spend nearly 3X more on Boutique Agencies than Traditional Agencies.
- Nearly all buyers will invest in Brand Monitoring, but don’t expect the ROI problem to be solved.
- Community Platforms become a mainstay of Marketing and Support.
- Advanced corporations will invest in Custom Technology Development, including integration of social networks on the corporate website.
- To scale, more mature programs will invest in nascent systems, such as Social Media Management Systems (SMMS) and Social CRM (SCRM).
SoTech was a presentation at the 2010 Social Collective Conference in London, UK. The people behind So Tech Now have released the first version of their SoTech infographic.
Their view on the impact of social technologies on business can be summarised in six main areas.
Inside the business:
- Operational
- Development
- Leadership
Outside the business:
- Reputation/brand management
- Customer service
- Acquisition and retention
Let's have a look at the 6th aspect of social technology - Acquisition and retention
Customers are at the heart of every business with social technologies having wide ranging benefits on loyalty, average spend, frequency of spend, referrals and overall customer satisfaction. In addition social technologies deliver deep insight into customer demand as well as the potential for greater customisation. For marketers, muc of what they deliver should impact here but with many never measuring the results of the efforts or "true" ROI.
Social tech:
- Incentive and promotional tools & communities
- Paid Media like Paid Search, PPC, Display, Targeted ads, Direct Mail
- Brand Owned Channels like blogs, video, image, websites, communities
- Earned Media/ WoM/ viral marketing
- Analytics & reporting tools
- Social Commerce tools
- Social CRM software and tools
- Customer profiling & tracking tools
Metrics:
- Reduction in paid media spend
- Increase and/or more targeted reach
- Returning customers
- Volume of WoM
- Sales date: acquire, repeat/increase purchase, reduce return, cross sell, friend-get-friend
- Engagement metrics
- Measuring effectiveness of campaigns: Reach, Engagement, Positive Sentiment, Negative Sentiment
Data from a worldwide survey by research company TNS shows that, on average, internet users spend 4.6 hours a week on social sites, compared with 4.4 hours on email. Email, however, is still the most popular online activity.
From More Time Spent on Social Media than Email Worldwide @ eMarketer.com:
And it’s little wonder they spend so much of their time on social sites. In addition to a wealth of social games and opportunities to share and generate content, social networks remain at heart a communications tool. US internet users told UM in 2010 they stay in contact with 53 people on average through social media, up from 31.2 last year. Worldwide the trend was similar: Users now keep in touch with 52 friends through social, compared with 38.8 in 2009.
DragonSearch has a "
Social Networking Media ROI Calculator", based on the original one from the
Blog ROI piece in Groundswell, by Charlene Li and Josh Bernoff. This tool allows you to fiddle with the numbers until they make sense.
This doesn't mean you can save a lot of out-of-pocket money by going for social media instead of, say, tv budgets. You get a long way with passion and plain hard work. One of the premises in my upcoming book on social media for businesses is that innovation is the true ROI of social media.
If your company is serious about including the social dimension must be included in each department and embedded within the company culture, this means that way your executive level and their departments work must change. But the good news is: by doing so, companies are able to discover the real return on investment of social media: Innovation.
Like all investments, there are risks and rewards when a company and their employees engage with customers in the social web.
In his most recent Matrix: Risks and Rewards of Social Business, industry analyst Jeremiah Owyang sums up the risks of not participating:
Business risks:
- Less control: Customers and competitors will talk about us (good and bad) and we're not there.
- Demonstrate lack of innovation.
- Company may be ill-prepared for a crisis or attack, stemming more "spikey" costs.
More complete overview in this matrix:
By listed product, service category, and frequency.
- Blue = regularly turn to social media
- Green = sometimes turn to social media
From Flowtown's The Rise of Social Network Ad Spending infograph.
The most recent Nielsen Global Online Shopping Report (.pdf) highlights the importance of online opinions as part of the decision making process in purchasing products and services.
Example from the Indian consumer market:
- Many Indian consumers went so far as to say they would not buy products or services without considering online reviews, and again this was particularly important in the purchase of Consumer Electronics (41%), Car (38%), and Software (35%).
- With online reviews and opinions weighing so heavily in consumer’s decision making processes, it is interesting to note that more than four in ten Indians are more likely to share (post a review/ Tweet/ review) a negative product or service experience online than they were to share a positive experience. At the country level, this tendency was highest amongst consumers in China (62%), Vietnam (46%), Singapore and India (both 44%).
- Half the Indian consumers (50%) use social media sites to help them make online purchase decisions. This percentage is higher for the Asia Pacific region at 60 percent who use social media sites to help them make purchase decisions (compared to 43 % globally).
Further reading:
In an
excellent blog post Ogilvy's John Bell outlines the three stages of social media adoption within companies:
- Social Media Experiments - usually the first year or two of unconnected social media programs involving bloggers, video content distribution, cgm/ugc contests and other tactics.
- Adoption and Integration - in the following years, the value or success of social media is felt within and there is a push to do more and integrate it with more people and disciplines.
- Go 'Big' - after some experience and success following integration, brands can't help but want to "go big" either with a substantial facebook campaign or a more impactful integration (e.g. committing to 20 people in social customer care via Twitter and Live chat). usually these brands have sketched out a measurement model that reassures them the effort is smart business.
And depending on whether social media is an obligation (from your CEO or headquarters), a quest (to change your business) or the path to integration into every discipline, budget sizes differ.
In John Bell's Spend Matrix he sees budgets vary from 1% of the prototypical $10 million marcom budgets (experiments - obligation) to 17% ("go big" - well integrated").
Further reading:
