Andy Hinder, Managing Partner, STEEL discusses the future of social media, and what it means for your business
The rise of social media means digital marketing is no longer the poor relation within the marketing mix. The times of accepting our channel as a radically undervalued, response-only medium are over; digital media is at the boardroom table of our biggest, most valuable brands.
Consumers are talking and we have started to listen. Social media represents everything that digital is and was meant to be – an open dialogue with your customers and a platform for your brand ambassadors.
To measure social media using the metrics that digital has been constrained by for so long doesn’t make any sense. Social media is emerging as a branding channel, and also plays an integral role in shaping business strategy.
More importantly, social media builds brand trust and favorability through engagement and in a world where so few consumers really trust brands themselves, it’s vital to look at social media to fill that void through the power of peer-to-peer influence. Proving today’s brand currency is all about understanding the true value to be had from providing permission for the consumer to communicate on behalf of the brand, rather than gathering an audience to broadcast to.
As we know CPA, CPC, etc. doesn’t wash when measuring branding. But, like many digital touchpoints, there are challenges in effectively measuring the role it plays in building brand awareness, associations and consideration. Metrics currently available through third party social listening platforms such as Radian 6 and social media platforms’ own metrics such as Facebook Insights, only give us part of the picture. Being able to quantify reach, engagement, even virality, is a good step forwards, but we need to be able to measure branding in terms a marketing director can compare with other media.
Good case studies proving the ROI of social media are rare so it’s important to be able to point them out. When Greggs, one of our clients, posted a rise in 3rd quarter sales despite the doom and gloom on the high street, we would have privately taken pride in the role we played to support that. But to have the CEO talk to the financial press about our work launching a new product range of doughnuts – using only social media – to sell 1.4m of them in five weeks was unprecedented.
That said, as marketers we’re so pre-conditioned to look for the instant response and conversion to sale. Social Media should not be approached in the same way, however. Thinking more in terms of latent purchase and sales retention is a far better approach to gauging effectiveness and anticipated ROI from social media spend.
In developing a social media strategy we are developing a long term ambition to increase our message penetration, lower the CPA and reduce churn in customers. These are the sort of metrics we should be looking more toward to prove ROI.
Underpinning all of this is the wealth of data that is being gathered, but do we really understand how to really make this work for us in these social times? Social data is different from traditional data which has ‘behaviour’ at its segmentation heart. Social data is defined more by preference and should be seen as the frontier between market research and CRM. It’s a world where our data lives, literally, on the social platform. It changes as often as our customers change opinion and to be able to monitor this and track the fluctuations will enable us to drive more effective and agile marcoms.
However, outside the marketing department, realization is growing of the wider business benefits of social media. From customer services to crowdsourcing ideas, social media is a direct route to your customers. This is why the decision makers within major brands are waking up to social media. Ignore your customers at your peril. If they are talking to you or about you, then you need to listen and acknowledge them.
Business processes need to be agile enough to respond, but intuitive enough to recognize when to respond. Businesses need to be ‘social by design’ and therein lays the challenge for most organisations. At what point do you let social media dictate business strategy? After all, not all your customers and potential customers are social media users. Not all social media users comment on or follow brands on social media. But for those that are there, brands need to be there for them, and prepare for the growth in numbers and influence. Where this tipping point may be will, of course, depend on the individual situation and type of business. What is clear is that we see more clients signing up to social media measurement or listening tools simply because they can react quickly to incidents revealed in social media.
Social media is set to become the most important, people powered, shift in marketing and advertising in history. The boards of many of the biggest brands have started to realise this. The problem is that the way in which we measure such activity just hasn’t yet caught up with its value and application. PR has struggled in many similar ways to justify effectiveness, settling for a model (the Advertising Equivalent Value) that uses a traditional advertising spread and reach awareness formula to demonstrate success.
As we move from a traditional CRM approach to a Social CRM (sCRM) acceptance then we simply have to develop a robust and commonly accepted way to measure effectiveness, which doesn’t rely purely on direct sales.