Post by David Nichols, Managing Partner and Head of Invention
News this week suggests that Facebook wants to prove that advertising on its site actually does what all marketing is supposed to do: SMS = sell more stuff. Facebook is linking data on its 37 million unique monthly users with Dunnhumby’s data on the shopping habits of 17 million Tesco Clubcard shoppers, as reported on by Sarah Vizard in Marketing Week here. Dunnhumby has been testing the Sales Impact module with eight FMCG companies across 10 brands, including soft drinks, detergent, confectionery, personal care, beers, wine and spirits.
Does this mean Facebook has the answer to the question we’ve been asking for a while: “Can social media show you the money?”
First, what’s good about this approach:
Focus on advertising: we have raised on this blog concerns about the ability of most consumer goods brands to create relevant content that engages a broad group of consumers on social media. I suspect, like me, your Facebook timeline is more full of family news, vacations and personal triumphs & disasters than debate about the merits of one pasta sauce brand over another. “Most people don’t go to Facebook to buy a packet of biscuits,” says Pollyanna Ward, social media manager at Mondelez highlights, in the Marketing Week article.
However, the Dunn Humby tie-up looks at the effect of Facebook advertising, not social media content. Rather than social media being restricted to what a brand does on its own Facebook page, we’re looking here at advertising that can reach a much wider audience.
Direct link to sales: The exciting thing about this testing is that it allows consumer goods brands to do what online brand have been able to do for while and measure directly the link between advertising and sales.
“A-B testing”: In the testing, brands posted different ads and were able to measure the response in store. This is sometimes called “A-B” testing and is used all the time by online brands seeking to optimise effectiveness. This kind of system is clearly superior to the usual ad pre-testing where the link to sales is only estimated. In one test, an FMCG brand tested six different creative executions on mobile to work out which worked best. The winning creative resulted in a 10% sales uplift. Another brand tested the frequency of ad exposure, testing one ad per week on one group of Facebook users, and two ads per week on another. Exposing users to more ads resulted in a 6%-7% uplift in sales, according to Dunnhumby in reports here.
And what are the challenges?
Driving brand choice, not just category sales: An interesting finding from a test with a detergent brand was that the FB campaign did drive increased visits to the detergent aisle in store, but the actual sales went to a different brand that happened to have a big promotion on – doh! The challenge here is the same as with all communication: create campaigns that are not build not just awareness but also distinctive memory structure linked to a brand story and set of brand properties.
Testing vs alternative media: The Dunnhumby testing seeks to help brand optimise their Facebook advertising. “It’s like allowing a kid to grade his own test and give himself an A+,” observes Tina Moffett, senior marketing analyst, Forrester Research here. It would be even better of Dunnhumby would create other alliances to evaluate the effectiveness of consumer goods advertising on Facebook versus other forms of communication, such as Google search or even TV.
Closing “the path to purchase”: consumer goods brands are at a disadvantage compared to online brands when using social media to sell more stuff owing to a less direct “path to purchase”. See a Facebook ad for an online retailer or betting company, and you can click straight through to the site and buy. With a brand of detergent or biscuits its harder to do this; you have to remember the brand when you go to do your shopping (as is the case with TV and other traditional media). There are some attempts to shorten the path to purchase for consumer products, such as Mondelez trialling a “Buy now” button that you click on to add a brand to your online shopping basket, as we posted on here.
Concerns about privacy: data will be anonymised at a household level and handled by a third party to ensure privacy is maintained according to Facebook’s Alex North, head of partnerships EMEA. This is sensible, but will need some serious reinforcement from Tesco to avoid any backlash from consumer groups or consumers who may worry their personal data is being misused.
Summary
This FaceBook/Dunnhumby tie-up is a first step towards closing the advertising to sales loop in mainstream grocery. It’s hugely important, because that’s where the majority consumer goods brands ply their trade. This feels like the tip of a very large ROI iceberg. Are the days are approaching when all campaigns will be tested ‘live’ and optimised in real time?
Watch this space.