Can social media show you the money? (brandgym research part 1)
This is the first of two posts where I will share highlights from our 6th annual research paper, which tries to cut through the hype and hysteria around the red-hot topic of social media*. The research combined feedback from 100+ marketing directors, and from consumers in the UK and USA.
* The creation of content using social media (e.g. Facebook
pages, Twitter feeds) and not online advertising on social media sites.
In this first post I'll share results showing why, for most brands, social media has a limited role to play. In the second post next week I'll share ideas on how to best use the time and money you do spend on social media.
Hype buster 1. Social Media Usage is based on fashion, not facts
‘Keeping up with trends’ was by far
the main reason given by marketing directors for their use of social media.
This scored much higher than any hard evidence, or even gut feel, on the
business building effect of social media.
Hype buster 2. Social has limited reach
Sensationalist, scare-mongering
messages about the demise of TV advertising and the rise of social media are
popular headline-grabbers. In reality, social media has a limited role to play,
and conventional marketing is far from dead.
The key driver of brand growth is
penetration: having as many people as possible using you at least once a year.
Loyalty measures, such as frequency of purchase, are actually similar between
brands in a given category. And our consumer research shows that 80%+ of people were already using a brand before
they
started interacting with it on social media, with less than 20% new users. This
means social media has a limited role in driving penetration of your brand, as
you're talking mainly to existing users.
Hype buster 3. "Old marketing" is far from dead
Advertising, especially on TV, is
far from dead. "Old" marketing still has the central role to play for
most brands, for several reasons:
you need to drive penetration
advertising has the highest ROI of any medium, according to econometric
research by Thinkbox.
And this ROI is actually up +22%
in the last five years, owing to growing commercial TV viewing and lower costs
. Plann-able: with conventional advertising you can plan the size and targeting of your
audience. In contrast, social media content creation is a lottery. Its impossible to predict how
many people of what target will like your Facebook
page or watch your YouTube video
What
about word-of-mouth?
Word-of-mouth is often portrayed as
a key reason for brands to be active on social media. In reality, 90% of
word-of-mouth conversations about brands still take place offline, primarily
face-to-face, according to research by Ed Keller and Brad Fay.
Hype buster 4. People use social media to follow friends, not brands
Only 7% of UK
people saw social media as being very important for staying in touch and
interacting with brands, with the US slightly higher at 14%. This is dwarfed by
the importance of friends and family (39%/50% in the UK/US). These results help
explain why people like on average only 9 brands on Facebook,
compared to an average of 200+ friends.
Hype buster 5. Most brands aren't social, or online
We suggest that social media should take up a limited amount of time and budget for most brands, especially consumer goods brands. Here are three questions to help you with your brand:
– How social is your brand?
Even within this minor role for
brands, not all brands are equal. In the league table of brands liked on Facebook,
consumer goods products come rock bottom (8%), in
research by DDB. At the top were brands from media (55%), charities (51%) and
fashion (46%).
results reflect the fact that most brands are just not that social. If social
media is a virtual pub or cafe where conversations happen, would people talk
about your brand? Would people want to read your brand's weekly magazine, or
watch its daily TV show? If your brand is closer to pasta sauce than Prada,
then the answer is probably a resounding ‘no’.
– How
young is your brand?
A further
point to bear in mind is how important younger people are to your brand, given
their higher usage of social media. If you are a brand like Axe, Nike or Levi's
where this a key audience, social media will play a bigger role.
– Can
you sell online?
If online is a key sales channel for your brand, then
social media can help you sell more stuff, not be just a communication medium. Take The X-Factor, a reality TV singing contest,
similar to Idols in other markets. The brand’s UK Facebook
page had a whopping 3.7million it helped generate online revenue by people
buying iTunes tracks of the week's songs and by encouraging mobile phone voting
for who stays on the show.
In contrast, for consumer goods
brands the link to selling more of the core is much more in-direct. The best an
FMCG brand can do is link to an online shopping site, but this is still a niche
channel, accounting for only 3% of the grocery market.
You can score your brand out of 10
on the questions posed in this section. In this highly sophisticated media
model, the total score is the % of your budget to spend on social media, as
shown in the example below.
In conclusion, social media usage is driven by hype and fashion, not facts. In reality, consumers' interest in brands' social media is limited, as is its potential to drive penetration. For most everyday brands it should probably be taking up less than 10% of your budget and time, with good old fashioned marketing still being the main way to grow.
Check back next week for the second post, on how to make best use of the time and budget you do decide to spend on social media.
