When it comes to social media, you cannot simply assume that if you have 500+ fans on Facebook and the same in followers on Twitter, that you are running a successful social media campaign. After all, how many of these fans / followers are friends? Or people that have kindly retorted your follow, with one in return?
The point is, the matrix for measuring social media success doesn’t even really exist yet, so be mindful as to how much time you are investing into platforms, without any understanding of your ROI.
In this next article, the CIM has, for the first time, undertaken a major benchmarking study, with the aim of helping marketers to measure their campaign’s success against its industry standard. The report has analysed the four major digital platforms (Facebook, Twitter, LinkedIn and Youtube) to see which ones marketers are getting the most success from.
Do you agree with its findings? Personally, for now, I find Twitter the most valuable from a business perspective.
An exclusive report on how brands can put a value on their digital activity in 2012.
Many businesses are bullish in their commitment to digital marketing, convinced that it’s a cost-effective way of marketing their products and services. Three-quarters say they will spend more money on social media this year compared with 2011, according to The Chartered Institute of Marketing (CIM).
Procter & Gamble is one of those dedicated to the digital approach, to the extent that it has restructured its marketing team in the belief that social media is a major force. Similarly, Reckitt Benckiser is selling a new Cillit Bang cleaning product solely through Facebook, in line with its vision of a future where social media, sales and marketing are more integrated.
Because more brands are turning to the social media space, convinced that it can yield a cost-effective return on investment, the CIM has undertaken a major benchmarking study, with the aim of helping marketers to measure their campaign’s success against its industry standard.
Value and investment: where is the value in social media platforms? Click the table above to enlarge.
The report, shown exclusively to Marketing Week, to coincide with Social Media Week, has analysed the four major digital platforms to see which ones marketers are getting the most success from. Facebook is the most successful with 16% of businesses seeing a return on their investment. This compares with 15% for Twitter and LinkedIn and 9% for YouTube.
Half of the 900 UK marketers questioned by the CIM see potential in social media, saying it will be a significant force in five years’ time. But for the moment, many aren’t seeing results.
Nearly a quarter say their activity on Twitter was not at all effective last year, a third say the same for Facebook, 37% for LinkedIn and 44% for YouTube.
According to Graeme Boyd, social marketing manager for Xbox EMEA, this will be the year that marketers will spend their money on this type of media carefully – and will be measuring its effects. In order to monitor the success of a campaign against the current industry standard, tracking must be put in place.
“The days of throwing thousands of pounds at snazzy but unvisited Facebook apps or dropping support for your existing digital touchpoints because social media is ‘what everyone’s doing’, should be over,” says Boyd.
Xbox is tracking data points across its YouTube pages and Facebook channels, setting targets and benchmarks for each. From this, Boyd will be able to put together a picture of success and begin building an ROI model.
“By measuring our earned media [free ‘media’ from consumers advocating or talking about a brand] against the costs of paid media, we can start to see a clear benefit – expressed in a cash value – from our social media work,” he says.
Xbox, which works with the media agency UM, uses Facebook and YouTube for content creation and to talk to fans, and tends to use Twitter for customer queries via @XboxSupport. It is testing customer-to-customer support, where its most loyal and knowledgeable users can give other people advice.
Tracker: Xbox has set targets and benchmarks for its YouTube and Facebook pages
For the CIM’s head of insights Thomas Brown, having a clear financial understanding of what these platforms can do for a business is the first step to convincing leaders to invest.
“There’s little point in going to the board and jumping up and down about fans and followers and retweets if they don’t understand what it all actually means. Marketers need to turn these buzzwords into something that is meaningful for the wider business.”
Last November, Adobe launched a tool to help analyse the monetary value of these platforms, called SocialAnalytics, which it claims is particularly useful when looking at Facebook ‘likes’. It helps to measure the effect of platforms on a customer’s buying decision.
Setting achievement metrics that work towards achieving or exceeding the current industry standard set out by the CIM will also help to convince those at higher levels that digital is right for your business.
Marketing Week columnist Mark Ritson, often outspoken about the effectiveness of social media methods, agrees that the rules of return on investment should apply to these newer forms of communication just as they do to traditional platforms. He says marketers should be asking themselves what the objective of the campaign is – is it awareness building, changing brand associations, lead conversion or sales? Who is the target audience? And what is the current benchmark achieved and your goal compared with this?
Answering these questions should help avoid the ‘digital waste’ that has been created, according to a TNS study, which shows that 61% of consumers do not want to engage with brands via social media.
Yet it is clear that some do. Burberry, for example, has 10 million ‘likes’ on Facebook and launched its perfume, Body, through the network (see case study, below). However, having people who like your brand is one thing, measuring whether or not they are engaging with it is another.
Trench artfair: Burberry called on its facebook fans to help it launch its fragrance Body
One way of measuring the effect of a Facebook campaign is to look at the overall engagement by consumers, proportional to the fan base, which is a benchmark O2 uses. A basic way of doing this is to add up all the likes, shares and comments on a brand’s status update over a defined period of time, and divide that by the number of fans.
“This is led by sector, but if you are achieving above about a 2% engagement ratio, you are generally doing a pretty good job. Past 5% is very good,” says Alex Pearmain, head of social media at O2 UK (see Q&A, below). “It’s not difficult to acquire more fans through ad spend if that is what you are after. The challenge is keeping them engaged when you get them there.”
Some brands are clearly doing well at integrating social media into their overall marketing strategies. But convincing management this is the right thing to do can be tricky. Phones4U head of social media Jeremy Waite says his board originally didn’t buy into social media because of ‘fluffy metrics’.
Indeed, 30% of marketers ‘strongly disagree’ that their management understands why their brand is investing in Facebook, 28% say the same for Twitter, 27% for YouTube and 22% for LinkedIn, according to the CIM. On the plus side, more than a third of respondents ‘strongly agree’ that leaders understand investing in LinkedIn (see below).
Waite says Phones4U moved the management of social media out of marketing and into the e-commerce team to give it a more commercial angle. Speaking at Marketing Week’s Digital Strategy summit last month, he said: “We set up a social community management team in the e-commerce division. That team tracks clickthroughs and cost of acquisition. Social is now discussed commercially in the same way as paid search.”
Facebook has often drawn attention to how Burberry uses its pages to promote its perfume to fans of the designer label
Convincing the whole business to be engaged in your digital strategy is the only way to make money from any investment in this area, argues Ken McMeikan, chief executive of Greggs. “Social media will make you money if you act upon what your customers are telling you. That is not just as a marketing team, that is the whole business acting on it,” he says.
The leadership team at the UK’s biggest baker discusses feedback from social networks every week, something that McMeikan calls “one of the most powerful tools for a chief executive, giving a greater sense of what is really happening in your business”.
“[Social] gives you what is on the customer’s mind in real time. If you have a business that is agile enough to reply and do something about it, you will have a growth business,” he says.
Yet even if a business isn’t using social to its full effect yet, Russ Shaw, former Telefonica marketing director and general manager at Skype, says it is worth experimenting – as 28% of marketers say they are doing. “These channels are very new. My advice would be keep trying. Some things are not going to work, they are going to be a disaster, but some things will.
“Build on your learnings and what is working. Understand how these channels then relate to the specific audience you are trying to reach.”
Measuring results against the CIM’s industry standard could be a good place to start learning about and understanding a brand’s social media efforts. That way, you can assess whether you are going in the right direction with your digital strategy.