Stats of the Month

Last week, I went to Leicester with fellow Rabbits Bridey Lipscombe and Cat Turner  to give a presentation to De Montfort University marketing students.  The full presentation (which includes a blurb about Rabbit) is up on the Rabbit Issuu page.

As part of that though, I presented a series of ten consumer and media trends that set the scene for why social media marketing exists as a discipline.   I’ve included them in a separate presentation.   The trends in the presentation are:

• Over the past year the UK’s (daily) national newspapers have lost the equivalent of the population of Glasgow in sales

• Trust in social media is now higher than trust in print media

• Consumers not only get more of their news online, online news carries higher attention spans

• ‘Media stacking’ combined with low attention rates for live TV and radio, means a lot of ads are now ignored

• When it comes to sourcing product info online, consumers trust other consumers

• Super-fans and advocates are more likely to create content that influences a purchase

• Customers engaging with companies on social media spend 20%+ more

• Women and mothers in particular are social media power users

• In-store mobile browsing means customers are checking their smartphones, not the point of sale material

• The standard for replying to online customer comments is now as low as ten minutes

Hope the stats and presentation are useful, each slide has a link to the appropriate post with more info.

Over at Rabbit, we publish a monthly series of social media guides.  This time around, I’ve put together an overview of the different social media influence systems that try and tell brands how “important” someone is on social channels – it is embedded above.

These scores are not just academic or good for a bout of social media navel-gazing, they now serve practical purposes.

Case in point, Klout scores are built into the two main social media team management systems hootsuite and cotweet.   If you call out a brand, chances are the person at the other end will now be looking at how influential Klout deems you to be.

As the report implies, I am not a big fan of Klout – and that’s not because I lost 14 points in the recent Kloutapocalypse!

Kred however does seem to hold a lot of promise: The transparency in calculating scores (as opposed to Klout’s secret sauce approach) and the different influence scores for different communities are welcome innovations.

(To view, go into full screen mode above.  It is also available to download from our Issuu page - issuu.com/therabbitagency)

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The good news if you are someone like me earning their living in this industry?  They “are as excited about social media today as ever before.”   The bad news:   A quarter intend to spend less than 35,000 euros this year (US 48k, GBP 30k)

Forrester’s Nate Elliott says it comes down to a mixture of resourcing and the inability to prove ROI.

Measuring social media is actually pretty easy.  However, as I’ve heard said many times before, it is tracking the right things that is difficult.   On that note check out this SEOMOZ article on social media KPIs, one of the best I’ve read

There is a third problem though, one that revolves around the perception that social media campaigns are free.   They are not.   Some investment, at the very least in monitoring what people are saying about you, needs to be made.

So how much does a social media campaign cost?   It depends on a whole range of factors, but this piece where various (US) social media practitioners took hypothetical ad budgets and scoped out what they would do with it is useful (thanks @shannonpaul for reminding me about the link!).

It shows you how can indeed build a year long programme for the price of a few magazine ads…but not for 35,000 euros.

(photo from loop oh via creative commons)

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A piece doing the rounds thanks to Mashable (which at the time of writing has 2791 re-tweets) concerns a GSI Commerce / Forrester study claiming to show that retailers would be advised to divert their social media budgets elsewhere.

Basically the crux of the study is that traditional digital solutions – search, advertising, email marketing and so on = good.  Putting money into social media = bad, with less than 2% of orders in a study of 15 online retailers coming via social media.

The punchline comes from GSI’s Fiona Dias.   Mashable tells us that: “Dias says she isn’t surprised by the survey’s results because she’s been telling retail clients for some time that social media outreach is a waste of time and money.”

“It’s been a mystery to me why the media is excited about social media.   From a retail and commerce perspective, it seems to have no effect.”

Well, this blog is all about stats, so here are some that say otherwise:

• Research from Exact Target shows that 37% of Twitter followers compared to 27% of email subscribers (and yes 17% of Facebook fans) are more likely to buy from a brand.

• Newspaper and magazine articles are half as influential as online reviews (53% vs 26%) among US parents buying electronic goods.

• 50% of US under 35s follow the recommendations of social media friends, compared to 45% who are influenced by newspapers and magazines and 17% by celebrity endorsements

• Even if search and email newsletters are better at getting you to visit a retailer, social media makes you more likely to buy.   Ten times more likely in fact.   Research by Sage Pay shows that while 7% of all visitors to an online store make a purchase, 71% who came via social media will end up in the transaction section.

• According to Skywrite, 75% of women and 50% of men are likely to follow up a recommendation from a social media source.

• The UK’s OFCOM says that 36% of consumers trust and 33% distrust what they see on social media.   For newspapers the split is 34% / 46% (trust is actually highest of all in online news)

Direct sales aside, there is then the brand reputation angle.   Even if you believe social media can’t drive sales, it can certainly hurt them.  GSI’s study was about online retailers, so to take just one example, look at what happened to Amazon two years ago when gay titles were classified as adult.

Social media outreach a waste of money?   In fact, something as simple as a sincere reply in response to a negative review will turn 18% of detractors into fans, with 70% revising the review.   What other marketing discipline could give you that ability to win converts and brand fans for a relatively modest outlay.

Of course GSI’s research didn’t talk about offline retailers, which is the area where I personally believe social media money is well spent.

So, Radio Shack found that shoppers using Foursquare spent 3.5x more money than the average, and the rise of mobile in-store browsing means that mothers and the under 35s in particular are spending time in shops with one eye on their smartphones.

(Image – Ivan Krutainis)

Related articles

• Social Media Has Little Impact on Online Retail Purchases [STUDY] (mashable.com)
• Study shows major UK retailers unresponsive on social media, only 1/4 responded to tweets (liesdamnedliesstatistics.com)
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Here’s a series of infographics from the always informative Flowtown, showing the growth of social media ad spending.  Currently half of the US$3.3 billion spent on social media ads worldwide is spent on Facebook.   With Facebook now being the 500 million user gorilla, if anything I’m surprised it’s not higher.

As a % of total media advertising, it will hit 12% of the total in 2011.   No wonder so many media buying and planning agencies are (as I discovered in person on one occasion last week) are making an increasing play to manage clients’ social media strategies – PR consultancies watch out.

Another interesting chart from the infographic, people who ‘sometimes’ (green % below) turn to social media when making purchase decisions.   For travel it’s 24%, clothes 23%, groceries 15%.

That might sound low in percentage terms but quantify that in absolute numbers.   Facebook has 133 million users in the US and 28 million in the UK.   If 23% of those occasionally consult their social media friends before buying clothes, that represents 30.59 million customers in the US and 6.44 million in the UK.

(The full Flowtown infographic can be found here)

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This is according to social media monitoring service Alterian (via MarketingProfs) which found that fairly standard marketing objectives lay behind branded social media efforts.

“Acquiring new customers”…or rather plain old sales was the number one objective for 30.1%, followed by awareness raising (26.5%), and using it as a communications channel for existing customers (24%).   However customer services as such was the main social media objective for only 1.2% of marketers surveyed.

It’s worth noting that respondents (who were based in the US) were asked to give one answer, so this isn’t the same as saying that said marketers don’t consider customer services via social media to be important.   Still – the fact that many brands still see everything through an advertising prism, and often get it wrong as a result, can be seen in the fact that sales was the most popular answer.

At the same time another US survey has come out, this time via publisher Colloquy and the Direct Marketer Association.   This one found that among marketers who do see social media as a customer services channel, the average social media spend was $88k compared to $53k who were motivated by brand awareness and $50k by those who wanted sales.

Not withstanding the fact that this second survey was done by email and involved respondents filling out 17 questions, you do have to ask…is that it?! $50k (£33k) spend to use social media as a way to get new customers?   Unfortunately that stat confirms that marketers taking the social media sales route are sometimes also the ones who understand the least about the area.

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Here’s a stat from the KellerFay Group in the US about where word of mouth marketing conversations take place.   And it turns out 90% don’t take place on the Internet.  Oh nos! Time to get back to having promo staff doing stunts and giving away freebies on street corners.

The PR Squared blog says that this should serve as a wake-up call that online approaches are only ever an “ADDITIVE, not a REPLACEMENT for their “traditional” approaches.”

Though I know PR Squared certainly doesn’t fall into this camp, for social media sceptics this will be a bit of a “see! see! told you so!” argument.  It reminds me of a former colleague who used to dismiss social media marketing with “it’s all smoke and mirrors” and “you still need a good idea.”

Er…well yes, yes and yes.  Online marketing campaigns should very much work in tandem with other marketing disciplines, see a previous post on the need to combine TV and online for one example. Surely that should be self evident?

Naturally we talk about brands all the time (60x a week according to KellerFay) , and tend to do so in our normal day to day lives when not glued to a computer screens.  Similarly, most “new” news is still broken by what’s considered to be traditional media – check out this stat from Pew Research earlier in the year.

Where online channels do however come into their own is in amplifying and rapidly spreading messages.

For example, Twitter stories can become front page newspaper ones in as little as four hours.   And a separate study by Harris shows that Americans under 35 trust social media recommendations over newspaper ones….and far above celebrity ones.   Finally, people who are most active on Twitter are also the ones who are most likely to post ratings and reviews, comment on news and upload articles to share.

(via Lauren Fernandez)

Image – Kit Cowan

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There’s been a lot of research out about how social media recommendations can increase the chances of people buying products or services.

For instance, the other week Harris in the US found that 50% of under 35s followed the recommendations of social media friends, compared to 17% who acted on celebrity endorsements.   And last year Comscore released a study showing that ‘social search’ (social media activity and paid search together) was 233% more effective than search advertising alone.

However,  a recent study featured in Marketing Magazine in particular is worth noting.   It shows that people accessing an online retailer via social media are 10x more likely to buy something than a visitor that comes to the site cold.

According to Sage Pay, on average 7% of visitors to an online store will make a purchase.   However, if directed to the retailer via social media, the % of visitors who will go to the transaction section goes up to 71%.

Especially when compared with a click-through rate that can be as low as 0.02% for display ads, those figures are fairly compelling.   Yet, in the same Sage Pay survey, only 5% of marketers with responsibility for online marketing said that social media was the most effective communications channel.

This is one of the items that we featured this week at Rabbit on our regular ‘Rabbit Feed’ – more details here

Image – Daniel Weir, Via Flickr

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Not anymore, as anyone who owns a smartphone / laptop combination will know.   And data published in emarketer (from a TNS / InterCall study) show that in the US 3/10 workers felt the need to be connected to work 24/7 – in particular men in their 30s.

A prime culprit according to the study is in fact social media and ‘always on technologies’ in smartphones.

An earlier IDC study in the states found that 57% of US workers now use social media for business purposes at least once a week.   Meanwhile 34% actually chose a consumer network such as Facebook or Twitter over a business one, due to familiarity and low cost.   The main thing that they do?  Something familiar to everyone on Twitter, asking questions and acquiring knowledge from a wider peer group.

At the same time there are doubts about how productive this is.  While 52.3% of workers surveyed by the American Society for Training and Development did say they learned more in less time, only 37% actually thought they got more work done.

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A lot of that so-called lost generation is probably represented in these charts from socialmediaexaminer.com, which show that while 91% of marketers use social media, 2/3 (65%) have just started using it.

Marketing Charts, where I got these stats from, also refers to another study by Unica, which shows a slightly different picture.   That survey of ‘global marketers’ shows that while 80% are using social media or plan to in the future, only 47% do so now….in other words more than half don’t.    And depressing news for those of us in Europe, while 58% of marketers in North America use social media, here it’s only 34% – so barely a third.

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