Almost every agency in this space, ourselves included, is often asked to prove a direct link between social media and sales / conversions.

Indeed though awareness for the need for social media marketing campaigns is without a doubt higher than 3-4 years ago, questions about measurement and tangible benefits remain the same.

I’ll come back to whether the ‘show me the sales’ question is useful to ask on its own.   But the fact is there is research out that shows social media does impact the bottom line.   I’ve distilled some of these into ten key points, included in the presentation below.

They are as follows:

1 – 83% of consumers globally are likely to visit a website are likely to visit a website recommended by a friend on Facebook, and more than half say comments posted on retailers’ Facebook and Twitter pages, whether positive or negative, also influence their opinions (2011 Global Consumer Shopping Habits Survey – Channel Advisor)

2 – Consumer opinions posted online (70%) are more trusted than information on TV (62%), newspapers (61%) and online banner ads (33%) (Nielsen)

3 – In Europe over 50 percent of respondents aged 16 – 64 with access to the Internet, use social networks to assist with shopping decisions and of those that would be likely to follow a retailer on a social network, 35 percent stated they use social media platforms to read reviews or rank products and services (IBM)

4 – “Customers who engage with companies over social media spend 20 percent to 40 percent more money with those companies than other customers.” (Bain & Co)

5 – A study in South Korea (a mature social media market) found that social impacts sales among moderate and heavy users.  Recommendations shared among moderate social media users increased brand sales by 5%.

However, heavy social media users also listen to negative chatter.  Brands talked about negatively experienced a 14% sales drop among this grow (Harvard Business School)

6 – The heaviest Facebook users are also the biggest spenders online - the top 20% of users spend $67 per quarter, compared to $27 for non Facebook users (Comscore)

7 – According to a Kantar Media study in the US, 35% of social media users say Twitter has influenced their purchasing decisions (Twitter links also result in more clicks than Facebook)

8 – Even concentrating on smaller social networks can be commercially beneficial.  Radio Shack in the US found that customers checking into their stores on Foursquare spend 3.5x more than those that don’t

9 – Super fans and advocates on your social channels are 50% more likely to create content that influences a purchase (ComBlu)

10 -  The picture is the same if you look at individual industries.   In the ‘quick serve industry’, consumers exposed to social media have a 7x greater likelihood of ‘higher spend’ (WPP / Ogilvy)

Meanwhile, 60% of consumers say they factor other travellers’ online reviews into their plans when booking a vacation / holiday (eyefortravel / Simpliflying)

Is that the right question to ask?

That’s a selection of evidence that provides a direct link between the tweet or Facebook post and the cash register or online check-out.   But, as I said earlier, that may not be the right question to ask in isolation.

Yes, social media needs to provide a return on investment just like any marketing spend.   But the danger is seeing social media as the brand marketing equivalent of a slot machine – put the coin in and get an instant return.

By and large social campaigns don’t (and shouldn’t) work like that for a number of reasons:

1 – Social works best in tandem with other marketing disciplines.   The WPP study mentioned above shows that social campaigns are particularly effective when integrated in the overall marketing mix.   Similarly there is evidence that combining search and social marketing campaigns are particularly effective

2 – Social media has a key role to play in protecting a brand’s reputation.   There is plenty of evidence of what can happen if you don’t see and respond to negative comments.   Indeed, one bad tweet or post can cost you 30 customers (Convergys)

49% of people would be much less likely to buy from a brand which had a page where customer questions went unanswered (Conversocial)

Related to that, a large % of consumers now feel empowered to blast out about companies online (EURO RSCG)

3 – Rather than look at how social media directly drives sales, it is more fruitful to look at how social media can support the whole sales and conversion cycle.

This infographic from Get Satisfaction is a favourite.   This illustrates how social media comes into play all the way from the information gathering stage to converting new customers into fans who will talk up your products and services online

4 – Finally rather than ‘how does social media impact sales’, I actually prefer the question ‘how does social media impact behaviour’, which is much more powerful.

To take one high profile example, there has been a direct link between men taking part in the annual ‘Movember’ campaign and social media activity

(Above image, Martin Deutsch / Featured post image – 401k)

Related articles

• [Infographic] How travel marketers calculate ROI on social media and why the future is mobile (simpliflying.com)
• Is social media marketing central to managing online reputation? (marketing.yell.com)
• Social media is a research tool, not a crystal ball (agbeat.com)
• Publishing Insiders Wrap-Up: Facebook Facts from Social Media Expert Mari Smith (amarketingexpert.com)
• To Stick with your Social Media Program or to Abandon It, That is the Question (worob.com)

Recently, there has been a trend of brands being encouraged to think of themselves as media outlets in their own right.     For example, earlier in the month AdAge published a feature “All brands are publishers”

Many brands and organisations seem to agree.   In these recessionary times, content marketing is one area where money is being spent and its worth looking at a range of research that has been released over the past month to support that fact:

• Slideshare and Columnfive media released an infographic on the power of content marketing (snippet above).  This includes the statistic that marketers are spending a quarter of their budgets on content marketing and 71% of b2b companies are doing more content marketing than last year

• According to IDG, content marketing, which IDG defines as “white papers, case studies, videos, custom websites, video and white papers”, is one of tech marketers top five spending priorities for 2011

• These stats are echoed by the (US) Content Marketing Institute and MarketingProfs.   Nine out of ten b2b marketers are using content marketing, which includes article posting (79%), social media (excluding blogs) (74%), blogs (65%), emailed newsletters (63%), and case studies (58%)

• Another US study, this time from the Custom Content Council (which obviously has a vested interest in the results), shows that 72% of marketers think branded content is more effective than advertising in a magazine, 62% say it is more effective than advertising and 69% say it is ‘superior’ to direct mail and PR

If money is being funnelled into content creation, what are the perceived benefits?    The Content Marketing Institute says it is brand awareness (69%), customer acquisition (68%) and lead generation (67%).

Added to that is of course the effect that a content campaign can have on your search results and traffic.   I’ve written before about the case study of tech company Centerbeam, which created a newsroom and got it listed on Google News, resulting in a 152% increase in landing traffic .

Of course, creating content is the easy bit.

Creating content that is both interesting to your target audience and avoids ramming brand messages down their throats is trickier, and examples such as these 15 best practice corporate blogs featured in Mashable last year, are worth a look for any marketer operating in this area.

Related articles

• 42 Content Marketing Commandments | Content Marketing Institute (affiliatestartingline.com)
• Content Marketing Examples from Home Depot (converstations.com)
• 32% of Businesses Cite ‘Lack of Time’ as Biggest Social Media Challenge (prweb.com)
• How to Jump on the Content Marketing Bandwagon [Infographic] (mpdailyfix.com)
• Proof that online content creation works (liesdamnedliesstatistics.com)

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)

Related articles

• Social Media Consultant or Copywriter? (renwrite.wordpress.com)
• Is Your Social Media Strategy Flash, Fluff or Functional? (concepthubinc.com)
• Make Your Marketing Social by Design (greatfinds.icrossing.com)

In the ever excellent Wall Blog, Gordon MacMillan has commented on a Telegraph piece by Alexis Dormandy of Lovethis.com.   In his Telegraph article, Alexis pointed the finger at generation X marketers for the fact that a lot of businesses are still struggling with social media.

The crux of Alexis’s point is that most marketers of my class learned their craft in the pre social media age, and hence certain skills sets have passed them by.   Maybe so, says Gordon, but at the end of the day what really counts is still having a great idea – citing the Old Spice campaign as an example.

I understand the accusations of age-ism in the comments underneath the article, though I don’t agree that Alexis Dormandy was being ageist.   I also appreciate the dangers of generalising.

Yet, I think there is an element of truth in Alexis’ argument.  And he isn’t the only one who thinks this way, the same point was articulated by none other than Simon Clift, the former chief marketing officer of Unilever, of course one of the largest companies in the world.

Speaking to the FT last year, Clift spoke of a ‘lost generation’ of marketers aged between 30 and 45 – “if you are 25 or 20, you know this stuff….if you are 50 you see your kids do it.   Most of our brands are managed by people who have had to learn it.”

Some have indeed taught themselves the necessary skills.   I can think of a whole range of generation X-ers on the agency side whose social media knowledge and ability is first class (just a few UK examples – here, here, here and here)

But others haven’t.  Certainly 2-3 years ago when social media marketing and management was beginning to evolve, it didn’t in every instance go down well when a 20 something talked social media to someone 15 years their senior.   Things have hopefully changed, but I think the knowledge gap is still partially there.

So to come back to it all needing a good creative.   Yes it does need that.   But as I argued in a post last year it also comes down to understanding measurement, understanding the speed at which things happen online, and knowing the etiquette of different social channels.

Old Spice did work because it was a great idea.   It also worked because Iain Tait, ex Poke London, who moved to W&K, knew how to bring the campaign online.

Gordon MacMillan says that a good agency can compensate for the social media knowledge gap, in the same way that a media buying agency can provide media skills.   Being in an agency myself, clearly I agree, but media buying and planning is not like social media, which are direct communications channels.

As a result, I’d argue that one of the jobs of any agency handling social media on behalf of a client is to help the key members of a marketing and management team skill up and get to grips with online social tools.

The result should be that social media isn’t seen tactically as a channel, but rather something that is embedded into the way a marketing department and an organisation as a whole works.

Image – Russell Davies

Related articles

• When (And When Not) to Automate Your Social Media Updates (hubspot.com)
• Is Your Social Media Activity Putting Your Career at Risk? (moneyning.com)
• Businesses Need to ‘Get’ Social Media (accesscomptech.wordpress.com)

I rarely use this blog to big up work we’ve done at Rabbit, but this is an exception as it’s something I was particularly thrilled about.    It turned something that’s normally seen as an inconvenience – construction hoardings – into a public information point for (London) Gatwick Airport.   And that information is presented in a different way, through giant mobile barcodes.

Eventually a series of these codes (you use the free Stickybits app to scan them) will appear around the airport and together they will form a ‘Gatwick Discovery Tour’ that will bring the airport’s £1bn ($1.58 bn) investment programme to life through images and video.

We deliberately decided to use Stickybits as opposed to the QR codes, because we thought people would respond better to the type of barcode they see day in, day out on household products, and I’m not convinced that most consumers would be able to identify what a QR code is.

Kevin Dugan has used this as the basis of a post where he calls QR codes “marketing’s scan-gasm”:  “QR codes are getting the buzz worthy of a shiny new object, but the consumer’s awareness of barcodes is a great point. There is education required regardless of which you choose, but Stickybits offers the marketer a bit more flexibility and a level of engagement that QR codes seemingly cannot.”

Obviously I’m biased, but I think his conclusion is right – look behind the “shiny new aura” of QR codes.   Might ‘standard’ ones work just as well in supporting marketing activity?

Related articles

• Gatwick Airport Unveils ‘Discovery Tour’ Using Barcodes (thedenveregotist.com)
• QR Codes — Marketing’s Scan-gasm (prblog.typepad.com)
• A Quick QR Code 101 (prsarahevans.com)
• Giant barcodes at UK airport to lead visitors on “Discovery Tour” [TNW UK] (thenextweb.com)
• RedLaser Now Scans QR Codes (mashable.com)

US media strategist and business week columnist Ben Kunz points us to a fascinating case study from US digital agency Organic.

Faced with the constant question every agency in this space is familiar with of “yes, but how does it drive sales?”, Organic hired economist Jason Harper to work in the Detroit office for US car clients.

Instead of scrabbling around with post campaign reports, Harper took a different approach – to predict whether a marketing campaign was hitting targets mid-flow by assessing the level of chatter.

In other words, social media wasn’t evaluated, it was an evaluation tool.

According to MIT’s technology review, a ‘velocity and acceleration’ model constantly measured social media activity and (importantly) the momentum it was gathering as a way to see if a campaign was on track.

As it was, Harper was able to prove that consumers who engaged with one of (auto brand) Jeep’s “online touch points” were twice as likely to schedule a test drive at a dealership.

Image – Darren Hester

Related articles

• Predicting where the social dice will land (thoughtgadgets.com)
• A New Model for Predicting Social Media Impact (technologyreview.in)

Conducted among US Internet consumers, the study showed that 27% of subscribers to an email newsletter were more likely to purchase from a brand while 37% of Twittewr users were.

Meanwhile less than one in five Facebook brand fans (17%) said they were more likely to buy – a surprise considering that 49% disagreed with that statement (which is obviously not the same as saying that they were less likely to make a purchase).

Exact Target has produced a handy chart showing that while Twitter has the lowest reach, it provides the greatest opportunities for customer acquisition.   However, it’s email subscribers who are the most interested in getting discounts, promotions or freebies.

Finally, it’s worth looking at who conducted the survey.

Exact Target is an email marketing system, and Co Tweet is a Twitter management tool…no Facebook app developers involved in the study then.   I’m not suggesting the data is wrong.

A lot of it is definitely interesting, and personally I am a big Twitter fan, but you do wonder if some of the questions were skewed to produce a certain result.

Related articles by Zemanta

• Study Finds Customers Value Email, Facebook and Twitter as Collaborators, not Competitors (eon.businesswire.com)
• Study Finds Twitter Users Three Times More Likely to Impact Brands Online (eon.businesswire.com)
• Smartphones, other mobile devices boost social networks (macworld.com)
• Despite Fanfare, Only 3% of General Public Use Twitter for News (socialtimes.com)

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.

Related articles by Zemanta

• Alterian Survey Reveals Brands Undervalue Customer Service Objectives with Social Media (prweb.com)

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

Related articles by Zemanta

• Marketing Doesn’t ONLY Happen Online (pr-squared.com)
• Going Deeper into Word of Mouth Marketing (brandautopsy.typepad.com)
• 5 Key Benefits of Monitoring Your Client’s Brand on Social Media (mashable.com)

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

Related articles by Zemanta

• Social networks drive online commerce, says study (newstatesman.com)