the new RULESOF ENGAGEMENTMeasuring the power of social currency                in association with:
ContentsForeword.............................................................................................................
FOREWoRD             For marketers, truly understanding your customer is what drives success. But for too long, this      ...
INTRODUCTIONWhat engages consumers? What catches their attention and keeps it? What’s riveting? Whatsends them scuttling e...
Key Findings             Marketers recognize the value of engagement as a way to start and maintain conversations with con...
Spotlight On The MarketerIf metrics aren’t the raison d’être of marketers, then they’re not far from it.The Forbes Insight...
New metrics systems in the realm of big data allow                   Companies are satisfied with what they have now becau...
Disconnects In SocialMedia Usage MeasurementAs many companies continue to move larger portions of their marketing budgets ...
The gap between consumers and marketers was even                  media goals. Take the online provider of retail discount...
our site that one time and then ultimately, leverage our other    time to do these things are likely to be the most invest...
Proactivity Equals Engagement                                                                            Figure 5. measuri...
Constellation Brands’ Breslin. “You have a lot more access          Underscoring this point, about one in three respon-to ...
Spotlight on Consumers             Consumers still gravitate toward traditional media more than any other medium. More tha...
TABLE 2. engagement habits across age groupsDo you ever do any of the following?(Percentage of consumers who answered Regu...
Marketers and Consumers:             Similarities and Differences             The Forbes Insights/Turn surveys have uncove...
Figure 9. Similarities and differencesConsumers                                                          Marketing Executi...
ShopatHome.com:                  Improving A Winning Formula                  If you build it, they will come. And if you ...
GETTING PERSONAL:A MATTER OF DEFINITION—OREXPECTATIONS?Among the largest gaps in company-consumer perspectives is the disp...
BRAND PROACTIVITY:             WHEN IT’S MORE THAN WORD             OF MOUTH             A similar imbalance exists when i...
Boyden and The Horse-To-WaterStrategy For Social MediaProfessional services firms serving other businesses             Hol...
Figure 11. Proactivity             Consumers                                                     Marketing Executives     ...
Gund’s approach to Social Media—How to Teach an Old Dog New Tricks“Gund exists because our products are loved by peo-     ...
IN THE EYE OF THE BEHOLDER:             IS THE AD ENGAGING?             Equally vital, there is a disparity on several fro...
CONCLUSIONFaced with an increasing number of options, in the ongoing competition for consumers’ attention,marketers will d...
Methodology                   Forbes Insights conducted separate surveys of 250 marketing executives and 2,000 consumers. ...
AboutForbes InsightsForbes Insights is the strategicresearch practice of Forbes Media,publisher of Forbes magazineand Forb...
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Forbes Insights+Turn | New Rules of Engagement: Measuring the Power of Social Currency 2012

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A report interviewing 250 marketers and 2000 consumer and showing how they often aren't on the same page about what valuable social media (or even customer service) interactions are. Read my article about it: http://digitaldevotee.com/2012/12/06/consumers-on-what-engagement-really-looks-like/

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Forbes Insights+Turn | New Rules of Engagement: Measuring the Power of Social Currency 2012

  1. 1. the new RULESOF ENGAGEMENTMeasuring the power of social currency in association with:
  2. 2. ContentsForeword....................................................................................................................................................................2Introduction...............................................................................................................................................................3Key Findings............................................................................................................................................................ 4Spotlight on the Marketer................................................................................................................................... 5Disconnects in Social Media Usage Measurement.....................................................................................7Constellation Brands: The Smooth and Humorous.................................................................................. 9Spotlight on Consumers.....................................................................................................................................12Marketers and Consumers: Similarities and Differences........................................................................14ShopAtHome.com: Improving a Winning Formula..................................................................................16Getting Personal: A Matter of Definition—or Expectations?................................................................ 17Brand Proactivity: When It’s More Than Word of Mouth......................................................................18Boyden and the Horse-to-Water Strategy for Social Media.................................................................19Gund’s Approach to Social Media—How to Teach an Old Dog New Tricks...................................21In the Eye of the Beholder: Is the Ad Engaging?.....................................................................................22Conclusion..............................................................................................................................................................23Methodology.........................................................................................................................................................24
  3. 3. FOREWoRD For marketers, truly understanding your customer is what drives success. But for too long, this has been an inexact science, reliant on after-the-fact analysis, qualitative conversations and intuition of the marketer. Turn partnered with Forbes Insights to measure the discon- nect between brands and consumers. And after surveying 250 marketing executives and over 2,000 consumers, it’s clear that what marketers consider to be high-value engage- ment is not always thought of in the same way by consumers. For example, only 15% of consumers who share an ad feel We change the way you make decisions. Turn has invested in a brand, while 49% of marketing executives mea- the technology to deliver real-time data insights, sure sharing ads and other online content as highly influential. giving you control at the moment of decision Yet there is no reason for this disconnect. Every day con- to make smarter, more informed decisions that sumers are taking actions that can be observed, analyzed and translate into amazing campaign performance. acted on. They are telling marketers what they want. The We help brands explore the big picture—and truth is out there and it’s in the data—and to leverage it you take advantage of it. just need the right technology. At Turn, we engineer software that enables data-driven decision making across multiple channels by providing mar- keters with a single, holistic, real-time view of their marketing programs. With Turn, you can stop guessing and truly know which audiences are engaging with you and why. And that does change everything. BILL DEMAS CEO, Turn2 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  4. 4. INTRODUCTIONWhat engages consumers? What catches their attention and keeps it? What’s riveting? Whatsends them scuttling elsewhere? And, perhaps most important, how can marketers measurethese consumer behaviors and act on them? It’s the age-old concern for marketers.The advance of social media has added layers of complexity to The challenge for many companies will be opening them-this challenge. It has given companies more areas of engage- selves up to new methods. To be sure, there are strong signsment to consider. “Likes.” Tweets. Views. Comments. Shares. that companies are seeking new ways to determine how bestReviews. Blog posts. A dizzying array of promotions. Do they to reach the public with the sort of content that leaves posi-all represent engagement, or just passing interest? Or is passing tive and lasting impressions. It is the quality of content andinterest the new engagement? And is this sort of activity some- ability to pinpoint the right place for it that is the inevitablething that should be ignored if it results in the growth of loyal, Holy Grail for marketers. And marketers now seem to realizeactive brand communities and a steady lift in awareness and that their best investment is in resources that can ensure theypositive perception? After all, it’s all in the interest of the brand. make the best possible decisions. “Everyone defines engagement differently,” says Joe Beck y Saeg er, for merCiardullo, chief marketing officer for mobile phone accesso- Charles Schwab CMO and a “Marketers are not on theries retailer Cellairis. “It’s a kind of vacuum that people don’t Turn advisor and board mem-know how to really measure and don’t really know how to ber, notes that over the past 12 same page with theirmonetize. It’s changing every day. What was in today is out to 18 months, she’s noticed that customers when it comestomorrow. So metrics that we’re used to, the ROIs of the past, marketers have really started to the significance ofthe tools don’t always apply. I would say particularly in social to get serious about wrappingmedia and engagement, we’re almost pioneers, so we are forced their heads around what kind social media activities.to think different.” of technology can help them. How can CMOs accurately Equally important is how companies are determining where “They’re saying, ‘I’m on the measure something theyto spend their advertising dollars and how they define measur- hook for return on investment,ing success. The issue of measurement has grown in importance I’m going to do whatever I need don’t fully understand?”as marketers face a growing array of advertising possibilities to do to take advantage of the —PAUL ALFIERIand a widening number of ways to generate metrics. What technology that will help me,’” Vice President of Marketing,system is best for a company? What should it be measuring or says Saeger. Turnprioritizing, and what should be secondary? What software Forbes Insights and Turnoffers the most value? wanted to get to the heart of “Marketers are not on the same page with their customers major issues involving engagement and its measurement.when it comes to the significance of social media activities,” says Through surveys of senior marketing executives and consumers,Paul Alfieri, vice president of marketing at Turn, a marketing as well as in-depth interviews with CMOs and leading expertstechnology company. “How can CMOs accurately measure on marketing trends, the research sought to better understandsomething they don’t fully understand?” how consumers engage with brands and how marketers define Many companies may not be keeping pace with current and measure that engagement. The aim of the project was toimprovements in software that can analyze consumer engage- help marketers achieve higher levels of performance, particu-ment and predict future behavior, suggests a survey conducted larly on the measurement end.by Forbes Insights and Turn. Indeed, most of the survey respon- The Forbes Insights/Turn study discovered that currentdents said that they were satisfied with their current metrics, marketers’ use of metrics offers ample room for improvementalthough the systems for generating them were designed a few in their understanding of consumer behavior, development andyears ago. With the rapidly increasing usage of social media placement of content, and media buying tactics. The reportand an expanding number of ways for companies to reach out also looks at consumers’ definition of engagement and onlineto consumers, conditions have changed vastly. More recent practices. It finds stark differences between how marketers andtechnology can evaluate a wider range of activities, provide consumers define brand engagement, further underscoringbetter, more precise data on engagement and guide future the importance of precisely targeted—and measured—media buys—all this while adapting to continued changes in engagement messaging.social media and beyond. Copyright © 2012 Forbes Insights | 3
  5. 5. Key Findings Marketers recognize the value of engagement as a way to start and maintain conversations with consumers and build long-term relationships. A majority of them say that they acknowledge customer feedback and communicate with consumers via social media (Figure 1). The majority of companies quantify consumer engagement, with more large companies (revenues over $1 billion) saying that they use statistical analysis of marketing initiatives. Engagement metrics fall within the purview of in-house marketers, according to the majority of the Forbes Insights/Turn survey respondents. Lack of knowledge about available measurement technologies may be the reason companies report high rates of satisfaction with current measurement methods. Marketers view consumers’ proactivity via social media as more engaging then consumers do. The inflation of “engagement” in this case has been caused by the ease of social media use and equating online followers with successful marketing. Measurement of social media engagement is an area where CMOs often don’t know what they don’t know. Fundamental disconnects in how marketers and consumers understand and value engagement tactics may cost marketers great opportunities. The biggest schisms are found in approach to redemption rates, discount codes and loyalty programs. Additionally, marketers’ attempts at personalization and customization engage few consumers. This finding may stem from consumers’ high expectations of what true customization and personalization stands for. Consumers identify strongly with brands, particularly younger consumers, who view their relationship with brands as a reflection of self. And they approach and interact with them in a variety of ways, from social media to traditional advertising. They don’t necessarily view this as engagement, however. Rather, their view of how they interact with and relate to brands is much more holistic. A seismic shift in the use of metrics is approaching with the younger generations of consumers. While the current use of metrics to measure engagement seems to inflate and exaggerate the value of fast and easy social media interac- tions, the Forbes Insights/Turn surveys show that these measurement methods are more justified when they relate to younger consumers.4 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  6. 6. Spotlight On The MarketerIf metrics aren’t the raison d’être of marketers, then they’re not far from it.The Forbes Insights/Turn survey found that most com-panies quantify consumer reaction. Nearly two in three Figure 1. Marketers as Relationship Buildersmarketing executives (60%) said that their businesses mea-sured consumer engagement, while another 18% said they Maintain a brand presence on Facebookplanned to do so in the future. Less than one quarter of 80%marketers’ firms did not provide such measurements. Reach out proactively to consumers It is interesting to note that larger companies were 72%more likely to use statistical analysis of marketing initia-tives. A full 66% of organizations with at least $1 billion in Acknowledge customer feedbackrevenue said they use metrics, compared with 48% of com- 61%panies with $500 million to $999 million in revenue. This Maintain a social media presence to communicatesuggests, not surprisingly, that the degree to which metrics with customersare used correlates to the resources a company can afford. 53%Companies’ measurement systems are largely set in-house(Figure 2). Most marketers also indicated satisfaction with theircurrent methods for measuring engagement. But the highrate of satisfaction may, in fact, be misleading. Metricalanalysis of engagement in all its forms, especially in theburgeoning social media realm, is still in its early days.Many systems focus on traditional measures of engagementand a finite number of areas, even as new types of dataare available and new paths to engagement are unfoldingboundlessly—frequently offering deeper insights into whatforges stronger bonds with consumers and what doesn’t. Turn’s Alfieri asks rhetorically: “Can we track all activ-ities to a revenue goal? Are we really satisfied with 80,000‘likes,’ for example?” Copyright © 2012 Forbes Insights | 5
  7. 7. New metrics systems in the realm of big data allow Companies are satisfied with what they have now because companies to literally address their digital media across they don’t know that there are better ways of gathering channels, starting with whom they want to reach, and then information. Quality data management platforms can use software platforms to identify targets and find them now do nothing less than analyze the online behavior of wherever they are in the ecosystem. The sheer quantity a targeted audience, guide media buys across the broadest of higher-caliber information has already transformed possible spectrum of options—video display, mobile and marketing strategies and will lead to even more pro- social media—and provide ongoing feedback on the suc- found change. “We have the capability today to not just cess of a campaign. say, ‘I want to reach people who have household incomes Such a data-driven approach leads to a typological pro- of $75,000-plus and at least $250,000 in investable assets file of people who are not currently customers but are likely and are between the ages of 35 and 50.’ With the technol- to respond to messaging. This can be used not only to hone ogy today, just add in behavioral data, look at what they’re that target audience but also to buy advertising across digital doing online and ideally find people who are even more channels and continuously refine that buy to optimize the likely to respond to the advertising that I’ve put out there, response. “To me, it’s just honing and honing and honing whether it’s mobile or video or display or search or what- the upfront work around defining your target audience and, ever,” says Saeger. therefore, increasing your results on the back end,” says Saeger. FIGURE 2. mEASURING CONSUMER RELATIONSHIPS 66% 48% 79% of companies with of companies with determine revenues over $1 revenues under $1 successful billion use metrics to billion use metrics to management measure consumer measure consumer metrics engagement engagement in-house 60% 65% feel their current have a system or metrics help process in place them understand to try to connect or quantify engagement engagement with financial outcomes6 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  8. 8. Disconnects In SocialMedia Usage MeasurementAs many companies continue to move larger portions of their marketing budgets to onlineresources, they’ve also understandably become more focused on measuring the results.But in this rapidly changing environment, a number of marketers still grapple with what andhow to measure.The Forbes Insights/Turn surveys revealed disconnects Yet such disparities are sometimes reversed. Just 16% ofbetween marketers’ and consumers’ attitudes toward social senior marketers track participation in sweepstakes as a mea-media. Marketers appear to give certain social media sure of engagement, but 41% of consumers enter contests oractivities more weight than consumer participation would sweepstakes sponsored by a brand.merit (Figure 3). It is worth noting that younger consum- At the same time, while 55% of senior marketers useers’ actions match marketers’ expectations more closely. “likes” on Facebook as a metric to measure engagement, only More than half (55%) of the surveyed executives use 30% of consumers say that “likeing” a brand makes them feelthe number of “likes” to measure social engagement, but more connected to it. Again, though, younger consumersjust 41% of consumers said they actually “like” brands— felt differently, with many more of them saying that digitalthough it’s noteworthy that younger consumers’ behavior “likeing” made them feel more connected to the brand—more closely matched executives’ approach, with 58% of indicating a seismic shift in perceptions of brand connectionthose ages 18-24 and 51% of those ages 25-34 “likeing” and engagement that may be occurring as younger consum-brands on Facebook. ers continue to come of age in a world of social media.figure 3. Social Media InteractionConsumers Marketing ExecutivesWhich of the following common interaction activities Which of the following metrics do you use to track and/orapply to you? measure social engagement?“Like” its page on Facebook or follow on Twitter Number of “Like”s on Facebook 41% 55%Follow the posts or tweets shared by the brand Number of Twitter followers 12% 36%Tweet at the brand or post on its wall Number of mentions on Twitter 8% 33%Share content the brand shares through social media like Number of shares on Facebook, LinkedIn, Digg,Pinterest or Facebook StumbleUpon, or any other social media sites 14% 27%Read blogs that discuss the brand Number of mentions on blogs 17% 19%Enter contests or sweepstakes hosted by the brand Participation in sweepstakes on Facebook 41% 16% Copyright © 2012 Forbes Insights | 7
  9. 9. The gap between consumers and marketers was even media goals. Take the online provider of retail discounts and larger in attitudes toward Facebook page fans and fan other services, ShopAtHome.com. The company sees social clubs. While one in three executives measured engage- media simply as a way to start a dialogue that can lead to par- ment partly by counting Twitter followers, just 7% of ticipation in the loyalty programs that are at the core of its consumers said that they felt invested in a brand when they business. It is not concerned whether response to its social followed it on Twitter. This indicates that easy-to-execute media activities meets some definition of full engagement or tasks do not seem like engagement to consumers, but rather not. “Channels like social media are more of an acquisition may simply be part of the modus operandi for social interac- channel, not necessarily a conversion or a retention chan- tion with brands (Figure 4). nel for us,” says the company’s director of online marketing, Some companies have taken likely consumer attitudes Becki Dilworth, who added: “Our thinking is, ‘Let’s try to toward engagement into account in adjusting their social get the consumer over to our site. Let’s try to get them using Table 1 . SOCIAL MEDIA INTERACTION Which of the following common interaction activities apply to you? Total 18-24 25-34 35-44 45-54 55-64 65+ Respondents “Like” its page on Facebook 41% 58% 51% 47% 41% 29% 20% or follow on Twitter Follow the posts or tweets 12% 23% 22% 13% 11% 3% 2% shared by the brand Tweet at the brand or post 8% 16% 14% 10% 7% 1% 2% on its wall Enter contests or sweepstakes 41% 42% 40% 38% 44% 45% 40% hosted by the brand Read blogs that discuss 17% 32% 23% 17% 14% 9% 7% the brand Share content the brand shares through social media 14% 23% 22% 16% 13% 6% 5% like Pinterest or Facebook figure 4. social engagement Consumers Marketing Executives When do you feel engaged with or invested in a brand? Which of the following metrics do you use to track and/or When I… measure social engagement? “Like” it on Facebook Number of “Like”s on Facebook 30% 55% Join its fan club on Facebook Number of friends or fan page members on Facebook 13% 41% Follow it on Twitter Number of Twitter followers 7% 36%8 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  10. 10. our site that one time and then ultimately, leverage our other time to do these things are likely to be the most invested.marketing vehicles to convert them to a repeat shopper.” But the significantly differing views of younger consum- For companies, the lesson may be that while these activi- ers under the age of 34—those who feel more connectedties boost messaging and brand awareness at a relatively low to a brand by “likeing” it on Facebook or following it oncost, and are important measures of consumer interest, other Twitter—are encouraging news for companies that are spend-activities are better signs of true engagement. Activities that ing more on social media (Table 1). Their feedback suggestsrequire more time and energy to execute—such as writing that engagement via simpler tasks may increase in the future,a review and proactively recommending a brand—may be as larger numbers of younger consumers raised in social mediabetter indicators of engagement. Consumers that take the grow older. Constellation Brands: The Smooth and Humorous The nature of digital content may vary widely from looking at that smooth or unsmooth association to get business to business at large companies. Constellation our consumers to interact with that content and drive Brands uses humor to advertise its Paul Masson Grande that engaging dialogue that not only associates with Amber Brandy. This spirit is known for its smoothness. our product characteristics but also brings to life events So Constellation, which has roughly 100 brands of that are happening at that time.” wine, beer and spirits, has emphasized this quality in an interactive, social media campaign. As part of the Breslin says that “social media gives you the ability to roughly yearlong campaign, the company asks con- go back and forth with an audience in ways that didn’t sumers via Facebook to vote exist years ago. It’s through intermittently in light-hearted that conversation that we’re surveys on such questions as able to forge stronger relation- the smoothest comedian, and ships with our consumers and “...social media gives you during the NCAA men’s bas- keep our brand and our prod- ketball championships last the ability to go back and forth ucts top of mind, while also spring, the smoothest team. with an audience in ways that identifying advocates of our didn’t exist years ago.” brand and taking advantage In a separate Facebook appli- of that advocacy to keep the —KARENA BRESLIN cation, Constellation asked its brand front and center.” Director of Digital Media, audience to categorize smooth Constellation and unsmooth images “in or- In contrast, for its Kim Craw- der to detect how smooth ford wines, which come from they are as an individual,” says the Marlborough region of Karena Breslin, director of New Zealand, the company’s digital media for the company. The overall initiative led Facebook posts have taken a different tack, featuring to an estimated additional $500,000 in revenue over the images of natural beauty, such as pictures of vineyards previous 12 months. and people enjoying the wines at elegant events. “It was taking advantage of that smooth characteristic “They create a sense of place associated with the of the brandy and bringing that to life in social media,” product,” says Breslin. “That’s proven to be heavily says Breslin. “We had regular posts that were really engaging to our consumers.” Copyright © 2012 Forbes Insights | 9
  11. 11. Proactivity Equals Engagement Figure 5. measuring consumer Engagement Marketers understandably consider sales as the strongest measure of consumer engagement. Such information gives How does your organization currently measure consumer them the clearest indication that their advertising is hit- engagement? Total Respondents (N=136) ting its target. Nearly six in 10 executives who measure engagement (57%) saw repeat purchases as a measure of Repeated purchase of product or service engagement—far and away greater than any other activ- 57% ity; the other measures marketers use include positive Positive recommendation or review recommendations or reviews (45%), proactive efforts to recommend a brand (45%) and emotional relationships to 45% a brand (42%). Proactive effort to recommend brand Constellation Brands analyzes engagement by look- 45% ing at the quantity of interactions relative to the number of people who have seen a specific post. Then the pro- Emotional relationship to brand ducer of wine, beer and spirits “leverages this data to 42% derive insights around how community members react Proactive effort to demonstrate positive opinion of brand and engage with specific types of content,” says Karena Breslin, the company’s director of digital marketing. She 41% says that the company places high importance on personal First purchase of product or service recommendations made via social media. About nine in 36% 10 of Constellation’s Facebook fans recommend one of its brands to family and friends. “That’s very powerful in our Enrollment in membership or loyalty program industry, recommendations from friends and family are a 30% key driver in wine purchase decisions,” says Breslin (see Proactive effort to connect with brand sidebar, page 9). 29% The Marketing Budget Proactive effort to learn more about brand Companies are allocating the largest portion of their mar- 28% keting spend on social media. Forty-four percent of senior First redemption of coupon or promotion marketers said their organizations spent 10% to 29% of their budgets on online brand building—more than on 17% any other medium, including television (24%), newspapers Repeated redemption of coupons or promotions (24%) and magazines (36%). 14% This is likely to increase, as 44% said that they would spend more on social media in the coming year, while We don’t have a definition 42% predicted they would boost spending on online brand 3% building (Figure 6). These trends applied both to larger and smaller companies, offering strong evidence that regardless of size, firms know they will need to have a strong online marketing presence or risk their competitive edge. The Continued Trend Toward Social Media Although it has been a major force for less than a decade, social media is now the top online tactic—and is likely to remain so, as demonstrated by the 58% of executives who plan to use more social media as part of their mar- keting tactics in the coming year (Figure 7). A growing number of companies believe that social media enables them to keep in better touch with consumers’ preferences. “There are a lot of benefits to social media—to having that conversation with your consumers and community,” says10 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  12. 12. Constellation Brands’ Breslin. “You have a lot more access Underscoring this point, about one in three respon-to real-time input and information from your consumers, dents said that they do not enable sharing of content orand that allows us to adapt and evolve more quickly than promotions on any social media sites. Clearly, even thosewe could in the past.” companies that have made a commitment to social media are still wrestling with what to make of it.Facebook Is Dominant Also, there is clearly significant room for growth inIn their use of social media, companies are spending more the use of mobile devices. Just 40% of marketers said thaton Facebook than on other sites—50% of executives said their companies had created a tablet app, while only 39%that this was the case, far more than on any other resource. said that their organizations had a smartphone app. LargerThat said, 31% said that they don’t spend any money on companies were more likely to have both.social media. This may reflect an inability for some com-panies to recognize the social network’s importance as amarketing tool, or simply a lack of resources to study socialmedia effectiveness.Figure 6. SPEND TRENDS: ADVERTISING BUDGETS Figure 7. Online tacticsOVER THE NEXT 12 MONTHS How do you feel your use of these tactics will shift in the next(Percentage of respondents who said more will be devoted to 12 months? (Percentage replying More) Total Respondentsthe following areas) Total Respondents (N=250+) (N=250+)Social media Social media 44% 58%Online brand building SEO 42% 29%Online direct response Email newsletters 36% 25%Mobile Paid search marketing 33% 25%Direct mail Display advertising 9% 24%Television 9%Radio 6%Magazines 5%Outdoor 4%Newspaper 3% Copyright © 2012 Forbes Insights | 11
  13. 13. Spotlight on Consumers Consumers still gravitate toward traditional media more than any other medium. More than nine in 10 respondents said that they watch television, while more than eight in 10 read ads in maga- zines or newspapers. Yet digital also figures largely in consumers’ viewing habits. More than half watch ads on online video sites. A similar percentage forward ads to friends and colleagues. And at the same time, signs point to a seismic shift in the extension of their personalities and character, 62% and 58%, coming years, when digital formats will largely replace the respectively, of those ages 18-24 and 25-34 said the same. more traditional platforms among younger consumers. Likewise, younger consumers know what suits them. The younger the consumer, the likelier he or she is to While 47% of the total respondents said that the brands they watch and participate in social media marketing. At the same use are an accurate reflection of their character, 63% and time, younger consumers are less likely to act on ads they 58%, respectively, in the 18-24 and 25-34 age groups said see in print and more likely to skip television ads. Aware of the same. these trends, particularly the cultural mindset to avoid tele- Nearly half of consumers would make a brand they care vision commercials, companies may continue moving more about part of their image, and younger consumers were far resources to digital and social media (Table 2). likelier to believe that a brand is an important part of their personal identity, and want to share it with others. About half What Resonates For Consumers of the respondents between the ages of 18 and 44 agreed that Consumers respond most favorably to humorous or clever someone can tell a lot about a person based on the brands they ads. But timing matters even more: they also are more use—a higher percentage than the other age groups com- likely to engage with an ad for a product they’re already bined. A full 50% of consumers in the 18-24 age group agreed considering purchasing. that they use brands to convey the personal image they’d like, For younger consumers, brand matters most. While 44% compared with just 36% overall. of total consumers consider the brands they use to be an12 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  14. 14. TABLE 2. engagement habits across age groupsDo you ever do any of the following?(Percentage of consumers who answered Regularly or Occasionally) Total 18-24 25-34 35-44 45-54 55-64 65+ Respondents Watch ads or commercials 94% 92% 94% 96% 94% 95% 91% on TV Read an ad in a magazine 86% 80% 86% 87% 85% 88% 87% or newspaper Purchase something because 86% 81% 87% 86% 87% 89% 84% you learned about it in an ad Search for promotions or discount codes for things 85% 87% 89% 87% 86% 82% 77% you want Visit a website or store 83% 84% 88% 86% 85% 84% 72% based on an ad Join membership 80% 71% 86% 87% 79% 77% 76% or loyalty programs Read email alerts or updates on special deals from 80% 74% 82% 83% 83% 81% 73% advertisers Discuss particularly funny, interesting, or resonant ads 79% 85% 85% 84% 79% 77% 68% with friends or family Click on an ad or video 60% 63% 68% 63% 62% 56% 48% on a website Skip ads using DVR 57% 61% 69% 65% 53% 48% 47% Forward a particularly funny or interesting ad to friends 56% 68% 71% 62% 52% 48% 37% or colleagues Watch ads or commercials on YouTube or other online 53% 82% 73% 62% 47% 39% 19% video sites Copyright © 2012 Forbes Insights | 13
  15. 15. Marketers and Consumers: Similarities and Differences The Forbes Insights/Turn surveys have uncovered some fundamental disconnects between marketers and consumers that serve to undermine a deeper understanding of “engage- ment.” The two groups differ fundamentally in how they define the state of engagement with a brand; what companies consider engaging is not considered anywhere near so by consum- ers. But this also cuts both ways: some activities that consumers consider highly engaging are seen as less important by marketers. This may be costing companies great opportunities to engage consumers. For example, less than half (45%) of senior marketing exec- that incentives represent a lesser, shorter-term form of utives rated consumer redemption rates of promotions or engagement. The consumer becomes engaged with the discount codes as a strong influence on their measurement brand because he or she has the possibility of receiv- of engagement. Just one in five marketers said that their ing something he or she values. But incentives do not organizations actively offered promotion codes or discounts. create the sort of deeper, long-range engagement that But 85% of consumers said that they searched for promo- companies crave. “As soon as I get my promotion, my tions or discount codes for things they wanted (Figure 9). engagement goes away,” says Chernev. “It’s low-hanging Likewise, 44% of executives said that membership in fruit to nearer-term engagement. Consumers want incen- loyalty programs was a strong influence on engagement tives, but managers who think long-term should know measurement—while 80% of consumers said that they that this sort of engagement is not sustainable. They have joined such programs. One company that clearly under- to think about how to maintain the engagement after the stands where the consumers’ hearts are—and how to reach incentives have gone away.” them—is ShopAtHome.com, an online provider of dis- This data underscores the ver y real differences in count coupons and loyalty programs (see sidebar, page 16). how marketers and consumers def ine and value various There were also wide discrepancies in the importance types of brand engagement. Engagement in and of itself of email alerts/special deal openings, discussions/mentions has changed in recent years, as increasing amounts of on social media sites, and views of ads or commercials on marketing activity shift online—and again, particularly, YouTube or other online video sites. A far smaller percent- as social media becomes more integral to consumers’ age of marketers considered these activities vitally important daily lives. to engagement than the percentage of consumers who said In some cases, what was once a special activity signify- they took part in them. ing attachment to a brand is now considered commonplace A lexander Cher nev, a professor of marketing at behavior. In other instances, even longstanding best prac- Northwestern’s Kellogg School of Management, says tices do not strike the same nerve they once did.14 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  16. 16. Figure 9. Similarities and differencesConsumers Marketing ExecutivesDo you ever do any of the following? How strongly does each of the following influence(Percentage of consumers who answered Regularly or Occasionally) your engagement measurement?Search for promotions or discount codes for things you want Redemption rates of promotions or discount codes 85% 45%Join membership or loyalty programs Membership in loyalty programs 80% 44%Read email alerts or updates on special deals Open rates on email alertsfrom advertisers or updates on special deals 80% 52%Watch ads or commercials on YouTube or other online Views of ads or commercials on YouTubevideo sites or other online video sites 53% 31%Discuss particularly funny, interesting, or resonant ads with Discussions/mentions onfriends or family social media sites 79% 58%Forward a particularly funny or interesting ad to friends or Forwards or shares of ads or othercolleagues content online 56% 49%Visit a website or store based on an ad Website visits 83% 78%Purchase something because you learned about it in an ad Purchases of products/services 86% 83%Click on an ad or video on a website Clicks on an ad or video on a website 60% 62% Copyright © 2012 Forbes Insights | 15
  17. 17. ShopatHome.com: Improving A Winning Formula If you build it, they will come. And if you offer them back programs, largely because it was concerned that deals or promotions, consumers will flock to you. consumers would not understand them completely or Consumers using the Internet, just like consumers in trust their authenticity. “Our messaging used to be more traditional areas of retail, are always looking for very heavy on coupons because we knew that people deals. The discount, promotion or loyalty program understood coupons,” says ShopAtHome.com Direc- with attractive perks can tor of Online Marketing engage them more strongly Becki Dilworth. “Cash-back than other types of content, was very much of a second- as the Forbes Insights/Turn ary communication.” “Ten percent from a revenue surveys show. perspective is fairly significant But the company had a But even an organization in our books. It can really hunch that it was not do- built on this dynamic of offer- ing everything it could to change the bottom line.” ing coupons and cash-back attract potential custom- rewards, as is ShopAtHome. —becki dilworth ers. Some consumers didn’t com, can find ways to im- Director of Online Marketing, know about the cash-back prove its ability to engage ShopAtHome.com programs, so they couldn’t an audience by finding new sign up for them. In its new ways to package or promote messaging, ShopAtHome. its products and services. com combined information ShopAtHome.com’s main about the two—coupons social media challenge has been drawing individuals and cash-back—more closely. It quickly found that to its website, where it lists its offerings. The company “they’re better together,” Dilworth says. has found that once consumers are there, they are likely to embrace ShopAtHome.com’s model, which provides ShopAtHome.com has quickly seen positive results. regular coupons and cash back to members. The percentage of consumers who clicked through in- creased by roughly 10%. “For us that means we saw Yet ShopAtHome.com was not satisfied that it was an increase in the amount of engagement that we had drawing in enough customers. In mid-2012, it launched from users wanting to use a coupon, get cash back, a redesign of its website and recast its messaging. Pre- or most likely, the combination of the two,” Dilworth vious communications heavily emphasized the store says. “Ten percent from a revenue perspective is coupons that the company awarded. ShopAtHome. fairly significant in our books. It can really change the com was more understated about presenting its cash- bottom line.”16 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  18. 18. GETTING PERSONAL:A MATTER OF DEFINITION—OREXPECTATIONS?Among the largest gaps in company-consumer perspectives is the disparity of viewpoints on apersonal connection: 72% of marketing executives say that they have personally reached out tocustomers, but just 9% of consumers say that they feel engaged or invested in a brand becauseof such gestures. The personal connection has been a cornerstone of marketing strategy.Does this discrepancy mean that consumers no longer insight from my perspective that consumers would feel directappreciate the personal touch and that marketers are on contact from marketing departments is needed,” Hollett says.the wrong course? Or does it indicate that the defini- “They are touched constantly from the numerous marketingtion of personal touch has changed? Do marketers consider activities that occur, pre-sell, sell and post-sell.”the Facebook posting, tweet or pre-written promotion sent But Hollett adds that the very definition of person-to thousands of people to be “reaching out”—or is it just ally reaching out is not entirely clear. “What exactly is thean easy way for a brand to check off the box and say it is perceived desire, that marketers call them directly?”doing so? While 35% of marketers said that their companies Boyden global executive search’s CMO, Gray Hollett, encouraged consumers to customize products, just 15%understands the customer perspective in the business-to- of consumers (and 24% of those ages 18-24) said they feltbusiness world (see sidebar, page 19). Boyden is a professional engaged or invested in a brand when they were able toservices firm whose sales depend largely on its consultants’ do so. This may be another case of differing definitions:personal relationships with other businesses. But Hollett “customization” to a marketer may mean something as simplebelieves there are many touchpoints and is intrigued about as choosing from a range of different colors; to a consumer, itdirect outreach with consumers. “It is kind of a surprising may mean something far more extensive.Figure 10. CONSUMER FEELINGS OF ENGAGEMENT VS. MARKETER ACTIVITYConsumers Marketing ExecutivesWhen do you feel engaged with or invested in a brand? Do you (or a member of your marketing team) ever do any ofWhen I… the following?Receive a personal note from someone Reach out to customersconnected to the brand personally 9% 72%Am able to customize items from the brand Encourage or enable customers toto reflect my own personality customize products or services 15% 35% Copyright © 2012 Forbes Insights | 17
  19. 19. BRAND PROACTIVITY: WHEN IT’S MORE THAN WORD OF MOUTH A similar imbalance exists when it comes to consumer proactivity—an area highly prized by marketers. The advent of digital media in general and social media in particular has made it eas- ier than ever for consumers to proactively discuss, share or recommend a brand. It’s just not as difficult as it used to be; consumers don’t have to make much of an effort—or be as committed to a brand—to spread their feelings. But there are also serious disconnects in how senior market- in a positive way. And if not, we’ll take a negative situa- ers view proactive efforts by consumers and when consumers tion and make it positive, which can actually generate even feel engaged. Indeed, 58% of marketers rated discussions/ more engagement.” mentions on social media sites as a strong influence on their However, some marketing experts—such as Diane engagement measures, but just 24% of consumers felt engaged Hessan, chief executive officer of Communispace, the con- when taking part in these activities (Figure 11). One com- sumer insights agency, which manages online communities pany that seems to have found a way to truly connect with for over 100 major brands—believe that marketers have its consumers via social media is the teddy bear manufac- become too casual about stamping some metrics with the turer Gund (see sidebar, page 21). “engagement” title. This may stem from being overly con- Does it matter whether consumers feel engaged with a cerned with volume. Some organizations still equate numbers brand? If they fall short of marketers’ level of the definition of online followers with successful marketing. of engagement but are still proactively spreading positive “Because it’s sometimes difficult to measure real engage- vibes, they are serving as brand ambassadors with all the ment, we have lowered the bar on what’s truly working,” resulting benefits for the company. At that point, it may says Hessan. “If I click on a Facebook ad by mistake, that’s be just a question of semantics—simply because marketers not engagement. If I sign up on your Facebook fan page call it “engagement” and consumers call it something else or your company website, largely because I’m looking for doesn’t mean it’s not still effectively achieving the goals discounts, that’s not the same as what happens when people marketers want. Engagement by any other name may still are truly connected to your brand.” create a desired effect. Many marketers agree on one point: They’d rather have “Word of mouth has changed,” says Cellairis’s Joe a smaller committed following than a larger group of more Ciardullo. “Word of mouth has become social. In the old casual fans. “I use the word social currency. How do you days, my dad used to go to a barbershop and sit down and measure a ‘like’?” says Ciardullo. “I have different denomi- talk for 10 minutes before he got his haircut to the six or nations of how to pay. I have a ‘like,’ I have a tweet, I have a seven guys in the room. That was word of mouth. ‘Hey, ‘follower,’ I have an email. Somebody gives me their email don’t go to this place to get your car fixed; they won’t do a address; Instagram, someone is posting pictures. So if that’s good job.’ Today, that very same experience will be tweeted the currency, if those are the different types of money that out or posted socially on Facebook in a matter of seconds. people can give me, their phone or social currency, sure, If you have a bad experience with a customer, that could ‘likes’ are important. [But] I’d rather have a smaller, stronger be seen by your entire base within moments. That engage- base versus this large crazy base that isn’t very active, because ment rate is this ongoing word of mouth, so to speak. It’s that’s telling me that they may not be potential customers.” important that our brand is being actively talked about, and then secondarily, depending on what the topic is, hopefully18 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  20. 20. Boyden and The Horse-To-WaterStrategy For Social MediaProfessional services firms serving other businesses Hollett tries to give Boyden consultants and indi-face their own unique set of circumstances. They must vidual offices flexibility in their individual use of socialmaintain a strong corporate brand but also allow their media but also creates guidelines to ensure that they areconsultants to forge their own individual brands. The acting consistently with the corporate brand. This tasklatter may be equally or even more important than the is complicated by Boyden’s vast global presence—former in certain aspects of relationships. “I think that in offices in 43 countries.many cases, in a consultativeenvironment with clients, cli- “A lot of professional servicesents often don’t understand have this problem,” Hollettthe corporate brand at all, says. “You have a corporate “I think that in many cases inbut they actually have a per- brand, and then you havesonal relationship with the a consultative environment a regional or local brand,person who is delivering the with clients, clients often don’t and then you have the in-services to them,” says Gray understand the corporate brand dividual brands. Getting allHollett, CMO of Boyden glob- of those things to mesh is aal executive search, a leading at all, but they actually have a very difficult task. In a de-executive recruiting firm. “So personal relationship with centralized organization likethat [individual] brand is very the person who is delivering Boyden, you don’t have thatstrong. It’s a challenge for or- opportunity. What you have the services to them.”ganizations, and you see how to do is create a strategy thatservice organizations over —Gray Hollett gets the associates to say,the years have tried to get CM0, ‘Okay. That makes sense.’beyond that challenge, how Boyden Global Executive Search We call it the horse-to-waterto deal with it, because those strategy here. Our whole ob-billing associates often move jective is to educate the firm,from company to company.” firm-wide, on the value of a strong core brand in the mar-Boyden’s recruiters place senior-level executive positions ketplace, recognizing that they [individuals] also have aacross a range of functions and industries. It’s important strong brand, and getting them all to work together. Thefor consultants to maintain a strong presence in their cov- way we do that is by creating really cool things that theyerage areas—to stamp themselves as experts who can want to participate in to further their business develop-pinpoint the type of leaders that will help Boyden’s cli- ment activities and to further their conversations withents grow. Individual offices in different parts of the world prospects and clients.”may also conduct their own social media outreach andmarketing activities. Copyright © 2012 Forbes Insights | 19
  21. 21. Figure 11. Proactivity Consumers Marketing Executives When do you feel engaged with or invested in a brand? How strongly does each of the following influence your When I… engagement measurement? Share an ad Forwards or shares of ads or other content online 15% 49% Discuss an ad Discussions/mentions on social media sites 24% 58% Reach out to someone connected with the brand Proactive effort to connect with brand 7% 29% Sign up for special deals Subscribers to email alerts, newsletters or other loyalty or email updates program communications 41% 63% Convince others to use the brand Proactive effort to recommend brand 24% 45% Discuss the brand with friends, family or other fans Proactive effort to demonstrate positive opinion of brand 29% 41% Seek out the brand proactively Proactive effort to learn more about brand 29% 28%20 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  22. 22. Gund’s approach to Social Media—How to Teach an Old Dog New Tricks“Gund exists because our products are loved by peo- Gund has also found a way to turn social media into aple,” says the company’s president, Bruce Raiffe. “We source of ideas for products with audiences already builtdon’t make a stuffed toy, but in. An example is a Gundrather, make a product that character based on a real dogthey love to own, love to that lives in San Francisco, agive—an affordable luxury. “We don’t make a stuffed toy, Pomeranian named “Boo,”So in our dialogue with our but rather, make a product that who had 1 million friendsconsumer, we support the on Facebook before thevalue of our brand.” they love to own, love company approached its to give—an affordable luxury. owner. The number of Boo’sThe company has seen the So in our dialogue with our friends has since risen tostrongest consumer con- 5 million.nections to campaigns that consumer, we support thegive the public a say in nam- value of our brand.” Gund is privately held anding and designing particular does not share informationproducts, or more recently, —bruce raiffe about the financial benefitto drum up votes for a new President, Gund of such initiatives. However,animal in a trade magazine’s Raiffe says that his companytoy of the year contest. The does “look at financial returncompany primarily uses for the efforts. And I wouldFacebook, Pinterest and Twitter to promote such activi- say we definitely harvest from social media a lot moreties, along with its own website. than we sow.” Copyright © 2012 Forbes Insights | 21
  23. 23. IN THE EYE OF THE BEHOLDER: IS THE AD ENGAGING? Equally vital, there is a disparity on several fronts between what senior marketers and consum- ers consider effective advertising, particularly the importance of humor. Just 14% of marketers said that they developed campaigns or initiatives aimed at being intentionally humorous or irreverent. But 67% of consumers said that a funny ad made them take notice (Figure 12). The Kellogg School’s Alexander Chernov says that this Communispace’s Hessan suggests people laugh often gap may stem in part from the daunting task of creating because an advertisement means something to them. In content that is truly humorous. “It’s not that ad agencies some cases, they may have faced a similar situation, can lack an awareness that humor is effective,” Chernov says. imagine the possibility or would like to. “I think that “Humor is personal, easy to judge, which may make the humor works because it can be a surrogate for relevance,” ad agencies reluctant to use it. A humorous campaign that‘s says Hessan. “People laugh when something resonates with not well done can backfire. The quality of the content is them. They’ll say, ‘You know, that brand really, really the key.” understands me. I just looked at that ad, and that was funny A recent series of online videos featuring the HBO to me.’” comedy series character Kenny Powers, as played by actor On the other hand, marketers overestimated the impact Danny McBride, was an Internet sensation. Korean auto of ads designed to stir emotions—28% of them said that manufacturer Kia earned some chuckles with a commercial they had created campaigns of this type, but only 19% of that featured hamsters. Dos Equis continues to draw notice consumers said emotionally resonant ads grabbed their with its Most Interesting Man series. attention. figure 12. In the Eye of the Beholder Consumers Marketing Executives What makes you notice or pay attention to an advertisement? Do you or your marketing team ever develop marketing campaigns or initiatives aimed at doing any of the following? It’s funny Intentionally humorous or irreverent 67% 14% I find it moving or emotionally resonant Intended to be moving or emotionally resonant 19% 28% My friends or family have forwarded it to me Intentionally for viral purposes 19% 14% It’s thought provoking Intended to be thought provoking 33% 37% It’s well designed or particularly eye-catching Intended to be well designed or particularly eye catching 50% 49%22 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  24. 24. CONCLUSIONFaced with an increasing number of options, in the ongoing competition for consumers’ attention,marketers will depend increasingly on their ability to statistically understand individual behaviorand predict where they will get the most value for their media spend. Newer systems representa major improvement over their predecessors, and that trend will undoubtedly continue, if onlyto keep pace with companies’ needs and the continued migration of advertising to the Internet.In the world of big data, marketers now can get closer to the respondents in the marketing executives survey saidtruth of how consumers are engaging with brands. Metrics that they were satisfied with their current systems forwill offer marketers a deeper knowledge of the emerg- generating metrics. The challenge for companies whoing power of social media. For example, they will help create this improved software will be to demonstrate itscompanies determine how they may make the best use of effectiveness.Facebook, which remains the site of choice for consumers Better use of such technologies will allow companiesto engage with brands. At the same time, they will also offer to see more eye-to-eye with consumers, as the Forbesinsights across a wide range of channels, including video Insights/Turn surveys revealed some areas where mar-and display advertising. This will give companies improved keters’ programs seem to diverge from what consumerscontrol of their campaigns. The survey results suggest that are looking for. Among the areas that may benefit frommarketers need a higher vantage point—a dashboard to see more effective use of measurement are the value thathow all the touchpoints contribute to growing a brand or companies place on the more mechanical aspects of inter-driving to purchase. As we move into a world where big action—Facebook “likes” and content sharing—versusdata is the norm, platforms that take advantage of all avail- the value placed on discounts and promotions, and theable data and can measure and promote engagement across opportunity for consumers to participate in such areas aschannels in a unified way will deliver substantial value to product design.brands wise enough to invest in them. Proper measurement will lead to understanding and, as Yet many companies are not aware of the capabilities a result, more effective monetizing of engagement.of the newer technology. That may be why 60% of the Copyright © 2012 Forbes Insights | 23
  25. 25. Methodology Forbes Insights conducted separate surveys of 250 marketing executives and 2,000 consumers. More than 99% of the executives were U.S.-based. Nearly two in three were from companies with revenues of at least $1 billion, and one in four of them from companies with at least $10 billion in revenue. Nearly nine in 10 companies said their firms had at least 2,000 employees. The consumer survey polled 2,000 U.S.–based individuals, age 18 and up, projectable across U.S. income, age and other demographics. ACKNOWLEDGMENTS Forbes Insights would like to thank the following people for contributing their thoughts for this report: Joe Ciardullo, CMO, Cellairis Paul Alfieri, Vice President, Marketing, Turn Becky Saeger, Former CMO and Marketing Consultant, Charles Schwab Karena Breslin, Director of Digital Marketing, Constellation Alexander Chernev, Professor of Marketing, Northwestern’s Kellogg School of Management Becki Dilworth, Director of Online Marketing, ShopAtHome.com Gray Hollett, CMO, Boyden Diane Hessan, Chief Executive Officer, Communispace Bruce Raiffe, President, Gund Billie Goldman, Co-Marketing Manager, Intel Special thanks: S.I. Newhouse School of Public Communications, Syracuse University, for their support and partnership.24 | THE NEW RULES OF ENGAGEMENT: MEASURING THE POWER OF SOCIAL CURRENCY
  26. 26. AboutForbes InsightsForbes Insights is the strategicresearch practice of Forbes Media,publisher of Forbes magazineand Forbes.com. Taking advantageof a proprietary database ofsenior-level executives in theForbes community, Forbes Insights’research covers a wide range ofvital business issues, including:talent management; marketing;financial benchmarking; riskand regulation; small/midsizebusiness; and more.Bruce RogersChief Insights OfficerBrenna SnidermanSenior DirectorChristiaan RizyDirectorKasia MorenoEditorial DirectorJames Peter RubinReport AuthorDianne Atheydesigner 60 Fifth Avenue, New York, NY 10011 | 212.366.8890 | www.forbes.com/forbesinsights

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