Social media and Germany - realising the value


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We were asked to talk to the Board Members of the VKE Kosmetikverband in Dusseldorf, Germany. The members comprise senior executives from companies such as Chanel, Estee Lauder, Clarins, and Coty.
The question we were asked to answer was " If you were in our shoes, why should we invest in social media?

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Social media and Germany - realising the value

  1. 1. Thank you and intro’ 20 minutes CLICK NOW FOR NEXT SLIDE What do we do? 1
  2. 2. We are a specialist beauty media insight company and tell brands what’s being said about them on social media and in print media. In terms of print media as you can imagine with over 4,000 brands active in the market it’s impossible for a marketer to keep track of them all. So what we do is collect data on every single beauty brand in terms of their print advertising and PR activity and give our customers the whole market. We took these learns in print and developed our social media service. We monitor over 70 million website, globally in 20 languages in real time. Our expertise has meant that we have become the UK beauty industry’s standard for this type of social and print media research. We have since taken that expertise into Australia, and now Germany, and working with Melanie we have fortunately already agreed contracts with 2 major German based beauty companies. CLICK NOW FOR NEXT SLIDE Who do we work with? 2
  3. 3. These are some of our bigger UK clients And this is what one or two clients have kindly said about us CLICK NOW FOR NEXT SLIDE What do they say about us? 3
  5. 5. Thomas Schnitzler asked me if I was in his shoes why would I invest in social media? CLICK NOW FOR NEXT SLIDE How de we get value? 5
  6. 6. How do we get value out of social media and see the return on investment? I will answer that and give some example of how successful social media marketing can be, but I must emphasise that we all have common challenges, we’re all in this together in that the final objective is to always sell more products. So as a start point in answering Thomas’ question, I went out and asked my colleagues and friends in the beauty business what the word ‘marketing’ meant to them. CLICK NOW FOR NEXT SLIDE What is marketing? 6
  7. 7. It’s the art of selling”….is what Kenneth Green said in answer to my question. Michelle Feeney : CEO PZ Cussons Beauty answered by saying “We ask ourselves that question every day and the answer has morphed and changed. Right now it’s about understanding who you need to speak to. Where they are. What they’re interested in. Creating mechanisms and ways to tell your story. It’s gaining and keeping fans. I also asked whether beauty is any different from any other consumer product when it comes to marketing. Kenneth said “it’s about touching people intimately. You need to understand the fulfilment and emotion of the products”. Blake Hughes the MD at E Arden UK said it’s about “Selling emotions “ and added that “with fragrance you are selling a mood”. CLICK NOW FOR NEXT SLIDE The Difference 7
  8. 8. So how does social media fit into all that? CLICK NOW FOR NEXT SLIDE What’s different? 8
  9. 9. I have been talking to my beauty clients about the importance of social media since early in 2008 and it is only in the last 18 months in the UK that we have seen so many brands beginning to embrace it. However there is no magic about social media and let’s not lose sight of the end game in that it’s about selling and Michelle Feeney’s view is that “Social media is just another marketing platform” And my view is that the one thing that hasn’t changed as far as marketing is concerned is that for a message to be more effective it needs to be delivered from as many platforms as possible. Social media should be one of those platforms. Quite simply, online media works better when combined with offline and offline works better when combined with online. But one thing that HAS changed is the way that the consumer buys, they are taking control through the internet now more than ever. As you know they can review and exchange information and thoughts on just about any product and can share those thoughts across the globe in real time. 9
  10. 10. CLICK NOW FOR NEXT SLIDE What’s different (magnet) 9
  11. 11. As the consumer becomes more media aware they have come to expect to have a relationship with a brand, and in response marketing is changing in that it’s about consumer-attract rather than brand-push and social media is the perfect vehicle for “selling emotions and touching people intimately”. But I am sure that you all know this already and I want to tell you more about what I mean with a real and possibly surprising example CLICK NOW FOR NEXT SLIDE What’s different VW 10
  12. 12. Concluding with the memorable tag line “We pluck the lemons; you get the plums,” this famous Volkswagen ad from the 60’s teaches us a lot about social media and teaches me that as beauty marketers you already know a lot about reaching out to your target market. By calling their own car a lemon, VW related to the reader on a personal level. VW is not a faceless corporation imploring you to spend more, but a company that has real people rejecting cars for something as minor as a hair line scratch in the windshield. The ad relates to the consumer in a direct, personal way, to the point and with humour. The ad was a breakthrough in product-to-consumer relations, and social media is all about customer relations and starts before you’ve even got a customer. Let’s dissect that ad a bit more, then talk about fishing. It relates to the reader on a personal level by talking to them. It respects their intelligence as real people. It’s understood that they’ll ‘get it’. It uses humour, it’s personal, it’s direct. Social media does the same thing. For the word ‘direct’, transpose ‘engage’, and there is no doubt that humour always attracts people to you and social media is the perfect vehicle with which to do that. 11
  13. 13. So what’s new? Nothing really. It’s just the platform from which you can deliver your message is different, and can potentially reach the whole world. When it comes to swaying consumers, nothing beats word of mouth. 92% of people trust recommendations from friends and family when making a purchase decision. That’s a great stat if you’re a friend, but being liked on Facebook isn’t the only way to make friends. How do we make friends? We have common views and experiences, we share ideas and thoughts, we are like-minded. A conversation over coffee can range from fishing to shopping to holiday to the weather, in the time it takes to say cappuccino. We like fishing but we like other things as well and social media allows us to eaves drop in on all of that. We listen to a friend because we are aligned. We like their personality and we listen to their recommendation because we trust them. A brand is never going to be a true friend, how can it be? However it can create a personality but beware, consumers are savvy and their antennae is on the alert for when that conversation moves from a friendly chat to ‘buy this’. However a brand can have a personality and a consumer will identify with that personality and will want to get aligned in some way. They may even buy it, like it, and tell someone else. CLICK NOW FOR NEXT SLIDE The Audience 11
  14. 14. Let’s look at some top line stats for Germany CLICK NOW FOR NEXT SLIDE Who’s out there? Germany 12
  15. 15. With 83% of Germans using the internet and over 30% of the population using Facebook there is no doubt that the web is widely used in this country. In fact, 67 million people, in Germany are now using the internet and 25 million people are on Facebook, and we can look at that in more detail now. CLICK NOW FOR NEXT SLIDE Who’s out there? Germany (Facebook) 13
  16. 16. Facebook is a good indicator as to the health of the German appetite for social media, even though it’s notable that Facebook does not dominate the German market quite in the way it does as in so many others countries. But the interesting point for beauty is that the profile, highlighted in red, is skewed towards the typical beauty consumer. CLICK NOW FOR NEXT SLIDE Who’s out there? (Likes) 14
  17. 17. And for beauty brands the good news is that 80% of all Facebook users, not just Germany, prefer to get in touch with a brand through this social site. Nielsen’s latest Global Online Consumer Survey of over 25,000 Internet consumers, from 50 countries, endorses what I said earlier and tells us that recommendations from personal acquaintances, or opinions posted by consumers online are now the most trusted forms of advertising. But I do say that it does not have to be all about Facebook and I’ll come onto that later. CLICK NOW FOR NEXT SLIDE Who’s out there? Germany 15
  18. 18. If we look at German social media users as opposed to general internet users it is estimated that the usage will increase from 32 million people this year to just under 40 million in 2017 which means that nearly 50% of the population will then be interacting in some way with a social media site. And to help us there is a great deal of information from which we can understand how consumers use social media. CLICK NOW FOR NEXT SLIDE Who’s out there? USA women 16
  19. 19. There is no doubt that the USA is ahead of the world with social media usage so it’s worth looking at some numbers and see how they might relate to the core beauty target market of women, because the learnings from the USA do have relevance for the European market Please note that this is all products and not just beauty. 55% of daily active social media mums said they made their purchase because of a recommendation from a personal review or blog 78% of women in the US use the Internet for product information before making a purchase 92% pass along information about deals, promotions or things they’ve found, to others CLICK NOW FOR NEXT SLIDE Who’s out there? UK Beauty 17
  20. 20. Those number from the US were for all products not just beauty but the number of people interacting with beauty brands online in the UK is now at 15 million and you can see how just one brand, Clinique, can generate a huge number of conversations in just one week. This is based on a top line search we undertook of any site globally using the English language. CLICK NOW FOR NEXT SLIDE Online v Social 18
  21. 21. At this point I would like to step back from the numbers and make a clear differentiation about social media CLICK NOW FOR NEXT SLIDE What does social mean? 19
  22. 22. Social media is the ‘catch all’ phrase for Twitter, Facebook, Pinterest and so on, but also is used, incorrectly, to include the bloggers, e-zines, publications as well as all the other news sites. Incorrectly because the latter are not really social sites in the true sense. They’re news sites and media platforms. They’re not ‘social’ media in that the audience doesn’t engage in the same way that they do with a social site. We prefer to differentiate and call that group ‘online’ or ‘digital’ CLICK NOW FOR NEXT SLIDE What does social mean? . 20
  23. 23. Online is news and social is relationships. Both can work for a marketer equally well, however online is easier to get to grips with and social requires more subtlety. I have said this before but my question to the request “Join my baked beans Facebook page” is still “Why?” The power of online is that it provides plenty of platforms. However because they are fundamentally news sites there is still a strong element of push culture around the message, therefore a marketer should not necessarily expect the results to be radically better than offline. Conversely, the attract culture around social is hugely powerful because social is about making friends, recommendations. Remember the real value online can unlock is the power of recommendation - consumer / blogger recommendation is more powerful than many expensive advertising campaigns It’s a balance, as so much in life is, and marketers do sometimes struggle to get the balance right, but that is beginning to change. However we do recognise that many CEO’s underlying concerns still stem from the fear of viral negative conversations. 21
  24. 24. When social started that was a valid fear, because in most cases if someone was bothered to go online and post a review it was very often negative. That has all changed What’s also changing is that many more UK beauty brands are putting more and more effort into online as well as social. And this is what I want to talk to you about in a practical way based on what is happening in the UK now. Now today the UK beauty business is still concentrating on product placement, PR, albeit on a digital media platform but from the same publication, for example rather than Vogue on the news stand, and of course the .com version has the benefit of a different demographic profile. There has been a definite positive change within the UK beauty industry in terms of embracing digital and I would say that even this year digital is a the top of the agenda as opposed to last year. That’s all good and if it sells more product that’s even better, but budgets are important and you will still want to understand the ROI. CLICK NOW FOR NEXT SLIDE Start small think BIG 21
  25. 25. My advice is to start small and concentrate on the areas that you can control and measure the return on, for instance the reaching out to the bloggers and the online publications. Get your PR teams to be pro active. The reverse of that is reactive and there are hundreds of online conversations going on around your brands as we speak now, and they can of course be monitored and acted upon. However, my advice is that the place to start is with the online magazines and bloggers. Digital-only launches, bloggers-only dinners and tea parties and events, are increasing and all work well. Those PRs who have honed their skills with offline are seeing the rewards as they transfer those skills to online. Again whilst talking to Kenneth Green over a coffee he said to me that their worry was that social media had changed the way brands should market themselves and asked what advice I could give. My answer was simple. I said “Kenneth you are a master at communicating with people, it’s one of the many things you are well known for. You already know how to communicate your brand 22
  26. 26. story to the consumer, so just do what you are doing now”. In fact you are all masters at doing that but be aware that some of the ground rules are changing. The Blogging community is increasingly influential and as individuals they are also increasingly commercial with some bloggers charging up to 1,000 Euro per day. But without doubt Bloggers provide both a highly effective marketing platform as well as an immediate way to reach out to consumers in a trusted, third party way. Conversely, Bloggers have been described as a ‘movable feast’ with some Bloggers appearing and then disappearing making it hard for marketers to keep up to date as to who they should be engaging with. And then there are also some bloggers whose only real interest is in obtaining free samples. But there is plenty of data such as a Blogger Leaderboard and other metrics to help you target the most relevant and influential brand ambassadors. However Germany is behind the curve for social media and that is good news and a great advantage. It’s good news because you can start in a place that’s taken the UK beauty brands two or three years to get to. I would suggest that with potentially 50% of Germans predicted to be engaging with social media the fuse is lit and the timing is right to really push your brands. Also there is value in first mover advantage over the competition alternatively those that are too slow to adapt (and more importantly learn) could be left behind by more pro-active competitors… and on that note let’s take a top down look at some UK success stories. CLICK NOW FOR NEXT SLIDE Case Histories 22
  28. 28. I want to talk you through just a few case histories to show you how other brands have realised the value of social media and online. And whilst the first example is not actually a beauty product, it is aimed at women and their quest for beauty, however we might want to define that elusive term. CLICK NOW FOR NEXT SLIDE The ROI - Sales 24
  29. 29. With no above the line advertising and no marketing apart from Facebook and Twitter, Malcolm Bell the inventor of the slimming fashion product ’Hotpants’ took his company, Zaggora, a start-up from a turnover of zero to £10 million in one year. He gave 2,000 product samples away through Facebook, encouraged ‘Likes’ and sent out over 3,000 Twitter messages in a 3 month period. His basic ‘Hotpant’ sold for 57 Euro and he sold over 200,000 pairs in year one. Zaggora now spend about £50k a month on a cost per click strategy and are turning over £30 million a year after just three years with a much broader product portfolio. Well, we all deal in beauty and that’s what I expect you want to hear about, so in preparation for today we researched our client base and asked how importantly they rated online and social media as part of their overall media mix and I want to emphasise that last point. As part of their OVERALL marketing mix. So before I take you through the beauty case histories I wanted you to see the results of our own research. CLICK NOW FOR NEXT SLIDE 25
  30. 30. The ROI - Importance 25
  31. 31. In every case we had a 5 apart from one 4 and this what they said: Social media is a 4 for us. It would be a 5 except that Europe is so far behind the UK and US in terms of leveraging social media in PR terms that we have to fight to get approval to use it - especially with the super-luxury heritage brands. At the moment our French colleagues see it as something that needs to be "tamed" and controlled through carefully orchestrated social media PR campaigns that are so complicated, no one understands them and the personality of the message is invariably lost in translation! I will now take you through our 5 case histories. Because of confidentiality you will understand it is not possible to get into detailed brand specifics, apart from the next one, so the others are some real but neutralised examples of how online has been successful. They are based on real data analysed from real campaigns and 26
  32. 32. show how you can amplify a message and reach a greater audience than a static offline publication can with a fixed audience CLICK NOW FOR NEXT SLIDE The ROI - one reaches many 26
  33. 33. The Jean Paul Gaultier On The Docks launch in September delivered an impressive reach on twitter of 518,000 impressions from the 100 or so tweets made just on the one launch night. They combined online with offline for the overall campaign and that tweeted message has alone reached potentially half a million people, not all will have been based in the UK, and the other offline activity will have added many times to that number. CLICK NOW FOR NEXT SLIDE The ROI - global 27
  34. 34. Just one Tweet from a magazine editor, made at this UK launch event, was re-Tweeted, and this amplification created 29,0000 impressions which were then followed in 5 other countries in one night. CLICK NOW FOR NEXT SLIDE The ROI - Impressions 28
  35. 35. The brand Twitter handles for this event, which launched a skincare product, (on the left of the chart) was retweeted 679 times and made over 3.5 million impressions in total. The Hashtag (the results are on the right hand chart) is important to get right because it helps consumers identify with a product, and in this instance just the one Hashtag at the top where we’ve changed the name to ‘confidential’, made 2.7 million impressions Now just for clarification, an impression is a measure of the number of times an item is displayed, whether it is clicked on or not. Each time an item displays it is counted as one impression. It has been said that this of course is no different to TV ratings or magazine circulations. We know the numbers but can never really know whether the message was seen. However with social, the very fact that a Tweet has been re tweeted is clear evidence that the message has been seen. 29
  36. 36. This is part of the analysis we ran from this brand’s launch. It’s another skincare product, but was the first ever digital -only launch for the brand. Just online titles and bloggers were invited, again this brand’s identity has been withheld, but it is the purple one you can see highlighted in red. Amongst other things we looked at whether it was the bloggers or publications that posted the most coverage, and in this instance it was the online titles. It is quite clear that the activity took share of voice away from their competing brands across the activity period, July and August 2013, and that was one of the key KPIs on which the success of the campaign was measured. In fact they increased their share by over 500%, as you will see on the next chart, and that we know had a direct impact on sales uplift 30
  37. 37. CLICK NOW FOR NEXT SLIDE The ROI – before and after 30
  38. 38. This is the result of the share of voice analysis which showed that post-launch the brand’s share of the online voice increased to 62% up by over, as I mentioned, 500% CLICK NOW FOR NEXT SLIDE The ROI – brand values 31
  39. 39. And finally this post-campaign conclusion for a cosmetic could just have easily been derived from an offline campaign as well as an online one. We have included this to show that it is possible to understand how an online campaign worked in the same way that you do now with traditional media. In this case one of the objectives for the launch was the positioning of key messages and product attributes, and the need to see whether the media and the celebrity played them back, which in general they did not. CLICK NOW FOR NEXT SLIDE Thought 32
  40. 40. CLICK NOW FOR NEXT SLIDE The question is not if, but how…. 33
  41. 41. We are coming to the end of the presentation and I hope that I have put these thoughts into your mind. Our advice is to be clear on what you want to achieve and the recommendation is to plan and devise, as a first step to demonstrate value, an online product placement PR strategy. The basis of that could be to simply start by listening CLICK NOW FOR NEXT SLIDE …by listening to what they say to what’s being talked about around your brand 34
  42. 42. . CLICK NOW FOR NEXT SLIDE …like this? 35
  43. 43. The idea is to make social media work for you rather than make you do more work, or there is a danger of analysis paralysis So it’s not like this…. CLICK NOW FOR NEXT SLIDE ….no. There is a more structured way 36
  44. 44. Measurable and actionable analysis of campaign activity is key and needs of course to be based on clear objectives agreed from the outset, which could be impressions, influencers, key messages or even monetary value so….. CLICK NOW FOR NEXT SLIDE The value AVE 37
  45. 45. …lastly, where a Euro value is required, results can be measured against costs. Advertising value equivalents, that is what was the value of the online coverage worth had it been paid for advertising, can also be applied. Not to Twitter, but certainly to many publications and an increasing number of bloggers. In this instance you can see that Online for this campaign performed better than offline and for a hard pressed Financial Director that is a tangible KPI. I hope that this has all been helpful and to summarise… CLICK NOW FOR NEXT SLIDE Conclusion 38
  46. 46. CLICK NOW FOR NEXT SLIDE Summary thoughts 39
  47. 47. Thomas asked me to talk about the value of social media, if I was in your shoes why would I invest in social media? In conclusion, what I hope I have shown today is that the basis of the decision to invest in social media is essentially no different than the decision to invest in any media activity. It is not a sliver bullet, but it is measurable and delivers a huge audience, and is relevant, and is aligned to the way the consumer wants to engage with and buy into brands today. My point of view is that social media is the perfect vehicle to get alongside your consumer, build a brand’s equity through personal recommendation, and really develop a consumer-attract strategy as opposed to a blunt brand-push culture. For German brands social media is still slightly behind the curve, but it’s building fast and that’s your advantage. You are in the perfect position to benefit from the hindsight of others, you are at a start point that’s taken them 2 to 3 years to get to. So include it within you marketing mix, and accelerate sales even faster as your economy continues to grow. 40
  48. 48. CLICK NOW FOR NEXT SLIDE Danke 40
  49. 49. 41