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September 2012
               BRANDGYM
               RESEARCH PAPER 6
               By David Taylor
               Managing Partner




Can social media
show you the money?
www.thebrandgym.com



Can social media show
you the money?

About the research
In this, our 6th global survey, we ask “Can Social Media Show you the Money?”.
The first part of the research was with over 100 senior marketing professionals
across Europe, Africa, Asia, the USA and Latin America, covering a broad range
of sectors. In addition, we did research with 1000 consumers each in the UK and
USA, to compare their actual use of social media* with how marketers think they
use it. Read on to see how wrong most marketers are!
                                                                                            The brandgym partners
We have brought to life the findings with examples
from our work on brandgym projects, and through
interesting case studies we have come across in
our blogging and book writing.
* To clarify, this study focuses on the creation of content
using social media (e.g. Facebook pages, Twitter feeds)
and not online advertising on social media sites.


Introduction
Social media is a red-hot topic today. Social media         How social is your brand?: accepting the limitations of
is sexy, shiny and new. And it’s also a bit scary, with     social media, what role can it play for your brand?
headlines screaming that the whole world of marketing
is changing, and that ‘old’ media like TV advertising is    What consumers really want: the real reasons for
                                                            consumers using social media from brands are not what
dead. However, data on the brand and business building
                                                            marketers think.
effects of social media is thin on the ground.
                                                            Key platforms :
We felt it was time to cut through the hype and hysteria
                                                            Which social media
around social media, to better understand the role it can
                                                            channels to focus       Hype                     More
play. We wanted to find out: “Can social media show                                                          Hype
                                                            on, and why.
you the money?”                                                                               SOCIAL MEDIA
                                                                                               MARKETING
In this paper we look at the following areas:               	
Why social media is hot: what are the key drivers of
social media usage by marketing teams?                                                          Even
                                                                                                More
The limitations of social media: why social media has                                           Hype
a limited role and is far from replacing “old media”.


1 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 1: Why social
media is hot
It’s what cool brands do:
The research confirms our belief that the key driver of social media usage by brands today is fashion,
not facts. ‘Keeping up with trends’ was by far the main reason given by marketing directors for their
use of social media. This scored much higher than any hard evidence, or even gut feel, on the business
building effect of social media.
                                    Main driver for companies’ use of social media

                                                       19%

                                                                          Evidence of tangible
                                                                          business benefits
                                                                          Gut feel on business
                                      59%                                 benefits
                                                             21%          Keeping up with latest
                                                                          marketing trends




It’s good for business (we hope):
Given the lack of evidence, a surprisingly high 58% of marketing directors believed social media
was a driver of business growth, although most of these saw it having a minor role (33%) rather
than a major one (25%).
                                    Role played by social media

                                                 9%
                                                        25%
                                                                           Key driver of business growth

                                                                           Minor driver of business growth
                                     32%
                                                                           Helps with brand image

                                                                           No impact on brand or business


                                                      33%


Action point: Cut through the hype and refuse to be a follower of fashion.
Base your use of social media where possible on hard facts about what it can do for your business
and brand.

2 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 2: The limitations
of social media
Sensationalist, scare-mongering messages about the demise of TV advertising
and the rise of social media are popular headline-grabbers. In reality, social
media has a limited role to play, and conventional media is far from dead.

Social media has limited reach
The key driver of brand growth is penetration: having as many people as possible using you at least
once a year. Loyalty measures, such as frequency of purchase, are actually similar between brands
in a given category. Therefore, the key to growth is reaching as many people as possible, especially
light and non-users, to drive penetration . And this is where social media has serious limitations.

Our consumer research shows that                 Impact of social media on brand use
over 80% of people were already                  (% of people who say staying in touch with brands is important)
using a brand before they started
interacting with it on social media,
with less than 20% new users. This
means social media has a limited role                                                                Already buying
                                            US                     83%                     17%
in driving penetration of your brand as                                                              brand before using
you’re talking mainly to existing users.                                                             its social media
And if you think you can make them                                                                   Started buying
more loyal, you are fighting the facts                                                               brand after using
                                                                                                     its social media
of brand growth: loyalty levels across
brands are similar in a given category.     GB                      86%                     14%
This means that trying to grow share
by Increasing loyalty is a losing game.
                                                 0%     20%       40%      60%       80%      100%


                                            The limited reach of social media is shown by Coca-Cola.
                                            Its Facebook following of c.40 million fans seems huge.
                                            However, the following shows this is not quite true:

                                            • Coca Cola worldwide users: 4 billion
                                            • Facebook reach of users = c.1%

                                            And as only c. 15% of fans are likely to be new users,
                                            based on our research above, this means a potential
                                            increase in penetration of only 0.15%.

3 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 2: The limitations
of social media
Advertising is far from dead
Advertising, especially on TV, is far from dead. “Old” media still has the central role to play for most
brands, for several reasons:

• Reach: advertising has the reach you need to drive penetration.
• ROI: TV advertising has the highest ROI of any medium, according to econometric research by
  Thinkbox. And this ROI is actually up +22% in the last five years, owing to growing commercial TV
  viewing and lower costs.

• Plannable: conventional advertising allows
  you to plan the size and targeting of your
  audience In contrast, social media is a lottery.
  Its impossible to predict how many people of
  what target will like your Facebook page or
  watch your YouTube video.
• Ignition: most viral online success stories were
  originally driven by TV advertising. For example,
  Old Spice’s ‘ The man your man could smell like’
  (41 million+ YouTube views), was ignited with
  the most conventional form of ‘old’ media there
  is: a TV advert in the Superbowl.

                                            What about word-of-mouth?
                                            Word-of-mouth is often portrayed as a key reason for
                                            brands to be active on social media. In reality, 90%
                                            of word-of-mouth conversations about brands still
                                            take place offline, primarily face-to-face, according to
                                            research by Ed Keller and Brad Fay. As they say, ‘Online
                                            social networks are far from the Holy Grail of marketing.
                                            A far bigger and more powerful force is real world, face-
                                            to-face conversation’.


Action point: Ignore the hype about the demise of “old fashioned” marketing, it still has
a key role to play for most brands. In reality, social media has a supporting role in amplifying your
marketing, given its limited reach and the inability to plan the size and nature of the audience.

4 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 3: How social is
your brand?
Accepting the limitations of social media, what role can it play for your brand? To start with,
you need to get real about the role of brands in general in peoples’ day to day lives. Only 7% of
UK people saw social media as being very important for staying in touch and interacting with
brands, with the US slightly higher at 14%. This is dwarfed by the importance of friends and family
(39%/50% in the UK/US). These results help explain why people like on average only 9 brands on
Facebook, compared to an average of 200+ friends.

How social is your                                      Use social media to stay in touch/interact with...
                                                        (% Very Important)
brand?                                           60%
Even within this minor role for brands,                              50%
                                                 50%
not all brands are equal. In the league
table of brands liked on Facebook,               40%
                                                            39%                                                         GB

                                                                                                                        US
consumer goods products come rock
                                                 30%
bottom (8%), in research by DDB. At
the top were brands from media (55%),            20%
                                                                                       16%                  14%
charities (51%) and fashion (46%).                                              9%
                                                 10%                                                 7%
These results reflect the fact that most
brands are just not that social. If social        0%
                                                            Friends/Family        Hobbies               Everyday
media is a virtual pub or cafe where                                                                products/services
conversations happen, would people talk
about your brand? Would people want
to read your brand’s weekly magazine,
or watch its daily TV show? If your brand               Social media usage in P4Weeks
is closer to pasta sauce than Prada, then        100%
the answer is probably a resounding ‘no’.        90%


How young is your
                                                 80%

                                                 70%

brand?                                           60%

                                                 50%
A further point to bear in mind is how
                                                 40%
important younger people are to your                                                                                    GB
                                                 30%
brand, given their higher usage of social                                                                               USA
                                                 20%
media. If you are a brand like Axe, Nike
                                                 10%
or Levi’s where this a key audience,
                                                  0%
social media will play a bigger role.                    TOT 16-64     16-24   25-34        35-44   45-54       55-64




5 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 3: How social is
your brand?
Can you sell online?
A final factor to determine the role social media can play for your brand is the link to selling more
stuff. If online is a key sales channel for your brand, then social media can be a revenue driver, not
just a communication medium. An example of a brand like this is The X-Factor, a reality TV singing
contest, similar to Idols in other markets.
The brand’s UK Facebook page had a whopping 3.7million
fans and it helped generate online revenue by people
buying iTunes tracks of the week’s songs and by
encouraging mobile phone voting for who stays on the show.
In contrast, for consumer goods brands the link to selling
more of the core is much more in-direct. The best an
FMCG brand can do is link to an online shopping site, but
this is still a niche channel, accounting for only 3% of the
grocery market.

                                                                      X-Factor / Idols TV show   Lynx / Axe      Kellogg’s
Beermat business plan:
                                                  How social /10?                 8                  6               2
You can score your brand out of 10 on the         How online /10?                 5                   1              1
                                                  How young /10?                  7                  9               2
questions posed in this section. In this highly
                                                  TOTAL /30 = %Budget           20%                 16%            5%
sophisticated media model, the total score
is the % of your budget to spend on social              % of time/budget allocated to social media
media, as shown in the example on the right.                                                                  % Team
                                                  70%
                                                                                                              % Budget
                                                                           60%
                                                  60%

The score for Kellogg’s is in line with our       50%                47%
survey, with 2/3 saying they are allocating       40%
less than 5% of their budget or less to social                                   32%
media. The % of team time allocated is            30%


higher, with half allocating 5%+ to social        20%                                  17%
                                                                                                       13%
media, confirming the labour-intensive                          9%
                                                  10%
                                                                                             5% 7%             7%
nature of creating a stream of content.                    3%
                                                  0%
                                                            0%        1-5%        5-10%      10-15%      15%+




Action point: Don’t spend more than 5-10% on Social Media, unless you
are a social brand, selling online. Evaluate how social your brand is and the importance
of online sales. For most everyday brands this will show that social media should take up no more
than c.5-10% of your time and money.
6 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 4: What
consumers want
Consumers DON’T want a conversation with brands
Assuming you are going to allocate some time and money to social media, how best to use this?
What do consumers want from your brand? Well, here Marketing directors seem to be out of touch.
About 1/3 of marketers believe that consumers want a 2-way conversation with brands. This raises
expectations about how involved consumers want to be in creating content themselves. In reality, a
mere 5% of consumers said they used brands’ social media for this reason.
In contrast, desire for useful information and deals is much higher than marketers think. This means
you need a stream of distinctive, relevant content and attractive promotional offers to be active on
social media.
                          Why consumers use social media from brands
                    45%
                             41%
                   40%


                    35%
                                                                                    32%
                    30%            29%        29%
                                                                     27%
                                                               25%
                    25%

                                                                                               What Consumers Do (GB/US)
                    20%
                                                                                               What Marketers Think

                    15%
                                                    12%
                    10%

                                                                               5%
                    5%


                    0%
                           Useful, helpful   Getting deals/    Interesting,       2-way
                           info on brands     promotions       entertaining   “conversation”
                                                              brand-created     with brands
                                                                 content




99% of consumers don’t interact
The low interest in 2-way dialogue is confirmed by data on the top 200 brands on Facebook, done
by the Ehrenburg Bass Institute (EBI). Only 1% of people who liked a brand’s Facebook page were
interacting with it, based on the metric “People Talking About This” (total likes, posts, comments,
tags, shares). In other words, 99% of people were on the brand’s Facebook page to consume
content, not create it.


7 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 4: What
consumers want
Content is king
Brands need to create a stream of distinctive, relevant content on social media, and this has several
implications. First, this needs a new skill-set. You may need someone with writing or journalistic
experience to lead the creation of brand content, either in your team or an agency partner. And, like
a newsroom, you have to react on the spot to important events and consumer comments. Marks &
Spencer work on a 2-hour response time to comments in social media, for example.
Content creation, talent and speed were all seen as being
difficult for over ½ of our marketing directors, topped only by
the challenge of proving ROI.
The key challenge for a newsroom is to have a stream of
interesting, impactful news that can make headlines. This is
where brands with large ranges of products and services, such
as retailers, have an advantage of more to talk about than the
limited offer of most product brands.
                                                                                                 The Gatorade ‘newsroom’ -
                                                                                                 monitoring social media in real time.
       Social media challenges
100%


90%

80%


70%

           54%                                                                                 Extremely difficult
60%
                           18%                                                                 Difficult
50%
                                               25%               13%
40%                                                                               10%

30%
                           49%
20%
            37%                                34%               39%              34%

10%


 0%
         Proving ROI   Right talent to   Creating relevant   Quick response    Which social
                       create content     content linked      to consumers    media channels
                                           to my brand                         to focus on



Action point: Content is king - hire an editor You need an editor to lead content
creation: you may have to hire in or sub-contract to someone with writing or journalistic experience.

8 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 5: Which social
media platform?
With a better understanding of what              Extremely important social media platforms: Marketing Directors
consumers want from social media,
where should you focus your limited
time and money? After all, social media
enthusiasts like to scare us by showing
an ever expanding plethora of platforms.
Our marketing director survey confirmed
our belief in a focus on Facebook and a
supporting role for Twitter and YouTube.
Brands’ own websites also came out as
being extremely important.


                    has by far the biggest audience (900 million) and give more ability for brands to
create interesting content. The key challenge on Facebook is creating bite-sized bits of compelling
content, given that 90% of people consume brand content as part of their ‘news feed’, not on
the brand’s Facebook page as you might expect. You have to stand out amongst the news from a
person’s c.200 friends to be seen.


                   has a much smaller role to play, given its even more limited reach. It has fewer
members (300 million). And brands play an even smaller role than on Facebook: the UK’s top 10
brands Twitter following is only 1% of their Facebook following. The main role of Twitter for brands
is a new-age helpline, most relevant for complex service brands, and following celebrity CEOs. For
example, the CEO of US retailer Zappos, Tony Hseieh, has 2.4 million followers, almost 200 times
the following of Zappos.com.


                   Whilst every marketing director dreams of a YouTube sensation that ‘goes viral’,
we suggest that viral success should be seen as a bonus to your conventional media plan, not the
main objective. Firstly, the key drivers of virality seem to be sex, humour and “spectacle”, and these
my not fit with your brand. And more importantly, YouTube success is a lottery. For every viral
success, many more films fail to fly.

Action point: Focus your effort on the platform that has the biggest reach
with your consumers For most brands that’s likely to be facebook.

9 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com



Part 6: Beyond
social media
“What’s our digital strategy?” is the wrong question
Social media is only one aspect of the digital world brands operate in today. In fact, “What’s our
digital strategy?” is the wrong question. A better question is “What’s our strategy for a digital world”,
as this opens up opportunities beyond social media.
For example, we worked with the Carling Black Label brand in South
Africa on a digitally-empowered activation called “Be the Coach”.
This allowed soccer fans to vote via mobile phones to actually pick
the teams for a special cup match between South Africa’s top 2
teams, the Kaiser Chiefs and The Orlando Pirates.
An amazing 11 million votes were cast in 7 weeks. And the campaign
has helped improve brand imagery, most often used and volume.
During the match fans could vote via SMS for the player they
wanted to substitute.


                                            Other examples of digitally enabled brand activity include
                                            the Nike+ alliance with Apple that allows you to track your
                                            runs with your iPod or iPhone, and Gillette’s launch of an
                                            online subscription service for getting re-fill razor blades.


Conclusions beyond social media
Action point: Think
Bigger opportunities may“Can sociallookingshow you social media to jury is still out. On the upside,ideas.
In response to the question come by media beyond the money”, the other digitally empowered
social media can amplify the rest of your marketing mix with limited extra budget, though you need to invest
in people to create great content. However, you need to cut through the hype to understand exactly what
role it can play, and avoid feeling pressurised to “just do it” to keep up with marketing fashion. Specifically:
•	 Social media’s supporting role: given its limited reach, social media is far from replacing “old
   media” and is rather there to amplify the rest of your mix.
•	 Most brands are not social or online: if your brand is closer to pasta sauce than Prada, social
   media should probably use less than 10% of your budget.
•	 Content is king: most consumers want interesting content, not interaction, and you need a
   “new team” to create this.
•	 Focus on Facebook: it has the biggest audience and opportunity for creating content. Twitter
   is tiny. And YouTube viral videos are a lottery.
•	 Think beyond social media: there may be other, bigger digitally-powered opportunities to
   build your brand and business.

10 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com




Brand Leadership Coaching

•	 We are a network of 6 senior brand coaches helping companies gain and retain brand leadership.
•	 Our Turbo Marketing approach helps teams develop effective marketing plans including
   relevant social media and other digitally empowered opportunities:
  •	 Use fresh insight fuel as inspiration
  •	 Create a series of integrated “chapters” of your brand story
  •	 Build brand properties to boost marketing effectiveness
  •	 ‘Follow the money’ approach anchors plans on business issues
  •	 Build team energy and alignment through a collaborative, cross-functional process

•	 Additional brandgym services include Brand Vision to Action and Brand-led Innovation

•	 We have published 6 books on brand leadership including the updated version of the brandgym,
   Amazon’s best-selling management book




•	 Our track record with leading companies includes SAB Miller, Sainsbury’s, LVMH, Danone and Kraft.




     David Taylor (Managing Partner)         David Nichols (Managing Partner)                Diego Kerner (Latin America)
     M: + 44 (0) 7789 202 564                M: +44 (0) 7787 148 806                         M: + 54 (9) 11 5 058 5900
     E: david@thebrandgym.com                E: davidn@thebrandgym.com                       E: diego@thebrandgym.com

     Anne Charbonneau (Benelux/France)       Silvina Moronta (Latin America)                 Prasad Narasimhan (Asia)
     M: +31 611 64 34 07                     M: +54 (9) 3436612393                           M: +91 8951939090
     E: anne@thebrandgym.com                 E: silvina@thebrandgym.com                      E: prasad@thebrandgym.com


11 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6                                 www.thebrandgym.com | www.brandgymblog.com
                                                                                     DESIGNED BY SwaG | www.swagdesign.com

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Brandgym Research Paper 6 - Social Media

  • 1. September 2012 BRANDGYM RESEARCH PAPER 6 By David Taylor Managing Partner Can social media show you the money?
  • 2. www.thebrandgym.com Can social media show you the money? About the research In this, our 6th global survey, we ask “Can Social Media Show you the Money?”. The first part of the research was with over 100 senior marketing professionals across Europe, Africa, Asia, the USA and Latin America, covering a broad range of sectors. In addition, we did research with 1000 consumers each in the UK and USA, to compare their actual use of social media* with how marketers think they use it. Read on to see how wrong most marketers are! The brandgym partners We have brought to life the findings with examples from our work on brandgym projects, and through interesting case studies we have come across in our blogging and book writing. * To clarify, this study focuses on the creation of content using social media (e.g. Facebook pages, Twitter feeds) and not online advertising on social media sites. Introduction Social media is a red-hot topic today. Social media How social is your brand?: accepting the limitations of is sexy, shiny and new. And it’s also a bit scary, with social media, what role can it play for your brand? headlines screaming that the whole world of marketing is changing, and that ‘old’ media like TV advertising is What consumers really want: the real reasons for consumers using social media from brands are not what dead. However, data on the brand and business building marketers think. effects of social media is thin on the ground. Key platforms : We felt it was time to cut through the hype and hysteria Which social media around social media, to better understand the role it can channels to focus Hype More play. We wanted to find out: “Can social media show Hype on, and why. you the money?” SOCIAL MEDIA MARKETING In this paper we look at the following areas: Why social media is hot: what are the key drivers of social media usage by marketing teams? Even More The limitations of social media: why social media has Hype a limited role and is far from replacing “old media”. 1 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 3. www.thebrandgym.com Part 1: Why social media is hot It’s what cool brands do: The research confirms our belief that the key driver of social media usage by brands today is fashion, not facts. ‘Keeping up with trends’ was by far the main reason given by marketing directors for their use of social media. This scored much higher than any hard evidence, or even gut feel, on the business building effect of social media. Main driver for companies’ use of social media 19% Evidence of tangible business benefits Gut feel on business 59% benefits 21% Keeping up with latest marketing trends It’s good for business (we hope): Given the lack of evidence, a surprisingly high 58% of marketing directors believed social media was a driver of business growth, although most of these saw it having a minor role (33%) rather than a major one (25%). Role played by social media 9% 25% Key driver of business growth Minor driver of business growth 32% Helps with brand image No impact on brand or business 33% Action point: Cut through the hype and refuse to be a follower of fashion. Base your use of social media where possible on hard facts about what it can do for your business and brand. 2 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 4. www.thebrandgym.com Part 2: The limitations of social media Sensationalist, scare-mongering messages about the demise of TV advertising and the rise of social media are popular headline-grabbers. In reality, social media has a limited role to play, and conventional media is far from dead. Social media has limited reach The key driver of brand growth is penetration: having as many people as possible using you at least once a year. Loyalty measures, such as frequency of purchase, are actually similar between brands in a given category. Therefore, the key to growth is reaching as many people as possible, especially light and non-users, to drive penetration . And this is where social media has serious limitations. Our consumer research shows that Impact of social media on brand use over 80% of people were already (% of people who say staying in touch with brands is important) using a brand before they started interacting with it on social media, with less than 20% new users. This means social media has a limited role Already buying US 83% 17% in driving penetration of your brand as brand before using you’re talking mainly to existing users. its social media And if you think you can make them Started buying more loyal, you are fighting the facts brand after using its social media of brand growth: loyalty levels across brands are similar in a given category. GB 86% 14% This means that trying to grow share by Increasing loyalty is a losing game. 0% 20% 40% 60% 80% 100% The limited reach of social media is shown by Coca-Cola. Its Facebook following of c.40 million fans seems huge. However, the following shows this is not quite true: • Coca Cola worldwide users: 4 billion • Facebook reach of users = c.1% And as only c. 15% of fans are likely to be new users, based on our research above, this means a potential increase in penetration of only 0.15%. 3 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 5. www.thebrandgym.com Part 2: The limitations of social media Advertising is far from dead Advertising, especially on TV, is far from dead. “Old” media still has the central role to play for most brands, for several reasons: • Reach: advertising has the reach you need to drive penetration. • ROI: TV advertising has the highest ROI of any medium, according to econometric research by Thinkbox. And this ROI is actually up +22% in the last five years, owing to growing commercial TV viewing and lower costs. • Plannable: conventional advertising allows you to plan the size and targeting of your audience In contrast, social media is a lottery. Its impossible to predict how many people of what target will like your Facebook page or watch your YouTube video. • Ignition: most viral online success stories were originally driven by TV advertising. For example, Old Spice’s ‘ The man your man could smell like’ (41 million+ YouTube views), was ignited with the most conventional form of ‘old’ media there is: a TV advert in the Superbowl. What about word-of-mouth? Word-of-mouth is often portrayed as a key reason for brands to be active on social media. In reality, 90% of word-of-mouth conversations about brands still take place offline, primarily face-to-face, according to research by Ed Keller and Brad Fay. As they say, ‘Online social networks are far from the Holy Grail of marketing. A far bigger and more powerful force is real world, face- to-face conversation’. Action point: Ignore the hype about the demise of “old fashioned” marketing, it still has a key role to play for most brands. In reality, social media has a supporting role in amplifying your marketing, given its limited reach and the inability to plan the size and nature of the audience. 4 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 6. www.thebrandgym.com Part 3: How social is your brand? Accepting the limitations of social media, what role can it play for your brand? To start with, you need to get real about the role of brands in general in peoples’ day to day lives. Only 7% of UK people saw social media as being very important for staying in touch and interacting with brands, with the US slightly higher at 14%. This is dwarfed by the importance of friends and family (39%/50% in the UK/US). These results help explain why people like on average only 9 brands on Facebook, compared to an average of 200+ friends. How social is your Use social media to stay in touch/interact with... (% Very Important) brand? 60% Even within this minor role for brands, 50% 50% not all brands are equal. In the league table of brands liked on Facebook, 40% 39% GB US consumer goods products come rock 30% bottom (8%), in research by DDB. At the top were brands from media (55%), 20% 16% 14% charities (51%) and fashion (46%). 9% 10% 7% These results reflect the fact that most brands are just not that social. If social 0% Friends/Family Hobbies Everyday media is a virtual pub or cafe where products/services conversations happen, would people talk about your brand? Would people want to read your brand’s weekly magazine, or watch its daily TV show? If your brand Social media usage in P4Weeks is closer to pasta sauce than Prada, then 100% the answer is probably a resounding ‘no’. 90% How young is your 80% 70% brand? 60% 50% A further point to bear in mind is how 40% important younger people are to your GB 30% brand, given their higher usage of social USA 20% media. If you are a brand like Axe, Nike 10% or Levi’s where this a key audience, 0% social media will play a bigger role. TOT 16-64 16-24 25-34 35-44 45-54 55-64 5 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 7. www.thebrandgym.com Part 3: How social is your brand? Can you sell online? A final factor to determine the role social media can play for your brand is the link to selling more stuff. If online is a key sales channel for your brand, then social media can be a revenue driver, not just a communication medium. An example of a brand like this is The X-Factor, a reality TV singing contest, similar to Idols in other markets. The brand’s UK Facebook page had a whopping 3.7million fans and it helped generate online revenue by people buying iTunes tracks of the week’s songs and by encouraging mobile phone voting for who stays on the show. In contrast, for consumer goods brands the link to selling more of the core is much more in-direct. The best an FMCG brand can do is link to an online shopping site, but this is still a niche channel, accounting for only 3% of the grocery market. X-Factor / Idols TV show Lynx / Axe Kellogg’s Beermat business plan: How social /10? 8 6 2 You can score your brand out of 10 on the How online /10? 5 1 1 How young /10? 7 9 2 questions posed in this section. In this highly TOTAL /30 = %Budget 20% 16% 5% sophisticated media model, the total score is the % of your budget to spend on social % of time/budget allocated to social media media, as shown in the example on the right. % Team 70% % Budget 60% 60% The score for Kellogg’s is in line with our 50% 47% survey, with 2/3 saying they are allocating 40% less than 5% of their budget or less to social 32% media. The % of team time allocated is 30% higher, with half allocating 5%+ to social 20% 17% 13% media, confirming the labour-intensive 9% 10% 5% 7% 7% nature of creating a stream of content. 3% 0% 0% 1-5% 5-10% 10-15% 15%+ Action point: Don’t spend more than 5-10% on Social Media, unless you are a social brand, selling online. Evaluate how social your brand is and the importance of online sales. For most everyday brands this will show that social media should take up no more than c.5-10% of your time and money. 6 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 8. www.thebrandgym.com Part 4: What consumers want Consumers DON’T want a conversation with brands Assuming you are going to allocate some time and money to social media, how best to use this? What do consumers want from your brand? Well, here Marketing directors seem to be out of touch. About 1/3 of marketers believe that consumers want a 2-way conversation with brands. This raises expectations about how involved consumers want to be in creating content themselves. In reality, a mere 5% of consumers said they used brands’ social media for this reason. In contrast, desire for useful information and deals is much higher than marketers think. This means you need a stream of distinctive, relevant content and attractive promotional offers to be active on social media. Why consumers use social media from brands 45% 41% 40% 35% 32% 30% 29% 29% 27% 25% 25% What Consumers Do (GB/US) 20% What Marketers Think 15% 12% 10% 5% 5% 0% Useful, helpful Getting deals/ Interesting, 2-way info on brands promotions entertaining “conversation” brand-created with brands content 99% of consumers don’t interact The low interest in 2-way dialogue is confirmed by data on the top 200 brands on Facebook, done by the Ehrenburg Bass Institute (EBI). Only 1% of people who liked a brand’s Facebook page were interacting with it, based on the metric “People Talking About This” (total likes, posts, comments, tags, shares). In other words, 99% of people were on the brand’s Facebook page to consume content, not create it. 7 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 9. www.thebrandgym.com Part 4: What consumers want Content is king Brands need to create a stream of distinctive, relevant content on social media, and this has several implications. First, this needs a new skill-set. You may need someone with writing or journalistic experience to lead the creation of brand content, either in your team or an agency partner. And, like a newsroom, you have to react on the spot to important events and consumer comments. Marks & Spencer work on a 2-hour response time to comments in social media, for example. Content creation, talent and speed were all seen as being difficult for over ½ of our marketing directors, topped only by the challenge of proving ROI. The key challenge for a newsroom is to have a stream of interesting, impactful news that can make headlines. This is where brands with large ranges of products and services, such as retailers, have an advantage of more to talk about than the limited offer of most product brands. The Gatorade ‘newsroom’ - monitoring social media in real time. Social media challenges 100% 90% 80% 70% 54% Extremely difficult 60% 18% Difficult 50% 25% 13% 40% 10% 30% 49% 20% 37% 34% 39% 34% 10% 0% Proving ROI Right talent to Creating relevant Quick response Which social create content content linked to consumers media channels to my brand to focus on Action point: Content is king - hire an editor You need an editor to lead content creation: you may have to hire in or sub-contract to someone with writing or journalistic experience. 8 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 10. www.thebrandgym.com Part 5: Which social media platform? With a better understanding of what Extremely important social media platforms: Marketing Directors consumers want from social media, where should you focus your limited time and money? After all, social media enthusiasts like to scare us by showing an ever expanding plethora of platforms. Our marketing director survey confirmed our belief in a focus on Facebook and a supporting role for Twitter and YouTube. Brands’ own websites also came out as being extremely important. has by far the biggest audience (900 million) and give more ability for brands to create interesting content. The key challenge on Facebook is creating bite-sized bits of compelling content, given that 90% of people consume brand content as part of their ‘news feed’, not on the brand’s Facebook page as you might expect. You have to stand out amongst the news from a person’s c.200 friends to be seen. has a much smaller role to play, given its even more limited reach. It has fewer members (300 million). And brands play an even smaller role than on Facebook: the UK’s top 10 brands Twitter following is only 1% of their Facebook following. The main role of Twitter for brands is a new-age helpline, most relevant for complex service brands, and following celebrity CEOs. For example, the CEO of US retailer Zappos, Tony Hseieh, has 2.4 million followers, almost 200 times the following of Zappos.com. Whilst every marketing director dreams of a YouTube sensation that ‘goes viral’, we suggest that viral success should be seen as a bonus to your conventional media plan, not the main objective. Firstly, the key drivers of virality seem to be sex, humour and “spectacle”, and these my not fit with your brand. And more importantly, YouTube success is a lottery. For every viral success, many more films fail to fly. Action point: Focus your effort on the platform that has the biggest reach with your consumers For most brands that’s likely to be facebook. 9 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 11. www.thebrandgym.com Part 6: Beyond social media “What’s our digital strategy?” is the wrong question Social media is only one aspect of the digital world brands operate in today. In fact, “What’s our digital strategy?” is the wrong question. A better question is “What’s our strategy for a digital world”, as this opens up opportunities beyond social media. For example, we worked with the Carling Black Label brand in South Africa on a digitally-empowered activation called “Be the Coach”. This allowed soccer fans to vote via mobile phones to actually pick the teams for a special cup match between South Africa’s top 2 teams, the Kaiser Chiefs and The Orlando Pirates. An amazing 11 million votes were cast in 7 weeks. And the campaign has helped improve brand imagery, most often used and volume. During the match fans could vote via SMS for the player they wanted to substitute. Other examples of digitally enabled brand activity include the Nike+ alliance with Apple that allows you to track your runs with your iPod or iPhone, and Gillette’s launch of an online subscription service for getting re-fill razor blades. Conclusions beyond social media Action point: Think Bigger opportunities may“Can sociallookingshow you social media to jury is still out. On the upside,ideas. In response to the question come by media beyond the money”, the other digitally empowered social media can amplify the rest of your marketing mix with limited extra budget, though you need to invest in people to create great content. However, you need to cut through the hype to understand exactly what role it can play, and avoid feeling pressurised to “just do it” to keep up with marketing fashion. Specifically: • Social media’s supporting role: given its limited reach, social media is far from replacing “old media” and is rather there to amplify the rest of your mix. • Most brands are not social or online: if your brand is closer to pasta sauce than Prada, social media should probably use less than 10% of your budget. • Content is king: most consumers want interesting content, not interaction, and you need a “new team” to create this. • Focus on Facebook: it has the biggest audience and opportunity for creating content. Twitter is tiny. And YouTube viral videos are a lottery. • Think beyond social media: there may be other, bigger digitally-powered opportunities to build your brand and business. 10 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6
  • 12. www.thebrandgym.com Brand Leadership Coaching • We are a network of 6 senior brand coaches helping companies gain and retain brand leadership. • Our Turbo Marketing approach helps teams develop effective marketing plans including relevant social media and other digitally empowered opportunities: • Use fresh insight fuel as inspiration • Create a series of integrated “chapters” of your brand story • Build brand properties to boost marketing effectiveness • ‘Follow the money’ approach anchors plans on business issues • Build team energy and alignment through a collaborative, cross-functional process • Additional brandgym services include Brand Vision to Action and Brand-led Innovation • We have published 6 books on brand leadership including the updated version of the brandgym, Amazon’s best-selling management book • Our track record with leading companies includes SAB Miller, Sainsbury’s, LVMH, Danone and Kraft. David Taylor (Managing Partner) David Nichols (Managing Partner) Diego Kerner (Latin America) M: + 44 (0) 7789 202 564 M: +44 (0) 7787 148 806 M: + 54 (9) 11 5 058 5900 E: david@thebrandgym.com E: davidn@thebrandgym.com E: diego@thebrandgym.com Anne Charbonneau (Benelux/France) Silvina Moronta (Latin America) Prasad Narasimhan (Asia) M: +31 611 64 34 07 M: +54 (9) 3436612393 M: +91 8951939090 E: anne@thebrandgym.com E: silvina@thebrandgym.com E: prasad@thebrandgym.com 11 | SEPTEMBER 2012 | BRANDGYM RESEARCH PAPER 6 www.thebrandgym.com | www.brandgymblog.com DESIGNED BY SwaG | www.swagdesign.com