Ogilvy ChatThreads Social Media Sales Impact Study 2011
DoesInvestingin SocialMedia CreateBusiness Value?A Study on the Sales Impact of IntegratedSocial Media Marketing Irfan Kamal Dr. Walter Carl Senior Vice Founder, President Chief Research Ofﬁcer Ogilvy & Mather ChatThreads
2 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Table of Contents Executive summary: 5 things you should know 3 Introduction 4 Research 5 What we found: Brand exposure—TV dominates 6 What we found:Social media and sales—integration matters 7 What we found: Social media and brand perception—social media works rapidly 8 Practical implications: 7 ways to use the ﬁndings 10 Methodology details 11 Acknowledgments 12 About Social@Ogilvy 13
3 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011Executive summary:5 things you should knowI s exposure to social content—on online 2 Integration matters. Exposure to social social sites like Facebook and Twitter— content was most consistently effective effective in rapidly shaping brand when it was combined with exposure toperceptions or driving sales? To help answer other types of media channels.this question, Ogilvy and ChatThreadsenlisted approximately 400 US restaurant 3 Social media is a top driver of impact. Outconsumers who tracked and reported 5,295 of the 20 channels analyzed, social mediatouchpoints with ﬁve restaurant brands was No. 1 or No. 2 in magnitude of impact onacross all major types of media. As part of spend and consumption.the Ogilvy-ChatThreads Integrated SocialMedia: Sales Impact Study 2011, we also 4 Social media exposure is directly linked withcollected pre- and post-exposure data on their changes in brand perception. Social mediaspending, consumption and brand perceptions. by itself is particularly effective at rapidly impacting brand perception—exposure toWhat did we ﬁnd? social media generated the largest impact on brand perception over a short (one week)1 Social media exposure is directly linked period of time. with increases in sales. Integrated social media (social content + one or more other 5 Brand exposure in social media is low. channels) exposure is linked with signiﬁcant Weekly social media exposure to brand increases in spend and consumption—for mentions was relatively low (24% of panel) example, social media + PR exposure was vs. television branded exposure (69% of associated with a 17% spend increase panel), even in this selected high social compared to the prior week without these. media consumption group of consumers.
4 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011IntroductionA lthough two-thirds of the online To answer that question, it’s useful to population is active in social media,1 understand the impact of media mix—not there’s still uncertainty among brands theoretically, but in practice. Many brands areabout the real return on investment from talking about “owned, earned and paid” mediasocial media engagement. That’s to be models, believing the combination must beexpected, given the rapid growth of the stronger, but there’s little clear evidence ofmedium. Still, with an estimated 70% of that to date.brands on target to increase their socialmedia budgets by more than 10% this year,2 Some key questions faced by brands include:there’s increasing pressure to understand justwhat the value of all these so-called fans and How does exposure to integrated socialfollowers really is. content impact key metrics such as sales and brand perception?Is there the potential for brands to driveimproved revenue and/or preference by If integration matters, what are some of theengaging in these channels? channels to consider aligning? Are there situations where social content exposure works by itself?1 Nielsen: “By the end of 2008, social networking had overtaken email in terms of worldwide reach. According to the study, 66.8% of Internet users across the globe accessed ‘member communities’ last year, compared to 65.1% for email.” Reported by Mashable, http://www.mashable.com/2009/03/09/social-networking-more- popular-than-email.2 Seventy percent plan to increase their social media budget by more than 10% this year, according to a poll from Efﬁe Worldwide, Inc. and Mashable. http://www. mashable.com/2011/04/19/marketers-social-media-spend. Also, according to a November 2010 survey of business executives around the globe by StrongMail, nearly two-thirds of companies will increase spending on email marketing, and 57% will put more dollars toward social media marketing. Search took a distant third place, with 41% of respondents indicating they would spend more. Reported at: http://www.emarketer.com/Article.aspx?R=1008135.
5 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011Research The study, which ran in two staggered time periods from January 20, 2011, to May 6, 2011, captured a total of 5,295 interactions with ﬁve different restaurants.Research to date has been conﬂicting. We’ve actually noticed at any point during theseen survey data from Edison Research tracking period—moving beyond direct clicksshowing the link between social networks or opinions. We chose the Quick Serviceand sales—24% of social network users cited Restaurant (QSR) category for two keyFacebook as an inﬂuence on their buying reasons:decisions.3 However, we’ve also seen evidencefrom Forrester Research/GSI Commerce 1 The higher frequency of purchases allowedsuggesting that less than 1% of website us to capture changes in a relatively shortsales are driven by direct clicks from social time period.networks.4 Which is it? Is social media reallymoving the needle on important business 2 The existence of QSR multichannel mediameasures or not? programs allowed us to look at the interactions between more than 20 brandTo help move along our understanding of touchpoints, including social media, PR,social media impact, Ogilvy, along with TV, print, radio and out of home (OOH).BrandEncounter™ research platform providerChatThreads, decided to design a study to We provided 404 US restaurant consumersspeciﬁcally address these questions. Our with ChatThreads’ BrandEncounter™study was designed to look at the impact on touchpoint tracking tool to capture all of theirsales (and perceptions) of what consumers interactions.TOUCHPOINT EXAMPLES It’s important to note that we speciﬁcally looked at changes in purchase, consumption and attitudes. It’s not hard to imagine that fans of a brand spend more than non-fans, so we were only interested in lifts over and above that baseline.3 “The Social Habit II: The Edison Research/Arbitron Internet and Multimedia Study 2011,” Edison Research/Arbitron, 2011.4 “The Purchase Path of Online Buyers,” Forrester Research/GSI Commerce, March 16, 2011.
6 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011What we found:Brand exposure—TV dominatesS ocial media touchpoints in the QSR of consumers noticed a billboard ad for category are part of a larger paid, one of the ﬁve brands (7% share of the paid owned and earned media landscape. media touchpoints). Twenty-four percentTV advertisements dominate the paid media of consumers encountered a social medialandscape. Sixty-nine percent of consumers touchpoint—deﬁned as status updates,noticed a TV ad for one of the ﬁve brands company brand pages, updates and feedsduring a seven-day period, with TV ads on Facebook and Twitter, online videos onrepresenting 24% share of all touchpoints. YouTube and other venues, blogs, onlineThe second most frequently noticed paid ratings and reviews—during a seven-media touchpoint was OOH, speciﬁcally day period, representing 5% share of allbillboard advertisements. Thirty-six percent touchpoints. RELATIVE EXPOSURE TO DIFFERENT TOUCHPOINTS
7 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011What we found:Social media and sales—integration mattersW e looked at the change in purchase People who were exposed to social media and consumption of food before and (for KFC) were seven times more likely to after the brand interaction reporting spend more than they did the previous weekperiod. The following are key ﬁndings from ouranalysis of the data: Social media + OOH exposure (across the entire category) was linked to a 1.5× higherSocial media, particularly when combined with likelihood of increase in how much peopleOOH, PR or TV exposure, is associated with spent or boughtsigniﬁcant sales (purchase and consumption)changes. The following are the major social One of our most interesting observations wasmedia impacts on sales that were identiﬁed that exposure to multiple channels was mostduring this study: often associated with sales impact. In four out of ﬁve cases with signiﬁcant associations, People who were exposed to social media consumers were exposed to multiple + PR (across the entire category) increased channels. The speciﬁc exposure combinations their spending by 17% over the previous that were associated with sales impact were week social media plus OOH (twice), social media plus PR, and social media plus TV. People who were exposed to social media + TV (for Wendy’s) were twice as likely to buy more than they did the previous week SOCIAL MEDIA IMPACT ON SALES
8 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011What we found: Social mediaand brand perception—socialmedia works rapidlyI n contrast to the interaction effects with This is probably due to the short time period traditional media driving purchase and (seven days) for reporting—but it conﬁrms consumption behavior, brand perception and that social media can have a rapid impact onbrand favorability over the short time period attitudes. Other media, including television,studied were largely driven by social media are expected to have a longer-term impact.touchpoints on their own. The following are the major social mediaWhen it comes to shifting brand favorability impacts on brand perception and favorabilityrapidly, social media appears strongest. Of that were identiﬁed during this study:the signiﬁcant results around shifting brandperception, only one in four involved traditional People encountering KFC social mediamedia in addition to social media. Social touchpoints demonstrated a 250% increasemedia was largely responsible for shifting in their perception of KFC as a “great diningperceptions of brand favorability, “best value” experience”and “great dining experience.” SOCIAL MEDIA IMPACT ON BRAND PERCEPTION
9 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011Brand favorability for people exposed to The Taco Bell case was driven by the socialMcDonald’s social touchpoints increased sharing of controversial news stories aboutﬁve times over the change in people not the ingredients used in Taco Bell’s meatexposed products in Q1 2011.Also, among those exposed to McDonald’s There was also evidence that social mediasocial touchpoints, there was a 45% and OOH (speciﬁcally, billboard ads) led toincrease in their perception that McDonald’s a 2.6× higher shift in the perception thatprovided the “best value” for the money Subway “tastes great,” but due to only 4.5% of consumers encountering this combinationConversely, consumers who were exposed of Subway touchpoints we treat this result asto social media and public relations directional.touchpoints for Taco Bell had a 220%LOWER shift in their perceptions of TacoBell as providing a “great dining experience”
10 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011Practical implications:7 ways to use the ﬁndings1 Increase customer and prospect exposure 5 Use social experiences to drive changes in to engaging social content. We know social brand perception. The data demonstrate content exposure has business impact, but that social content can change your brand’s actual exposure is remarkably low, even in image. Incorporate social content into a social media savvy audience. Increasing branding programs and track perception exposure to social content should impact metrics. sales and brand perception. 6 Plan social content in a way that has2 Integrate your media for maximum impact. the best chance to bring out the brand Consider online-, search- and place- qualities you want emphasized. Create based ads that tie into the themes that are your conversation starters and other resonating in social media. engagement tactics to help bring out the types of messages and discussion that will3 When evaluating sales impact of social reinforce your brand’s core attributes and content, look beyond just direct clicks. promises. Think of ways to track how exposure has an impact on both online and ofﬂine sales: 7 Keep social content fresh, and allow for for example, with surveys, loyalty program authentic self-expression. There was tracking or coupons. lively discussion on many of the brand social media presences, both negative and4 Monitor social media closely. Identify and positive. respond to negative WOM or press. The study shows these negative discussions do impact brand perception.
11 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011Methodology detailsF or this study, Ogilvy and ChatThreads past month (for example, visiting Facebook, selected ﬁve large QSR brands with reading a blog post or viewing a YouTube active social media presences: KFC, video). Seventy-ﬁve percent were a brand fanMcDonald’s, Subway, Taco Bell and Wendy’s. or follower of at least one QSR brand, while 25% comprised a control group matchedChatThreads’ BrandEncounter™ platform for favorability, QSR visits, and social mediawas used to collect and analyze the data. activity but were not fans/followers of any QSRBrandEncounter™ enlists consumers armed brands.with their mobile phones to report brandencounters and reactions immediately, at the Participant demographics were as follows:time of experience. Over a period of seven Female: 67%days, participants report the brand, type oftouchpoint (e.g., saw billboard, saw TV ad, saw Median age: 34print ad, heard a radio ad, read a news article, Had annual household incomes less thanspoke to a friend, noticed Facebook status $50,000: 47%update, visited brand page, read a Tweet, etc.),and consumer sentiment about the touchpoint. Geographic distribution: South: 38%;Consumers submit any type of encounter Midwest: 24%; West: 20%; Northeast: 18%and are not limited to a prescribed list. Allsubmissions are automatically time- and date- Had mobile phone with a data plan thatstamped. Participants also have the option of allowed them to connect to the Internet andadding pictures and notes to the data. Pre- and send emails: 79%post-surveys are conducted for consumers to Had unlimited SMS/text messaging plan:measure changes in behavior and intentions. 80%Four hundred and four US consumers To minimize the impact of QSR brand fansparticipated on a rolling seven-day basis, or followers who already spend moresubmitting 5,295 touchpoints between 1/20/11 than others, we looked speciﬁcally at theand 5/6/11 (two staggered time periods). This relationship between touchpoint exposurestudy was designed to look exclusively at the and pre- and post-changes in purchaseimmediate impact of exposures: participants (consumption, spend). Thus, we only reporttracked their exposure during a seven-day results for lifts over and above a consumer’speriod, and provided pre- and post-data on baseline level of purchase and consumptiontheir consumption and spend. Participants activity. We looked at a short time frame (onewere screened for three criteria: 1) having a week) to focus in on the immediate impact offavorable view of at least one of the ﬁve QSR the touchpoints, and only report statisticallybrands; 2) making recent QSR visits (at least signiﬁcant results (95% conﬁdence interval, pa few times per month); and 3) being active < 0.05).on at least two social media venues in the
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