Feature
The price of loyalty
23 June 2011
If social media were an actual weapon, rather than a figurative one in the battle for marketshare, we would be running for cover. Brands are deploying social campaigns with zeal – often hitting their targets.
A recent survey by Millward Brown and Dynamic Logic, in co-operation with the World Federation of Advertisers (WFA), found that 85% of WFA members regarded Facebook fan pages as an effective means of gaining insight and boosting loyalty. Some 80% believed that social media bolstered advocacy, while 96% said they were spending more on the channel.
“The social web means that brands can put people right at the centre of their marketing,” says Eric Edge, global communications at Facebook, which attracts 50 million page-‘likes’ every day. “So, in a world where people inherently want to connect, marketing is becoming more personalised too.”
But it has taken a while for momentum to gather. “A year ago, only the brave challenger brands saw the opportunities in social media,” says Steve Richards, managing director of social media agency Yomego. “Now, the sector leaders are getting involved, and there seems to be a mad dash to get as many ‘likes’ as they possibly can on their Facebook page.”
The question of its worth, however, keeps arising. Millward Brown global innovation director Duncan Southgate argues that it is hard to attribute a monetary value to social media campaigns: “We’ve slightly set ourselves up for this question with the ‘value’ label,” he admits – the study is titled
The Value of a Fan.
“We ended up asking the more answerable question, which is what is the brand value of a fan page? A fan page is only part of the social media mix and it’s very hard to give it a precise dollar value. Input is hard to measure, the impact on sales is hard to measure and social media is only one of many influences... objectives are more about brand loyalty than driving sales.”
MEASURING PAGE ‘LIKES’
It is unsurprising then that Millward Brown’s research found that 50% of advertisers were unsure of the ROI of their social media fan pages. Although 23% felt they had achieved a good return, 27% felt it was poor.
While Millward Brown’s study refrains from assigning a dollar value to social media, other research is more forthright. Southgate cites Vitrue’s research, which values a Facebook fan at $3.60, while Syncapse puts the average annual value per fan at $136.3.
Richards questions both values. “There is a wide discrepancy – no-one’s got a handle on an exact attributable value on ‘likes’, because in many ways it’s meaningless,” he says.
But Malcolm Devoy, head of Arena Media’s social unit, Social 247, argues that “in some cases” demonstrating an ROI is achievable. Arena specialises in integrating all media and can track its influence by using widgets embedded into the social elements of campaigns. “It’s the same for paid-search, so when you do your reporting you can see the role social media has played,” he says.
Like it or not, all brands have a social media presence, from mentions by consumers and commentators in blogs and forums, to ‘likes’ on Facebook and Twitter feeds. This has led Yomego to set up an index of brands ranked according to their popularity in social media, comparing it with Interbrand’s
Best Global Brands ranking.
Topping the league is eBay, which comes 43rd in Interbrand’s ranking. “It’s a good example of a brand that knows its way around social channels,” says Richards. “Its customer service is integrated into the site really effectively and it manages any negative sentiment really well, monitoring detractors, ranking their influence and then doing something about it.” Conversely, Apple, second in Yomego’s Social Media Reputation survey, does nothing to engage social media, yet is revered.
But where a brand like Apple takes a passive approach, plenty of brands are actively embracing social media’s potential. A recent campaign for the pizza chain Domino’s by 247 Social, in which it recruited online customers as an affiliate sales force, is a case in point. The agency built a Domino’s-branded widget that could be downloaded from a variety of online sources, including Facebook, and which could be hosted as an ad on people’s social network pages or blogs. Those who generated enough sales were paid a commission. Since its February launch, it has contributed to a 61.4% hike in Domino’s ecommerce sales.
But there are many examples of brands opting for a less definable return on investment. Yomego’s work for Ireland’s leading telecoms firm Eircom, sponsor of the Irish national football team, eschewed the pursuit of ‘likes’ to create a bespoke social media space. The agency used Facebook, Twitter, Flickr, Bebo and YouTube to direct fans to a site called Soccer Republic where they could create, view and comment on exclusive content. The campaign did not result in a demonstrable returnon-investment, but attracted
more than 100,000 visits.
TRACKING CONVERSATIONS
Devoy asserts that pure brand awareness campaigns are hard to track. “It depends on the assets created to spark conversations,” he says. “You have to think about what you do to measure it. We all use social media monitoring tools that track conversations, so on a basic level you can see how many people are talking about a brand.”
While Facebook’s Edge avoids associating a ‘like’ with a monetary value, he argues that brand advocacy is a powerful aspect of marketing. “We know that when someone sees a friend in the social context around an ad for example, the ad is even more effective,” he says. “Nielsen research shows that, on average, people are 68% more likely to remember seeing an ad and twice as
likely to remember its message.”
He cites a Facebook campaign with a strong ROI. Ticketmaster in the US implemented a ‘friends’ module where users could see events their friends ‘are attending’ or ‘maybe attending’. It found that when a customer posted an event on Facebook it generated more than $5.30 in direct ticket sales, while ‘likes’ generated $3.
So, is it possible to assign a dollar value to a brand’s social media voice? That depends. Campaigns that incorporate direct response provide a clear indication of ROI, whereas the impact of pure branding campaigns is harder to determine. “There is a distinction between brand TV and DRTV,” Devoy says. “Advertisers will spend a huge amount on TV to keep a brand front of mind. So, social media shouldn’t always be viewed as something that should generate sales.”
Southgate adds: “Analytics will likely improve and as audience sizes increase it will become easier to measure.”
Facebook is clearly looking to tap into this growth and is bolstering its social commerce capabilities, a move that could see more brands invest in ROI-accountable social marketing.
There are still brands intimidated by unregulated social media. “Other media channels have a differentiator – you can cut and run,” Devoy says. “Social is a media channel but also a conversation.” But as the volume of brands entering conversations with consumers grows louder, those that stay silent risk being drowned out by their rivals.
M&M VIEWPOINT
Facebook has only been around for seven years and Twitter for less than five, so it’s not surprising that it is hard to assign an accurate monetary value to a Facebook fan or a Twitter follower, despite the industry’s best efforts.
The complexity of the relationship between brands and consumers in the social space means that the best we can manage at present are proxies - such as our effort below. With ‘social media’ growing in popularity with consumers, and so with brands, the race to define a social media metric is on.
Also read Integrated social media drives sales
Ben Bold