INSIGHT: Social at the heart of marketing strategies

On the 20th February, PHD’s 21st birthday, it sent out a film to all its employees called 'We are the future'. In truth, PHD had not prepared for it to spread in the way that it did.  Therefore, the link was sent out without any social infrastructure to manage it. And the agency paid a price. Within four days it had a social contagion that it flamed by deleting some of the more offensive comments. 

After the event, the key learning is a visceral confirmation of the incredible power of social networks.

This has heightened the already elevated interest in the power of social - and made the agency wonder what happens when brands generate positive contagion.

In essence, socially engaged companies also seem to be companies that make good decisions across all areas of the business - as gauged by financial performance. This evidence comes from the latest Engagement Report. It showed that organisations with the deepest social media engagement increased revenue 18 per cent last year, while the least active saw sales drop six per cent. 

The key point here is that of correlation not causality. This report is not saying that becoming socially advanced will lead to disproportionate increases in revenue and profit.  What it is saying is a lot less dramatic, albeit of note:  well-run businesses are heavily investing in social.

But what about causality?  One of the early pieces of research was carried out by Comscore and GroupM in 2009, which suggested that social media exposure significantly increased consideration. Consumers exposed to ‘influenced social’ exhibited 223 per cent heavier search behaviour than consumers not exposed. The issue is getting a high enough reach through ‘influenced social’ to justify the investment and thinking time this requires.

A more recent study carried out by Nielsen and Facebook looked at the impact of social exposure on brand metrics. In 2010, Nielsen examined the impact of Facebook advertising on 14 campaigns using the Nielsen BrandLift methodology. Campaigns used the ‘become a fan’ engagement unit, and although organic and social ads only accounted for 10 per cent of the total impressions served, they had greater power — up to three times the effect on brand measures — compared to standard ads.

Beyond campaigns, social marketing is also being used for promotional campaigns. The most famous example of a social promotion is Dell’s use of Twitter as a sales channel. This is still worth mentioning as it is yet to be surpassed. They claimed US$3 million in sales generated through their Outlet Twitter feed over just two years.

So social media offers a new array of channel options for promotion campaigns, with real opportunities to generate significant ROI. Social can increase consideration, increase power of online investment and offer opportunity for social-led promotions. But arguably the greatest gain seems to be in making social the core of the whole marketing piece. Examples are emerging to corroborate this. The now infamous Old Spice campaign doubled sales within a month of the campaign inception — clearly, this is exceptional, but it does indicate the potential power of socially-activated marketing campaigns.

The key learning here is that these early examples are indicating the power of going beyond just using social media within an online space and instead giving the whole campaign social roots.

In fact, agencies probably need to move beyond this and aim to help create socially enabled businesses. So this would mean thinking beyond campaigns and thinking real-time. Agencies must think ‘always on’. There is emerging evidence on the value of doing this, on the ongoing value of building communities that keep the brand front of mind, outside of campaign periods. In the last decade, direct response advertisers saw telephone-based responses drop but saw increases in website visits. We are now starting to see an echo of this in social media — with click-through rates for social ads falling, while click-throughs from earned media are increasing. For example, in 2009, an ad on Facebook generated an average CTR of 0.063 per cent (with a cost per click of $0.27 and effective CPM of $0.17).  Within around a year this has dropped 20 per cent to a CTR of 0.051 per cent (with a cost per click of $0.49 and an effective CPM of $0.25).

Now, however, adding the clicks generated via both owned and earned impressions begins to rebalance the CTR; and in some instances can actually result in holistic CTRs that are significantly higher than anything experienced to date. What is clear is that social media has more than emerged as a marketing discipline that can, if carried out well, offer opportunity for truly significant payback. 

Whether it is increasing brand consideration for active searchers, increasing the
return from online, facilitating powerful social-promotions, allowing marketers to create socially enabled brand campaigns or building ongoing communities. Not to mention using it to survey, propagate and co-create with members. As we move ahead into these new areas we must not forget to get the basics right — listening and responding in time; and engaging in an authentic and completely open way. A lesson PHD has personally learnt.

This article was originally published in the April issue of Campaign Asia-Pacific.