Social media has dramatically changed the landscape for marketers in many significant ways, including the opportunity for greater creativity, the ability to have meaningful dialog with end users, and perhaps most importantly the ability to communicate with significantly greater speed than ever before.
Social media is easy to use. It’s fast. And you get immediate feedback, which reinforces behavior. And like most addictive behaviors, this can lead to bad habits. So when true believers storm the C-Suite with heartfelt pitches to invest people, resources and money in social media endeavors, it isn’t always met with open arms. Why? Well, many social mediaphiles would like to chalk it up as a cultural disconnect due to the Luddite-like fear of people out of touch with the new and the now, but the fact is that it’s often a business disconnect – a financial and strategic disconnect that needs to be understood.
I’ve been on many sides of this issue, including being the C-Suite guy who’s said yes and sometimes no to clever and hip new marketing approaches. So let me give you an opinion that may run counter to prevailing commentary on the 3 wrong answers you don’t want to hear about social media marketing.
“The ROI of Social Media” question.
Ask this of your social circle on Twitter and you’ll hear that it’s the same as the ROI of putting on your pants, the ROI of still being in business in five years or that the real definition of ROI is “return on interest” or somesuch nonsense.
The real answer is that the ROI of social media is the incremental return your enterprise gets divided by the fully loaded investment in your social media efforts.
What a buzz kill.
It costs money to pay people to write blog posts, tweet and generally do things in social media. If this isn’t reducing costs or boosting your incremental revenue – your incremental revenue – then you’re wasting scarce resources.
Incremental revenue, just so we’re all on the same page, is money you made that you wouldn’t have made had you not done what you just did. It isn’t sales that came in through social media that otherwise would have come in through another channel. It’s incremental.
If what you’re doing on Twitter isn’t measurably saving more money than the expense the people doing it are costing the company, you’re doing it wrong. And “doing it wrong” refers to how you’re approaching your business, not how you’re managing your social media campaign.
“We tested it on Facebook and Twitter.”
No you didn’t.
Facebook and Twitter are both inappropriate for projectable data collection unless your entire business is comprised of active commenters on both Facebook and Twitter, which I’m guessing it isn’t even if you’re the marketing director for Farmville.
You don’t test a logo in a focus group any more than you’d ask anonymous strangers standing in the dark if this bowtie makes you look funny. When everyone is listening only to the most strident 1% who are talking – the ones who most like to hear themselves talking – then you get the worst part of group think.
GAP, in all probability, never tested their new logo. They should have. A professional brand would have. Their best course of action would have been to test a series of different logo concepts plotted out on a four-quadrant map with each point of the compass representing a different and strategically important extreme, and then refine these into four or five workable executions that would then be tested against a panel of likely consumers – not handraisers – who shop at GAP and other similar stores, including those who have shopped before but have stopped, those who shop at competitors and maybe an oversampling of one or more important sub-clusters.
They should have tested a sample size of somewhere around 5,000 randomly selected people who fit within the above profile filters – this would have allowed them to have statistically relevant (95% confidence interval reads at +/- a few percentage points of sampling error) samples on even the smallest data tabs (like left-handed female head of households with 3+ kids in suburban midwestern zip codes who haven’t been in a GAP store since last Christmas, for example). They would have known what was best. Then, if the social mediasphere complained, the brand could have told these self-proclaimed experts to sit down and shut up. They didn’t because they couldn’t.
An insider with knowledge of the brand’s stance on research told me yesterday that GAP’s research budget has been cut significantly over the past several years, possibly by as much as 75%. My friend wasn’t surprised at what happened, saying, “This is what happens when a fact-based culture decides it has all the answers and stops doing its homework…” True statement.
“It’s successful if people are talking about it.”
It’s successful if it sold something. Talk is irrelevant unless it comes along with the right action – which isn’t sending it to your friends so they can smirk at it, too.
Old Spice was a viral hit, and the viral hit didn’t move the sales needle until the brand threw a ton of buy-one-get-one-free coupons behind the product. When they did, sales ticked up – and when the coupons expired, the brand sell-through collapsed.
YouTube views, Facebook likes and blog comments are all good things that show a commitment to a brand. The commitment may be active – meaning they’ll do something if you ask – or completely passive. The role of marketing is to get people to do stuff –that stuff being buying your stuff. So if the community building isn’t active, it’s both passive and useless from a marketing standpoint.
Lesson learned? Not really. Old Spice is still held up as a paragon of great marketing. It should be held up as a paragon of great theater. The production value was extraordinary. But as a marketing vehicle? Lots of expense, little to show for it at the end of the quarter.
The Need for Causality and the Lowering of the Bar.
I have a growing concern that runs through this entire argument. The cost of digital cameras and desktop video editing, not to mention the ease at which anyone can post a video to YouTube, have all made content creation terribly easy. When my father was making films back in the day – documentaries, mostly for governmental agencies and NGO’s – making a film was a steep five-figure or six-figure investment. Now, it’s a Flip cam and an upload. Blogging, Tweeting and all other forms of social media have not just lowered the bar to self-publishing but actually eliminated it.
Have we become lazy? The ease at which we can do stuff has given us the motivation to do more stuff rather than reflect on what may or may not have made what we just did successful or not. It’s easy to look at the easy metrics. It’s hard – and subsequently becoming a rare skill set – to understand causality and clearly define what makes one campaign a financially successful one while another is not. For a purely web-based business, this is relatively easy of course. For a channel based business – like GAP, or Old Spice, or Tropicana, or anyone else like these – it’s harder. Our collective attention spans are shorter than they once were.
Marketing needs creativity but it also needs discipline, and discipline needs to be the parent. Too often, it’s the other way around. When we hear (not so much anymore, but it’s still out there) that the future of business lies not with MBA’s but with Masters of Fine Arts graduates who are more skilled with Illustrator than Excel, we may have a data point that explains this phenomenon. And the result is that advertising is increasingly theater and not “commercial.” Marketing as a discipline suffers as a result, its credibility waning with every massive expense that fails to convert shoppers into buyers.
What does this all mean?
With the explosion of media choices and the ubiquity of inexpensive creative options, the skill set most in need in the modern enterprise is understanding causality. What works and why. The above examples show us how lazy we’ve become and this hurts us all.
[…] This post was mentioned on Twitter by StephenDenny, Serengeti Comm. Serengeti Comm said: The 3 Wrong Answers You Don’t Want to Hear in Social Media Marketing from @Note_to_CM) http://bit.ly/bsMeWp […]
Perfectly valid diagnosis. Got any suggested treatments? Cures?
(Stupid me, I should probably have read back a few posts before I wrote that.) I’m enjoying your blog.
McDonald’s recent assertions regarding their success with a FourSquare “campaign” are another great example of telling a better-version-of-the-truth (extolling foot traffic while neglecting actual sales metrics) when it comes to calculating SM ROI.
There’s no doubt that SM is forcing brands to rethink how they interact with consumers. There’s also no doubt that marketers are still scrambling to figure out how best to harness the power. Some get it (Ford) most still do not. But, I wonder if the impact of SM isn’t more than a little over-hyped. The recent events surrounding Apple’s iPhone 4 got me thinking, and it evolved into this blog post that I invite you and your readers to check out: http://bit.ly/dpPVK3 (forgive the self-promotion, but I think the two pieces make good companions).
All the valuable content you provide apart, your insights on Gap and Old spice will make me think and chuckle for a while.
Thanks for clearing my mind a lot.
Gabriele: thank you – a chuckle helps sometimes! There are interesting lessons buried deep in some of these big stories! Glad they continue to resonate and I appreciate your stopping by to comment.
Ken: I haven’t read the McD’s/4Sq story yet – and truthfully, I know that there are good and solid case studies that show positive ROI stories attributed to social media efforts – but I shake my head when I hear the sort of “the debate is over” rhetoric used with regards to this particular toolkit. Any time a proponent declares the debate to be over, it typically means that the debate isn’t – and that the proponent is tired of hearing arguments that they can’t refute.
Will check out your post and many thanks for stopping by & commenting – most appreciated!
Thank you sir – glad you’re finding it useful and glad that it’s making sense! I never know, myself.
Stephen — Thanks a MILLION for these excellent insights. You are dead-on. I have long insisted that far too many devotees of social media marketing are far too caught up in the “social” and the “media” without a clue about the “marketing”, with all the business acumen and savvy that entails.
Interesting info on the Old Spice promo — where can I get more facts on the real results?
Also, I would love to get your feedback on a column that I penned a couple of months ago in the inaugural issue of Social Media Marketing Magazine: http://bit.ly/cpmizj . Please understand, I am not being merely self-promoting here — I am generally desirous of honest feedback, pro or con …
Many thanks for your comment and glad it all resonated with you – all the data I saw on Old Spice is out there on Ad Age, Brand Channel and elsewhere. I have links to many of the articles in my previous (2 or so) Old Spice posts, so that may help you get to the facts quicker.
I’ll give your post a read – thanks for forwarding along!
Great post and excellent conclusion: different situations call for different tactics and it’s no good following the herd just because SocMed is fashionable.
But most of what you say also applies to advertising, so is the implication is that corporate brand building is no longer worth the spend?
Ludovic: thanks for your note – I wouldn’t say that “corporate brand building is no longer worth the spend” unless you’ve done the math and come to the conclusion that the way you’re trying to do it isn’t helping. There are plenty of ways to build a brand (and a company). You just have to know, based on the evidence you’ve collected, whether you’re getting any sort of positive return for your efforts.
That all being said, advertising definitely falls into this same equation. When you spend money on an ad campaign – whether television, radio, print, or sandwich boards on gorilla-suited guys standing on the street corner – do your sales go up? Do they go up so that you’re making more money than what you spent? How you measure this and over what period of time depends on your own judgment and the likely longevity of your messaging and media choices, but at the end of the day you need to be sure your marketing is helping the business, not just massaging the ego.
The last time I looked at this body of research, I saw a lot of upside-down ROI on CPG brands and a toss-up in B2B. Who knows. Depends on your business, your market, your marketing strategy and how well you connected your marketing to driving sales.
Not an easy question! But if marketing was easy, we’d all be doing it. Thanks!