The State of Social Network Marketing

Professor Johnny ParhamProfessor of Marketing. Zicklin School of Business The City University of New York

Over 33% of global marketers say they feel “minimally prepared” to take advantage of new techniques in digital and social media

Over 33% of global marketers say they feel “minimally prepared” to take advantage of new techniques in digital and social mediasocial media

I. The Marketer View

Fun stuff about Johnny Parham

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Most recent purchase at: Victoria’s Secret

How do marketers feel about social media today?

???

68%say it’s

“critical” or“important”

Source: Alterian,Dec, 2009

63%say it’s

“overrated”

Source: AdMediaPartners,Dec, 2009

Social media marketing participation among marketers in the U.S.

Forrester Mzinga & Babson

Business.com

Placing ad dollars on social sites

41% 40% 48%

Building own social media presence/ Devoting staff 64% 57% 74%*

*Maintain company accounts or profiles on social sites (average of B2C and B2B marketers)

“We spend the majority of our time engaging with people on these networks, not advertising on them.”

--Scott Monty, Ford, in an interview with eMarketer

“We spend the majority of our time engaging with people on these networks, not advertising on them.”

--Scott Monty, Ford, in an interview with eMarketer

“If you’re good, you can get a lot of value on social networks from very little investment. You are almost rewarded for getting better results by spending less money.”

--Ian Schafer, CEO, Deep Focus

“If you’re good, you can get a lot of value on social networks from very little investment. You are almost rewarded for getting better results by spending less money.”

--Ian Schafer, CEO, Deep Focus

It’s less about buying social media, and more about how

you can earn and own it!

It’s less about buying social media, and more about how

you can earn and own it!

It’s all a matter of

TRUSTIt’s all a matter of

TRUST

The Hierarchy ofTRUSTED Sources

#1 Friends, Family

“Social Sites”

Face-to-face,personal

interactions

Sources: Edelman; ARAnet; LightspeedResearch; Keller Fay Group, etc

Marketer

The importance of trust

Focus on Your Core:

Prospects

Customers

CORE

Owners of your brand

Cultivate them carefully

Create brand Fan Pages,

evoking cognitive dissonance

• More likely to buy

51%

• More likely to

recommend60%

Chadwick Martin

Bailey, Mar, 2010

What about social media measurement and ROI?

80% of US marketers acknowledge that it is difficult to track ROI with social media

–Econsultancy, Feb, 2010

???

59% of US marketers say social media is either somewhat difficult (39%) or very difficult (20%) to measure

–Aberdeen Group, 2009

Less than 1/5 of marketers are measuring the ROI of their social media efforts

• MENG................... 12% (US)• Mzinga & Babson.. 16% (global)• Aberdeen Group.... 18% (global)• Econsultancy.......... 19% (US)

“Everybody knows social media is important, but it’s so new that only a few are measuring its business impact with any sophistication.”

--Jim Sterne, author, Social Media Metrics

“Everybody knows social media is important, but it’s so new that only a few are measuring its business impact with any sophistication.”

--Jim Sterne, author, Social Media Metrics

The ROI Mandate

While 80% of marketers say it’s important to measure ROI from online activities, only 31% say they can do so effectively

--Omniture, May, 2010

While 80% of marketers say it’s important to measure ROI from online activities, only 31% say they can do so effectively

--Omniture, May, 2010

Social Media Measurement Today

“For the few marketers who do attemptto measure social media, the metrics they use are not terribly sophisticated.

Most marketers today do not investsufficient time, effort or money on

social media measurement.”

Business.com Survey% Using Site Traffic as a

Measure of Social Success:

• B2B............ 68% (#1)• B2C............ 57% (#1)... and“easy”

“But unless these new visitors, fans or friends transact as a result of their visit, either directly or by their referrals, the

value of the traffic is limited.”

“But unless these new visitors, fans or friends transact as a result of their visit, either directly or by their referrals, the

value of the traffic is limited.”

THE AGE OF ENLIGHTENMENT(circa 2010)

Getting a handle on social media leads to improved business results

For those top “best-in-class” companies, amajority of whom monitor social media, thesefirms were 87 times more likely to see higher returns on their marketing investment.

Found a financial correlation between thosefirms who are “deeply and widely engaged” withsocial media and those that significantly outperform their peers in revenue and profits.

1. Establish clear, agreed upon marketing goals

2. Organize your metrics into a logical framework

3. Identify specific metrics to go into each bucket

4. Design a ‘test and control’ (A/B) approach

5. Determine a dollar value for customers who

opt-in to engage with your brand

6. Consider the cost savings in market research

7. Build system for measuring 360-degree view

7 Guidelines for Achieving ROIfor Social Media

#1. Establish clear marketing goals, and then identify social metrics that directly support those objectives.

If hard ROI metrics are difficult to track directly, consider a range of softer metrics that can be linked back to desired outcomes.

“Hard” ROI

• Sales• Leads• Cost-per-sale• Profits

ConsumerSentiment

VideoSharing Rate

# of TwitterFollowers

# ofFan Pages

# ofBrand

Searches

“Soft” Metrics(i.e., Measures of Engagement)

#2. Organize your measurements and metrics into a logical framework.

ExposureEngagement

ROI/Outcomes

Social Media Measurement Framework

Perceptual & Behavioral Outcomes

FinancialOutcomes

MarketingInvestment

OutcomeMetrics

Engagement Metrics

Exposure Metrics

LINKAGE

LINKAGE

LINKAGE

93

#3. Identify the specific metrics that will be measured within each bucket

Exposure

Social Networks (Facebook/MySpace): •Number of fans/friends •Number of comments

Twitter: •Number of true followers •Number of tweets•Number of re-tweets

Videos/Photos (YouTube, Flickr): •Number of views •Number of comments •Number of passalongs, e.g., via widgets

Social Networks (Facebook/MySpace): •Number or % of comments in response to photos/videos/posts•Number of positive vs. negative sentiments

Twitter: •Number or velocity of retweets •Number of positive vs. negative sentiments

Videos/Photos: •Number or % of comments, favorites, tags to videos and photos•Number of positive vs. negative sentiments

Engagement

(transcend individual social channels)

Brand Awareness: Increase in % of respondents aware of the brand

Consideration: Increase in % of respondents who include the brand intheir consideration set

Purchase Intent:Increase in % of respondents who indicate an intent to purchase the brand

# of Qualified Leads

Sales/Purchases

ROI/Outcomes

#4. Using consumer panels, design a ‘test & control’ (A/B) testing approach to compare outcomes for each metric

Identify and segment individuals in your target audience into two groups – those Exposed to content and a Control group (not exposed)

Compare outcomes (e.g., purchase history, intent to purchase, sign-ups for a demo) between the two groups by measuring the ‘lift’

Calculate ROI for initiative…

Calculating an ROI for social media

VALUE for Exposed Group

VALUE for Control(not exposed) Group

Fully LoadedCosts

Or, create a “Social Media Dashboard” composed of soft and hard metrics

“Using a variety of hard and soft ROI metrics can absolutely be accomplished. I would offer that volumes of conversation over competitors, sentiment, the level of influence of those who are interacting with your brand, etc, are but some of the metrics that can be used to construct a dashboard of success.”

--Blake Cahill, Visible Technologies

#5. Determine a dollar $ value for customers who choose to opt in and engage with your brand via social networks.

“We look at the percentage of Facebook fans that convert to customers, the percentage increase in their frequency of visits, projected increases in their average ticket and...we can project their future value. Are we 100% right? No. But are we directionally correct? Absolutely.” --Jim Ensign, VP

A. Learn how consumers talk about your brand, product or service category• Notice what words and language they use• Learn about their interests and intentions

B. Discover real or perceived problems with your product or customer service,e.g., via Twitter

#6. Take into account the money your saving in all kinds of indirect ways

“Warning! Warning!”“By listening carefully, we harness social media as an early alert system… so we can react quicker to issues.”

--Richard Brinhammer, Dell

“If you do not listen carefully, you are a fool – not because the crowd is a threat (although, of course, it is) but because it is your greatest resource. What if its wisdom were harnessed and its power unleashed? Here's what: payday.”

--Bob Garfield, former ad critic, Ad Age

“If someone on a blog or social network is trashing your brand, what is it worth to you if one of your passionate brand

fans speaks out on your behalf?”

“If someone on a blog or social network is trashing your brand, what is it worth to you if one of your passionate brand

fans speaks out on your behalf?”

#7. Build the technological capabilities to measure your customers’ complete digital footprint – in real time.

Marketers need to capture:

• Intentions… serving messages – in real-time – based on the assumed intentions of the consumer.

• Mentions… the things people say about your brand are more important than what you say.

“You need to invest in analytics to understand the various data points available and examine the correlations of these data points over time. You develop an observation, you formulate a hypothesis and you either prove or disprove your ideas.”

--CoryTreffiletti, President, Catalyst SF

“You need to invest in analytics to understand the various data points available and examine the correlations of these data points over time. You develop an observation, you formulate a hypothesis and you either prove or disprove your ideas.”

--CoryTreffiletti, President, Catalyst SF

Integrate social media into every aspect of your marketing efforts – and in real-time!

“I view listening as an important analytic. Listening and other analytics can drive your strategy at a macro-level... They can either reinforce your strategy or correct it, and give you opportunities for ideas, products, services and/or segments.”

--Michael Mendenhall, CMO, Hewlett-Packard

“I view listening as an important analytic. Listening and other analytics can drive your strategy at a macro-level... They can either reinforce your strategy or correct it, and give you opportunities for ideas, products, services and/or segments.”

--Michael Mendenhall, CMO, Hewlett-Packard

Double-digit increasein online bookings!

• Think social marketing, not media.

• Know your objectives!

• Leverage TRUST.

• Listening comes first.

• Join the conversation –

but add value.

6. Be Authentic, Humble, Transparent.

7. Recruit from your core.

8. Target the Influentials.

9. Adopt a long-term, real-time approach.

10. Integrate with other

communications

Best Practices for Social MediaThe Top 2 Objectives for Social Marketing:

#1. Enhance relationships with customers/clients#2. Build company’s brand