Executive  summary      

 

Social  media  is  a  trendy  and  global  subject,  which  gives  390  million  results  on  

Google  search  engine.  In  Belgium,  82  %  of  the  online  population  is  connected  to  

social  networks.  For  this  reason,  more  and  more  brands  decide  to  invest  in  this  

new   channel   but  majority   of   those   brands   do   not   measure   the   return   of  

investment  (ROI)  of  social  media.  Impression  emerged  that  many  companies  are  

investing  in  social  media  to  mimic  other  companies,  to  be  modern  and  because  it  

looks  like  a  “free  lunch”  but  do  not  have  a  real  strategy.  This  feeling  has  given  a  

definite   question   for   this   thesis:   “is   social   media   a   profitable   channel   for  

FMCG  brands?”        

 

This   thesis   tries   also   to   countered   common   erroneous   beliefs   such   as   the  

concept  that  social  media  is  free,  that  “built  and  they  will  come  strategy”  is  always  

successful,   that   social   media   can   only   be   measured   by   qualitative   metrics  

because  much  is  intangible.  

 

Based   on   researches,  main   reasons   for   unsuccessful   social   medias   can   be  

emphasized:   lack  of  knowledgeable  staff  and  of  budget,  management  resistance  

and   technical   complexity,   not   relevant   to   the   market,   issue   of   immediacy,  

complexity  of   integration   in   the  marketing  mix  and  consistence   in   the  different  

channels  used.    

 

Increase   sales,   create   shareable   content,   mimetism,   skip   expensive   traditional  

media  and  create  more  competition  in  the  advertising  space  in  order  to  improve  

 

To  contact  me  :      sg@live.be  http://www.twitter.com/stevegoudsmit  http://www.linkedin.com/pub/steve-­‐goudsmit/37/760/ba3  

purchasing   conditions   of   traditional   media,   improve   after-­‐sales   department,  

enhance  brand  awareness,  modify  brand  perception,  personalize  the  brand  are  

the  main  reasons  to  invest  in  social  medias.  

 

It  seemed  essential  to  separate   the  social  media   landscape   in  three  different  

components.  The  first  is  the  paid  media,  that  requires  paying  advertising  space.  

Then   there   is   the   owned   media,   which   represents   all   the   assets   the   brands  

possess   such   as   their   Facebook/Twitter/YouTube   page   and   finally   the  earned  

media,  which  refers  to  “brand-­‐related  consumer  actions  and  conversations”.  This  

thesis  focus  on  owned  media  because  earned  media  is  not  led  by  companies  as  

it   is   initiated   by   consumers.   Nevertheless,   consumers-­‐generated   has   been  

considered   for   the   listening   part,   as   it   is   the   starting   point   to   build   an   owned  

media  campaign.  

 

To  determine  the  listening  value  for  FMCG  brands  in  social  medias,  a  sample  

of  twenty  different  brands  have  been  selected  at  a  representative  cluster  of  local  

and   regional   brands,   which   are   active   in   Belgium   and   in  maximum   two   other  

neighboring  countries.  No  global  brands  have  been  chosen  to  avoid  creating  too  

much  noise  and  because  patterns  and  preferences  are  different  among  various  

cultures.   Then,   a   sampling  method  has   been   selected,   using   socialmention.com  

(to   analyze   social  media)   and   google.com/blogsearch   (to   analyze   blogs).  Many  

limitations  were  however  faced,  such  as  the  low  quality  of  the  chosen  platforms,  

software   issues   to   recognize   sarcasm,   slang,   comparisons’   issues   and   the  

equivocal  use  of  names.    

 

This  analysis  has  demonstrated  that  only  10%  of   the  total  sample  expressed  

opinion   related   to   the   brand   while   only   7   comments   out   of   640   could   help  

brands.  For  the  majority  of  those  brands,  not  enough  information  was  available  

to   get   a   directional   or   a   representative   idea   that   brands   could   use   to   better  

understand  feelings  toward  the  brand.  This  seems  to  be  linked  to  FMCG  market  

(low   involvement)   for  which   consumers   do   not   spend   time   to  write   reviews.  

Moreover,   it   seems  more   relevant   to   look   at   the   category   of   products   than  

analyzing  brand  names.    

It  has  been  concluded  that  online  listening  cannot  be  currently  considered  as  

an   alternative   technique   and   brand   should   continue   to   listen   offline.   Online  

listening   could   however   be   interesting,   as   it   has   permitted   to   highlight   two  

potential  crises.    

 

The  core  of  the  thesis  has  been  focused  on  the  ROI  of  owned  social  media  

advertising  in  2011.  The  aim  was  to  provide  an  easy  and  clear  framework  that  

can  be  applied  to  different  social  media  platforms.  It  is  obvious  that  it  is  not  the  

only  measure  to  evaluate  impact  of  social  media  but  it  has  permitted  to  highlight  

results   that   the   analyzed   brands   were   not   aware   of.   Engagement   and   brands’  

personalization   concept   are   too   difficult   to   measure   and   have   been   excluded  

from  the  analysis.  For  this  chapter,  a  sample  of  115  local  and  regional  brands  has  

been  identified  but  only  84  of  them  have  been  studied,  as  the  others  have  been  

considered  as  equivocal  (having  several  meaning  such  as  “Le  Chat”  &  “Sun”  soap,  

“Zero”  chocolate).    

 

The  analysis  of  this  ROI  is  based  on  the  respective  cost  per  contact  in  traditional  

media  vs.  social  media.  Each  social  media  cost  per  mille  (CPM)  will  be  linked  to  a  

traditional  media  that  mirrors  well  the  value  of  a  contact.  This  approach  gives  

the   maximum   value   that   a   brand   could   spend   on   social   media   before  

reaching   the   break-­‐even   point   vs.   traditional   media   expenditures.   This  

notion  has  been  called   “maximum  equivalized   investment”.    YouTube  has  been  

compared   to   television,   Twitter   and   Facebook   to  magazines.   It   seems   obvious  

that  comparing  magazines  with  social  media  is  not  a  perfect  fit  as  there  are  a.o.  

problems   related   to   the   quality   of   Twitter   posts  which   should   not   exceed   140  

characters  while  magazines  ads  appear  on  one  page,  problems  linked  to  people  

who  choose  to  follow  brand  social  media  news  while  magazine  ads  are  imposed  

by   the   magazine’s   editors,   etc.   Nevertheless,   it   gives   the   most   reasonable  

benchmark  to  start  the  analysis.  Furthermore,  for  Facebook  and  Twitter,  analysis  

has   only   looked   at   web   pages   managed   by   brands   while   for   YouTube,   owned  

videos   but   also   earned   videos   that   were   generated   by   consumers   have   been  

considered,   to   determine   their   owned   social   media   share   of   voice.   Finally,   by  

interviewing   the  brand  owners   and   comparing   value   (as   calculated)  with  

costs  of  the  social  media  campaign  (as  communicated  by  the  interviewee),  

it  has  been  possible  to  judge  the  ROI  of  their  owned  social  media  efforts.  

 

Many  findings  can  be  extracted  from  the  analysis.  First,  not  every  FMCG  brand  

is   active   on   a   social   media   platform:   25  %   are   active   on   Facebook,   5%   on  

Twitter  and  20%  on  YouTube  and  the  bulk  of  those  brands  are  active  only  on  one  

of   the   three   different   networks.   Then,   beer   brands   attract   more   people   on  

Facebook   than   other   brands.   This   can   be   explained   by   the   notion   of   social  

magnetism,  where  some  trademarks  appeal  more  to  people  as  they  want  to  be  

associated   to   them   and   because   those   brands   reflect   an   image   of   coolness.  

YouTube   videos   uploaded   seem   to   be   interesting   due   to   the   best   practice  

campaigns   but   60  %   of   the   analyzed   videos   have   been  watched   less   than   100  

times.  It  has  also  be  concluded  that  85  %  of  the  studied  brands  should  spend  less  

than   1000   €   on   YouTube   before   reaching   the   break-­‐even   point   vs.   traditional  

media.  For  Facebook,  80%  of  the  brands  should  spend  less  than  5000  €  to  reach  

this   break-­‐even.   Moreover,   interviewed   brands   claimed   having   spent   between  

40.000   €   and   60.000   €   in   2011.   It   can   thus   be   concluded   that   Facebook  

investments   could   have   been  more   significant   than   YouTube   investments   and  

above  all,  that  owned  social  medias  were  not  profitable  for  FMCG  brands  in  

Belgium.  

 

Another  finding  is  linked  to  the  share  of  voice  of  the  three  different  social  medias  

in  comparison  with  TV  traditional  media:  for  75  %  of  the  brand,  social  medias  

represent  1  %  of   the  total   traditional  and  social  media  views  while  for  the  

remaining  25  %,  the  share  of  voice  is  lower  than  5  %.  

 

Earned  media   seems   to   be   the   consequence   of   a   good   paid   and   owned  media  

strategy.  Indeed,   focusing  on  owned  media  increase  brand  awareness,  motivate  

people   to   speak  up   and   can  be   the   stimulus   that   lead   to   the   next   social  media  

campaign.    

 

To  conclude,  owned  social  media  has  a  lot  of  potential  but  still  a  long  way  to  go  

before   it   becomes   a   profitable   tool   for   the   local   and   regional   FMCG   brands   in  

Belgium.