The True Value of Social Media

How social media is forcing us to redefine our marketing KPIs

 1. We create too many dead-end experiences.
2. We don’t know how to evaluate things that
aren’t dead-end experiences.

The Problem (with marketing)

 http://www.youtube.com/watch?v=ERGrSQoY5fs http://www.youtube.com/watch?v=D3qltEtl7H8&feature=related

It’s well
documented.

http://www.youtube.com/watch?v=gwaX40EnUdM
Culprit The microsite

Engaging, fun, but not very shareable

Culprit The web/mobile application

Engaging, helpful, but not very shareable

Culprit The online game

Engaging, addictive, but not very shareable

Culprit The online video

Engaging, entertaining, but not very shareable

Unless it goes viral...which is a 1-in-a-million chance you can’t plan for.
Dead end digital
Microsites Applications

Games
Videos

Engaging digital actions are important. But what’s more important is that we
enable consumers to effortlessly share, adapt and evolve our messages AND
measure the influence it creates.
 Return on Investment
Dead-end digital is similar to most
advertising, and we measure it
Digital Digital
Sale accordingly, judging its performance
Action Interaction
based on the sales it directly motivates.
But what about advocacy? What
about the ripple effect? Aren’t most
purchases influenced by personal
recommendations anyway?
Return on Interaction

We’re missing half the picture

 A Different Approach
DIGITAL MEDIA MEDIA THAT’S SOCIAL

Objectives: Objectives:
Reach Advocacy
Awareness Loyalty
Coverage Trust
Engagement Influence

Measures: Measures:
# of visitors Sentiment
# of page views Comments
Time on site Feedback
Conversions Mentions
Organic Reach

Adapted from http://www.slideshare.net/LumensionSecurity/the-greatest-

question-since-the-meaning-of-life-what-is-the-roi-of-social-media
 Return on Investment

Digital Digital More

Sale WOM Reco
Action Interaction Sales

Return on Interaction + Return on Influence

A more realistic way to assess value

Quantify the true impact of digital
and social actions by moving
beyond immediate impact to
include return on influence.

Our Goal

http://www.businessweek.com/magazine/content/09_22/b4133032573293.htm
Cool idea…but how do you do that?
 Visited this brand’s Downloaded a phone application
website or microsite from this specific brand
Posted a video online (e.g., Facebook,
YouTube) about this brand Watched commercials or videos
made by this brand on YouTube
Read a blog sponsored
Customized or designed a by this brand
product for this specific brand Played a web or browser game
sponsored by this brand

22
Posted a Tweet or RT about this specific brand
We studied
Made a charitable donation
directed through this brand’s site
Posted pictures online (e.g., Flickr, Picasa,
Facebook) that focused on this specific brand
Participated in an augmented reality
experience sponsored by this brand
Wrote about this brand in a personal blog

digital actions and their Became a fan of this brand on Facebook

Sent a customized message sponsored by
this brand to a family member or friend
effect on consumers.
Joined a Facebook group
focused on this specific brand
Posted a Facebook status
referencing this specific brand

Followed this brand on Twitter

Offered product ideas to this Voted on a product decision by this
brand in an open forum (e.g., brand (e.g., flavor, design, name)
mystarbucksideas.com)

Provided feedback on this Posted reviews about this brand

Joined an online panel or research
survey for this specific brand brand’s website
1.
1 2 3 4
Engage
Visited this brands’
Contribute Participate
13. Become a fan of this
Create
16. Posted a Facebook status
8. Posted reviews about this
website or microsite brand on Facebook referencing this specific brand
brand
2. Watched commercials or 14. Joined a Facebook 17. Sent a customized message
9. Provided feedback on this
videos made by this brand group focused on sponsored by this brand to a
brand’s website
on Youtube this specific brand family member or friend
10. Voted on a product
3. Downloaded a phone 15. Followed this brand 18. Wrote about this brand in a
decision by this brand
application from this on Twitter personal blog
(e.g. flavor, design, name)
specific brand
11. Joined a panel or research 19. Posted pictures online (e.g.
4. Read a blog sponsored by survey for this specific Flickr, Picasa, Facebook) that
this brand brand focused on this specific brand
5. Played a web or browser 12. Offered product ideas to 20. Posted a Tweet or RT about
game sponsored by this this brand in an open this specific brand
brand forum (e.g. 21. Customized or designed a
6. Made a charitable mystarbuckideas.com) product for this specific brand
donation directed through
this brand’s site Organized 22. Posted a video online (e.g.
Facebook, Youtube) about
7. Participated in an this brand
augmented reality
experience sponsored by
into 4
this brand categories
RECRUIT CUSTOMERS GROUP BY ACTIONS SURVEY ONLINE COMPARE GROUPS

n=408
ENGAGE

n=281 15 min. survey

CONTRIBUTE

BRAND X ENGAGE PARTICIPATE

n=282
ADVOCACY
PARTICIPATE CONVERSATIONS
NEW CUSTOMERS
BRAND SPEND CONTROL
n=284 ...
CREATE

CONTRIBUTE CREATE

n=1,945 n=865
Recent customers of 52 brands
CONTROL

20+ years old | HHI $35k+ Control group representative of Survey included questions on how Compared groups to each other
M/F Split | Social Media Accounts brands found in test groups much they talked, recommendations, and made conclusions based on
brand spend, etc. significant differences
Brands whose customers we studied.

*Brands determined by a pre-study of social media actions among consumers.

 % Who Talked
Percent of those who initiated conversations about the brand.

Control Engage Contribute Participate Create

26% 47% 55% 53% 64%

1.8 x control 2.1 x control 2 x control 2.5 x control

Assuming a set of 100 Assuming a set of 100 Assuming a set of 100

consumers, 80 more consumers, 60 more consumers, 170 more
people talking than the people talking than the people talking than the
Engage set. Engage set. Engage set.

Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010.
 Via Social Via Instant Message Other Digital
% who talked Face to Face Media Via Email or Texting Means

Control Where
26% 94% 2% 8% 3% 1%
people
Engage
talked
47% 82% 9% 15% 5% 0% Participate and Create are the
only digital actions that
Contribute generate conversation both
online and offline. Proof that
social media has influence
55% 71% 10% 27% 11% 3%
beyond the digital space.

Participate

53% 75% 43% 22% 28% 9%

Create Source: Digital Actions and

Their Effect on Advocacy,
22squared and Consumer
Insights Inc., 2010.
64% 55% 48% 41% 19% 3%
Presentation by:
How much they talked.
The number of conversations per 100 consumers.

Control Engage Contribute Participate Create

42 conversations out 110 conversations 123 conversations 260 conversations 270 conversations
of 100 consumers out of 100 consumers out of 100 consumers out of 100 consumers out of 100 consumers

Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010.
Social media actions generated
nearly 2.5 times more conversations
per 100 consumers than the lower
involvement engage group.

Control Engage Contribute Participate Create

42 conversations out 110 conversations 123 conversations 260 conversations 270 conversations
of 100 consumers out of 100 consumers out of 100 consumers out of 100 consumers out of 100 consumers

Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010.
How they influenced purchases
Percent who spurred a purchase

% who talked

% who spurred a purchase

Control Engage Contribute Participate Create

11%... 20%... 26%... 32%... 35%...

influenced a transaction influenced a transaction influenced a transaction influenced a transaction influenced a transaction
26% talked 47% talked 55% talked 53% talked 64% talked

Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010.
Influenced Purchases
The number of purchases influenced per 100 consumers.

Social actions yield about 4x as many influenced

purchases as dead-end digital engagements. 83 95
Purchases
Purchases
Influenced Influenced

22 32
5
Purchases Purchases
Purchases
Influenced
Influenced Influenced

Control Engage Contribute Participate Create

42 conversations out 110 conversations out 123 conversations 260 conversations 270 conversations
of 100 consumers of 100 consumers out of 100 consumers out of 100 consumers out of 100 consumers

Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010.
 And, they spend more too...
Median “Spend Index” by groups:

Socially involved customers spend more and drive

higher spend levels among the people they influence.
247

126

100

Control Group Engage + Contribute Participate + Create

Presentation by: Median dollar value associated with customer groups. Self-reported customer includes
Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. dollars spent, anticipated spend, and referred dollars through recommendations.
So what’d we learn?
 1 Take a broader view of value
We have to try to understand the impact of social media beyond the initial interaction
and through the reverberating influence it has on consumers. We can’t only apply
traditional digital metrics to social interactions.

Digital Digital More

Sale WOM Reco
Action Interaction Sales

Return on Interaction + Return on Influence

Return on Investment
 2 Social media actions pay
It pays to leave the comfort of your own website or microsite and live in the consumer’s world of
social media. Can you screw it up? Sure. But some simple principles, like being honest and
interesting and adding value to people’s lives, can go a long way in the social space.

in more places

Gets more people talking

more times

for more sparking more purchases

money
 3 Move from dead end digital to social
We’re not saying that brands should stop being helpful or entertaining. That they should stop making cool
apps or killer videos. We’re just saying that you should do it in the social space and let people mess with it.
The more you get them participating and creating, the more you’ll get in return. DO MORE OF THIS...

“I follow them on Twitter and ask for “Purchased a coffee, was able to ask “I participated in their design the next “I posted pictures of my many pairs of
advice on certain products. The agents about different varieties and got what I donut competition, as well as enjoying Nikes.”
are usually very helpful and informative.” wanted!” their delicious coffee on a regular basis.”

“I sent an email about an ice cream “I ordered personalized M&M's for a “I occasionally drink Mountain Dew and I “I wrote to Starbucks encouraging them to add more
giveaway on Facebook.” Valentine's Day gift. I also posted this on voted in a contest to determine a new Gluten Free products to their offerings and to complain
my Facebook status and copied the URL flavor.” when the GF orange cake was removed from their
addy and sent out to a few friends.” product offerings.”

Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010.
 2 Quick Notes:
This is changing: These are good:

http://www.slideshare.net/
LumensionSecurity/the-
greatest-question-since-the-
meaning-of-life-what-is-the-
roi-of-social-media

http://www.slideshare.net/
yongfook/social-media-roi

As social media increasingly becomes the backbone of

our digital experience, consumers will migrate to being
more active participants and creators of content. This
could already be obsolete.
For more on building advocacy, visit:

http://www.22squared.com/whoweare/agency-model http://www.slideshare.net/brandonmurphy/the-friendship-model