Social media faces some tough questions

Oct. 30, 2008 | by Philip Buxton

Image Credit: Flickr User terinea

Chairing Chinwag Live’s Social Media ROI panel debate at E-commerce Expo last week was fascinating for a number of reasons – not least for the amount of people trying to pack themselves into a small space.

The debate featured some social media luminaries: Robin Grant from We Are Social; Stuart Bruce from Wolfstar; Helen Lawrence, social media planner at Dare; and Alex Burmaster at Nielsen Online. But the driver of the conversation (the influencer if you will) turned out to be Ankur Shah, founder of Techlightenment, who, as Robin described, was coming at things from a direct response-focused angle.

The great thing about Ankur’s input was that it dragged conversation about social media out of (again, as Robin put it) ‘fluffy’ objectives and into its value in terms of hard, lead-generation targets.

While we all see that connecting with customers ‘at their place’ – their social online networks – is a great thing to be doing, measuring the value of these kinds of things is nigh on impossible. iCrossing as it happens is doing the best job I’ve seen of seeking to ‘measure ‘engagement’ and thus place a benchmark on the ‘success’ that investment in social media is having. But, as we enter recession, there’s no doubt there’s a new sense of urgency about how we can get social media to deliver on lead-gen objectives.

Ankur’s examples were, essentially, highly-targeted ads in social media spaces like Facebook. Yes, as social shifts, tools like Twitter are very interesting – he sort of argued – but Twitter hasn’t worked out a way of monetising itself yet, let alone advertisers.

As Alex Burmaster pointed out, the costs of measuring softer objectives like social media visits and engagement are prohibitive to anyone but large brands, so where does that leave the small and medium-sized retailer sites that make up a huge amount of the market and who currently divert the bulk of their spend to search?

The room at the debate was to some extent made up of these people and it was clear from their questions that what they want to hear is exactly what Ankur was driving at: ‘How do I use it to make sales?’

Well, I hope you weren’t expecting any answers from this post – panel debates rarely deliver those. If forced I’d suggest using Twitter/RSS to push out opted-in sales messages as one opportunity. But what we did identify is that, as one questioner put it – ‘my children are using user-generated content to make purchase decisions’. Therefore we have to work out a way to engage more directly in those places.

I remember the last digital crash well. Two years covering entirely bad news tends to stick around in one’s mind and soul. But, while all that was going on, a little thing called GoTo (which became Overture) was taking root. All the while that dotcoms were collapsing, search – the ultimate direct-response model – was keeping the market alive and changing the way we think about advertising.

Now this recession is here, there is a bitter pill we have to swallow: that social media needs to discover a similarly effective model to turn this challenge into an opportunity. For, if it can claim budget share by delivering ROI in the hard times, then, when we emerge from the gloom, it will find itself in a strong position.

If it can’t deliver a direct path to hard targets soon, then you fear it faces a couple of years of hibernation until advertisers are willing to think ‘fluffy’ once more.

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    Comments (7)

    • Arjo Ghosh

      This is the crux of the current debate and one that I suspect that has been conditioned by 10 years of ROI from 'digital'. As digital specialists we've created our own noose and now clients, quite rightly, hold our own methodology (supported by tracking and other various bit of technology) to the same logic.

      We need to widen the debate and fight for the right for digital to be considered as a multi-layered, highly sophisticated communications medium.

      All advertising, promotion and communications is done to enhance a company. The missing element in the digital/ROI debate is that much advertising achieves more than just direct sales. As the IPA Datamine 3 study demonstrated, the most effective advertising strategies were those that helped maintain product margins and pricing and thus protecting market share and profitability.

      As many consumers turn into participants we can help guide organisations develop an appropriate social 'mindset'. Done right this can not only be measured, but can support the very brand essence that has such a big effect on value in the mind of the public.

      An outcome that just values engagement will not win the day, but engagement + price sensitivity + brand promise + good feel = market share and ultimately profit.Nov 11, 2008 10:32 am

    • james wood

      I have read the many views given here and I also viewed the image from flckr by B Solis, them THE Conversation - the art of listening, learning and sharing. As those of us involved in social marketing via all the web2.0/online pr methods are interested in monetizing and metrification of some intangible aspects eg after the campaign the brand images, press and blog write up and widgets are still in circulation finding new audiences in a global cybersphere, that weren't aware possible 18 months from the initial start the campaign launch.


      But we are involved in THE Conversion - the art of the art of listening, learning and sharing through social media to brand, market, persuade and influence decision or opinion of the targeted group, audience or online community.Nov 4, 2008 08:27 pm

    • Adam Boulton

      I agree with the above, social media campaigns are normally branding & PR exercises rather than a direct sales tool. And while attention achieved by a social media campaign is being measured by agencies such as iCrossing using engagement metrics, the monetary value of this attention has not been calculated.

      I think social media as a branding tool can be very powerful it can help increase online attention and exposure to a brands values or help reposition the brand. It can also help increase customer's loyalty and advocacy to a brand. Problem is these brand effects are difficult to measure and regress.

      Relating traditional marketing and PR exercises to a brand's position and corresponding sales has always been slightly fluffy, how do you know how a new logo has really impacted on branding or sales, or that attributing a TV ad to a increase in sales is correct? However, with digital, companies are used to having much more direct feedback i.e. spend x on marketing activity get x returns. Social media is more of a spend x on social media activity get x attention online and x increase in brand effect.



      Nov 3, 2008 12:24 pm

    • Philip Buxton

      Again I agree, but the key point to come out of the discussion was that - once those things have been measured - they need to be modelled effectively to hard targets like sales. has this link been made?Nov 3, 2008 11:29 am

    • Antony Mayfield

      I think it's complex but entirely possible to measure the effects of social media and being engaged in it as a brand. Why? Because we're doing it...


      "Indirect" and "fluffy" marketing and communications used not to be measurable, something that you could evaluate accurately - now you can.Nov 2, 2008 10:36 am

    • Philip Buxton

      Yep - but to get investment (in tracking, engaging in conversations, enabling 'listening', builsing new systems etc.) from marketers they - unfortunately - need to be able to demonstrate the effect...Oct 31, 2008 09:19 pm

    • Tamsin Hemingray

      Here's the "scary" truth:

      Social Media isn't for selling stuff. It's so that people can talk to each other and find things out from each other. (courtesy Simon Mustoe).

      If companies can't afford to think about how their brand can engage in these spaces, then their best hope of ROI lies in stopping trying to find ways to sell directly to people via social media and to concentrate on making sure that their product / service is the best it can be so that people who buy/use it are moved to share that with their network. If they offer something truly great, the networks will do the selling for them.Oct 31, 2008 04:13 pm

     
    Please note: the opinions expressed in this post represent the views of the individual, not necessarily those of iCrossing.

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