Marketers are increasingly turning to social media, but have little insight into what their budget is delivering. David Reed looks at how practitioners are trying to bridge the gap between advocacy and loyalty to show that followers can also be buyers.
Advocacy is one of the key dimensions of social media. Marketers who can get their brands talked about know it creates a halo effect around their own messages. Measurements of this uplift are becoming more robust and credible, yet they remain post-hoc - targeting people who might be advocates is generally difficult.
Direct marketers have no such problems. Assuming the right permissions to contact exist, they can track who is receiving their messages and whether they go on to purchase (subject to direct sale or EPOS data). What is missing from the DM model is the critical social dimension in which customers extend the impact of a campaign.
So what if you could combine these two dimensions of marketing, linking social and transactional data together? What effect would this be likely to have on sales overall and campaign performance in general?
A new study carried out by dunnhumby and BzzAgent, “From Customer Loyalty to Social Advocacy”, has revealed that the benefits of linking social identity data with loyalty programme information does indeed deliver substantial benefits. Using household-level demographics to target social marketing campaigns generates more quality advocacy than using either demographic or social influence data on their own.
Remarkably, the uplift on in-store sales from this approach averages 8% and the benefits are long-lived - six months after the end of a programme, sales still average 4% higher. Brand marketers are likely to find those benefits very attractive and validation of their belief in the importance of adding social to the marketing mix.
Malcolm Faulds, senior vice-president, marketing, for BzzAgent and co-author of the study, says: “The overall idea was to prove whether marketers could make more efficient use of social media if they were informed by insight into who buys their products. Not only is that shopper data useful for recognising their spend, but also as a targeting mechanism.”
His agency runs social marketing programmes which gain opt-in for social media identities to be captured. In return, these individuals receive product samples, access to activities and pass-on offers aimed at stimulating word of mouth. This was matched to loyalty programme data from dunnhumby and retrospective analysis carried out using two test and two control markets. In this way, the impact of advocacy on actual product sales could be identified.
As Faulds points out, “for any given brand, there is a very small proportion of customers that account for a large proportion of purchases.” In the study, these brand champions represented just 3% of consumers who bought 30% of products.
Identifying this group and leveraging their willingness to be an advocate would be a powerful marketing tool. Equally, it would help marketers to avoid wasting their social marketing efforts on vocal consumers who are not actual customers. Getting buy-in to marketing content from genuine buyers who go on to discuss their experience online is extremely powerful and very persuasive for other consumers.
This is where Faulds notes that insight needs to be linked to strong creative. “The quality of the contact makes a difference, but it only works for good products, not parity or commodity products.” Scarcity is one dimension that can be leveraged to good effect, by offering advocates access to limited edition products or offers.
Faulds also notes that providing good value to advocates is highly beneficial. “We often recommend giving them a full-size sample because it is like ‘Christmas in the mail’ when they get the package and it gives them the full experience,” he says.
That is far more likely to generate positive word of mouth in social media, but is also a good reason for tightly targeting recipients based on their value and influence combined. “The reason why marketers don’t like doing that is because it pulls those customers out of the buying cycle. But if you do it right, the upside offsets that,” says Faulds.
While the study has established a benchmark for the impact which targeting in the social space using offline transactional data can have, it is just the first stage in an ongoing programme. “We don’t have answers to all the questions right now,” says Matt Keylock, senior vice-president, media partnerships at dunnhumby and the report’s other author. “We have gained a top-level view, now we are looking at who is the most influenced by advocates and what types of advocates are the most influential.”
This will be another critical step in the evolution of social media towards being truly data-driven. Early studies have demonstrated that some online consumers have bigger networks than others and that some of them are more influential. Combining that with knowledge about which advocates actually buy products, rather than just talk about them, and which of the influenced convert to buyers will make the whole activity genuinely powerful.
“It is unlocking doors. It is the whole area that everybody is calling big data - social media, mobile apps - which provides a very granular insight. Companies capturing that data have got tremendous potential to link to other types of information and understand their customers in a 360-degree way,” says Keylock.
It is not just brand marketers who are likely to pick up on and benefit from this multi-dimensional data. Media owners are likely to see it as a powerful tool to validate their audiences and show to advertisers that there is a close link between awareness, advocacy and purchase. “The same capabilities inherent in new digital channels are also being applied to old media, for example TV set-top boxes. It is going to change the paradigm of how media is planned, measured and targeted,” he says.
While the dunnhumby/BzzAgent study has taken an important first step, it is just one in a number of initiatives to help close the gap between online and offline insight into the consumer. It may be self-evident that consumers are active across channels and that what they buy influences what they talk about and vice-versa, but tracking and measuring those combinations is challenging.
“It is very hard to do that,” agrees Julie Atherton, planning director at Indicia. “You have either got to create a value-exchange which allows you to link Facebook identities with your customer database or you have to do what we’ve done a number of times, which is post-activity analysis looking at individual Twitter IDs and tracking to finding out what they have said.”
To make this more accessible and easier to deploy, Indicia has developed a consumer profiling tool called Inspire which looks at the combination of channels through which individuals advocate, the size of the group they network with and how influential they are. This can then be used to target social marketing in order to ensure it addresses the most influential and most influencable.
Tourism Ireland made use of this profiling tool for its Road Trip campaign. This featured a real couple, Nick and Sam, travelling in Ireland and visiting destinations based on recommendations from followers on Twitter and Facebook. After the first-stage, profiled participants were sent special offers and competition links before the campaign was rolled out more broadly. As a result, Facebook Likes for Ireland rose by over 1,000% with nearly 11,500 participants and over 19,000 competition entrants at a cost per response of £1.24.
“We knew we wanted the campaign to be viral - we wanted people to hear about Ireland from people who actually knew it. What Tourism Ireland had to do was not tell people what to say, but give them a platform and allow them to inspire others to visit,” says Atherton. “You have to be confident to do that, but you do achieve true advocacy because it is real.”
One of the critical questions now being asked by marketers about social is how the value of any advocacy compares to financial value achieved when somebody buys. Atherton says that parity can be seen in some cases. “With one digital retail client, we identified in Inspire people who weren’t customers but had signed up for a newsletter and were advocates. We were able to attribute a value to them, even though they didn’t buy, because they influenced lots of other people who did buy,” she says.
Attribution is important in an era of tight marketing budget constraints. If social is to stay on the agenda, it has got to be able to demonstrate a return on investment, otherwise it is likely to be questioned by the financial director. That ROI may need to be proven in new ways, since the outcome of social campaigns is not always that advocates themselves go out and buy.
Alisdair Townsend, director of business strategy at Online Fire, says that two different metrics get used, but are often confused. “The first is direct sales. If you are running a promotion, you can use Facebook to attract followers, but you will only attribute a small proportion of the value from that social engagement because you can’t track it directly like you can from an email database,” he says.
“The second approach is giving social a retrospective value by modelling average purchase value and frequency of purchase and assigning a proportion to each channel. In theory that works, but in reality consumers are influenced by multiple sources so there are big challenges with that,” he says.
Benchmarking existing sales and other metrics before a campaign begins does provide an element of insight, especially if there are distinct and discrete elements. But as Townsend says, “there will always be an element of doubt and there will be people who just want to get a coupon via social media.”
There is also a risk of metric overkill - if each separate component of a campaign is measured against ten performance indicators, that could easily generate a dashboard of hundreds of metrics. While this might provide a granular insight, it will not necessarily be actionable.
One consequence of the imbalance between marketing’s desire to measure the impact of social marketing and the weakness of metrics is that agencies like Townsend’s are having to adopt a more consultative approach, working with clients to establish how and where to measure in a credible way.
Eventually, it seems likely that some substantial data-driven measurement tools will emerge from commercial providers, probably those which have an insight through large-scale, multi-partner loyalty programmes and can win opt-in from their customers. As spend on social grows, the gap in understanding and measurement will certainly close. For now, at least, the models of how it works are starting to improve.