Can social media work for brands?

We have been working very closely with the Internet Advertising Bureau (IAB) over the last 12 months to see if we could build a cross-category case study that proves (or disproves) the effectiveness of social media for brands across all levels of the purchase funnel.  There have been lots of brand or even campaign specific case studies written on this subject but we wanted to take a robust approach to establishing if, how and to what extent social media can provide a return on investment.

This led us to partner with Twinings, Kettle Chips and Heinz Beanz and track their Facebook and Twitter activity over an 8 week period earlier this year.  The results of our study were released at the IAB’s Social Media Conference last week and are now available to download via their website.

The headline grabbing figure is the 3:1 return on investment, but to get there we followed a scientific and iterative process to ensure that we were measuring the impact of customers’ engagement with social media, and not the fact that people on social media are different.  By surveying c5k people both following the brand on social media as well a like-for-like sample not following the brands we were able to build a model that showed the following key differences:

Those exposed to social media rate higher for all steps along the purchase funnel: But then we would expect that, as anybody following a brand on social media is going to be pre-disposed to some extent, so we needed to establish a more direct causal effect between exposure and customer behaviour.

Comparing only those already buying the brands, there is still an uplift in purchase funnel metrics:  It is smaller, but still significant. So even removing the element of previous purchase experience there is still a difference between our two groups. This  difference was especially true for brand sentiment with more people loving the brands, demonstrating that social media is having most impact on the tail-end of the purchase funnel in terms of loyalty and brand love. 

And even comparing those fully engaging with the brands activity versus those following but not engaging we see stronger levels of attachment to the brands: In fact, those who were actively viewing plus liking brand posts showed significantly higher levels of loyalty and brand sentiment compared to those more passively following brands on social media.

The full report of our study then puts these results in the context of the objectives and subsequent activity of our 3 partner brands, but collectively we were able to take the following learnings away from our research:

1. Use social to enrich customer conversations around product trial and brand loyalty

2. Use social to provide an immediate but short-term boost to purchase intent, and a longer-term support for off-line brand building

3. Focus on balancing the relevance and frequency of posts to develop a conversation with your fans

4. Ensure all activity is relevant to and centred around your product – that’s why people follow you after all

5. Measuring ROI can be straight-forward if think about it at the outset, set objectives, measures, benchmarks & monetary values

Interestingly Ed Couchman from Facebook presented their own results on ROI measurement across a large number of brands at the IAB conference last week, and showed brands’ ROI ranged from 3:1 to 5:1.  So whilst our own findings are based on 3 FMCG brands over a short 8-week period, our result of £3.34 customer value generated for every £1 invested fits very nicely within their range.

Would we expect exactly the same result for a different set of brands in a different category?  Probably not; with different objectives, different executions and different purchase cycles both the intention and effect will be different.  But then wouldn’t the world be a dull place if there was one simple answer!

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Ian Ralph
01962 842211
Article date - 09/07/2013
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