Figure 6.1 Social Media Marketing Benefits from McKinsey & Company's December 2010 Executive Survey
Source: Bughin, J., and Chui, M. “The Rise of the Networked Enterprise: Web 2.0 Finds Its Payday.” McKinsey Quarterly, Dec. 2010
Chapter 6
Social Media Marketing
Marketing departments were among the earliest adopters within most businesses to start applying social media. It wasn't long after blogs and social networks arrived on the scene in a major way in the mid-2000s that marketers began using these emerging online tools. Although they often used social media very much like the traditional push channels that came before them—such as print, radio, and television—they also grappled with and learned to work through the unique challenges and opportunities of the new two-way communications environment that social media appeared to offer.
The early days of social media marketing proved instructional for brands. The lessons from pioneers came fast and furious for those who watched closely. Major companies started blogs, with some even giving a blog to any to employee who wanted one. A great deal of experimentation with sites that were new at the time like MySpace and emerging tactics like influencer outreach ensued. Now, most large companies have Twitter accounts and Facebook pages, combined with a smattering of other social media presences.1 Some early adopters achieved significant wins with online communities, engaging effectively and strategically with their existing customers. The big winners didn't necessarily trumpet their successes, however, and so it was years before the market was clear on what worked and what didn't.
Given the perceived lack of clear-cut, widely broadcast success stories, a commonly held view of social media marketing in the early years was that it showed potential but might not drive meaningful business results. However, as demonstrated in stories like P&G's knock-out hit with the Old Spice campaign, engaging with the world through social media can produce widespread results regardless of target audience. Indeed, studies show that social media marketing can be employed effectively for high-impact bottom-line results in terms of sales revenue and profits. Along with financial benefits come closely related outcomes such as improved products, more efficiency, and a deeper connection to the marketplace, as well as happier, more satisfied customers.
In late 2010, McKinsey & Company surveyed over thirty-two hundred executives from a wide range of industries, regions, and internal functions and explored the impact of social technologies on their business. In terms of marketing, 63 percent of respondents reported that social media improved marketing effectiveness. The median improvement, given the fledgling adoption compared to more traditional approaches, was notable, with solid double-digit gains in awareness, consideration, conversation, and loyalty (see Figure 6.1).
Figure 6.1 Social Media Marketing Benefits from McKinsey & Company's December 2010 Executive Survey
Source: Bughin, J., and Chui, M. “The Rise of the Networked Enterprise: Web 2.0 Finds Its Payday.” McKinsey Quarterly, Dec. 2010
Participation is the key to making social media marketing work. Creating a participatory environment conducive to driving business results relies on two general tenets:
Social business activities encourage open, widespread collaboration and capture value from the resulting inputs through the processes of curating, moderating, and analyzing the contributions of participants. Social media marketing efforts start by targeting particular audiences and draw in varied participants who can take the conversation in constructive and destructive directions. Preparation is essential (a full discussion of how to manage communities is explored in Chapter Twelve), and brands must be ready for all types of contributions; prune only the ones that are truly unacceptable (due to legal, regulatory, or policy reasons), and respond to contributions that warrant engagement. The unexpected is often perceived as the enemy of stability and success, but social business practitioners realize it's also the gateway to opportunity.
In fact, nearly every seemingly negative contribution is value in disguise and can be turned into something useful through further engagement. For example, in 2006 General Motors launched a user-generated advertising campaign to promote its Chevy Tahoe SUV with online thirty-second spots, such as vehicle hero shots, majestic mountain scenery, and ability to overlay text on all graphics. Shortly after launch, GM faced an unanticipated and unintended outcome: environmentalists started creating videos with anti-GM messaging that began receiving mainstream media attention. Rather than censor the four hundred videos containing messages like “Don't Buy Me” and “My MPG [miles per gallon] Sucks,” GM used the opportunity to highlight positive environmental aspects of the Tahoe, including its best-in-class fuel economy and ability to use renewable fuel, as well as having the highest safety ratings in its segment.
Managing social business efforts, governing results, and dealing with risk are key aspects of applying this social business tenet successfully. This applies particularly to social media marketing, which requires exposing a company's public brand in a seemingly permanent way. The least expected contributions can often have the largest business impact: extracting value from unexpected outcomes requires adept management in the moment, when situations are most unclear and critical difficult to control.
Studies on human interaction have shown that even small increases in the required choices in a process will increase its complexity to a point that it significantly reduces contribution.2 This is equally true of human interaction in social media. Consider the Chevy Tahoe campaign. To generate a high level of participation, GM had to simplify the extremely complex process of TV commercial production and make intuitive tools available online to novice users. Making user contributions easy was an incredibly difficult process.
Many of the most effective social media services, such as Twitter, which basically consists of a single field to type in status updates, work primarily because of this key tenet.3 Unfortunately this principle is frequently abandoned in the enterprise, where user interfaces and experiences are overly complicated and overengineered to appear sophisticated or highly capable, while the consumer Internet industry learned long ago that complexity reduces participation and leads to failure.
One of the more nuanced aspects of social media marketing is what is known as designing for impact. While many of the requisite superficial activities of social media marketing are necessary and important, such as maintaining company pages and user profiles in social networks, these activities in isolation won't do much to align the marketing process with the organization's social business vision. Traditional marketing has its own life cycle intent on identifying customers, satisfying them, and retaining them as long as possible. Marketing has become a sophisticated discipline that encompasses demographics, social sciences, psychology, anthropology, and other fields to maximize the effect of messages transmitted to the marketplace, so as to help customers find the company and generate demand for its products and services.
In social media marketing, the objectives of customer acquisition, satisfaction, and retention remain, but relationship management requires fundamental rethinking. Whereas it was reasonably straightforward to understand the marketing numbers game (reach, response rate, conversation ratio, and so on) in a limited number of large channels using well-defined and branded marketing messages, social media marketing is different. A substantially greater number of channels with less structure are available for social media marketing: hundreds of social networks, special interest online communities, blogs, and other unique forms of social media that may contain relevant audiences. Identifying and segmenting audiences can be challenging and highly inefficient.
But identifying the suitable social media segments to engage with is only half of the challenge of maximizing the impact of social media marketing. The other challenge is figuring out the best type (or combination of types) of social media to use. There are four major strategic approaches to marketing with social media (see Figure 6.2):
Figure 6.2 Methods of Engagement in Social Media Marketing
Note: API = application programming interface; BI = business intelligence
Figure 6.3 HBO's True Blood Facebook Marketing Application: An Integrated Social Experience
Activating these four strategic approaches requires effective execution of tactics. As the old saying goes, the devil is in the details.
Chief marketing officers and business managers need to know what returns they can expect by engaging in social business methods for marketing. Measuring value and calculating return on investment can be accomplished with a combination of existing and emerging techniques. Calculating return on investment can be difficult unless all factors are known. But most businesses should have a set of key performance indicators (KPIs) already in place that are linked to value creation and currently being collected. Linking social media marketing programs to existing KPIs is the most direct method for determining if efforts benefit the organization and deliver results cost-effectively. Common KPIs used to measure and compare the results of social media marketing are number of leads generated, leads to opportunity conversions, value of sales against campaign spending, and an increase in brand awareness scores.
Emerging techniques for measuring return on investment can be derived from the mechanics of social business activity by participants. These KPIs are much more experimental but good for conveying the approaches that new methods of operation and interaction create. Useful social media marketing KPIs include:
Good social media marketing shares and decentralizes efforts in reaching, involving, engaging, contributing, supporting, and doing business with customers across lines of business. Successful marketing departments will find themselves positioned as architects of collaborative processes leading to desired business outcomes. Looked at through this lens, return on investment never looked so good, though the process of getting to the top of the maturity curve will take years and survival of more than a few social media crises.
Most organizations that start to engage in social media marketing—or any other kind of social business activity for that matter—soon run into a challenge. Once they begin opening up to a wider audience, the sheer size of resulting participation quickly overwhelms a company's capacity to listen, much less respond, to what the world is saying. This isn't an issue for traditional marketing approaches: one-way communication may reach millions of listeners, but brands are not expected to engage in a sustained conversation. By contrast, in social media marketing, consumers, prospects, shareholders, activists, and other participants expect dialogue. Nonresponse can lead to damaged brand and reputation; however, most companies underestimate the level of effort required when getting started.
The emerging field of social media analytics has enabled brands to listen at scale and gain insight into the general public's perception of a company's actions and statements. By examining social media data for different time periods, businesses can understand how public relations policies and marketing efforts have changed general opinion. Consider the situation of global auto manufacturer Toyota in late 2009, when a spate of high-profile vehicle recalls started to have an impact on multiple brands in the global automotive industry. Toyota faced a recall over faulty accelerators and had to navigate a communications crisis amplified by social media.
Toyota wasn't the only manufacturer experiencing a recall, but a growing chorus of media, consumer, and governmental voices seemed to focus on Toyota. At the time, to get a sense of how large-scale discussions in social media were affecting the perception of the industry, Internet monitoring firm Webtrends examined the social media discussions involving well-known automotive brands undergoing recalls, including BMW, Audi, Peugeot, Citroen, and Honda.5 During the peak of the global furor around these recalls, Webtrends used social analytics to create a picture of marketplace sentiment and determine which brands were dealing well with the impact of the media firestorm taking place.
Damien Hews, a social measurement specialist for Webtrends, analyzed the leading topics of conversation involving the automotive industry in various social media across the Internet. As expected, Toyota was at the top of the public's mind. Of the six brands analyzed, Toyota far and away dominated social media discussions. Over 400,000 posts out of nearly 1 million relating to the six brands mentioned Toyota during the two weeks in 2010 that Webtrends analyzed the social data. Said Hews of the data at the time: “Delving deeper into the analysis, I wanted to learn more about the tone of people's conversations regarding the brands. Toyota was mentioned over 11,000 times; of which 64% of the dialogue was negative.” In comparison, social media discussions relating to other brands made evident Toyota's inability to respond effectively. Hews observed that Honda's “key words mentioned in 5,866 posts have been predominantly positive.” The social media analysis concerning Honda contained a decidedly different result, with mentions of “quality,” “hero,” and “airbag” appearing next to the word “recall.” This strongly suggested that although Honda also had to recall over 1 million vehicles because of airbag issues, its communication management efforts had been more effective than Toyota's.
What was fascinating about this event, which played out in the media dramatically for several months and involved many of automotive's largest brands, was that Peugeot and Citroen remained almost completely untouched by their recall issues in the social media arena. BMW had the strongest showing of sentiment in the social media channels analyzed, with approximately 200,000 mentions of the brand over the same time period and almost none mentioning its recall. Hews reported that “discussions relating to the brand have included words such as ‘stunts’, ‘performance’ and other premium brand names such as ‘Mercedes’ and ‘Audi’ both being mentioned in discussions relating to the BMW brand.”6
Ultimately Toyota was roundly criticized for mishandling its social media strategy. Hundreds of millions of its customers were using social networks, and the company did little to engage and address the negative messages that were repeated and amplified, undermining efforts when the brand finally began to respond in a limited fashion through services such as Digg.7 In the fast-moving world of social media, a company's lack of social presence means that it completely loses the ability to influence the message or connect with and shape the perception of the public in any way. Brands must invest the time to monitor what the collective consciousness of social media is thinking about the company, its product and services, and be ready to engage and respond.
Toyota's efforts started only after considerable damage was done.8 YouGov's brand index, which is based on a poll of five thousand people per day, positioned Toyota at the top of the index at the beginning of 2010, but it soon plummeted far below the other major auto manufacturers (see Figure 6.4). It wasn't until the February 8 appearance on DiggDialogue by Jim Lenz, president of Toyota's North American sales operations, that the numbers began to turn around. The appearance garnered over thirty-two hundred comments, an engagement level that typically only celebrities achieve, showing the intense public interest in the subject. But the damage was permanently inflicted on Toyota's closely guarded reputation.
It's clear in retrospect that the incalculable financial and competitive impact, given Toyota's sterling global reputation prior to the recall, could have been mitigated with better communications. It's a story, however, that is commonplace given the sudden appearance of social media on the global stage: unprepared companies continue to experience the disruptive effects of new global knowledge flows in social media that they'd previously disregarded. By the time Lenz made his appearance in social media, it was far too late. Listening and responding need to be real-time in social media. Effective social marketing is built on a strong foundation of continuous listening and effective engagement.
Another major brand affected by emergent bottom-up influence the same year as Toyota was oil multinational juggernaut British Petroleum (BP). Following the catastrophic accident on the Deepwater Horizon oil drilling rig in 2010, oil flowed unabated into the Gulf of Mexico for three months, resulting in the largest oil spill in U.S. history. The BP crisis communications team, instead of being an effective voice for the company in managing the unfolding situation, quickly became the target of social media. BP's social media participation, despite millions of urgent global conversations taking place concerning the company, was largely limited to formal pronouncements in traditional channels that were largely repeated or referenced from the company's official Twitter account. Soon after the oil rig disaster struck, an individual with the pseudonym Leroy Stick launched a Twitter account known as @BPGlobalPR, which he used to satirize the starched and formal tone of PR messages from the BP crisis communications team. What began as Stick's personal outlet for expressing frustration through humor and parody quickly grew into one of the more effective and widely repeated commentaries on the crisis.9
BP's own social media was not nearly as effective as Leroy Stick's, and even three years after the crisis, the unofficial and incendiary @BPGlobalPR Twitter account still had five times as many followers as BP's official account.10 Many sources credited @BPGlobalPR as being more interesting, relevant, and informative than anything BP provided during the crisis, while also portraying the oil giant's attempts to deal with the situation as inept and bumbling. Like Toyota, BP's reputation rapidly sank to even further depths than the car manufacturer experienced, and it stayed there.
The formal, controlled language and tone of traditional business communication (press releases, news wires, press conferences, TV and radio spots, corporate communication areas on company sites) is not the language used in effective social media engagement. BP's story is just one of many suggesting that social media engagement must be more personal and direct in nature. Language needs to be conversational and casual, as in personal face-to-face communication. Humor and self-deprecation, as in real life, are also highly valued but must be used with care and in the cultural and regional context. Scaling engagement can be challenging, but people expect personalized conversations.
These stories and the many others like them therefore lead to two more tenets of social business, both crucial to success in social media marketing, but also in virtually any social business activity or process:
This approach of listening and engaging continuously has been debated and criticized as unsustainable. Before the rise of social media monitoring and analytics, a case could have been made that this approach was impossible for most organizations. Listening across the entirety of social media and then successfully identifying important conversations would require too large a staff or too much time. But in the era of sophisticated tools that enable monitoring of a surprisingly large portion of the many corners and edges of social media, it's now entirely possible for largely automated methods to provide the thorough coverage of social media on a near real-time basis. Most organizations can avoid becoming a Toyota or BP and instead effectively listen to and engage in social business conversations.
The language of everyday conversation is the language of social business. Although some cultures are more formal than others (Japan is a well-known example of business formality), social media provide an effective way to connect people when technology helps mediate among parties who often don't know each other very well. Companies must listen to all potential stakeholders and engage in meaningful conversations with simple, natural, and personal phrases that are understandable and clear.
A high-profile social media crisis driven by external forces, as with Toyota and BP, can be a worst-case situation for large companies, which are often unprepared and take too long in today's rapid information cycles to organize and respond. However, for others, these cases are the most critical examples of how companies can turn a tide of negative sentiment into a benefit and transform situations into major opportunities to build reputation and brand.
In late 2008, Ford Motor Company targeted the operator of a small Ford Ranger online fan site called TheRangerStation.com for infringing on its trademark and intellectual property rights. Ford issued a cease-and-desist letter to the Web site's owner, Jim Oaks, and demanded payment of five thousand dollars in fines, in addition to turning the domain name over to Ford. At the time, Oak had run the site for ten years and lacked the resources to fight the automotive company in the courts.11 Consequently, he reached out to the only significant resource he had, the site's members as well as the world at large, by posting the story of Ford's action out in the open in his blog. Within twenty-four hours, there were nearly a thousand indignant responses, many of them openly hostile to Ford and disappointed that Ford was treating its loyal customers, as well as passionate brand advocates, in this way.
For its part, Ford followed a standard process to stop sites from selling counterfeit products by threatening legal action, which was usually enough to get them to close up shop. But although Jim's site was technically in violation of Ford's legal rights, it was also unlike most other sites that Ford encountered because TheRangerStation.com fostered a community of Ford loyalists. Ford also had a manager who could listen and engage in a personal, direct manner.
Scott Monty, Ford's global digital and multimedia communications manager, became aware of the “Ranger Station” situation by a tweet within hours after Jim's post. Instead of waiting days or weeks to go through a formal response process involving discussions with the legal, brand, and compliance folks at Ford, Monty quickly responded over Twitter, saying he'd investigate the issue. Over the course of a single day, Monty kept the public updated on his conversations with Ford internal departments and answered user questions as the story gained greater publicity. By the end of the workday, Ford and Jim Oaks had reached an agreement. Monty's rapid action had quickly defused the situation before it became fodder for traditional media and a potentially much larger social media crisis.
Ford was fortunate that Monty was able to listen and engage rather than hide behind formal policies or legal statutes. He simply talked to those watching the situation in everyday language and explained what he was doing. By avoiding legalese and being open, helpful, and informative—in other words, engaging in conversation—he avoided a potentially far worse outcome and aided directly in the successful resolution of the problem. Even more important, he changed the perception of Ford's actions at the end, turning what looked like a heavy-handed legal move that harmed a seemingly innocent person into a story of unfortunate but necessary behavior by the company. The final message was one of a positive outcome that benefited both Ford and Jim Oaks.12
Most social media marketing does not consist of identifying and turning crisis situations. However, all organizations must be ready to listen and engage. These capabilities are fundamental to social business success. As organizations evolve, listening, engagement, and analysis have rapidly matured into a sophisticated discipline known as social business intelligence.
Social business intelligence helps companies extend listening and engagement by applying insights across business processes and targeted business outcomes beyond marketing communications (Figure 6.5). Specific responses to social business intelligence insights depend on the nature of the analysis. For example, outcomes can be strategic and affect how a company evolves its products and services. They can also be tactical, on-the-ground insights that drive individual interaction or collaboration with prospects, customers, business partners, and others.
Figure 6.5 Taking Social Listening and Engagement to a New Level: Social Business Intelligence
The number of examples of social business intelligence driving key business outcomes is rapidly growing.
Marketers were early adopters of corporate social media, and they have also been some of the first to explore applications of social business intelligence. In addition to reports and dashboards that provide raw data such as visitor counts and number of retweets, marketers are able to determine why events occurred. With social business intelligence, companies can craft detailed yet fully integrated qualitative pictures of the inbound funnel, identify why engagement strategies are working or not, and organize systematic yet mass-customized responses in scale. A prime example is U.S. Cellular's ability to measure the successful impact of a social business activity by using the Dachis Group's Social Business Index (SBI), a big data analytics service that measures the effectiveness of corporate social engagement with its ecosystem of customers, partners, and influencers. The index ranks companies with respect to each other: a lower number means a higher overall effective level of social business performance.
Launching a new social marketing campaign in September 2011, U.S. Cellular wanted to track its effectiveness to see if it was engaging potential customers better than in the past. By monitoring its ranking in the SBI (which steadily rose from 600 at the outset to 120 by late 2010), the company could see how its actions affected performance. By using social business intelligence, it understood far more about the actual campaign results than just raw traffic numbers. Visitor statistics alone can reflect positive outcomes (enjoying the message) or negative results (from critical or mocking references in social media) depending on the situation, inflating results. Natural language processing and pattern matching was used to gauge intent and sentiment to determine if the U.S. Cellular marketing campaign was creating desired outcomes and levels of engagement.
Going beyond trend analysis of analytics allows processing and isolation of deeper implications of social media activity. Social business intelligence can identify innovation opportunities, new ideas from the marketplace, customer wants and desires, and the gaps in an organization's services.
Social business intelligence enables companies to identify and track top trends, understand when critical situations arise to protect customer experience and brand reputation, and more. Going beyond low-level analytics, social business intelligence can help make sense of big data more deeply than other manual analytical processes can.
By fully empowering social customer relationship management, social business intelligence augments interactions with customers in social media by improving triage, prioritization, and resolution processes within customer care. Telecommunications provider Comcast brought the possibility of using Twitter for customer service to the world's attention with one manager's use of the platform to engage customers. Today companies including Dell and Time Warner use social analytics and social business intelligence processes to identify customer care situations and address them as needed.13
While social analytics provides basic insight into a customer's state of mind, more sophisticated methods of social business intelligence can semantically process and assess the actual meaning of the social media conversations involving a company or its products in order to derive actionable insight and market research.
In the following chapters, we explore how social business intelligence can be applied in specific business applications.
