This post was first published in the American Marketing Association blog.
Bazaarvoice and the CMO club recently published a report about how CMOs think about social media and how they are finding ROI (or not). You will find a number of stats and details in the report itself. I want to share my own perspective on what I think are the implications made evident by the research.
Social is Important. Every marketer knows it. Customers have shifted the way they buy. Social is here to stay, there is no question about it. Every CMO knows they need to have a social marketing plan. This should not be a surprise to anyone, the report simply confirms it.
Measuring results is harder than expected. The report shows social media is harder to measure than what CMOs expected. By looking at last year’s report, it is clear most of them thought by now their social marketing efforts would have matured enough to have a good measurement framework. Today, most marketers are measuring engagement, not actual business impact. Many are still chasing shiny objects. Consider how many companies are trying to grow their Facebook fan pages without a clear reason why they are doing it or a strategy to convert fans into business value.
Social Marketing is too tactical. Without an indication of results, CMOs can’t make investment decisions on social media. As a result, most companies are still in experimentation mode. Only two years ago, social marketing meant blogs and wikis. Last year it has been about Facebook and Twitter. Now GroupOn (which is not even social, IMHO) and Foursquare join the category of shiny objects. Small and large businesses are jumping on the GroupOn mania, getting 25 cents on the dollar, often without thinking through a strategy.
Sadly, without a framework for results, CMOs have a hard time deciding how much to invest in social. According to research by Altimeter, the average large company is investing only $830K per year in social marketing. This budget can cover salaries for a team of three people, maybe a community platform to run support forums and a listening platform. The amount of resources, budget and results in social marketing is insignificant relative to overall marketing efforts. The danger is that a CMO hires a social strategist, two people to “man their Facebook and Twitter pages”, start a blog and ‘check’ – they have a social strategy, they can move on to more important stuff.
CMOs know they need to shift their investments from traditional advertising to social and digital efforts, but they can’t do it blindly. Even if a CMO wanted to shift $20 million dollars to social, they would have a very hard time finding where to spend it.
Reading the results from the research can be heartbreaking. The obvious question is: How to build an effective social strategy? There is no easy answer, however, I want to offer four ideas to help you build social into your marketing strategy:
- Social is not a Strategy. Eventually, the word social will go away. Humans are inherently social, most human activity is social. We don’t talk about digital computers or electronic calculators, it is assumed. Companies are in business to make money. According to management guru Peter Drucker, the only valid business purpose is to create a customer. That is a paying customer. Social is not a goal, it is a means to an end. Should you experiment with social? Sure. What I am suggesting is to always think about how each social marketing activity will support your business goals.
- Social as a marketing tool. Social tools can help marketing, innovation, customer support and other functions. But this is a blog for marketers. Yesterday I was having lunch with a friend who asked me if he should hire a social media strategist. To his surprise, I said ‘No’. I suggested he should hire a marketer that understands how social media can support the organization’s marketing goals. A marketer that understands how social marketing efforts can work together with ‘traditional’ marketing efforts to create more customers. To make money.
- Smart social metrics. In any business functions leading indicators are important. For years, online marketers have measured page views as a leading indicator for customer engagement that then can be converted into paying customers. In the same way that email newsletter subscribers are an engagement metric that companies can leverage to do permission marketing to drive sales, the number of Facebook fans are also an interesting metric that enables permission marketing to drive sales. But you have to think through the experience: from leading indicator to business impact. Build a model that uses social media tools, to drive engagement and activity that then impacts business goals. Take a look at the model in this slideshare from two years ago, and at a more evolved model in Jeremiah Owyang’s Social Media ROI Pyramid
- Social drives Advocacy. Social Marketing can be used by marketers in many ways: to build confidence in customers, to learn from customers and monitor your brand to make your organization more customer centric, etc. If you are looking for a quick win, I suggest consider using social media to drive advocacy: tap into Facebook , customer reviews and other forms of social media to empower your customers to sell for you. Word of Mouth is nothing new, it has been around forever. Social Media online makes it easy for happy to customers to drive advocacy and makes it scalable – and often measurable – for marketers.
Good luck with your social marketing efforts. Have fun. Be authentic. Experiment. And learn.
This post was first published in the American Marketing Association blog. Bazaarvoice and the CMO club recently publishe...