Getting the most from social: An integrated marketing approach

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1 Getting the most from social: An integrated marketing approach

2 Foreword Matt Glasner General Manager, Experian Marketing Services How does social media fit in as part of a true multichannel marketing strategy? This is a crucial question that marketers must ask if they are going to reap real value from this booming channel. Social media is an integral part of many brands marketing strategies and Facebook, in particular, is becoming critical to the success of direct consumer engagement. In the past few years, we have witnessed the phenomenal growth of social media in people s lives. According to Experian Hitwise data, Australians notched up 11.4 billion visits to social networks in , and the obsession shows no signs of slowing. A very captive audience exists across social media channels in Australia, presenting a great opportunity for companies to engage with consumers via these interactive channels. Already, some brands are making it work. Quiksilver, Streets Bubble O Bill Ice Cream and UGG Australia are among the top Australian brands on Facebook by number of fans, each with over one million. 2 How did these brands get to this point? And what are they doing to extract the most value from the fans they ve got? These are questions that many marketers ask themselves as they formulate and implement a social media strategy. They must consider which camp their brand falls into: the proactive or the reactive? In general, proactive brands actively post messages that get high response rates from fans. Deals Direct is a great example. This brand may not have as many fans as Quiksilver, but its strategy of posting trivia questions, brain teasers, requests for photo captions as well as pushing marketing messages and product offers ensures that its legion of fans are well engaged. More reactive brands which typically fall into the service industries, such as banks, e-commerce organisations and utilities have a large customer base and need a social media presence to monitor and respond to customer comments. These brands face the challenge of shedding their transactional image and finding a way to engage with consumers on social media. As the channel becomes normalised in people s minds as a legitimate forum for brand engagement, marketers can really start to leverage social networks to establish long-term dialogue and engagement. To be successful, it s important to use information such as demographic insights and competitive intelligence to optimise and target campaigns, working out what to post on social networks to elicit the best response from fans. Along the way, marketers will confront pressures to demonstrate business and brand value, and measure return on investment. At the heart of each social media campaign is the desire to gain a better understanding of the role of social media influencers and how they impact customer conversions. Armed with this clear understanding of their customers, marketers are in an ideal position to target campaigns to acquire more customers and crucially engage with and retain the customers they ve got. 1 Data sourced from Experian Hitwise 2 2 Getting the most from social: An integrated marketing approach

3 The current state of social play As mentioned in the foreword, Australians are proving keen participants in social networks. There are 11 million active Facebook users in Australia, and of these, 67 per cent return daily 3. Data obtained using Experian Hitwise tools analysed user behaviour across Australia and showed: Australians visited Facebook 6.2 billion times in the twelve months to end December 2011 Facebook represents a 54 per cent visit share of all social media websites visited by Australians 4 (which includes social networks such as Twitter, YouTube, LinkedIn) Australians visited Facebook an average of 1.6 times per day per person, and spent an average of 26 minutes on the site each visit between January 2011 and December 2011 Facebook is the most popular search term typed into search engines, and three of the top 10 most popular search terms online are Facebook related ( Facebook, Facebook login and FB ) Further analysis of the Experian Hitwise data shows that the amount of people leaving Facebook to visit an online retail website 5 grew 15 per cent in 2011, from 4.51 per cent to 5.22 per cent. This increase sends a strong message to retailers about the value in growing their social media fan base and incentivising click-throughs to their websites. Clearly, social media s influence is growing. Marketers need concrete action plans to make the most of the vast opportunities it presents. The question is, how can you best prepare for this evolving world? This whitepaper draws upon recent research conducted by Experian Marketing Services among Australian marketers and consumers to answer these and other questions. You can use the insights within this report to support key decisions about how your brand can use social media marketing to bolster business results. 3 Experian Hitwise 4 Websites within Experian s Computers and Internet - Social Networking and Forums category 5 Websites within Experian s Shopping and Classifieds category 3 Getting the most from social: An integrated marketing approach

4 Executive Summary To shed light on the current state of play in the social media landscape, Experian Marketing Services commissioned independent research with 330 Australian marketing professionals and 1,000 consumers. The research gives us a greater understanding of how marketers across Australia are using social media channels and how consumers engage with brands via social networks. It reveals the discrepancies and similarities that exist between user experiences and marketer expectations, and potential areas in which marketers can improve their efforts in the social media space. The research is part of a two part series looking at how well marketers and consumers interests are aligned. The first report published in late 2011, The future of multichannel marketing 6, demonstrates where marketers in Australia are investing their dollars and which channels they value most highly in their communication. From a consumer perspective, it explores how effectively the general Australian population respond to and engage with marketing efforts. The marketing participants in both pieces of research came from the retail, financial services, government, technology, digital and travel industries; while consumers were from across all demographics. The research shows that social media is becoming a valued part of the overall marketing mix, with marketers setting budget aside specifically for social media. They are certainly adapting to the changing habits of consumers; and are very much present on social media channels. Alongside this growing investment in social media, the shape of the marketing department is changing with the growing trend of hiring Community Managers to take care of social media interactions. While marketers have invested significant dollars in developing a presence on social media channels, many still take a broad brush approach whereby the same campaigns are rolled-out to all audiences across all social networks, without effective use of demographic insights to target consumers with the right message at the right time. This approach is very normal for new communication channels as marketers find their feet. When they do, they will reap the benefits of getting closer to customers and achieving an in-depth, long-term level of engagement via social media. Along the way, marketers will need better ways to measure return on investment (ROI) currently, when it comes to measuring social media s value to the business, many organisations hit a stumbling block. With brand engagement via social media still in its early days, it s natural for consumers to be wary of brand messages they receive via social media channels. Yet this will not last forever and there is a real opportunity for marketers to change the way they engage through clever, incentivised acquisition campaigns; highly targeted post-acquisition campaigns; developing clear policies around responding to negative comments; using analytic tools to target their social media ; and ensuring that any social media activity ties in with broader multichannel marketing activities. For long-term engagement with a captive consumer audience using social media, marketers need to apply clever thinking and communicate with them on the consumers terms. Get it right, and brands can enhance their customer communication and develop an immensely valuable, long-lasting dialogue Getting the most from social: An integrated marketing approach

5 Research Results Brands investment in social is growing Spend in social media on par with online Marketers have great insights into their target audience; and for most marketers, these insights show that the majority of their target audience is active on social media networks. Budgets are being reallocated to reflect this growing channel. Take Facebook. In Australia, marketers are spending 18 per cent more on this network every year. Gross annual spend on Facebook is expected to hit $100m by the end of Indeed, the Experian research shows that 28 per cent of marketers say they spend more than 10 per cent of their budget on social media. This is a significant budget allocation similar to online spend (34 per cent of marketers say they spend more than 10 per cent of their budget in this area) and is likely to cover everything from staff costs and strategy, to agencies and design. This figure is set to grow in the next 12 months. Already, business trust in social media is growing, with 48 per cent of marketers saying that it isn t hard to get budgets approved for new channels like social media. Given this, 58 per cent of marketers anticipate that the proportion of marketing budget they allocate to social media and channel development will increase over the next 12 months. The allocation of budget to social media very much depends on the brand. Larger companies tend to outsource the management of social media to big media agencies, and their social media budget becomes part of their branding budget. Then there are companies that view social media as a pure acquisition channel, and put a cost-per-acquisition limit on the channel. The structure of marketing departments may evolve at the same time, with more and more companies seeing the value in hiring a dedicated Community Manager. The Community Manager s role is to ensure that every person within the brand s social media community is communicated to in a timely and engaging way. This may mean sending different messages to different demographic groups on Facebook, or a timely tweet to the cohort of Twitter followers. It is the Community Manager s responsibility to ensure that social media has a measurable effect on the business. Given the potential impact such a role can have, it is expected that Community Managers will become more prevalent in large organisations in the next 12 months indeed, organisations commitment to this new role is another indication of how much they are prepared to invest in social media. Proportion of marketing budget allocated to the following channels: Proportion Social media and channel development marketing Sponsored search engine / PPC result SEO Online Online video Direct mail TV or radio Print Apps Events Other Zero 23% 14% 25% 30% 18% 32% 21% 32% 15% 38% 22% 32% Less than 5% 28% 26% 23% 29% 20% 24% 27% 19% 21% 24% 25% 25% 6-10% 21% 25% 22% 19% 28% 18% 19% 18% 20% 17% 20% 18% 11-25% 15% 19% 17% 12% 16% 13% 16% 14% 20% 9% 17% 10% 26-50% 8% 10% 8% 6% 13% 8% 10% 10% 15% 8% 9% 7% More than 50% 5% 6% 5% 4% 5% 5% 7% 7% 9% 4% 7% 8% The structure of marketing departments is evolving, with more and more companies seeing the value in hiring a dedicated Community Manager Getting the most from social: An integrated marketing approach

6 Research Results The bottom line for ROI Social media a close second to When it comes to delivering ROI, marketers are confident about the performance of social media despite the challenge of trying to answer the seemingly unanswerable: How do you measure the value of a fan on Facebook? According to the research, 75 per cent of respondents rank social media marketing and as one of the most effective ways to deliver ROI. This comes a close second to marketing, which topped the table with 83 per cent of marketers believing it to be the most effective channel at delivering ROI. Marketers know that there is immense value in social media attribution and loyalty. This is particularly the case when high influencers get on board to endorse a product or brand. Yet, until now, marketers have not been able to put a tangible measure on this attribution. While they certainly acknowledge it s a good thing, marketers want more concrete proof of the impact that an influencer s comment or tweet has on the brand s image or, more importantly, bottom line. However, emerging social attribution tools are now becoming available to do just this. Tools can track the movement of consumers from social media to websites and vice versa; they can be used to measure the impact of likes and shares ; and can provide rich intelligence around the significance of an influencer s comment or re-tweet. The ability to gather such data will give marketers valuable insights into how their social media activities fit in with their broader marketing strategy. Tools to better target Facebook are also becoming available brands can now use technology platforms to optimise Facebook ads so that they reach their core audience and build a strong online community of brand advocates at the lowest possible cost. Rank the following marketing channels in terms of their effectiveness to deliver the most ROI: Proportion marketing Social media marketing/ Print TV / radio Online Brand experiences e.g. stunts, promotions, interactive digital content Apps Events SEO PPC Other (4) Highly Effective 36% 27% 30% 27% 26% 21% 18% 26% 20% 16% 14% (3) Effective 47% 48% 44% 36% 50% 46% 32% 45% 31% 29% 37% (2) Ineffective 11% 14% 19% 18% 13% 19% 27% 14% 30% 32% 28% (1) Not Effective 6% 11% 7% 19% 11% 14% 23% 15% 19% 23% 21% 6 Getting the most from social: An integrated marketing approach

7 Research Results Yet it is still early days. Despite the emergence of new analytical tools, reporting back on the success of social media channel activity is a stumbling block for many brands. The research shows that 40 per cent of marketers do not have measurement tools in place for their social media strategy; and 20 per cent of marketers are evaluating their strategy less than biannually, if at all. As more analytics tools hit the market in 2012, marketers will have at their fingertips valuable information so they can measure the real value of a fan or impact of a like. Of increasing importance is the ability to understand the value of social attribution what impact does it have on the business if a fan re-posts a brand message or shares an offer or advert via Facebook between their friends? Whilst the person who shared the advert may not click on the link, one of their friends may take action. It s the ability to track this attribution that will give marketers the insights they need to understand valuable Facebook influencers and the way in which they impact conversions, thus driving more value from their social media campaigns. At the same time, they will be able to accurately measure the ROI from social media channels, and present an even more compelling case for future investment in the channel. Tools to better target Facebook are also becoming available brands can now use technology platforms to optimise Facebook ads so that they reach their core audience and build a strong online community of brand advocates at the lowest possible cost. 7 Getting the most from social: An integrated marketing approach

8 Research Results Crossing the social frontier Brands are going social, but people don t fully trust them yet The Experian research shows that Australian marketers are committed to building a social media presence; yet have some work to do in gaining the trust of consumers. The social media channel is the new kid on the block in the multichannel marketing mix. Marketers and their audiences are treating this kid with a mix of reverence and caution they are keen to get on board, but they are treading carefully, wary of making early mistakes. Currently, 58 per cent of brands have a presence on social media in Australia. Of these, 40 per cent have been in the social media fray for more than one year. It is clearly a channel that consumers love. According to Experian s research, 73 per cent of Australian consumers use Facebook, while 48 per cent visit YouTube and 32 per cent are using the relative newcomer, Google+. Despite embracing social networks, consumers are still wary of the brands they encounter through social channels. Only four per cent of consumers would trust a brand s official social media channel be it Facebook, Twitter or YouTube the most for obtaining information about the brand or company. Nineteen per cent of consumers regard social media as the least trustworthy channel for obtaining information. In fact, consumers trust information about a brand on Wikipedia more than they trust the information they receive on a brand s official social media channel, with six per cent of respondents saying Wikipedia is the most trustworthy channel. That s not to say consumers won t use social sites when sourcing information about a new product or a brand. Forty one per cent of consumers classify blogs, forums and review sites as relevant sources of information. Social commerce has never been more important. As consumers turn to blogs, review sites and forums to help them evaluate where to purchase a product, marketers need to understand the importance of this valuable third party endorsement and the way in which social is used to shape purchasing decisions. As a new marketing medium, social networks still have some way to go and it is expected that consumers will be wary about engaging with brands using this channel. Such reticence is not unusual marketing professionals will have encountered the normalisation curve that follows the introduction of any new channel in the marketing mix, and only need to think back five years to when marketing campaigns were introduced to see how quickly the new became mainstream. Indeed, while marketers are waiting for the normalisation curve to flatten, it may pay to get their overall online strategy right. Many organisations in Australia retailers, in particular haven t made the most of their web presence, let alone started using social media. While some retailers are forging ahead with the integration of web, mobile, apps and social media, too many are still struggling to articulate their online strategy and how it fits into their broader business. Getting this right will put the foundations in place for an effective social media strategy further down the line. 8 Getting the most from social: An integrated marketing approach

9 Research Results Striking the right balance Consumers will engage, but are wary of too much contact Consumers are starting to show some willingness to follow and engage with brands via social media; yet marketers face the challenge of getting them to choose their brand to follow. The average consumer doesn t have the time or the inclination to follow every brand they are loyal to via social media. With that in mind, acquisition is a top priority for marketers trying to build their social media presence. Then, attention shifts to making the engagement as relevant and rewarding as possible for the brand s followers. Yet striking the right balance is always going to be difficult. When it comes to the most appropriate levels and frequency of communication, there is a disconnect between marketer activity and consumer perception 22 per cent of marketers feel that they don t communicate with their customers enough; while 36 per cent of consumers feel overwhelmed by the volume of communications they receive from a brand across all channels. Focusing on social media, there is a great opportunity for marketers to engage with consumers. While many consumers cite information overload as a deterrent to brand loyalty, the same number (34 per cent) are actively following brands on social media. This suggests a willingness to engage with brands as long as it s on the consumer s terms. Of those that follow a brand, 46 per cent of consumers follow one to three brands, while 45 per cent follow between four and ten brands on social media channels. Given that marketers face stiff competition from other non-corporate brands out there such as celebrities, musicians, television shows it is a fierce battle to win the likes of consumers who may limit the number they give out. Approximately how many brands do you follow? Number of brands Total years years years years years 51+ years 1 to 3 brands 46% 43% 32% 43% 61% 47% 68% 4 to 6 brands 37% 37% 39% 41% 30% 44% 29% 7 to 10 brands 8% 7% 12% 8% 4% 9% 10+ brands 9% 13% 17% 8% 5% 3% When it comes to the best volume of communication, there is a disconnect between marketer activity and consumer perception 22 per cent of marketers feel that they don t communicate with their customers enough; while 36 per cent of consumers feel overwhelmed by the volume of communications they receive from a brand across all channels. 9 Getting the most from social: An integrated marketing approach

10 Research Results Shaping social media strategy Marketers must listen to what consumers want, and deliver Growing a fan-base on social media is the first step. But for marketers, the focus lies in getting long-term value from each and every customer relationship on social networks. As a starting point, it pays for marketers to consider the reasons why consumers like them. The research shows that the top three reasons why people follow brands on social media channels are to: get updates on new products or services (77 per cent), gain access to special offers or discounts (71 per cent), or enter competitions (56 per cent). While not all marketers are in the position to develop content strategies that are shaped around these three angles product updates, special offers and competitions they must be mindful of the motivation behind a like and strive to give consumers what they want. Indeed, it s not all about how many fans a brand has. Rather, it is what the brand does with these fans. There is a large difference between a one-off engagement and the nurturing of long-term relationships. The more successful brands on social media ensure that they re not always pushing marketing messages, and provide a good mix of entertainment, interaction or information. This practice of giving something back helps to strengthen the sense of community and increase the likelihood of fans becoming brand ambassadors over the long term. Another important element of a social media strategy is based upon the old fashioned notion of customer service. Brands must not shy away from saying sorry. If a customer posts a negative comment, or is rightfully angry about a brand s product or service, consumers often expect to receive an explanation or apology via social media channels. Finally, brands must ensure that their social media strategy is tied in with all other marketing activities. It is critical to present a consistent experience across all channels, so that those consumers who dive from one to the next are receiving the same message across all mediums. As with any communication channel, social should not be used in silo to other interaction with customers. Ensuring a consistent multi-channel communication experience will increase the engagement that organisations have with consumers on an individual level. Clearly, there are many things to consider when developing and implementing a social media strategy. To do it properly, marketers cannot simply add the job to their to-do list and expect that it will happen. Social media marketing is a full-time job that requires priority attention. The more successful brands on social media ensure that they re not always pushing marketing messages, and provide a good mix of entertainment, interaction or information. 10 Getting the most from social: An integrated marketing approach

11 Summary The Experian Marketing Services research sought to shed light on one of the fastest growing areas of marketing offering both marketer and consumer views on the value and impact of social media, and its role in brand engagement. As a relatively new communications channel, marketers need to tread carefully in how they communicate with consumers via social media. Like any emergent channel, consumers are still wary about interacting with brands in this space, despite the fact that, on a personal level, they embrace the channel wholeheartedly. Marketers need patience and caution, yet with the right strategies in place they can win the trust of their consumers and start reaping immense value. Before any communication starts, marketers need to acquire a deep understanding of their audience including such things as demographic insights and behavioural analyses to determine the right social media networks and means of communication. The ability to understand how audiences are using social media to evaluate and purchase a product will help shape marketers online communication strategy. They also need to steer clear of a broad brush approach where social media campaigns target all consumers without thinking about how information can be tailored to specific audiences. Taking this tack, they run the risk of doing more harm than good by missing out on targeted engagement and losing a captive online audience. With these foundations in place, marketers can offer tailored, personal and relevant communication, via the right channel for the right audience. This communication can address three key stages in the customer lifecycle acquiring, understanding and retaining customers and as such be relevant and engaging at each stage. Analysis is an important adjunct to this social media activity. Whilst marketers certainly recognise the potential of social media and are actively using the channel to engage with customers, many lack the tools to report against its effectiveness and the value it brings to their organisation. And it s not just about ROI. Marketers want and need to know the value that a social interaction brings to their organisation. What does a Facebook like mean? How much value does a re-tweet of a product launch bring? Marketers must have ways to measure the value of every single interaction in social media whether it be a like, a tweet, a comment or a share. With the right tools in place, a quantifiable figure can be placed against social media s ROI and lessons from previous campaigns can be learnt. Social media is firmly entrenched in the marketing vernacular. We are now moving beyond the early-adopter mentality of it s here and we have to do it, and into the more strategic let s make this work for our business phase of adoption. In 2012 and beyond, we will see Australian marketers leverage the channel in even more creative and exciting ways delivering real business value. 11 Getting the most from social: An integrated marketing approach

12 Summary Social media marketing: top tips 1 Understand your audience As with any marketing campaign, develop a detailed picture of the audience you are targeting. Then drill even deeper. Understand the demographic you are reaching, their likes and dislikes and the social channels they use. And then develop a campaign that will work for them based on how your audience interacts with and uses social channels. 2 Make your campaign to acquire fans actionable If you are going to launch a social media campaign, include an incentive to make it actionable (e.g. fan of the month, competition for the best photo of your product, coupons or giveaways). 3 Build a strong post-acquisition strategy Once you ve got fans, you need a strategy in place to encourage these people to become brand ambassadors. This strategy should include a plan for dealing with negative comments about your brand, which are bound to arise in this new era of free speech. 5 Recognise the multiplicity of social media Social media is not just one channel; there are many social media networks and different ways of interacting (e.g. inbound and outbound requests) to consider. What works for one brand won t necessarily work for yours, and you don t need to be on every channel to succeed. 6 Get creative To stand out on social networks you need to be different. Creativity paired with a genuine relevance to your brand will boost your chances of engagement. 7 See the bigger, multichannel picture Always remember that social media marketing is just one element of a good marketing plan. Wherever possible, tie your social media campaigns in with your website, your print or TV ads, your marketing, and so on. Customers want a consistent experience across all channels. 4 Measure every influencer Extend your measurement and analysis capabilities to include the value of social attribution. Develop an understanding of the impact of a re-tweet or the sharing of a Facebook advert amongst friends. Report back on this to the business. 12 Getting the most from social: An integrated marketing approach

13 Research Methodology Experian Marketing Services commissioned independent research with 330 Australian marketing professionals across the retail, financial services, government, technology, digital and travel industries; and 1,000 consumers aged 18+ across all geographic regions in Australia. The findings were used to develop the industry whitepapers on The Future of Multichannel Marketing and Getting The Most from Social An Integrated Marketing Approach. Experian Australia Level 6, 580 St Kilda Road, Melbourne, VIC, 3004 T +61 (03) F +61 (03) E

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