Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands

Transcription

1 For: Marketing Leadership Professionals Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands by Xiaofeng Wang, July 2, 2014 Key Takeaways Linking Social Media Metrics With Business Outcomes Is Still A Rare Occurrence Nestlé is among the very few marketers in China that have started to measure the link between social media metrics and business outcomes rather than basic volume and engagement metrics. Even so, it is still at an early stage of measuring business metrics and has done so for only a limited number of campaigns. Marketers In China Focus Social Media Measurement On Operational Performance For many marketers in China, including Nestlé, social marketing efforts are more on social media operation -- owned and earned -- than on social ads. With its social marketing agencies, Nestlé has invested in creating and refining a sophisticated set of metrics such as buzz share of organic discussion and engagement rate. Nestlé Uses Social Insights Along With Measurement To Improve Performance Metrics like engagement rate can help marketers understand the result of their social marketing efforts, but social insights like tweeting time analysis can provide direction to improve performance. Marketers in China, including Nestlé, often combine these two in their social performance reports, as do many social agencies. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA USA Tel: Fax:

2 July 2, 2014 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands by Xiaofeng Wang with Luca S. Paderni and Samantha Merlivat Why Read This Report Marketers in China are struggling to effectively measure their investments in social media. Most of them are still at the early-maturity stage of social media measurement focusing on basic volume-based metrics or simple qualitative proxies of engagement. Nestlé China s ice cream division has successfully tackled the social media measurement challenge by gradually increasing the sophistication of its measurement approach over the past few years. This case study illustrates how the Nestlé ice cream marketing team went through three different stages of social media measurement maturity. It will help marketers understand how best to approach their social media measurement strategy and implementation in China. Table Of Contents Nestlé Develops Social Measurement In Three Stages Stage 1: Measure Volume Stage 2: Measure Engagement Stage 3: Measure Business Outcomes What Drives Social Media Measurement Success At Nestlé Ice Cream recommendations Social Marketers In China Need To Refine Their Measurement Approach Supplemental Material Notes & Resources Forrester interviewed the senior marketing manager of Nestlé China s ice cream business unit. Related Research Documents Win The Social Marketing Measurement Game January 9, 2014 Benchmarking Social Marketing Efforts In China October 24, 2013 Social Media Measurement In China July 25, 2013 Winning Social Media Marketing In China March 18, , Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please clientsupport@forrester.com. For additional information, go to

3 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 2 Nestlé Develops Social Measurement In Three Stages Nestlé China s ice cream business unit has two major brands BenNaNa and Five Rams. BenNaNa is an unusual ice cream stick with a peelable jelly shell that shapes the ice cream, which is eaten just like a real banana. Because of its playfulness, BenNaNa is the No.1 kids brand in China and popular among young consumers. Five Rams is a local brand that has been based in Guangzhou for more than 50 years; Nestlé licensed in the 1990s. As a regional brand, Five Rams is the category leader in the province of Guangdong. 1 Getting actively involved in social media is a must for business-to-consumer brands in China. Nestlé started using social media in 2012, when Sina Weibo gained traction in the marketplace. As Olivier Jakubowicz, senior marketing manager of Nestlé China s ice cream division, told us: Going social is not a choice, as people are constantly on social media. We have to keep up with changing consumer behavior. Metro Chinese online consumers are what Forrester calls Social Savvies, with an overall Social Technographics Score of 48, much higher than that of US consumers, who are Social Snackers with an overall score of Social Technographics Scores are even higher for Nestlé s two key target audience segments Guangzhou consumers and young consumers (see Figure 1). As social media programs mature, they have a positive impact on business outcomes. Nestlé s social marketing efforts were mostly on Sina Weibo for the first two years, as the company tested other platforms that did not generate a good performance. Starting this year, the Nestlé marketing team added WeChat to its social spectrum and gradually shifted its efforts to this rapidly growing mobile social platform. In this period, Five Rams has clocked a 15% yearly growth versus a category growth of only 5%, while the BenNaNa brand has gained 36% growth in brand awareness. Since 2012, Nestlé has gone through the three stages of social media measurement maturity that we typically observe among large brands in China: 3

4 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 3 Figure 1 High Social Technographics Scores Stress Centrality Of Social For Metro China Consumers The Social Technographics Score This score gauges how important social tools are to an audience s customer life cycle and where in the life cycle social tools have the greatest impact. Guangzhou: Online adults aged OVERALL SCORE use social to: Discover Explore Engage SKIPPERS SNACKERS SAVVIES STARS Metro China: Young online adults, aged OVERALL SCORE use social to: Discover Explore Engage SKIPPERS SNACKERS SAVVIES STARS Rest of metro China online adults, aged OVERALL SCORE use social to: Discover Explore Engage SKIPPERS SNACKERS SAVVIES STARS Base: 210 Guangzhou online adults (18-54); 473 metropolitan Chinese online adults (18-25); 1,851 metropolitan Chinese online adults (26+), excluding the two previous categories. Note: All scores have been rounded down. Source: Forrester s Asia Pacific Technographics Online Benchmark Survey, 2013

5 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 4 Stage 1: Measure Volume In 2012, Nestlé was mainly at this initial stage. Like most marketers in China, Nestlé s Weibo marketing started with collecting fans and measuring basic volume metrics. Its digital agency Ogilvy helped Nestlé track the social marketing results. Back then, both social platforms and agencies were able only to provide metrics that were: Based on volume, such as number of comments and shares. While both brands managed to attract a decent number of fans Five Rams has more than 100,000 followers and BenNaNa has more than 50,000 this was not the main concern for the marketing team at Nestlé. Instead, early on, it focused its measurement efforts on tracking and comparing key social activity metrics such as the number of comments and shares on Weibo, which can provide better granularity on the operational performance (see Figure 2). Figure 2 Five Rams' Key Weibo Posts Volume Metrics For The Made In Canton Campaign

6 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 5 Stage 2: Measure Engagement In 2013, Nestlé moved to the next stage of its social media maturity by starting to measure engagement. The marketing team developed a more structured social strategy and adopted moresophisticated social tactics like cooperation with key opinion leaders and co-creation with Weibo fans. 4 Nestlé started to work with social listening agency CIC to improve its social media measurement initiatives, with a new focus on both quantity and quality of engagement generated. In particular, marketers measured: Quantity of engagement with metrics such as impressions. Nestlé no longer simply combined the buzz volume but rather calculated the overall impressions that each of its ice cream brands was generating. For example, during the ice cream season in 2013, April to August, it compared Five Rams total buzz volume and total impressions with those of eight competitors (see Figure 3). Quality of engagement with net sentiment rate. Sentiment is more about social insight than measurement, but by calculating the net sentiment rate, marketers can have a better understanding of the quality of engagement. Nestlé calculated Five Rams net sentiment rate using the following formula: (positive minus negative)/(positive plus negative) and compared it with those of competitors brands (see Figure 4). Buzz share of organic discussion. Nestlé separated organic discussion from campaign-lead discussion activities to effectively measure the results of its social marketing campaign efforts on Sina Weibo. The lower buzz share of organic discussion implies better performance of the paid social campaign (see Figure 5). The newly created compound engagement rate metric. With the help of a social analytics vendor, Nestlé calculated a compound engagement metric that shows the average amount of activity that its Sina Weibo fans generate on each post (see Figure 6).

7 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 6 Figure 3 Five Rams Social Media Buzz And Impressions In Guangdong, April To August 2013 Figure 4 Five Rams Net Sentiment Rate, April To August 2013

8 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 7 Figure 5 Five Rams Buzz Share Of Organic Discussion, April To August 2013 Figure 6 Five Rams Engagement Rate, April To August 2013

9 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 8 Stage 3: Measure Business Outcomes Nestlé is still at the beginning of this stage, Mr. Jakubowicz told us. It s the biggest challenge for us to measure the actual business impact of social marketing. Nestlé has its own brand-health tracking model, but it s hard to separate the attribution of social from its other marketing efforts. Nonetheless, the company had a few early examples of successfully linking social activities to business outcomes: For the BenNaNa Island campaign, Nestlé measured effective social CPM. Nestlé used its paid, owned, and earned media model to measure impressions and calculate the overall impressions-per-thousand (CPM) rate of the campaign. It accounts for the impressions created by the branded social accounts as owned media and impressions created by organic buzz and user-generated content as earned media (see Figure 7). According to Mr. Jakubowicz, We did not invest much in the BenNaNa brand s social campaign, but it had lots of organic buzz, and ROI was really good. For the WeChat campaign, Nestlé measures social s contribution to sales via a QR code. In 2014, Nestlé started to invest in a WeChat marketing campaign. Now, 80% of our social marketing efforts are on WeChat for two reasons, Mr. Jakubowicz explained. First, WeChat can help drive purchases directly. Second, user activity on Weibo is dropping. WeChat users can scan the printed QR code on Five Ram s ice cream packaging and go to the campaign site to vote and enter a contest (see Figure 8). By tracking the unique code, Nestlé knows not only how much traffic is coming from WeChat but also the sales volume driven by this specific campaign. Figure 7 Five Rams BenNaNa "Island" Campaign Measurement Paid Paid% Owned Owned% Earned Earned% CPM BenNaNa 3,008,696,000 95% 50,319,000 2% 102,555,000 3% 4.43 Note: Paid, owned, and earned numbers are impressions.

10 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 9 Figure 8 Five Rams WeChat Campaign And Measurement What Drives Social Media Measurement Success At Nestlé Ice Cream Compared with its peers, the Nestlé ice cream division is doing well in social media. By learning, analyzing, and understanding social consumers, said Mr. Jakubowicz, Nestlé ice cream became the social media leader in the company and the whole ice cream industry in China. Nestlé is successful because it: Chooses the right social marketing objectives for each brand. Last year, we focused too much on engagement. But we realized that it shouldn t be the primary objective for all the brands, Mr. Jakubowicz said. After several years of experience, the Nestlé marketing team realized that engagement is the right metric for a more matured brand like Five Rams, while brand awareness is more important for a newer brand like Niunaibang, Nestlé s new local ice cream brand. Then it adjusted its measurement strategy accordingly. Builds its own social benchmarks. Like other marketers in China, Nestlé was frustrated by the failure of agencies to provide meaningful industry benchmarks for social media measurement. As Mr. Jakubowicz told us: When we first started using social media, we constantly asked

11 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 10 agencies for benchmarks, but they couldn t provide much. We are ahead of our agency in measurement and constantly push it to provide better metrics. Since 2012, Nestlé has created its own benchmarks comparing this year versus last year and this brand versus that brand. Uses measurement results to constantly improve social performance. Nestlé has a real-time monitoring system in its digital acceleration team room (see Figure 9). It gets daily and weekly reports and has weekly meetings with its agency to adjust its social tactics. Leverages social insights with social measurement. By analyzing fans posting times, Nestlé knows the best time to post and adjusts its posting time accordingly to improve engagement rates (see Figure 10-1). The company also uses social insights to understand what content would drive better sentiment and how it should improve net sentiment rate (see Figure 10-2). Figure 9 Five Rams Social Marketing Real-Time Monitoring

12 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 11 Figure 10 Five Rams Uses Weibo Analysis To Improve Performance 10-1 Five Rams Weibo posting time analysis

13 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 12 Figure 10 Five Rams Uses Weibo Analysis To Improve Performance (Cont.) 10-2 Five Rams buzz sentiment analysis Recommendations Social Marketers In China Need To Refine Their Measurement Approach Social marketers face challenges every day: from creating the right social strategies to selecting the right social platforms and tactics to effective implementation. More importantly, as social media is evolving fast in China, adapting and improving social media measurement in the future is essential. To support positive business outcomes, social marketers in China need to: Customize their metrics for different brands. As the Nestlé marketing team has realized during its social marketing experience, the same metrics won t be a fit for all brands. Instead, the team uses social reach metrics more for newer brands like Niunaibang and social relationship metrics more for mature brands like Five Rams.

14 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 13 Refine their metrics overtime. Social media is constantly changing in China, and marketers like Nestlé adapt and refine their metrics over time. For example, when there was no like functionality on Sina Weibo a year ago, Nestlé used the same formula of the engagement rate metric that was used in other markets but with a slight localized twist, replacing the number of likes with the number of direct mentions. And when the functionality was available later, Nestlé adjusted the metric accordingly. Use coupons and unique identifiers when more-sophisticated solutions aren t available. Unlike in Western countries where social measurement is more advanced, there aren t yet many social agencies and vendors in China that can provide sophisticated social measurement solutions such as mix modeling and attribution tools. So marketers like Nestlé go to easier options, such as coupons and unique identifiers, to measure social marketing s direct contribution to sales. Supplemental Material Methodology Forrester s Asia Pacific Technographics Online Benchmark Survey, 2013 was fielded in May 2013 of 9,007 individuals in Australia, Indonesia, Japan, South Korea, metropolitan China (including Beijing, Chengdu, Dalian, Guangzhou, Nanjing, Ningbo, Shanghai, Shenyang, Suzhou, Wuhan, Wuxi, and Xian), Hong Kong, and metropolitan India (including Ahmedabad, Bangalore, Chennai, Hyderabad, Jaipur, Kolkata, Mumbai, New Delhi, and Pune). This survey is based on an online population of people ages 18 and older who are members of the Ipsos Mori online panel. Ipsos Mori weighted the data in all countries by age, gender, and geographical distribution to be representative of the adult online population in each country surveyed. In metropolitan China, the data was also weighted by income level for each city surveyed. In metropolitan India, the data was also weighted by the SEC AB groups. For results based on a randomly chosen sample of this size (N = 9,007), there is 95% confidence that the results fall within a range of statistical precision of plus or minus 2.0% to 4.3% of what results would be if each country s entire population of online individuals (defined as those online weekly or more often) ages 18 and older had been surveyed. The survey sample size, when weighted, was 9,007. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have more experience with the Internet in general and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from data collected offline. The sample used by Ipsos Mori is not a random sample; while individuals have been randomly sampled from the Ipsos Mori panel for this survey, they have previously chosen to take part in the Ipsos Mori online panel.

15 Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands 14 Endnotes 1 Guangdong is a province on the South China Sea coast of China, with humid and hot weather. It is China s most populous province, with a total population of 104,303,132 as of the 2010 census. Since 1989, Guangdong has topped the total gross domestic product (GDP) rankings among all provincial-level divisions. Guangzhou, the capital city of Guangdong province, is one of the wealthiest and most populous cities in China. 2 The Social Technographics Score is a framework that Forrester created to show the commercial side of people s social behaviors to help marketers choose among social strategies. The first piece of this new data model helps marketers evaluate how important social tools are in their customers life cycle and place consumers in one of four categories: Social Stars (score of 60 to 100), Social Savvies (30 to 59), Social Snackers (10 to 29), and Social Skippers (1 to 9). The second piece of this new data model identifies where in the customer life cycle social media has the biggest impact and which social marketing strategies should work best: discover, explore, or engage. To learn more details of the Social Technographics Score framework, see the February 20, 2014, Revealing The Social Technographics Scores Of Global Consumers report. Source: Forrester s Asia Pacific Technographics Online Benchmark Survey, To get a better sense of how marketers in China mature through three stages in social measurement, see the July 25, 2013, Social Media Measurement In China report. 4 The division s most successful case of co-creation is its Made in Canton campaign on Weibo. The Five Rams branded account collected stories from Weibo fans and asked six cartoonists who were key opinion leaders to use them to create six posters that were then shared on Weibo.

16 About Forrester Global marketing and strategy leaders turn to Forrester to help them make the tough decisions necessary to capitalize on shifts in marketing, technology, and consumer behavior. We ensure your success by providing: Data-driven insight to understand the impact of changing consumer behavior. Forward-looking research and analysis to guide your decisions. Objective advice on tools and technologies to connect you with customers. Best practices for marketing and cross-channel strategy. for more information To find out how Forrester Research can help you be successful every day, please contact the office nearest you, or visit us at For a complete list of worldwide locations, visit Client support For information on hard-copy or electronic reprints, please contact Client Support at , , or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions. Forrester Focuses On ebusiness & Channel Strategy Professionals Responsible for building a multichannel sales and service strategy, you must optimize how people, processes, and technology adapt across a rapidly evolving set of customer touchpoints. Forrester helps you create forward-thinking strategies to justify decisions and optimize your individual, team, and corporate performance. «ERIC CHANG, client persona representing ebusiness & Channel Strategy Professionals Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow.