Social media ROI part 5 : What’s next

ROI

Over the course of this series looking at social media ROI we have moved from theory and strategy to the practical implementation of a social media plan. We looked at metrics and measurements in part one, discussed the art of growing your community in part two and developed real world guidelines for the differing social media platforms in part three. The fourth and most recent article in the series looked at utilising social media data for lead nurturing and conversion. In our final stop in the series we will take a step back and look at where social media marketing is heading and discuss how your company should be prepared to capitalise on this rapidly evolving space.

Before gazing too far ahead we need to look at why the market is changing so rapidly. The advertising industry is in the midst of major disruption. The February 8th issue of the Australian based AdNews had a cover headline that read, “Surge in account reviews spooking media, agencies.” The article went on to say that, “…major advertisers are trying to ascertain whether they should bundle their digital, search and social media into a single agency…” The thematic trend in these types of articles is backed up by an Econsultancy report which shows that 71% of businesses world-wide are planning on increasing their spend on digital marketing this year.

What’s going on? Why is the marketing industry increasingly going digital?

In part one of this series I referred to an article called “Marketing is dead” published on the Harvard Business Review website in August 2012, which provided some insight. It cited research showing that 73% of CEOs think that “CMOs lack business credibility and the ability to generate sufficient business growth,” and 77% of the same CEOs have “had it with all the talk about brand equity that can’t be linked to actual firm equity or any other recognized [sic] financial metric”. These damning statistics suggest that in the current post-GFC world the traditional “soft” metrics so often used to justify marketing spend are failing to deliver. Business leaders want each dollar spent on marketing to be linked back to sales figures. The need for accountability is part of the attraction of digital marketing. Every activity can be measured, in real time, down to a single click.

A far more important factor is that the consumer is driving real change in the market, forcing brands to interact in new ways. Social media and the consumption of content through digital channels has now reached near ubiquity. While this will not spell the end of TV, radio and newspapers, digital is capturing an increasingly larger proportion of market share. Furthermore today’s consumer is sophisticated. When she wants something, she wants it personalised, and she wants it right away. Only the online environment can meet these kinds of demands.

Additionally are looking to invest in experienced people. The majority of businesses do not have the skills required to keep up with the pace of change. A 2012 IBM study – “Fast track to the future, The 2012 IBM Tech Trends Report” – found that across the four technology areas it explored – mobile, business analytics, cloud and social business – only one in ten organisations had all the skills it needed. Within each area, roughly one-quarter reported major skill gaps and 60% or more reported moderate to major shortfalls. An integrated approach to digital marketing would address all of these areas so it makes sense to invest wisely.

With all of this budget upheaval the one thing that can be guaranteed is that the marketing industry is going through a major disruption. When it emerges from this phase it will be permanently altered – and this is a really big deal. As the famous management author Peter Drucker said, “Business has only two basic functions – marketing and innovation.”

Digital communication gives the brands of today the ability to address both of these functions at once. But it is going to take a drastically different approach to digital marketing to do this effectively. Banner ads and landing pages are no longer enough. The future of digital marketing needs to have social media, and the data it generates, at its core.

What will be happening in the next few months? What are the trends that brands need to be aware of and how can we see beyond the complexity of technology and find the opportunity that really exists? A safe bet is any strategy that is not data-utilisation-focused probably won’t get off the ground. As The New York Times stated in an article called “Marketers Celebrate Glimmers of Recovery” in 2011, “Data rules… content may be king in media, but in advertising, it is data”.

While I don’t have a crystal ball, providing commentary on the digital space in publications across the world allows me to take a step back and see how things are evolving. Below is what I see coming.

Content will start to take centre stage

Marketing professionals are now quickly moving beyond understanding digital and social platforms and are focusing on how to make their chosen digital communications channels come alive. A recent study by Econsultancy found that only 38% of companies surveyed had a developed content strategy in place, but 90% believed it would come into focus over the next 12 months. Much as the creative firepower of the storyteller for the 30 second spot became the hero of the TV-centric advertising world, the skilful weaver of the digital narrative will be what every brand will be looking for.

Agencies that can demonstrate ROI will lead the way

The advertising industry is currently going through disruption. One of the major factors driving this change is the huge volumes of unstructured data available. Unlike having a set of predefined fields that fill a database, such as old style CRMs or competition entry forms, unstructured data is conversations, interactions, and preferences such as Facebook Likes that will be different for each customer.

While many advertisers are still caught up in trying to work out the “engagement” formula – how to get people to engage with content online – the forward thinking companies are now firmly focused on generating conversion-focused insights out of unstructured social media data. The companies that can effectively connect the dots between engagement, data, and conversion will dominate this space.

Brand data platforms will come into focus

In mid-January Nike quietly released a framework for developers to connect to their Nike+ platform. For those of you who don’t know, Nike+ lets you put sensors in your shoes and track how you are using your trainers – how long you run and how fast you run is recorded, and you can share it on Facebook.

By doing this Nike+ have managed to build a data platform that lets them extend their connection with their customers for the whole life of the trainers, creating much deeper relationships – and new opportunities to sell product. With the release of the new developer framework Nike are making a transition from active clothing product brand to active technology brand. They want to effectively own the active lifestyle data space.

Other brands will be trying to do the same thing this year. They will want to develop their own platform for customer relationship growth.

Company internal investment will increase significantly

Not so long ago the terms “community manager” and “social data analyst” didn’t exist. Now  every major brand is investing in resources with titles like these. Companies have learnt, some the hard way, that community building is not only important but requires well developed skills.

Brands will work out how to use Facebook

On the whole most businesses have been lost when it comes to Facebook. There has been a lot of hype, many mistakes and the occasional spectacular success. The lessons from this experimentation have been learnt and brands are looking to drive real business results from the communities they have now invested in. There is no one “Facebook formula”, but there is a right way for each brand.

It is not only the brands who have been learning. Facebook itself has been trying to get their offering to businesses right and this year we’ll see the social media giant step up their game and offer a range of enterprise oriented tools and training to help brands realise the potential of the platform.

Marketers will begin to think about ‘closing the loop’

It’s interesting to look at the spectrum of data available from a marketing perspective. Facebook knows what people are doing, Google knows what people want, companies like Amazon know what people are buying and brand platforms like Nike+ will make it possible to know how that product is used. Pulling all of that information together will be extremely powerful for marketers. Better products and services combined with more relevant communications equals happier customers who spend more.

Each of these developments point towards the importance of making social media marketing techniques more accessible to the business community. It is far too easy to get lost in conversations about the technology in an industry that is moving at break neck speed. The technology is important but it will only ever be a method for delivering a brand story.

Storytelling is in our cultural DNA. Great stories capture the imagination and help us relate to the underlying message. For your business, compelling storytelling is essential for one simple reason – people do not really care about brand. It’s easy to forget that the business you live and breath is not as interesting to your market as it is to you. And real customer loyalty is difficult to maintain. Developing a good story helps to make your brand interesting and attractive. The story about the business origins, for example, can help to put a human face on your brand. The story of Facebook starting out in a coffee fuelled Harvard dorm room has helped turn Mark Zukerberg, and the Facebook brand, into something resembling legend.

Social media gives you the ability to tell stories in a new way. While no technology can help you construct a narrative, knowing how to use each platform correctly helps you be more effective in its telling. Finding out what sort of content your audience will engage can be tested, and refined, quickly through social media. It’s then and matter of utilising social media data to refine and personalise your story.

There is no magic bullet when it comes to social media return on investment. Of course you need to know how to use the tools but what is more important is how you use them to engage your market. Invest in engaing your audience, and they will return the favour.

To revisit the earlier parts of this series go to bit.ly/MMsocialROI

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