Tapping Friends and Followers

Garnering Facebook fans is no guarantee of incremental sales, but ignoring the burgeoning power of social media is a sure way to give your digital-marketing-savvy competitors an edge.

With 70 percent of U.S. Internet users on Facebook and Americans now spending thrice the time with social media as they do with email, marketers are missing a vast audience if they're avoiding social media, according to Nielsen's third-quarter 2011 "State of the Media: The Social Media Report." About 23 percent of the total time Americans spend online is devoted to social media compared with 8 percent for email, and Facebook is by far the biggest draw, the report says.

But what can retailers and CPG companies hope to accomplish from having a social media presence? And how can they measure the success of their digital marketing efforts? Companies that enter the arena hoping to gain awareness, engagement and feedback are more likely to be satisfied than those who are looking for an immediate payback of higher sales at the register, experts say.

The ability to engage in dialogue with customers while promoting a brand makes social media a powerful marketing tool, says Erin Jurew, partner at Next Street Agency with offices in New York and Boston. "The opportunity to push your message is obvious, but the real value is what CPG brands and grocery retailers can pull from the customers," Jurew says.

why consumers share company experiences (% Social Media Users) SOURCE: Mn Incite

Driving Soft Conversions

About 35 percent of advertisers use social media to drive sales, 24 percent use it to spur engagement, 23 percent want more brand awareness, 14 percent strive for more Facebook "friends," and 4 percent are hoping to drive brand impressions, suggests research by San Diego-based search marketing firm Covario Inc.

Even negative posts can be opportunities for companies to turn around the situation, and many have positive outcomes, says Rob Ciccone, vice president of American Express Open, which provides tools for managing social media. "The most important thing is to recognize these conversations are happening whether you're following them or not, so you should be a part of them," he says. Like it or not, two out of three consumers say they are influenced by social media advertising, according to Nielsen's Global Online Survey. And many report trusting personal recommendations from friends and family more than other product research, Nielsen says.

CPG companies are trying a variety of approaches to get the dialogue going. Last fall, Heinz announced on its Facebook page, which at that point had 837,238 followers, that its new Heinz Tomato Ketchup Blended with Balsamic Vinegar would be available for purchase through its Facebook page starting Nov. 14, weeks before the product landed in select Walmart, Safeway and other participating retailers in December. The Facebook page now has more than 1 million "likes."

Giving Consumers a Voice

By engaging customers in a contest or trial and by offering limited-edition products, marketers generate buzz, says Susana Yee, partner at BuzzSmith, a marketing firm in Los Angeles. "It's a really great way for companies to test new flavors without spending a lot of money on getting it into the market," she says. Long before the new ketchup product was available, "people were clamoring to buy that one limited-edition vinegar flavor," Yee says.

By investing in social media, companies can strengthen brands and encourage product purchases, Yee says. "It's not just about driving traffic to the site....It's important to get people excited enough that they'll actually go and purchase product."

According to the Covario study, 38 percent of companies now have separate social media budgets, while 37 percent pay for social media marketing from their search-marketing budgets and 24 percent pull from their public relations budgets.

In general, the more consumers a company reaches, the more cost-effective a social media program is. Yet companies that measure the number of brand mentions on Facebook likely aren't capturing the true reach, because each Facebook user has the potential to tell friends about the brand or offer, suggests Reston, Va.-based market research firm comScore, which now offers an analytics tool for social media. (See related story on page 18.)

Still, the number of fans is one measure of a Facebook page's success, and Coca-Cola tops that list. Its page has 41.5 million "likes" and in late April boasted that 383,754 people were "talking about this." The number of Coca-Cola Facebook fans has been growing at a monthly rate of 3 percent, according to Covario. Coca-Cola's Facebook page includes corporate information, with product descriptions, nutrition labels and news releases from the company itself. But it also features fan-submitted photos, and its wall is full of user-generated comments.

Among retailers, Walmart is No. 1 for overall engagement, Covario says. Walmart receives about 7,390 comments and 726 "likes" for each post, more than any other advertiser in a Covario study that used Advertising Age's list of the top 100 companies by advertising spending and examined their Facebook reach, engagement and reputation. "Reach and engagement are particularly revealing," says Craig Macdonald, senior vice president and chief marketing officer at Covario, in a news release.

The corporate approach differs markedly on Walmart's Facebook page, which boasts more than 15 million fans and immediately engages users by posing a question, such as: "Tell us how you'd pack a care package for your loved one for under $20." The post, "Backyard bar-b-que, bike ride or getting your garden gorgeous...how are you celebrating spring outdoors?" posed March 31 drew 2,331 "likes" and 372 comments.

With more marketing options than ever to choose from, companies need to evaluate their social media programs through testing and analytics, Ciccone says. "There are a lot of places to go," he says. "We've found businesses see it as a challenge or game to try to get their social media reach as high as possible."

Attracting Followers

For companies just getting started, the first step is attracting followers. O.N.E Coconut Water used social media to "evangelize" its products, says Yee, who worked on the campaign. It was designed to grow the company's fan base and encourage a sense of community, she says. One aspect involved promoting the Healthy Child Healthy World campaign, to protect children from environmental health risk. "Every time someone liked it on Facebook, [the company] would give a dollar to Healthy Child Healthy World," Yee says. The company's Facebook page now has 13,597 fans and continues to attract attention by supporting social causes. "The great thing about this kind of social media is it gives people the power" to communicate, Yee says.