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.
Next Street Agency
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.
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.
American Express Open
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.)
Social media scorecard shows value of friends
Facebook fans are a hot commodity these days, as marketing budgets increasingly shift to social media. But it's the "friends" of these fans that grocery and consumer products companies really want.
Social media friends of Facebook fans are the customers of tomorrow because consumers are often influenced to try a brand or retailers by their social networks, says Reston, Va.-based market research firm comScore, which offers research examining the link between social media use and consumers' shopping behavior.
Facebook, with an average of 160 million U.S. visitors a month, representing three out of four Internet users, now accounts for about 90 percent of all time consumers spend on social networking sites, comScore and Facebook reported in a July 2011 whitepaper, "The Power of Like."
The universe of friends is generally far larger than the number of Facebook users who have "liked" a brand or retailer. In fact, among the top 100 brand pages on Facebook, the circle of fans' friends is 34 times larger on average than the number of fans, comScore reports.
How valuable are Facebook friends?
A fan's ability to influence friends is one of three ways marketers should assess their value. In addition, marketers should be looking to boost engagement and loyalty with an eye toward improving incremental purchase behavior, the company suggests.
To determine the effectiveness of social media, consider: Do your fans spend more time at your stores? Do they purchase more? Do they visit your website more often? Do they influence their friends to do the same?
The Facebook Newsfeed is the place to get noticed. Users are 40 to 150 times more likely to see a marketer's content on the Newsfeed than on the fan page, comScore says. That's because users spend 27 percent of their time on their homepage, where the Newsfeed is prominent. For example, for every one fan-page view, Starbucks landed 156 brand impressions through Facebook. Highly relevant content that is frequently updated will help extend its reach.
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."
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.