How successful is social media’s impact on a socially responsible company’s bottom line?
This is the leading question framing a Social Media Week panel I’ll be speaking at this Thursday.
We know that social media has had a tremendous impact on society, but to what extent does it translate into real dollars? There are many metrics we can use to track engagement: number of followers, number of people writing about us, number of visitors, etc. However, it is still difficult to correlate the impact of social media on a company’s bottom line; it’s often an ecosystem of small, unordered interactions that lead to a click, a purchase, a donation.
However, for some organizations, the correlation is much clearer. There are many companies that would not exist without social media: Mashable, Kickstarter, Pinterest, Groupon. These platforms are social media, thus their entire business models are predicated upon it.
While not all companies can exist as social media, what we can learn from these startups is that social media has a greater impact on a company’s bottom line when it is treated as an integrated part of a company’s brand strategy, rather than just a marketing afterthought.
Social media should be less about platforms, more about people and purpose.
Being “social” means creating a brand of listening. It means creating a brand that engages in in dialogues rather than monologues, a brand that empowers people to do more. It means creating a brand that is driven by purpose rather than just the latest trends.
Your brand purpose, based upon the intersection between what people need and what’s special about you, should shape how and where you engage with your audience. Your purpose should be a unifying force that drives your entire business – from social media to business model to operations.
When social media is contextualized within the big picture, your brand presence on Facebook, Twitter and other platforms seems more authentic, human and individualized. When it is viewed as another tool for driving impact and profit, the correlation between a tweet and a new business prospect is much clearer. When social media becomes an embedded part of your company’s DNA, it becomes an even more powerful – and sustainable – force for good.
Here are a few guiding questions we ask our clients to ask themselves:
Given our brand purpose, what are the most appropriate channels for engaging with our audience?
How can we empower our customers to do more?
If we are trying to translate social media into real dollars, how can we connect the dots between action and impact?
As part of Social Media Week, on February 16, WONY strategist Melissa Andrada (@themelissard) will join a panel on “Doing Well by Doing Good,” hosted by SCENEPR in association with Design for Social Innovation (DSI) at SVA. With Brian Reich, SVP/Global Editor at Edelman, and others from Purpose, Roadmonkey Adventure Philanthropy, and Mark & Phil, the panel will explore how purposeful businesses can use social media for both impact and profit. Sign up to attend here: http://dogoodsmw.eventbrite.com/
Social media is a powerful booster for brand authenticity and personality, but how successful is it in converting a good cause to sustainable dollars? In an atmosphere where customers’ trust and loyalty is increasingly earned through transparency and engagement there are new paths to the bottom line.
As part of Social Media Week, on February 16, WONY strategist Melissa Andrada (@themelissard) will join a panel on “Doing Well by Doing Good,” hosted by SCENEPR in association with Design for Social Innovation (DSI) at SVA. With Brian Reich, SVP/Global Editor at Edelman, and others from Purpose, Roadmonkey Adventure Philanthropy, and Mark & Phil, the panel will explore how purposeful businesses can use social media for both impact and profit.
Last weekend, I did the unthinkable: I got off the world’s largest social network.
My sister changed my Facebook password, so for at least 30 days, I’ll be off the grid. This means no status updates, no news feeds or even Instagram integration.
It’s a social experiment I’m conducting to understand the value that Facebook brings to the way people connect with each other.
As Facebook gets ready to go public, Mark Zuckberg wrote a letter to prospective shareholders, sharing his mission and ambitions for the company. One of his goals is “to strengthen how people relate to each other.” To what extent can Facebook actually do that?
Malcolm Gladwell argues that “the platforms of social media are built around weak ties.” While I disagree with Gladwell’s critique of social media’s ability to create social impact, there’s some truth to what he says. The people I really consider my friends communicate with me through email, IM, text message, or in person. Of course, if you’ve lived in many places, Facebook is an effective way to keep in touch with friends who live in other parts of the world. Or, if you are seeking to promote your personal brand, it’s useful for staying on top of mind for your former bosses, clients, coworkers and employees. If you’re not on Twitter or Tumblr, it’s also useful for keeping track of news and inspiration through the pages you like.
But the user value tapers off there. If we are really honest with ourselves, we spend a lot of time on Facebook seeing people on our feed we really don’t care about: the middle school classmate we haven’t talked to in 10 years, ex-boyfriends and girlfriends, your old boss you never got around to de-friending. Even by curating your friends’ list, it’s impossible to game the Facebook newsfeed to see the friends you really want to see.
I thought getting off Facebook would be the equivalent of quitting smoking, but surprisingly, I don’t yet feel like I’m suffering from FOMO (“fear of missing out”).
My questioning of Facebook’s social value is actually part of a larger trend in the world. What I’ve observed is that the backlash against the “weak ties” we maintain on Facebook and other social media platforms has led to a demand for channels that create more meaningful, personal connections. We’ve recently seen this manifest itself through online communities like Path, a more personal network that limits your friends to 150, and Stamped, a sort of “stranger-less Yelp” that lets you keep track of the restaurants, books, movies, and other things your close friends have stamped with approval.
As people increasingly turn to other online networks and activities to keep “close ties” with the people they really care about, I know I’m not alone in questioning where Facebook currently belongs in my life. I’m not suggesting that people will soon stop using Facebook—last year Americans spent more time on the social network than any other website out there. But with its purpose and role in people’s lives always changing, it’s important that Facebook now focus on growing with its users and not against them. If it doesn’t, it could lose them, potentially for more than 30 days.
I’ll write a follow-up post once I’m back on Facebook, so stay tuned for post-fast thoughts.
Melissa Andrada is a brand and content strategist at Wolff Olins New York. She’s passionate about the intersection between technology, social good and brand. @themelissard
Spanning all age ranges, economic sectors, and walks of life, social media has easily been one the most talked about subjects of 2010. And few people really get it. How does one measure the “social-ness” of a brand when a new social network arises everyday? Is there even a measurable ROI? We know that social media drives sales growth; sales increase by 18% at companies with the highest levels of social media activity and decrease by 6% at companies with the least social media activity (Source: Erik Qualman, Social Media ROI Socialnomics). But we wanted to see if there was a direct correlation between social media and brand value. We conducted some research using Interbrand’s list of Best Global Brands of 2010. We originally hypothesized that in order to make the top of this annual list, the companies must have a solid grasp on how to best utilize/popularize their social media platforms.
We were so wrong. We ran a regression analysis and it turns out that brand valuation and social media activity are not directly related. For example, the number 1 best global brand of 2010, Coca Cola, is worth $70,452 million this year and has over 12 million Facebook fans, over 122,000 Twitter followers and over 13,000 YouTube channel subscribers. These numbers are strongly correlated, however the number 2 brand, IBM, looks completely disproportionate. Worth $64,727 million, one would expect a more active social media presence than 13,000 Facebook fans, 11,500 Twitter followers and 1,000 YouTube subscribers.
Since there is no evident correlation between the level of activity of social media on a brand and the overall success on the brand, is it even worth it? Through our research, we have come to three conclusions.
Social media may not be appropriate for all brands. For example, the impact of social media on a B2C company (like Coca Cola) will be vastly different from the impact that it has on a B2B company (like IBM).
Social media is not everything and brand need to take a holistic approach to this phenomenon by focusing as well on advertising and communications.
Social media is not a push strategy. Brands need to engage in a relevant conversation with their customers because they are the influencers. Ultimately, these will be the people shaping the brand presence.
(Jean-Yves Minet) @acebrandage Photo courtesy of LA Hall
Gone are the days of avoiding the Internet. The prevalence of digital and social media has made it imperative for luxury fashion brands to have an active online presence. Facebook pages, livestreaming fashion shows and e-stores have made brands, like Gucci and Prada, more accessible to everyday shoppers.
The Internet has enabled high-end fashion brands to expand their reach, create a more direct relationship with their consumers and receive instant online orders. However, the problem with making luxury brands more accessible is it puts the risk of making the brand seem ordinary.
To quote Jean-Noel Kaperer, a luxury marketing consultant, “If too many people can buy it, the brand loses its exclusivity.” This is an important concern, but the services and merchandise that are available to the wealthiest and most loyal customers may not be accessible online. As Cori Galpern, worldwide marketing and advertising director for Tom Ford International, said on a panel at the Wharton Marketing Conference, “The core for a luxury brand is a customer with considerable wealth.” This means that luxury brands have to pamper and create vastly personalized experiences for their core customers.
Despite the ubiquity of digital and social media, the in-store experience is still integral to producing individualized experiences for high-wealth customers. “Even though the products are available to view online, it is not the same as the experience of seeing them in person,” said a business analyst at a high-end fashion brand in a recent interview. Viewing the product in a store enables you to touch it, learn more about the story about the collections and build a face-to-face relationship with dedicated sales associates. Digital and social media can amplify in-store experience for high-wealth customers, but shouldn’t necessarily be seen as a substitute.
Catering to the wealthiest consumers has always been a constant in the luxury industry, but fashion houses have to keep innovating on their customer experiences to stay ahead of their competitors – both on and off-line. When looking at ways to innovate, fashion houses should think about ways for not only core customers to keep coming back, but to inspire potential customers to become engaged with the dream of their brand.
The challenge for luxury brands is in evoking an aura of desirability across broad audiences, while curating individualized experiences for their core customer base. Luxury brands have to develop strategies that promote both accessibility and exclusivity. Digital and social media can help increase awareness of and perpetuate the myth surrounding the brand, but they must be carefully curated in order to maintain an impression of exclusivity. Furthermore, these channels should be viewed in the context of the store experience.
What do you think are the most innovative examples of fashion in digital and social media? Which luxury brands are creating the most accessible, yet also exclusive experiences?
Brand Value + Social Media + Corporate Responsibility
CSR reports have become the vehicle by which organizations put a moral and ethical face on their existence. At its core, it is a reporting exercise. It is usually reflective and without standards — but is that about to change? In autumn of this year, ISO (International Organization for Standardization) will release ISO 10668 – Monetary Brand Valuation. What does brand valuation have to do with CSR? Well, the back of this ISO offer has an interesting hook, SAM Group – the guys who produce the Dow Jones Sustainability Index (DJSI) – intend to upweight businesses in the DJSI if they adopt ISO 10668. Suddenly, the criteria for exacting value on brands is directly linked to their sustainability ranking.
The upweighting is based on three key factors: Legal, behavioral, and financial analyses. Taking a look at behavior analysis, the brand must understand the size of the market and trends. What are the stakeholder attitudes? What are the economic benefits bestowed on the business by the brand? In many cases media is still used as a platform to talk at instead of enabling conversation with constituents and customers.
Here’s the reason why social media, brand strategy and CSR folks should start meeting by the water cooler more often. If we’re entering a new paradigm of evaluating brand behavior as well as CSR reporting methodologies representing the practice toward improved corporate citizenship, and if we agree that social media is the most relevant way to start and maintain conversations with people to share a brands values, how might we use this brain trust to help shape business strategy?
The following are 5 key challenges that, if addressed correctly, will differentiate leading brands and lead to greater customer loyalty.
1. Create value with Values- gain trust through responsible and transparent actions.
2. Visualize brand value (and risks) across the complete brand eco-system: the offer, culture, business model, and communications.
3. Stop approving obvious solutions; overcome incrementalism as the hallmark of efficiency engineering, and make change that people want and need.
4. Bring back experimentation and invention as business values, and open them up to collaborators.
5. Constantly challenge, inform and refresh people’s exposure with the brand over their entire experience- not as market segments with prescribed preferences.
Zappos’ innovative approach to customer service, Target’s social giving platform, Patagonia’s footprint chronicles, Proctor & Gamble’s the brandery, Interface Carpet, and Seventh Generation are just a few of the increasingly inspiring examples where brands have embraced the system of social communication, and embracing some or all of these challenges in a way that builds brand loyalty and value, while mitigating risk, reducing costs, and positioning the business for a new era of growth.
Is your brand fit for the future?
(Eric Wilmot)
photo courtesy of Victoria Garcia, Creative Commons
A couple of months ago, I read a New York Times article on how despite efforts to be more accessible and broaden their audiences, the Brooklyn Museum of Art’s attendance has gone down. One of the many ways this cultural institution has attempted to make itself more accessible is by having an active presence on Twitter, Facebook and other social media platforms.
With over 1.8 billion people on the Internet, the digital space offers museums the opportunity to reach more people online than could visit in person. As one of the first cultural institutions to fully embrace social media, the Brooklyn Museum has had great success in engaging audiences outside of its physical address. With close to 100,000 followers on Twitter and over 20,000 likes on Facebook, the Brooklyn Museum’s popularity surpasses many other major cultural institutions and companies.
However, if the increase in online visitor engagement does not translate into an increase in physical attendance, and in turn greater revenue, does that mean a museum has failed?
The easy answer is yes; the more complex one is no.
If we look at other forms of metrics besides physical attendance, such as age, geographic, and racial demographics, can we say a museum has been successful?
While focusing on its low general attendance, The New York Times mentions, “[e]ven though the Brooklyn Museum’s audience hasn’t grown, it has become younger and more diverse. A 2008 museum survey showed that roughly half of the attendees were first-time visitors. The average age was 35, a large portion of the visitors (40 percent) came from Brooklyn, and more than 40 percent identified themselves as people of color.”
The contrasting metrics at the Brooklyn Museum calls attention to the difficulty in evaluating the efficacy of social media and the need for tools that capture the complex, nuanced nature of brands.
This problem applies to all brands— whether it is a museum, corporation, or person.
While increasing revenue should be a priority for brands, I would argue the first and foremost goal of social media should be facilitating conversations and communities around your brand.Social media is a long-term investment that involves cultivating sustainable relationships with audiences as partners rather than as consumers. With social media, a brand may not see an immediate increase in sales but could see a lot of discussion happening around a brand.
Furthermore, growth may be actualized in unexpected ways. In the case of the Brooklyn Museum of Art, while general attendance may have gone down, geographic, racial and age diversity went up. This particular case study highlights the need to re-think the ways we have measured success in the past and create frameworks that take into account the nuances of growth.
There is a wealth of information on social media best practices, but based on the example of the Brooklyn Museum, here are a few guidelines we can start from:
Define your goal(s). What do you hope to achieve by having a social media presence? Is it to increase revenue? Amplify brand awareness? Provide customer support? Produce real-time content?
Define the audience(s) you’d like to reach. Who do you want to engage with? Your existing customers? First-time visitors? Locals? Hardcore gamers? Teens?
Identify methods that could help audience(s) interact with your brand through social media and help you achieve your goals. Not all social media platforms are created equal. Each platform has a distinctive set of capabilities and cultural context. Based your goals and target audiences, you should think about which platform will best serve your needs.
Focus on the big picture, but also pay attention to the nuances. While general attendance or revenue may be your bottom-line, in what other ways is your brand growing? Who is talking bout your brand? What kinds of conversations are taking place? Quantity and quality are both important in evaluating the efficacy of social media.
Don’t rely on a single source for measurement but a myriad of sources. Because even quantitative data is interpretive, it’s important to look at a diversity of reporting tools to determine the efficacy of your social media presence. Each measuring platform has different strengths and weaknesses.
What ways do you think we should measure the success of social media?
Facebook is stepping up its integration of social media and retail partners with its invention of “Facebook Storefronts”. Soon 20 stores can have more than just fans of their brand, but give their customers the ability to actually purchase items directly through Facebook.
“While retailers like “Sears, the department store, and Threadless, the T-shirt seller, both let users add items to their shopping cart on Facebook;” never before have users been able to purchase goods without ever leaving Facebook’s site as they will be able to soon. 1-800-Flowers is the first retailer to have constructed a free-standing virtual shop on Facebook, with more to follow in the coming weeks. Facebook, however, “has no current plans to organise the storefronts into an online mall, or to make money from them by either taxing the transactions that take place on its site, or by offering its own virtual currency.” [FT]
Definitely something to think about with any new project.
