Social media value attribution

Everybody’s talking about how social media is the new big thing. Yesterday it was the next big thing. According to Facebook, the next big thing is, well, unknown so who knows what tomorrow will bring. So we have a marketing world set alight by the potential of social media, queuing up to use it, setting up plans to get into social media. But there’s no real rationale. It’s being done because it looks like it is important. People live there, so our world has changed. But as for value - well, who knows? KPIs all seem to surround the number of fans and Likes, sentiment (no matter how vague this is) and hope. Accountability - attribution - is the elephant in the room.

I’ve grown up with digital. In 1994 I set up a digital agency, building communities around websites for brands like Snickers and Hewlett-Packard. We added channels as we went along - search engines, ads, interactive television and mobile. Around ten years ago we had become part of the world’s fourth biggest advertising network, and the digital world looked full of colour, sexy as hell, with big brands piling in to spend money on visitors, eyeballs and sales. Having sold out, we next built an agency around something brand new in the world of digital marketing: accountability. We wanted to prove that digital could have tangible, measurable and commercial value. So we got into eCRM big time.

Working with brands like Virgin, NSPCC and News International we started creating digitally-delivered campaigns built around individual customers. What we learned about them and from them we used to better engage them. We used insights derived from demography and behaviour to inform targeting strategies that delivered relevant content when it was most likely to work. We used segmentation principles originated by the direct mail companies and facilitated by the cheapest of media, email, to improve response rates and sales revenues. We used Recency, Frequency and Value to benchmark customer segments, applied campaigns bespoked to each segment’s needs, and measured the changes. We gave marketers what they wanted: proof that what they were doing produced specific financial returns.

Today this is what we do, still. Sure, the channels have changed. We now use mobile, SMS and email, but we also use websites. What was once called personalisation has been adapted; for McCain Foods we extended the eCRM strategy from email onto its site, so that visitors see content based on which segment they belong to and where they are in a planned nudge-based customer journey. We track individuals through their entire web experience, bringing behavioural data back into the eCRM programme so we can attribute the contribution their experience makes towards changes in their value. Taking an example, we know that by increasing engagement through the programme, one specific segment has increased its average purchase frequency by 3% a year - leading to an increase in sales of around £1million.

This level of attribution means a client can justify spending part of its valuable marketing budget on this eCRM activity. If the incremental revenue a programme generates, and in particular the incremental margin it generates, is greater than the cost of generating it, then it’s a no-brainer. Likewise, one would think that if you could prove that the incremental margin was less than the cost of generating it, you’d close down the programme very quickly indeed.

And yet, social media defies this superbly clean logic. Because you cannot cast attribution, because you can’t tell whether it’s a positive or negative ROI, the hope that it’s the next big thing and it will be worth it seems to justify investment in it. Where’s the return? I read a statistic the other day that some Facebook campaign had generated an ROI of 4:1 (actually, they said “400%!!”). I’d love to know what that means... at a guess, this company isn’t making 25% margin, and unless it’s making 25% plus, that “ROI” is actually a loss.

So this is where we found ourselves, running fantastic, highly auditable campaigns, leveraging customer data for all its worth, using email, mobile and the web, when this groundswell of social media marketing buzz started preoccupying marketing minds. So Underwired has developed a tool that allows us to make some connections. It allows us to create specific calls to action to customer segments, and watch precisely what they do in response.

By creating this tool we’ve finally addressed the elephant in the room. We’ve added the ability to score individuals according to what social actions they take in response to our engagement programmes. It means we can add an advocacy dimension to our demographic, behavioural and motivation-based segmentation, and this means we can identify people who have value to us as recruiters and word-spreaders. We can even attribute new customers to an individual’s referrals, which gives us real power to tap into social behaviour and account for the results. This is the new big thing.

Making social media pay

There’s an apparent conflict between the pragmatic and the desirable. Marketers necessarily want to be able to justify every penny they spend on marketing - especially in a recession - so there's a strong emphasis on the accountable. And then there's social media.

Everyone’s talking about the importance of social media, including channels like Facebook, Twitter, Quora and LinkedIn. The buzz has been incredible. Clearly when movies are being made about the kids who got the movement going, making billions in just six years, that buzz becomes tantalising for brands. And of course nobody wants to play catch-up, no-one wants to be the one who gets the dregs of the success that a new and revenue-generating marketing channel brings with it. Arriving just before everyone else leaves the party is low risk but delivers a very low return.

So how can you reconcile the two things, this requirement for measurable return on marketing investment, and the need to catch the wave?

This is the thinking that led Underwired, already the UK’s leading eCRM specialist agency, to try and bridge the gap between CRM, which is utterly auditable, and social media, which isn’t. To go back to the party metaphor, eCRM is like the bit where you know exactly who you’re inviting to the party and why. Social is the bit after you’ve taken their coat and they’ve entered the room. Once they are in there, all you can do is measure the noise levels (and in fact that's what Buzz Tracking or Sentiment Analysis tools do).

The new Social CRM tool that Underwired has developed actually bridges the gap. It allows you to track an individual into, say, a Facebook environment (with standard functions including Like, Share, Comment, Upload content, watch a video) and see exactly what they do. You can tell if, responding to a call to action in an email campaign, John visits your page, Likes it, comments on it, only watched half the video but sitll shares it with his facebook friends. You can then append that data back to your database, which means that you can create sub-segments of people who respond in a certain way when presented with specific calls to action, offers, promotions or choices.

From a marketing perspective it provides you with a way to further segment your customers. You can assign advocacy scores (even types of advocacy) and use that to inform future campaigns just targeting people who share your content with their friends - real fan marketing. But more importantly, it gives you the means to extend attribution into social channels. And if you can identify precisely which routes your sales came from, without having a big grey area where you’ve temporarily lost control of your customer, it means you can improve your marketing at every single step of the customer journey. Finally, it means you can assign a real value to social media - though of course while it means you can dive in with confidence, you do still of course have to dive in.

Why my love of Ben & Jerry's isn't over just yet

Over the past couple of weeks there's been quite a bit of buzz about Ben & Jerry's dropping email in favour of social media. It stemmed from an email sent by their UK people to email subscribers, letting them know the monthly moosletter was being canned and asking recipients to fan them on Facebook. It's not quite switching off email (they'll use it still for special promotions) but it's pretty close. According to the quite rightly other-side-of-the-story article, Ben & Jerry's in Vermont isn't following this particular herd, and will carry on regardless.

I commented on the story as originally reported when it broke. My view is that a move to drop an entire marketing channel seems insane for a brand that appeals to people who like ice cream - kids, hippies, adults, old folk, squares alike. We all love Ben & Jerry's. Almost everyone out of their teens uses email. Indeed some kids and teens still use it (though the XML channels r00l increasingly). For instantaneous interaction between a brand and an audience there's nothing quite like social media. For longer-term, planned engagement based on deep understanding of behaviour/demographic/motivation-based segmentation, there's nothing (yet) quite like email.

Where email, and its grown-up cousin eCRM, comes in at its best is in shifting brand perception. A well-paced, well-segmented eCRM campaign over eight months can be persuasive in a way that an ad campaign cannot. You can make a case through demonstrating an experience and involving people in a journey that you cannot do by being interactive or sociable. I think social media channels are brilliant for maintaining and reinforcing a brand's positioning, adding a layer of openness for instance. And I think eCRM is exceptional for changing behaviours through understanding motivation and basing communications on that understanding. Email, SMS and the web can be segmented in a way that is invisible to users. The same cannot yet be said of the Facebook experience.

I am sad that ben & Jerry's has decided to focus entirely on the ephemeral in the UK, at the cost of a long-term brand engagement strategy. It's all gone a bit tactical. And when Facebook fades they'll have to jump on the next big thing. I think it's shortsighted. Customers are, or at least should be, forever. I'll be a Ben & Jerry's customer for as long as I remember its well-meaning roots. But as I'll never be a fan on Facebook it's going to be tricky for them to keep reminding me why I love their brand.