Digital marketing budgets are predicted to rise by 10percent in 2014, following a double digit rise in 2013, according to Gartner, the world’s leading information technology research and advisory company. Other research predicts that US marketers will spend US$5billion on social media marketing this year.
Last week, FELLT posted the first in an ongoing series about digital marketing strategies – a focus on Calvin Klein’s #mycalvins campaign, which was broken on Instagram on February 17 by Miranda Kerr, followed up by similar Instagram posts from some 200 other Influencers.
In the interim, Calvin Klein has launched another advertising campaign with a digital focus – the 20th anniversary campaign for the unisex fragrance CK One. The campaign was shot by Mario Sorrenti from the illusion of a “Selfie” POV of the cast – comprised of professional models and musicians – and includes a dedicated CK One Tumblr and a dedicated CK One Snapchat account.
Both campaigns utitise social media, but in different ways.
The CK One campaign pushes out marketing content on CK One’s own social media channels. The #mycalvins campaign – or at least in its initial social media push (it was subsequently followed up by a traditional print and outdoor campaign) – by using 3rd party Instagram accounts.
In the absence of a universal metric via which to measure the ROI of social media investment, however – something even Calvin Klein conceded last week – it seems few companies have a clear idea of what kind of return the increasing investment in this area can expect, certainly with regard to driving sales.
Other recent research has suggested that not only do 62percent of consumers report social media channels have no influence on their purchasing decisions, but social media accounts for just 1.1percent of website visits.
For a broader overview of the subject, FELLT spoke with Australia’s pre-eminent media analyst, Steve Allen, the managing director of Sydney-based media strategy firm Fusion Strategy, which counts numerous international brands among its client portfolio.
Surely brands that are investing in social media campaigns must be using some kind of metric to justify the investment. Otherwise how is it possible that funds are released to marketing teams for these purposes?
I would think that they would value it but, you know, often companies don’t. They just go one foot in front of the next and say, ‘This is marvellous, look at this coverage’. We often find companies – and even our own clients – are not very methodical about assembling all the exposure they get. Of course, the paid-for exposure is practically audited.
It’s verified. Every dollar we spend for any client we have to post-analyse. They get a report saying, “This is what we promised. This is what we delivered”.
But this is the issue here. Social media can no longer be considered earned media when increasingly, it is paid media.
When any of our clients are paying bloggers or when we’re seeding information, when the bloggers aren’t paid and you’re hoping somebody just picks up the thread….
That’s happening less and less in the fashion blogosphere and specifically on Instagram – where it is, increasingly, pay per post
I understand that but what actually happens in the commercial world, in areas that we’re involved with, basically anything that comes through us, whether it’s seeded or whether it’s paid, we have to report back on. So we have to say what it is that we set out to do, what it is that we got and what the value is that we got compared to what we’d previously indicated. And we have to do that with any mentions that are attached to commercial deals. But that nevertheless, for some big [brand] names, it’s probably less than half of what [exposure] they get. Because we’re not involved with top bloggers. But obviously any company would or should want to have a personal relationship with them [bloggers], regardless of whether or not money is being exchanged, because you’re around for longer than today and you want to maximise the value for whatever outlay you’re putting into them.
What does a million Facebook ‘likes’ mean at the end of the day?
Well our contention is that ‘Likes’ are… worth something. But we’ve challenged most of our clients, in a friendly kind of way, in an objective sort of way, saying, “When you’ve worked out how many ‘Likes’ make a sale, we’ll be happy to put it in the metrics of measurement”. And all of our clients, whilst they’ve got KPI’s [key performance indicators] here and globally on Facebook ‘Likes’, noone has the answer. Nobody actually knows. But everyone says, “Well having people that Like and having a lot of them must be better than nothing”. And you go, “Yes that’s true and that’s why it’s worthwhile”. But where we question it is, if it’s diverting our efforts and our energy, we need to know if there is a conversion and you’re saying you can’t tell us, you just hope there is. So a lot of these areas that now clients are concentrating on and are happy to talk about… we certainly don’t have a client that knows if there is a conversion and what the percentage is.
Clients in Australia?
Anywhere in the world.
Who are your biggest clients?
Ubisoft is one of our largest clients [the world’s fourth largest independent publisher of video games]. Also Tassal Salmon, in the food game [Australia’s largest aquaculture company]. They [Tassal] are in the embryonic stage of building some of these social platforms and therefore measurement. They’re progressing quite quickly. But again, none of these clients have a real commercial value of what a ‘Like’ is worth. None of them would say, “For 20 ‘Likes’ we basically get a conversion”.
Do you think some companies feel pressure that they absolutely have to be in social media, without perhaps fully understanding it?
There’s no question [that they feel they need to be there]. Look, it makes you feel good. A lot of client marketing today is in the ether and if a company feels good about what it’s doing because it’s noticing mentions or favourable comments or reviews, it jollies everyone along. But what we keep saying is, “We have a commercial endeavour and if we have all this other stuff but we’ve actually sold less merchandise, who gets fired?” There has to be a commercial reality to all of this. We can’t spend 50 percent of our energy and 50 percent of our marketing budget on something that we can’t prove works.
But how do you axiomatically prove that traditional advertising converts to sales?
Because we either measure by cause and effect or we measure by a number of different things. Such as, when we started advertising, what was the traffic on the website beforehand? Did they have a dedicated landing page for the particular product? Did we only launch at the time we advertised? What was the traffic afterwards?
Web traffic is different to sales
Traffic isn’t sales but it’s certainly one step further than product mentions.
So couldn’t you calibrate the social mentions in the same way?
Absolutely. And our clients are. But what we do know from all the other measurements… and you could argue quite correctly… if we doubled the number of ‘Likes’ on X brand since we started advertising or if we added 20 percent and then we have all these other measurements and other paid media channels, ie more conventional, mainstream, above-the-line media channels… And the cumulative effect was that we sold 200 percent more product than we forecast, then everything contributed.
But isn’t advertising in itself a leap of faith? If we invest in this beautiful campaign, then we’re going to sell x amount of product etc…
One of our clients is six star cruising company Orion, now rebranded as Lindblad Expeditions. For every dollar they spend, whether they’re sending out eDMs [Electronic Direct Mail], whether they’re sending out brochures, whether they’re sending out meeting presentations, which they get people to sign up for, whether we’re advertising…. we track [sales] leads and we track conversions. On everything. And so we know. Even on the PR aspect, we know, for what we’re investing and what we’re getting out, how many leads and how many sales we got.
So when you send out a blast on social media, why can’t the reaction be similarly tracked?
In the end, it’s not. It just takes time. But here’s the catch that we’ve always said – and this might be scurrilous and highly critical – but what client executive wants to be measured within an inch of their career? If they had a measurement system where everything was measured, they’d be accountable. And if they didn’t deliver, they might not have a job.
What analytics are used to measure traditional advertising?
Lifts in visitations to websites. Traffic into retailers, if you have a dedicated retailer. I’ll tell you a story about somebody that’s at the opposite end of the spectrum to the fashion market. This is maybe 15 or 20 years ago. We started working for Best & Less. They were so far ahead of any other client that we have on our books. They’re daggy stores, they don’t look great. I mean they’re much better now but they used not to be. That client would run a television commercial on say a Wednesday night and on the Friday morning, they could tell us what the customer traffic lifted by across their entire store network for the day after the television advertising. They could tell us what the retail sales were and how much of a lift [they experienced]. They could tell us whether the commercial had stimulated sales overall, but not sold the merchandise advertised – or whether it had sold the advertised merchandise but sold nothing else. They were seen as a daggy, backward, downmarket retailer and yet they had these fantastic systems which made everything they did, whether we did it or whether they did it, accountable. They’d put a catalogue out and use the same measurement, [reporting] did we sell off the pages? Were some pages successful and not others? It was a beautiful, simple computerised software system. And some of our other clients do have measurement systems like that.
So why not apply the same due diligence to ascertain the impact of social media content?
Because again, the problem comes down to, if you’re getting favourable coverage, how much favourable coverage leads to a sale? Yes it’s part of the mix, the same as we don’t know how many Facebook ‘Likes’ convert to a sale. We just don’t know. The reason this overall subject of measurement is so hard is because most clients go through retailers. And they don’t necessarily own those retailers. They’re selling through, say, Woolworths and Coles. You can get all of this information but guess what Coles will always do, they’ll charge you for the information and they charge like wounded bulls. So you can be in the fashion game and you can sell through Coles and Myer, but if you actually want real category data or your real data, obviously not if you’re say a Willow, but if you’ve got many lines, then you’re going to have to pay for the data. If you’re a Willow and you’ve got kind of a store within a store [at David Jones], that’s different. Whilst you’re connected with their system you’ve got cash registers, you know exactly what’s walked out the door and what price you sold it for and what units. But many clients are indirect sellers, because they’ve got a distribution network and it’s multibranded retail. And every retailer’s system is different. So even if you did have a margin that allowed you to buy all this data, then you’ve got to integrate it. So it’s all these hurdles. When we look at some of our bigger clients years ago, Nestlé and the like, this was part of their problem. They could see the cause and effect of advertising, but they couldn’t drill down far enough to know which parts specifically worked.
So analytics haven’t caught up with digital developments?
Some of the measurements have. One of the reasons that clients are obsessed with this area is because, particularly with the internet, there are good tracking and measurement systems. We can have a lot of these analytics and they come to you overnight, but what do they mean with regard to sales? If we’ve served up so many impressions and if we’ve got so many impressions to click through to our site or click through to the product offer, does that mean a sale? [The marketers] are just hoping that the further along that line, the closer we get to the customer and their purchase, the better off we are.
If you take an Australian magazine such as Marie Claire, with an audited circulation of 90,092 and a readership of 503,000 – that’s significantly less than the Instagram follower numbers of a major fashion blogger, who may have close to one million Instagram followers, such as Australian Jessica Stein. Which looks impressive on paper. In reality, not every one of those one million followers is guaranteed to see every brand mention that that blogger makes on Instagram. And indeed if you look at the number of ‘likes’ on the bigger bloggers’ Instagram posts, the ‘likes’ rarely seem to break the 35,000 point. When push comes to shove, moreover, a consumer who clicks the ‘follow’ and ‘like’ buttons on instagram – at no cost – is perhaps not quite the same as a consumer who has paid cash for a copy of Marie Claire.
They [bloggers] are making themselves into a currency and it’s up to the clients to work out whether they really think there’s a return on investment for what they need to put into that channel to make it work.
So if you think clients are “obsessed” with social media coverage, might it be clouding sound judgment in some cases?
Yes, absolutely. We had a client recently tell us that we weren’t doing enough. We were doing a campaign development and we’ve had the same product in previous annual campaigns. And they said, look, we [Fusion Strategy] are not doing enough in social, we’re not doing enough in social influence and we’re not doing enough in internet, so, digital. And so that was part of the challenge for all the teams in marketing – the PR team, the social team, the creative team and the media team. We went back to them weeks later and said, “You do understand that you as a company were doing more in this space last year than your competitors did?” And they said, “That’s not right”. So we actually gave them the data. The problem went away. So it’s perception and reality. Everyone thinks that the best place to be is in social and digital, with Influencers etc… They’re all obsessed. That’s the way the market is running presently. But they’re overthinking it and it’s a leap of faith in fact. Because there isn’t finite measurement. When you actually give a small reality check to the client, some clients react hostilely and say you’re a dinosaur. But some clients say, “Oh really? OK then. My impression was that my competitors were doing much more in this space”. And you go, “Well, they’re not”.