We all know that consumer packaged goods manufacturers widely use social media, especially Facebook. We also know that many of the efforts are in the early stages, that there’s plenty of testing underway and that one of the great marketing mysteries remains as to how this all truly impacts sales.
Budgets are small, but growing and social marketing campaigns most often play a supporting role in a larger program, but their effectiveness varies and often depends on organizational commitment.
A new national study from The Shopper Technology Institute conducted on its behalf by Partners in Loyalty Marketing has enlightened us even further. For example, few companies currently offer e-commerce via Facebook, but this could increase by 50% given its assumed potential to drive sales. Thirteen percent of respondents are currently using e-commerce on Facebook, and 30% who are not doing so now plan to start. Another 37% can see the potential of driving sales via e-commerce on Facebook.
The survey confirms that consumers are eager to connect with a brand through social media, but that enthusiasm depends on their emotional ties to the brand and the value delivered. Thus the most successful social media campaigns offer something consumers can grab on to, like coupons, combined with intangible content such as recipes and tips that makes the user feel understood and valued by the brand.
As an example, Kraft recently offered its 742,000 fans a $1-off coupon for its Smoky BBQ Wheat Thins. And Gatorade posted this tip of the day for its 4.1 million fans: Weigh yourself before and after exercise. Drink 20 oz of fluid with electrolytes for every pound of body weight lost.
“CPG manufacturers see potential in social media for connecting with consumers and creating brand awareness,” John Karolefski, executive director of the Shopper Technology Institute, said. “But there are challenges that need to be addressed in terms of measuring success and determining ROI.”
Nine of 10 CPG manufacturers (89%) reported including social media in their marketing plan, the survey found. The most commonly used social media platforms are Facebook and Twitter. Only 11% of those surveyed do not use either one.
As for the budgets, two of three respondents (66%) said that social media accounts for less than 5% of their marketing budget. But a whopping 76% say that the budget for social media has increased this year compared to 2010. About one of four (23%) reported no change, while only 1% saw a decline, the survey said.
Uni-ball is one brand that has increased its social spending. It has typically been a broadcast kinda’ brand, running TV spots to show how its pens are better than its competitors—in both price and performance. But the brand has made a major change this year, migrating all of its spending on broadcast media to a social and digital program, supported by an overarching national retail promotion. (Read the case study.)
The sticking point: ROI
But the big sticking point, and the most difficult to justify to the boss is the measurability of social media with few marketers able to tie social media investments to sales increases. According to write-in comments by survey respondents, the lack of success in social media is often due to a lack of organization or buy-in, as well as inadequate planning and resources.
“To date, metrics are mostly limited to consumer feedback and fan/postings counts,” Michael Schiff, managing partner of PILM, said.
Only 6% of respondents rely on qualitative measures, 31% use consumer metrics, and 20% use both. Some 21% look to increases in sales and unit volume, while 22% don’t even bother to measure social media at all.
On the qualitative side, 40% of those surveyed are analyzing conversations and gaining insights, while 43% aren’t doing so, but plan to. Seventeen percent aren’t analyzing and don’t have plans to start.
As a result, about half of survey respondents (48%) say social media has only been “slightly successful” in achieving their business objectives. Only 2% say it has been “very successful,” while 18% say it has been “moderately successful.” On the other hand, a third of respondents (32%) say social media has been “unsuccessful” in helping them achieve their business objectives.
When asked how measureable social media is in terms of ROI, only a quarter of survey respondents said “highly/moderately.” Some 43% said “slightly” and 13% said it’s not measureable at all. Nineteen percent didn’t know or had no opinion.
Another reason cited is weak metrics that fail to build organizational buy-in.
“The lack of evaluation and weak metrics have implications for future budgets and growth,” Schiff said.
The two main reasons why CPG marketers use social media are to “build brand awareness” (48%) and to “connect with consumers” (41%). “Building market share” was cited by only 5% of survey respondents, and “increase sales” garnered 6%.
Based on write-in comments successful social media campaigns attract consumers in several ways:
1. Making it fun
2. Offering coupons
3. Being direct and transparent
4. Balancing content about company/brand and fans
5. Creating special roles for loyal fans
Dave Kerpen, CEO of Likeable Media, has some ideas of his own and offers 7 simple steps to launching a successful social media promotion.
One successful case study came from Sara Lee’s Jimmy Dean sausage brand, which in January used social marketing firm SocialTwist to run a successful couponing program that helped determine which social media channels worked best in a viral environment.
“The challenge for CPG marketers is to build on the enthusiasm of the users of social media,” Schiff said. “To do this successfully, brands must deliver both tangible and intangible benefits.”
Methodology: An online survey was fielded in June 2011. The respondents included some 126 marketers of food, beverage, health and beauty care, and general merchandise brands.