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Paid is only the tip of the iceberg in Social - what lies beneath?
Social
03 Edition
Whitepaper: Social
Paid is only the tip of the iceberg in Social - what lies beneath?
The UK population spends 57 million hours a day on Social platforms. With 63% of millennials saying they stay updated with brands through Social networks, it is important that we understand and measure the impact Social has on brands and how to make the most of the opportunity. At Business Science, we evaluate the performance of advertising activity for our brands with a view to making more informed and ultimately better media investment decisions. It is a lot like being given a jigsaw puzzle to solve – we try to build a picture of what drove a KPI of interest (often sales) using our puzzle pieces (our data). We try out different pieces to see what fits within the broader picture, keeping what does, and we fill in as many of the gaps as we can given the data we have. Like a jigsaw, it is iterative that our picture evolves over time, getting better and more accurate as we go. Often we do not have all the pieces we would like – sadly with our work not everything comes in the box – and sometimes the condition of the data is not as good as we would like. Once we have put everything together, we have a really good picture of what drives our KPI. There might be gaps but we know where they are and how that fits within the overall picture. Then we can focus on what our brands are interested in – usually where advertising fits in and how to improve efficiencies. Social media is an increasingly important part of marketing with ad spend on Social platforms now accounting for almost half of all digital advertising investment. Building meaningful connections with your consumers is key for brands to drive sales growth. Social platforms offer brands the opportunity to build these connections through consistent and longer conversations with both current and prospective consumers.
Why focus on the system? Social media is unique amongst media channels in that it allows brands to have a two-way conversation with its consumers both individually and at large. There are three distinct elements to Social media – Paid, Owned and Earned (POE) – and each has the potential to react to one another. Historically, the focus has tended to be on Paid – which clearly vital in its ability to influence sales – is only one part of Social. Our gut feel was that Owned tweets (from the brand's own Twitter handle and Earned tweets (to the brand from consumers) also play a big role in driving the
performance of Social media overall, which has two implications for marketing if right: 1. Measurement: Paid likely drives Owned and Earned, in which case only looking at Paid undervalues it. Fundamentally, as valuable as we find Paid Social as a sales driver, it is likely to be even more efficient because of its impact on Owned and Earned which in turn drive sales. 2. Media Planning: our media planning should maximise the impact of Social across the full system. It is possible that we are not utilising Social as a sales driver to the best of its ability.
A blueprint for the future
To prove this, we partnered with Twitter and Cranfield University to look at the impact of Twitter on sales for three retailers that we have worked with for a number of years. We had two important goals: 1. To understand how Paid, Owned and Earned interact with one another, as part of a Twitter communications system. 2. To identify and measure the full picture of how Twitter influences sales. It was a unique opportunity to work with brands we are familiar with, who use Twitter and are interested in understanding where all elements of Twitter fit within the broader media mix. And crucially, to do so with the best data available, directly from Twitter, to test the hypotheses robustly. The results have confirmed what we thought. Social media should be thought of as a system of Paid, Owned and Earned which brands can utilise to drive sales. And this study, although using a small number of examples, may offer a blueprint for measuring Twitter, and Social more broadly, correctly. This is something that we are fully committed to looking at in the future. In partnership with Twitter we plan to explore this at length in 2017.
Focusing solely on Paid could underreport the extent to which it drives sales Paid Twitter activity is an important part of the media mix for the three retailers we looked at as it allows them to target specific audiences to which they are able to serve ads. For a lot of our clients – not just the three in this study – we find that Paid Social is an efficient media channel with a profitable ROI. All three brands saw that Paid drives sales directly. But importantly, it also drove new followers and increased Earned mentions. Paid activity generating new followers is important when thinking about whether Paid for Twitter activity has a long-term benefit, i.e. in following us, do we find it easier to engage with consumers down the line and therefore, drive even further value in the future? When we think of Paid within the Twitter system and not in isolation, we see that it is even more efficient in ROI terms. Work from another MediaCom Business Science/Twitter study finds that the ROI of Paid Twitter for one retail client increases by up to 25% when we take full account of the system. The implication is clear, when generating a marketing mix strategy that involves Twitter, it is imperative that we also consider how Earned and Owned, in addition to Paid, contribute to the business outcomes.
How brands use Owned seems to dictate how it acts as part of the system
The three retail brands included here used their Owned Twitter channels differently and this affected the extent and the manner in which it impacted sales. At one extreme, one of the brands used Owned as a customer service channel, sending on average 8,500 tweets per week – almost entirely responses to tweets from customers. Here we saw the largest contribution to sales from Owned brand tweets. At the other end of the scale, for the brand that used it the least, we measured no direct impact from Owned onto sales, although we still found that it had worked as part of the system – amplifying Paid and Earned. Across the three brands, Owned generated new followers, which also encouraged Earned mentions. This feels intuitive, despite the small number of clients included here, that the more brands engage with consumers through Owned channels, the more consumers do through Earned ones.
Earned is fundamental to the system In all cases, Earned had the most connections to other parts of the system – it is fundamental for the system as a whole as a direct driver of sales, but also as a way to amplify the effect of other parts of the system.
Written by Emma Whitehouse and Asher Moses
We saw Earned drive new followers and vice-versa in 2 out of 3 cases. In essence, driving Earned led to new followers and new followers influenced Earned. A positive and reinforcing set of effects that should not be treated or considered independently. Interestingly we also saw that for all three brands, non-Twitter media spend also promoted Earned. What we do offline can affect how consumers talk about us online. Twitter has value in amplifying media activity even when not used as a Paid for channel. There is a broader question within this finding about the causality of this relationship. Do consumers that buy a brand's products tend to say positive things about them or does saying positive things cause them to buy a brands' products? The answer is both but isolating these effects will continue to be difficult. This is something that we will look at in future work. Taken directionally, it tells us that the impact of Earned is fundamental and brands that have more positive interactions on Twitter should see it work harder and better for them.
In Summary The research has proven what our instinct told us. Whilst measuring the full impact of Social can be complex, the evidence points to significant benefits being gained from harnessing the power of the full system. By focusing solely on the impact of Paid activity, we are underestimating the value of Paid and likely not maximising the use of Twitter. Using Twitter as a customer service channel amplifies the impact from Owned and makes Twitter work harder for retail brands. Earned is at the heart of the Twitter system interacting with the other elements in addition to amplifying other media activity. Thinking about what you want to drive, why and how that works through Paid, Owned and Earned is fundamental to a successful Social strategy on Twitter. Whilst we have successfully managed to slot more pieces of our jigsaw puzzle into place, we believe that this is just the beginning of the journey in understanding the role of Social. To begin with, while our findings hold true across our retail clients, we will be investigating whether they are the same in other industries. Other questions we would like to address include topics such as understanding the impact of sentiment in Social. Watch this space!