During the past few years, social media has evolved from a curious novelty into a mainstream activity that drives corporate marketing efforts. Today, it’s nearly impossible to escape the tractor beam of Facebook, Twitter, and other social media sites, which have profoundly reshaped the way organizations connect to customers and others. Yet, on the front lines of business, bottom-line results are often elusive. Many organizations aren’t fully cashing in on social media.
Understanding the behavior of followers and connecting it to actionable data is the Holy Grail of social-media marketing. “Unfortunately, most organizations are struggling to make sense of the data and put it to use in a meaningful way,” says Joseph Turian, president of consulting firm MetaOptimize. Tapping into the data stream—through the use of analytics—can determine whether an enterprise soars or stumbles. “The challenge is that there’s no simple path to success,” he says.
Indeed, best practices for measuring the effectiveness of social efforts are still evolving, according to a recent Adobe Digital Index report, "Why Marketers Aren't Giving Social The Credit It Deserves." So how can marketers sift through the growing load of unstructured data to create information—and value? What types of insights are available from the steady stream of social-media data that flies by? And how can all of this information be used to fashion more successful marketing and advertising campaigns? There are no simple answers. As Brian Kilcourse, managing partner at RSR Research, puts it: “Social media represents an incredible opportunity. The ability to harness and use the data effectively separates overachievers from everyone else.”
Beyond The “Like” Button
It’s no secret that social media has taken the business world by storm. Most organizations have already established a presence on Facebook and Twitter, and eMarketer predicts that 88 percent of businesses with 100 or more employees will adopt social media for marketing purposes by 2012. “Social media provides a tremendous opportunity to create a managed space where it’s possible to communicate and interact with consumers,” Kilcourse says.
Jordan Enright-Schulz, social strategist for Adobe Digital Marketing Solutions, says that it’s critical to focus on three key areas within a social-media marketing strategy: engagement data and metrics available through Facebook Insights, monitoring data that’s collected through listening programs, and insights from analytics programs that cull through databases and unstructured data streams.
When organizations put the data to use effectively, they’re able to better understand what types of products to introduce, how to change existing products and services, and how to improve goods to meet changing consumer needs and desires, she says. “It can dramatically shape and reshape ideas and strategies,” Enright-Schulz explains.
Adds John Avallon, president of the North American retail practice at CapGemini: “There is a very real opportunity to extract business insights from social media, particularly in the retail arena.”
It’s an approach that makes sense—and dollars for Adagio.com, an online tea retailer that has embraced social media and analytics in a major way. The company promotes its products through Twitter and Facebook, and also advertises on Facebook to those who are identified as possible tea drinkers. But the hub of its social-media strategy is through its Web site. Customers post unfiltered product reviews and ratings and share preferences about teas with others. The site features a 100-point rating scale along with an algorithm to promote “friends” selections and preferences. In addition, if a tea receives poor reviews and doesn’t sell well, the retailer kills it off. However, if sales of a particular tea are tepid, but the tea receives good reviews, the company will likely promote the product.
Not surprisingly, an organization’s ability to “listen” to conversations and use underlying “signals” to better adapt the business to rapidly changing sentiment and conditions can pay enormous dividends. “Social media is much more than a way to shovel manure at customers. People do not want to be hammered by a constant stream of marketing messages. They want to feel that there’s a real connection and real value associated with liking or following a company,” RSR Research’s Kilcourse points out.
American Express is among the companies looking to unlock bottom-line value from social media. In March, it introduced a social-media program that lets Facebook and Twitter users receive discounts by syncing their credit cards with these services and then using hashtags and Facebook buttons to enroll in promotions and discounts with an array of national merchants, including Blue Nile, Drugstore.com, Lenovo, Redbox, Sheraton Hotels and Resorts, and Lord & Taylor. When the person pays with the American Express card, the discount is applied automatically.
However, the initiative attempts to take things a step further by linking Twitter conversations to transactions, according to Dave Wolf, vice president of global business and market development at AmEx. Ultimately, American Express hopes to provide merchants with deep analytics about customer-buying patterns, ranging from the size of a shopping basket to how often a customer visits a store. AmEx executives believe that ROI is associated with tweets and Facebook pages. What’s more, the financial services firm believes that it can identify relationships between followers, social-media conversations, and bottom-line results.
By combining advertising data and social-media feeds, a business can extract valuable behavioral and demographic data, says Emi Hofmeister, manager of social marketing for Adobe. “Over time, you can begin to paint a better picture of who exactly your audience is and what prompts them to make decisions about clicking and buying,” she says, adding that it’s critical to break down silos of data and combine structured and unstructured data in new ways—without making it uncomfortable for consumers or fueling privacy concerns.
Next Page: Discovering social values amid social analytics.
Identifying key influencers and how they impact the thinking of others is also at the core of social-media analytics. The number of likes and followers a business has doesn’t necessarily equate to revenue. “The idea is to have fans or followers who are committed and active,” explains Kelly L. Dempski, senior executive at Accenture’s Technology Labs. “You might have only 5,000 fans, but there are only 6,000 people in the world interested in your product and you have most of them engaged. [On the other hand], you might have 50,000 fans in a field where there are 1 billion potential customers.”
A growing number of social-media analytics tools “listen” and “measure” social conversations about brands. The goal is to provide insights into how a brand or service is perceived by a community and identify “advocates” that can influence others. These applications typically examine factors such as volume of traffic, overall sentiment, key demographics, and influencers in order to identify trends. Some applications also aim to measure and track social-media influence. This provides a business with the tools to engage with and reward consumers who are likely to drive positive brand perception or sales.
Typically, social-media analytics applications use algorithms to make sense out of an increasingly large universe of factors, including the number of hits or visits at a site or page, the number of unique visitors, the tone of comments, search-engine rankings, click-throughs, online discussion share, the number of influential friends or followers, and changes in attitudes or sentiment within a person’s sphere. Although these systems can prove useful, MetaOptimize’s Turian says that most are still somewhat rudimentary and crude.
“The challenge is finding an end-to-end social-media analytics tool,” he says. Not only is it necessary to capture data about users, it is critical to filter it—sometimes in different ways—to understand the context of influence and how different groups and conversations impact other individuals and circles. In other words, a heavy influencer in one group may have significantly less sway with others.
Moreover, the data must derive from sources beyond only Facebook, Twitter, and Google+. Blogs, online postings, user reviews, and other materials should all factor into a social-media influence rating. “The goal is to identify who is truly influential and their role in shaping the image of a brand, but also how their comments and postings affect the thinking of others,” Turian explains. “Today’s tools provide a rough-cut approximation. They offer only part of the overall picture.”
Companies are also looking to ramp up their big data models—and, in many cases, plug into social-media streams—to guide marketing and business decision-making. Consulting firm Ovum expects big data to gain greater traction during the next two years as organizations look for ways to better analyze customer segments, prevent churn, and ratchet up an understanding of buying behavior and what actually drives results.
By plugging in information from disparate sources, including third parties that track a person’s Web browsing patterns, credit history, what magazines they read, and even conversations they’ve had at social-media sites, it’s possible to assemble a fairly comprehensive picture of preferences and consumption patterns. Combined with predictive analytics, a business can determine, for example, when a woman is pregnant and when a man is in the market to buy a car and send these consumers customized promotions and coupons.
In the end, Turian says that the path to social-media success is likely paved with more than a few speed bumps: “The reality is that businesses are only beginning to understand how to use analytics tools to tap into the power of social media.” Putting the data to maximum use requires somewhat of a trial by error approach—particularly as organizations combine social-media metrics with traditional marketing metrics in order to “connect the dots in new and nontraditional ways.”