FreshNetworks Blog

Social media marketing budgets are set to rise for 40% of firms across Europe in 2011 and budget for social media marketing is an issue for only 18% of brands. These findings come from Meltwater Group‘s Future of Content report, a survey of with marketing and social media decision makers from 450 brands across the world, including the US, UK, Germany, Norway, Sweden, Singapore and Australia. The news is undoubtedly good news for social media agencies, but also reflects a growing maturity of how brands are viewing social media as part of their marketing and communications mix.

Of those interviewed, 40% said that their organisation fully embraced social media, and a much larger proportion (82%) reported that budget was not a constraint. Social media sits alongside more established tactics for those interviews – being the third most popular means of getting content out, after e-newsletters (the most popular) and printed magazines (the second most popular). But with 40% of firms reporting that their budgets will rise in 2011, social media marketing is a growing part of this mix and is challenging the more established media.

This pattern is one that we have seen in 2010 at FreshNetworks – clients moving from traditional print magazines to social media, especially in the B2B market. Engaging customers and stakeholders in social media has grown significantly over the last 4-5 years, and we are now witnessing it taking over traditional methods of communication as opposed to just complimenting and adding to them. Brands are starting to rethink their overall marketing and communications mix and are putting social media at the heart of it.

This study from Meltwater Group supports this trend and reinforces a trend we expect in 2011 for successful brands to dedicate a greater proportion of  their marketing spend to social media marketing. Reviewing existing campaigns and processes and working out how social media can add greater value than what they have already. We have moved beyond social media marketing being experimental and for individual projects alone, and into it being central to a brand’s marketing and communications mix. In 2011 we will see this become more pronounced, see more experimentation, and see more brands able to report, and prove, the value they are getting.

2011 will see social media marketing budgets rise, but it will also be the year when we should expect, even demand, to see more demonstrable value from this expenditure. But that’s the subject of another post in this informal series of predictions for 2011.

This post is part of an informal series: Social Media in 2011.

In the last year, almost 1 in every 4 UK holidaymakers used Tripadvisor to research their holiday before they booked. Given the plurality of information now out there – online and offline – for people to research and get advice on their travel choices, this number is very high. One in four UK consumers are using the same source to get information that influences what is usually a significant purchase. And this source is generated by other consumers, it is a classic online community.

The research, from WTM’s 2010 Industry Report, found that 36% of UK consumers used some kind of social media to research locations, hotels, airlines and other purchases or decisions before booking a holiday. Of these consumers two-thirds used Tripadvisor, by far the most popular source of information, reviews or advice. A much smaller proportion (34% of all those who used social media to do research) used Facebook and even smaller proportions used YouTube (231%) or Twitter (17%). That over a third of all consumers are going to social media before booking their holidays indicates its increasing importance as a resource that informs and influences consumer decisions. That two-thirds of all of these (so 24% of all consumers) are using Tripadvisor shows the importance of that channel.

Tripadvisor is a classic online community. Consumers read reviews and information from others. They connect with people based on content and a common need, question, interest or concern. For example people who are interested in hotels in Paris can connect through the reviews – some writing them and some reading them. This is not a space where people become friends, and in most cases people don’t care who has written the reviews, they just care about the content. This makes Tripadvisor very scalable and is the reason more and more users are turning to it for information. For every piece of information that is added, any users who are interested in that content could benefit.

And more than just using these sites as an information source, consumers are making real decisions on the basis of them. The same research found that when a users researched their holiday choices in social media, less than half then went on to book their original choices. 35% decided to change their choice of hotel, 15% changed their travel agent or tour operator, and 12% decided to visit a different country altogether.

Holidays are typically an expensive purchase and one consumers think about and research before booking. This study shows that an increasingly large number are turning to social media to help them with this research, and most of them are turning to one site – Tripadvisor. And those that do this research are likely to change their plans and original travel decisions.

Internet users in the UK are more likely to follow brands in social media than they are to follow celebrities. A study of over 1,000 internet users (by the IAB, Opinion Matters and RMM) found that whilst only 13.4% of users follow celebrities, more than one in five (20.3%) follow brands. Brands are, therefore more than 50% more popular than celebrities in social media. This is good news for brands and shows the benefits they can get of using social media and using it well. But it also reinforces the importance for all brands of getting a social media strategy in place.

The research also showed than more than one in eight UK consumers have given feedback to a brand or organisation in social media. That is more than half of those who say they are following a brand in the first place and shows that, when consumers are following brands in social media, they are also likely to interact with it.

Another way to ‘interact’ with a brand in social media is not to follow it or to give it feedback directly, but to complain about it in a public arena. The survey found that 7.7% of UK consumers had done just this and in 40% of cases brands had responded rapidly to these complaints and comments. Getting your social media monitoring in place is important for brands as it helps you to find and, if appropriate, respond to mentions and such complaints. The research also shows the benefit of brands monitoring and responding like this – almost four out of every five (77.8%) people who were contacted by a brand were left with a positive feeling about the brand.

So consumers are more likely to follow a brand than a celebrity. Of those who follow a brand, more than half will interact with it and give it feedback. Consumers are also complaining about brands and organisations through social media, and those who receive a response from the brand through the same medium and highly likely to leave with a positive feeling about that brand.

In an environment where we know that most people will happily consume, and be influenced by, discussions and comments. The number of UK consumers actively discussing and feeding back on brands in social media is relatively high, and underlines how critical it is for all brands and organisations to address how they are using social media and to make sure they are using it in a way that makes sense for them, and adds value to them as well as to their audience.

Universal McCann have just published Wave5 of their Social Media Tracker. It provides a great snapshot of social media usage from around the world. The overall report is useful for brands and social media agencies alike and provides particular insight to people planning multi-national soial media strategies.

Among other things, they asked internet users if and why they join brand communities (see diagram below). And found that those who had joined brand communities were 71% were more likely to make a purchase as a result.

This backs up what we have found with clients in a range of industries and shows the power that online communities can bring to brands.

Why people join brand online communities (McCann)

The report is well worth a read and is Required Reading from FreshNetworks this week. You can find a full version to download here.

2010 has seen a marked increase in luxury brands using social media and innovating with it. This is one of the findings in the latest L2 Luxury Digital IQ Index – research led by Scott Galloway, Professor of Marketing, NYU Stern. The report shows how luxury brands have really pushed their use of social media in 2010, realizing that the benefits for them come from not just having a social media presence but also from engaging people in social media and online communities.

The report takes an analytical approach to the use of social media in an attempt to quantify the digital competence of 72 leading global luxury brands. The ranking highlights some interesting observations – watch and jewelery brands on a whole perform relatively poorly, and a lack of investment in digital has seen brands such as Prada and Dior punch below their weight in the use of social media across their business.

But across luxury brands, the report highlights the innovation and successful use of social media that is happening. It showcases examples that are ahead-of-the-game and examples, not just to other luxury brands but to all brands using social media. Four notable such examples are below.

1. Coach

The leather goods brand is ranked first globally for it’s Digital IQ, notably for its social media enabled shopping and for its blogger collaboration. It has built a social media strategy that is directly linked to sales, and not just to building fans and Likes for the sake of it. This is evident in its use of all social platforms – making clear and contextual links to product from every post of Facebook so that if you are reading about an item you can easily click through to buy online.

In the summer of 2010 they ran a blogger outreach programme, the Poppy Project, which saw them engage 468 blogs to spread a trail of poppies across the web that were part of a competition for people to win gift cards for Coach products.

A great example of using social media to engage, but also to push people directly to sales, rather than just using social media for the sake of it and being unable to measure the rewards.

2. Louis Vuitton

Ranked joint-second overall for their Digital IQ, Louis Vuitton has integrated more innovative use of social media outreach into its overall digital campaigns. Of particular note is the use of video and an emerging trend among video bloggers – the haul video. In these videos, bloggers show on camera items they have just purchased on a shopping trip and discuss each item. This has become something of a craze online and one that Louis Vuitton has engaged to get exposure from these influencers for its products and for the brand.

A haul video created by JuicyStar07 about contents of a Louis Vuitton Speedy bag has had more than one million views online, putting the Louis Vuitton brand in front of other people and allowing consumers to showcase Louis Vuitton products.

3. Oscar de la Renta

Ranked joint-eleventh for their Digital IQ, Oscar de la Renta is a great example of how using social media can help to engage people on a lifestyle level, rather than just with your brand or your product. This can be a successful approach to social media when you are looking to engage (and engage with) a specific target audience that can be defined by their lifestyle. Oscar de la Renta achieve this primarily through their @OscarPRGirl Twitter account, which spent the summer tweeting about yoga, music and summering in the Hamptons. Rather than talking about their brand or products they are targeting people with a certain lifestyle and adding value to them.

4. Jimmy Choo

FreshNetworks client, and ranked 17th globally for their Digital IQ, Jimmy Choo are noted in the report as an overachiever – using social media to compete with search as a source of traffic and conversions – and as an innovator in social media that punches above its weight. The Catch-a-Choo campaign on Foursquare was highlighted as what the future of innovation in social media should look like – notably by taking social media offline and really engaging people in the product.

Also, Jimmy Choo is noted in the report for its ongoing engagement in social media. It is the third most successful global luxury brand at using Facebook not just to attract Likes, but to channel people to the ecommerce site, and so to lead to sales. This makes the report rank Jimmy Choo as an ‘overachiever’, where social media is competing with tradition search as a traffic driver and a driver of online sales.