FreshNetworks Blog

A recent IBM report on Black Friday sales figures stated that social media generated only 0.34% of online sales, with  Twitter generating an outright 0% of revenue. Shocking headlines aside, what can we actually take away from the statistics?

When you look at them like this, it does look rather bleak – if there were red figures for declines, it would be a bit of a bloodbath.

But this really doesn’t tell the full story. When I’m on Twitter or Facebook, it’s rare that I personally click on any sort of promoted Tweet or sponsored story, but that’s not to say that it doesn’t pique my interest. Often I will then go on Google and search for the promotion, or go directly to the website of the brand to find out more. If I then go on to make a purchase, this wouldn’t be attributed to social.

The most interesting part of the report for me referenced the positive mentions that people expressed post purchase; “Shoppers expressed positive consumer sentiment on promotions, shipping and convenience as well as the retailers themselves at a three to one ratio”.

So how could retailers find the true value that social attributed towards Black Friday?

A simple way would be combine social data with sales data. The chart in the IBM report, is a good start, breaking down over time the sales, but if a brand was able to break this data down and plot social discussions of products alongside it, it would be far more powerful. We would then be able to demonstrate if there were peaks in conversation about specific products and assess if these were driven by social mentions/conversations.

Tracking links through to sales is great, but the reality is that we have to make some assumptions. Brands are willing to pay £110,000 for a 30 second advert slot during the X Factor and use Marketing Mix Modelling to determine the impact on sales that the adverts have had, and social should be treated no differently.

If we are to judge the value of social, then we do need to use methods such as tracking links, but this should be one of a number of measures to make sure that we are accurately reflecting the value of any social activity and that it is comparable with other marketing disciplines.

According to IBM‘s new, inaugral Global Chief Marketing Officer (CMO) Study, 68% of CMOs are underprepared to manage the impact of key changes in the marketing arena that relate to social media.

The survey, based on face-to-face conversations with more than 1,700 CMOs worldwide, highlighted that CMOs see four challenges as pervasive, universal game-changers in the world of marketing:

1.The explosion of data
2. Social media
3. The proliferation of channels and devices
4. Shifting consumer demographics.

When it comes to social media, CMOs are acutely aware that social media is challenging older, mass-marketing assumptions, skill sets and approaches, and while the most proactive CMOs are mining new digital data sources to discover what individual customers want, relatively few CMOs are exploiting the full power of the digital or social media.  In fact, only three-quarters use customer analytics to mine data, only 26% track blogs, only 42% track third-party reviews and only 48% are tracking consumer reviews. The reasons behind this are attributed to the fact that the tools, processes and metrics that CMOs are using are not designed to capture and evaluate the unstructured data produced by social platforms.

More than half of all CMOs think social media is a key channel for engaging with customers and four-fifths of respondents plan to use customer analytics, customer relationship management (CRM), social media and mobile applications more extensively over the next three to five years.

Of the top 10 priorities for managing the shift to digital technologies, 4 relate directly to social media, with another 3 potentially being impacted by social media. It’s also interesting to note that social media metrics appear as one  of seven important measures for gauging marketing success – two years ago this would never have been the case.

The fact that so many global CMOs are concerned about the impact of social media, and how they are going to resource, manage, analyse and measure it, highlights that social media is finally moving beyond the numbers of views or fans on various channels. CMOs are starting to realise that social media can help achieve strategic objectives and transform their business if they invest in the right resource and planning and set metrics that match their key business goals.

There’s a great article over at MyCustomer.com about how social networks and online communities can add value to the customer experience (see article here), building on a recent report by the 451 Group.

The article is a great read and explores how firms are meeting their current and future social software needs. Indeed, the research is a validation of how young the market for such software is – of the 2,081 firms interviewed for the research, only 24% are currently using social software of any kind. Of those who are using this software, there is a spread of use between larger vendors, newer organisations and open source.

What’s interesting is to look at the intended use of those who are planning to implement social software, 23% plan to use open source software. Just slightly more than the 22% who plan to build something themselves. It is only after these two categories that the larger vendors appear – the Microsofts and Googles of the social software world. In fact some of the best enterprise-level solutions aren’t from the big providers, but from open source or from organisations who combine the software with other services, such as community management, insight, customer relations or marketing.

People are using social software for a variety of business needs, and many companies are looking to firms who can help them with both the business need and the software.

I used to live in France experienced first-hand the frequency at which some parts of the economy would go on strike; and now living in London I get to experience the frustration when the Underground is closed due to strikes. An article in this week’s Econmist shows how employees and trade unions are building communities online to campaign against businesses there rather than in the real world. The outcomes of these actions, however, are very much real world.

The technology to build communities and momentum online has come at the same time that workers are starting to favour short, sharp walk-outs (typically less than a day so there is minimal impact on the consumer and on the worker’s wages). The problem is that these short walk-outs don’t have the ongoing impacts that the six-month walkouts of old would have had. So workers are going online.

An interesting example of sustained campaigning online is the blog ‘On redoute La Redoute‘ (we fear La Redoute – a French store chain). The blog is used to inform workers about potential store closures, to get store workers across France to join and network with each other – to test campaigns that would work and to get feedback from workers.

This blog represents an active community, and whether you believe or not with the politics, it shows some of the benefits of a successful online community. The ability to get members together, sharing ideas, contributing to cocreation or innovation, building advocacy for the cause and as a source of insight for those running the community. These are core to any successful online community, whatever it’s being used for, and core to our work at FreshNetworks.

A further example given in the article shows what such online communities can acheive. Workers campaigned against an IBM pay-deal by protesting their property in Second Life. The campaign was a success both in a resolved pay deal but also as it was awarded a top award at the Forum Netxplorateur, a conference held in Paris in February. A real success for online community activities!