Commentary

Social Must Learn To Turn Income Into Outcome

You can't have your cake and eat it, So if you're a social team, you can't use marketing's budget and not report back in marketing terms. The simple truth, however, is that many companies are treating social as a PR exercise and measuring its success in fluffy PR terms, yet using marketing's money in the process.

Could that be behind the disconnect between the latest CMO Survey estimating that social is on its way to securing a fifth of marketing budget -- yet presently, half of CMOs rate its performance as below average? A tiny proportion -- just 3% -- are raving about social's ROI. For CMOs the message is clear. Social is eating into budgets, but we're not too sure what it's delivering. Put simply, social is not washing its face.

This disconnect between a communications past and a marketing future is where I see some of the issues around social arising. The easiest thing, but not necessarily the best approach, would be to allow communications or PR executives to keep on posting in the company's name and look at success in terms of a retweet or a like without the need to reconcile what any of those interactions mean for the business.

That would be incredibly simple, and to be honest, that's what a lot of brands are doing. The trouble comes now that the channel is seen by most as a marketing and advertising channel because that's exactly what it is -- particularly in the case of Facebook, which dominates the social landscape. As soon as you see social for what it is, you have to have digital marketing executives involved and, no doubt, have the team sitting in marketing rather than communications, burning marketing's budget. 

That leaves us with an ever-increasing slice of marketing budget going to a channel that is still measured in PR or communications terms. That's why CMOs are puzzled as to what social is delivering and if they're concerned, you can imagine how flummoxed the board is. If CMOs can't answer the ''so what" question, then we'll keep on seeing a repeat of the board turning around and questioning what is a "like" worth, what is a "follow" adding to the bottom line, and what does it mean for us if someone shares our content.

Now, there are tools and data analysis techniques available to work out much of this because social is digital, and that means there is lots of data. The issue, of course, is that people will tend to do things at a later date on a different platform. They may like your offer on sports shoes one day but not buy them until their current pair wears out in a month or two. So it's pretty hard to reconcile cause and effect.

One metric that I'm starting to see a little more of, which brands should be encouraged to investigate, isn't just an ROI argument -- it's more of a customer segmentation approach. So Adobe, for example, can tell how much more likely a person is to buy a particular product by how they have interacted with content about it as well as how they have engaged with the brand. So someone who likes their Facebook page is x% more likely to become a customer and someone who has interacted with content about a tool is a further x% likely to buy that piece of software. 

Such figures are not too difficult to work out, and that means the board can understand the implication of the social success a marketing team is claiming. If you can add to the fact that you have doubled the number of followers on a channel with the fact that this should lead to x% more sales in the next quarter, then that's something execs outside marketing can feel they can take to the bank.

A fully fledged ROI figure is the ultimate destination, and steps like these are a good way to get there while admitting that in a cross-device world it's hard to be too exact -- but here's what the figures are telling us. For putting x budget into social we will see a lift in sales of x over the next quarter.

That's the kind of discussion that marketing can have with the rest of the organisation that just doesn't seem to come out of the channel if communications and PR people are left repeating metrics, such as likes and shares, without any reference to what that actually means, and more importantly, where it leads. If social is burning marketing's money, it can't carry on being fluffy.

2 comments about "Social Must Learn To Turn Income Into Outcome".
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  1. Ed Papazian from Media Dynamics Inc, February 18, 2016 at 10:06 a.m.

    You points are well taken, Sean. We do a lot of work defining people in the marketing and media functions by their job responsibilities and what we see is an almost total separation of responsibilities with some people clearly managing "legacy media", others clearly handling "digital" but not "legacy" an, within digital, a plethora of "social" specialists. In other words lots of departmental "silos". Are these effectively coordinated by "top management"----we doubt it---a few exceptions aside. Rather, the silos seem to function separately, using different mertics and ways to evaluate ROI and their budgets are decided arbitrarily, not based on an assumed contribution to the total marketing plan. Small wonder, then, that there is so much confusion about how to evaluate the performance of "social". The residents of the "social" silos aren't talking the same language as the denizens of the "legacy media" and, to a lesser extent, the broader "digital" silos. Worse, top management doesn't seem to see this as an issue. After all, that's how they have handled their legacy medai mix decisions for decades---arbitrarily and without a proper evaluation of alternatives.

  2. Ed Papazian from Media Dynamics Inc, February 18, 2016 at 3:13 p.m.

    Pardon the typos, Sean, I just got back from Texas and picked up the accent in my typing .Sigh! My kingdom for an editing option on Media Post.

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