There has been a significant shift in the methodologies used to build effective social media campaigns over the past 18 months. The industry has evolved. The impact of building an earned social engagement program has diminished. Summations of elementary analytics such as “likes”, “followers” and brand mentions are less meaningful to smart marketers today. The importance of integrating and adopting the rigor of proven market research methods into your social media campaigns is now required. This shift in sophistication and mindset was on display by the brand team of MegaRed in the recent NY Times article “How Facebook Sold You Krill Oil”. The article highlights Facebook’s move away from earned media to a paid media form incorporating market research methodologies to ensure and measure “ROI”. An IPO has that effect.
The days of interpreting “ROI” as social media marketers proclaimed “Return on Influence” are over. “ROI” has shifted back to the traditional “Return on Investment” for two reasons:
- Social media marketing budgets are starting to get real. They continue to grow taking dollars away from print and direct mail. According to the SocialTimes, social media marketing budgets are projected to double in the next five years.
- Earned media is dying. The only way to reach your audience on social platforms is through paid ads. According to an Ignite study, Facebook brand posts reach approximately 16% of their fans. Even that number is no longer achievable for many brands, and Ignite’s analysis shows that roughly 2.5% is now more likely for standard posts.
Dust off those paid media skills because the “earned vs. paid” pendulum has shifted back to paid. There exists a significant rivalry between the earned (e.g. social media) marketers and the paid (e.g. media planning) teams for the “Cool Kids Lunch Table” title. The former measures engagement and reach, the latter talks about CPMs and CTRs. This is evident not only within brand teams but also with the roles that digital and media agencies play for their clients. Market researchers are the Ferris Buellers of this new marketing paradigm.
Queue: Resurrection of “Return On Investment”.
Until recently, market researchers have been reluctant to trust the hype of social media. Social media marketing methodologies lacked the empirical evidence to which traditional market researchers were accustomed. Nevertheless, current methods of market research take too long and cost too much. It can take weeks or even months to complete the research, evaluate it and then disseminate policy changes back down to the front line. Furthermore, traditional market research generally relies on large sample sizes in order to determine trends. As trends of survey completion rates decrease, panel costs increase and unbiased panels become more difficult to assemble, market researchers have been forced to find alternative data sources. This scale is found more easily (e.g. faster and cheaper) with classified unstructured social data.
Market research doesn’t only benchmark where a brand stands within a market but also uses data to understand and identify the brand’s target audience. As the article documented, MegaRed used a combination of market research firms – IRI, Nielsen, and Datalogix – to measure everything from baseline market share to campaign impact based on ad views and effect on purchase. Market research was also used to provide audience insights and attribution. MegaRed was keen on building a “look-a-like” target audience of existing purchasers of krill oil. Brands can now build a list, or people-based dataset, of specific users of similar demographic and psychographic attributes. This hyper-targeted methodology makes it easy to determine which one of those users converted, and thus easy to measure return on investment. Facebook holds the “keys to the marketing kingdom” in the form of structured user demographic and interest data from its 1.3 billion monthly active users. MegaRed used the target personas to identify the specific users on Facebook.
The recent change in focus from earned to paid in social media has re-introduced the concept of “return on investment”. It has also put a renewed spotlight on the role of market research to ensure that marketing spend is targeted to the correct segments. For a product as un-sexy as krill oil, MegaRed needed to find the right angle and reach the right audience. Armed with such audience insights, MegaRed was able to be where the consumer was and ensure a satisfactory return on investment.
Measure twice, cut once.
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