Tag: Facebook

Stop Social Media Marketing

Today, I gave a keynote address at the PR + Social Media Summit in my hometown of Milwaukee. My presentation was entitled “Stop Social Media Marketing (Unless),” and I have embedded the deck at the end of this blog post.

I predict that many CMOs will diminish their support for social media, content and earned media marketing in the next year or two, and when they do, careers will be adversely impacted. If your career relies on Marketing Department support for content or social media marketing, now is the time to take stock of the trends and consider some actions to protect your career. It is possible that you work for the right sort of company for which social media is well aligned for Marketing Department expectations—that’s the “Unless” part of the title–but, as you will see, I believe this is the exception and not the rule.

What is (and is not) Social Media Marketing?

Before we explore where social media marketing works and where it does not, let’s first be clear that the definition of “social media marketing” does not include paid media on social networks. Go ahead and invest in advertising on Facebook and Twitter, just do not call it “social.” The most popular forms of advertising on Facebook today are retargeting and custom audiences, neither of which are remotely social, and less than one in six ad dollars use social data.

I suggest a better definition of Social Media Marketing is this: Content authored or encouraged by the brand and shared by Word of Mouth that creates earned media and delivers on Marketing objectives. This definition excludes a couple of things, such as advertising (which is not social) and consumer content not coaxed by a marketing program (which is not marketing). It also excludes social media programs that fail to deliver on key marketing metrics, and therein is the problem for most brands.

The Earned Media Venn Diagram

A simple Venn diagram explains what works and what does not in Social Media Marketing. The first circle includes what your brand can say to move consumers closer. This does not mean retweets and likes–the fool’s gold of social media marketing–but rather changes in consumer attitude or behavior such as greater awareness, consideration and purchase intent.

The second circle in the Venn diagram is what consumers want to hear from your brand. For years, we have acted as if consumers crave branded content, but the data on this clear; a 2014 Kentico study found that 68% of US consumers “mostly” or “always” ignore brand posts on every social network. The situation is much worse for some categories than others–a 2014 Scratch/Viacom study found that 71% of Millennials would rather go to the dentist than listen to what their banks are saying! If people would rather get a cavity filled than listen to your brand, it’s a good bet your content and social media marketing faces a profound uphill challenge.

Where Social Media Marketing Works

Some brands have an overlap between these two circles of the Earned Media Venn Diagram; most do not. There are three types of companies that have this “magic intersection” between content that helps the brand and that consumers want:

  • Brands in select verticals:  Some categories have built-in consumer interest. For example, sports brands can easily post content that drives engagement and also increases demand for team attire and products. TV shows and movies have an easy time offering content fans will share that also increases ratings and box office receipts. Style brands are another example–in the same way that women eagerly purchase the September issue of Vogue with its 631(!) pages of ads, so too will style-conscious women pay attention to and share the latest pins and posts from their favorite fashion brands. Brands in select verticals enjoy a magic intersection between the content consumers want and the content that drives consideration and sales.
      
  • Brands with purpose:  Consumers may have little interest in what banks have to say, but that does not stop USAA from delivering great engagement and inbound traffic with its posts. This is because USAA has created a brand with a purpose that resonates with its audience. Another example is Chipotle, which has outperformed other brands in the restaurant industry by promoting its commitment to more locally- and organically-sourced ingredients. (Just last quarter, Chipotle delivered a same-store sales increase of 17% in a vertical where almost no brands are able to achieve half that.)
      
  • Brands with better products and services:  Of course, there is always the old-fashioned way of encouraging attention from consumers: Be better than the competition! Apple has no official company profile on either Facebook or Twitter, yet it still beats Samsung when it comes to building buzz. Both companies had product unveilings in early September (Samsung for the new Note and Apple for the iPhone 6), yet despite the fact Samsung has 2,350% more fans, followers and subscribers on Facebook, Twitter and YouTube, Apple still delivered far more Word of Mouth about their event and product. Apple does not need social profiles and content to drive WOM; it just needs to continue producing interesting, innovative products that get fans talking.
      

Some companies can publish content that consumers want and delivers on marketing goals, but most brands simply do not have that same opportunity–they have no “magic intersection.” This does not stop them from trying, of course, which is why so many brands stumble with unwelcome, heavy-handed, embarrassing, brand-damaging posts on Facebook and Twitter. 

We entered the social media era suggesting that brands with something to say could use social media to say it; instead, we today have brands with little to say that nonetheless post 4.3 times per day because some consultant told them this was a best practice. Desperate for attention and relevance, these companies continue to invest in content that is delivering neither the scale marketers need nor the content consumers want.

Ironically, even for the best companies, earned media may wither and die in the coming years. In just six months, organic reach on Facebook was halved, and many expect that zero organic reach will soon be the rule on the social network that collects 57% of all social visits. The organic reach game has gotten so tough that Coca-Cola, one of the strongest brands in the world, only earns engagement with 1 in 100,000 of its fans on Facebook. The situation on Twitter is no better; a recent Forrester report notes that the average engagement rate with brand posts on Twitter is just 0.03%–75% less than banner ad clickthough rates today!

Earned media could soon be a thing of the past. What happens to your social media marketing strategies if the content you create and post reaches no one?

Social Media Marketing’s Inability to Deliver Trust, Acquisition or Purchase Conversions

If the prospect of organic reach crumbling to nothing is not enough to worry about, social media marketing has a variety of other problems that marketers have been ignoring: 

  • Trust: Forrester’s 2014 data reveals that people trust brand social media posts 40% less than they do information on brand websites (and, of course, 70% less than recommendations from family and friends). Adobe’s 2013 research found the same–just 2% of US consumers found company social media page best for credibility compared to 17% for company web sites (and 59% for friends, family and coworkers.)
      
  • Acquisition of prospects: Although many marketers continue to view fans and followers as prospects, the Adobe study found that consumers are three times more likely to follow brands from which they already buy than brands from which they aspire to buy. An even more damning study comes from Custora: Studying data from 86 retailers and 72 million customers, Custora found that Facebook and Twitter deliver essentially zero acquisition. While acquisition is best delivered by organic search (16%), CPC (10%) and email (7%), Facebook and Twitter account for just 0.2% and 0.01% respectively. Furthermore, the Customer Lifetime Value delivered by those acquired through Facebook was just average while Twitter was 23% below average.
      
  • Purchase: An IBM study of the online sales generated by 800 retailer websites the week before Black Friday 2013 found that a mere 1% of those sales were generated from social media traffic, essentially unchanged from the year prior. And Monetate recently published its Q2 Ecommerce Quarterly based on 7 billion online shopping experiences–it found that social delivers an add-to-cart rate of just 0.6% (70% less than search), a minuscule conversion rate of 0.12% (70% lower than search) and an average revenue per session of $0.14 (yes, 70% less than search.)

If social media is so poorly equipped to deliver trust, traffic, acquisition and purchases–and is facing declining organic reach–why are marketers increasing their investment in the channel? These are, after all, the metrics that most marketers care about. In a 2013 study by Ascend2, both B2B and B2C marketers reported their top three most common performance metrics are website traffic, quantity of sales leads and conversions–goals against which social media does not deliver. Meanwhile, fewer than half of B2B and B2C marketers measure customer retention, awareness or reputation, which are metrics that align well to social media strategy.

But if social media is poorly matched to Marketing Department objectives, it remains a powerful opportunity for others in the enterprise who do not need to rely on reach and scale to deliver on their goals.  For example, The PR/Corporate Communications function can be successful if it uses social media to create relationships with a few dozen influencers, both traditional ones (journalists) and the new variety (bloggers). Product Development does not need to collaborate with tens of thousands of customers but can work collaboratively to develop new products and services with much smaller subsets of customers and vendors. And Customer Care can achieve success by answering the questions and complaints of a few hundred people in social channels. (Compare that to the average marketing campaign, which would be considered a dismal failure if it only engaged a few hundred people.)

Social Media Marketing on a Collision Course with C-Suite Expectations

For now, CMOs seem to have confidence in social media, but I believe this will change in the next year or two. Social media and content marketing is on a collision course with the C suite.

Recent research by the Fournaise Marketing Group, which was conducted with 1200 CEOs and CMOs, found that 80% of CEOs claim they have lost trust in their marketers. One of the reasons is that “74% of CEOs think Marketers focus too much on the latest marketing trends such as social media – but can rarely demonstrate how these trends will help them generate more business for the company.”

This criticism is, sadly, entirely fair. In just-released data from the 2014 CMO Survey, derived from 351 top US marketers, a mere 15% of CMOs say they have proven the impact of social media quantitatively. Another 40% “have a good qualitative sense of the impact, but not a quantitative impact” and a whopping 45% have “not been able to show the impact yet.” Despite this, CMOs expect to increase social media marketing spending 128% in the next five years. 

If you wonder why the tenure of CMOs is so short compared to the rest of the C-suite, the answer is right there. Less than one in six CMOs know if their social media investments are paying off, yet they still intend to rapidly double that investment!

I predict that increase will not happen. The falling organic reach, low acquisition, microscopic purchase conversion and inability to measure quantitative success will come crashing headlong into the growing pressure on the Marketing Department to demonstrate results. When this collision occurs, will you be the one holding the social media marketing bag? If your career depends on the success of social media or content marketing, now is the time to consider the data, trends and future.

How to Protect Your Social Media Marketing Career

For those in the social media marketing profession, I believe the time has come for a candid assessment. Protect your career by asking three questions:

  • Does your brand have a “magic intersection”? Are you in one of those categories–such as entertainment, sports and style–that has built-in consumer demand for branded content? Or has your company won high levels of loyalty and advocacy with its sense of purpose or by producing products and services that are leaps and bounds better than your competitors? If so, then social media marketing can be an effective channel for the Marketing Department, but if not, then ask…
     
  • Does your firm evaluate its Marketing spend based on reputation and loyalty? When marketing leaders furnish updates, do they lead with Net Promoter Score and measures of repurchase and reputation? Or do they lead with sales, conversions, acquisition and traffic data?  If the former, then social is well aligned to what the organization most cares about, but if it is the latter, then ask one last question….
      
  • Can you control the paid media budget for social? If you can control the ad budget and are really held more accountable for delivering paid media than earned media, then your job is secure (provided you are doing it well). If, however, the ad budget is controlled elsewhere and your job is dedicated solely to content and earned media, I would suggest you have career challenges ahead. It may time to consider one of three options:
  • Redirect: If your social media scorecard is full of non-marketing metrics such as likes, retweets and number of fans, then the time has come for you to lead a change. Do not wait until Marketing leadership begins to question how those useless social metrics tie to Marketing objectives; take the lead and start that conversation today. You may be able to change the conversation and redirect expectations toward the sorts of metrics on which social can realistically deliver.
      
  • Detour: It may be time to consider social media opportunities outside of the Marketing Department. While social may not deliver on typical marketing goals, it certainly aligns well to the needs and expectations of Public Relations, Customer Care, Product Development, Sales and others parts of the organization.
     
  • Exit: Or perhaps it is time to exit social media altogether and consider other career paths where your experience in customer-centricity and innovation can be of great value. In recent years, I have seen social media professionals successfully shift into new careers in Customer Experience, mobile and customer care, for example.

Of course, if your career is in social media marketing, you could choose the fourth option and bury your head into the sand. I hope you will not, because the data is consistent, the trends are in place and the questions about social media marketing effectiveness are only going to rise.

Below is my deck. I welcome your feedback, questions and challenges. 

Four Recent Studies on the Rapid Adoption of Social Media by Financial Advisors and Investors

In the Financial Services vertical, you can still find some who think that social media is not that important–that wealthy investors and licensed financial professionals are too busy and too serious to pay attention to (much less create) tweets and posts. The time has come to look at the data and discard groundless and dangerous beliefs about social media. Here are four recent studies that demonstrate social media has a key place in FinServ strategies:

Forrester Finds a Strong Correlation Between Social Communications and Financial Advisor Payments

In his July 2012 report, “Collaborative Advice: Using Digital Touchpoints To Enhance Advisor-Client Relationships,” Forrester Vice President Bill Doyle shared data about affluent investors’ digital interactions with advisors. The study demonstrated a strong correlation between the number of times these investors interact with financial advisors in social networks and the investors’ payments for advisors’ services. The correlation between advisor payments and the number of social media interactions (0.461) was almost twice as strong as the correlation with the number of interactions in person (0.234) or by phone (0.246).

It is important to point out that correlation is not causation. Doyle’s data does not suggest that social media interactions are twice as powerful as in-person or phone interactions but that frequent interactions between affluent investors and advisors in social media are associated with greater revenue for advisors. While an advisor can interact with just one client at a time on the phone or in person, social media provides a way for advisors to reach and interact with many clients simultaneously. This study demonstrates the power of social media scale and social network relationships to financial professionals.

Accenture Finds Social Media Helps Financial Advisors Retain Clients and Increase Assets Under Management

Last Fall, Accenture surveyed 400 U.S. Financial Advisors and published “Closing the Gap: How Tech-Savvy Advisors Can Regain Investor Trust.” The research found that digital and social tools “offer Financial Advisors unprecedented opportunities for more frequent interactions with their clients, helping them forge deeper, stronger relationships.”

Among the Financial Advisors surveyed:

  • 60% have daily contact with clients through social media
  • 77% affirm that social media helps with client retention
  • 74% agree that social media helps them increase assets under management 
  • 73% say it has led to an overall increase in client interactions
  • 40% indicate they have gotten new clients through Facebook
  • 25% have developed new clients through LinkedIn
  • 21% have earned new clients through Twitter

Brunswick Group Finds Social Media Drives Investment Recommendations and Research

In its 2012 survey of 476 investment professionals (including both buy-side investors and sell-side analysts), Brunswick Group found considerable adoption of social media compared to its earlier 2010 survey. More importantly, the study found that investors are using social media to drive investment recommendations and research.

Among the findings:

  • 52% read business information postings on blogs (up from 47% in 2010) and 24% have made an investment decision or recommendation after initially sourcing information from blogs.
      
  • 30% read business information postings on micro-blog services (up from 11% in 2010); 12% of investors have made an investment decision or recommendation after sourcing information from micro-blog services (an increase of 200% since 2010).
      
  • 24% read business information postings on social networks (up from 17% in 2010), and 9% have made an investment decision or recommendation after initially sourcing info from a social network.
      
  • Investment professionals are increasingly posting and not just consuming information in social channels. In 2012, 11% said they post investment information to blogs (more than doubling since 2009), 8% post investment info to microblogs (up 50% since 2010) and 10% post investment information to social networks (doubling since 2010).
      
  • Overall, 56% of investment professionals say the role of digital and social media in the investment decision process is increasing compared to 6% who felt it was decreasing.

2012 Brunswick Investor Use of Digital and Social Media Survey from Brunswick Group

Cogent Research Finds Many Wealthy Investors Use Social Media for Finance and Investing 

In a survey of 4,000 US investors with more than $100,000 in investable assets, Cogent Research found that a growing number of affluent investors use social media specifically to help inform their personal finance and investment decisions. Among the findings:

  • About 34% of affluent investors specifically use social media such as Facebook, LinkedIn, Twitter and company blogs for personal finance and actual investing
     
  • Another 41% said they use social media and sometimes come across investment information even though that wasn’t the specific reason they went to those sites
      
  • About 36% said social-media research has caused them to reach out to their advisers to ask questions
      
  • Seven out of ten wealthy investors who use social media for investment research (which is 24% of all investors) have either have changed their relationship with an investment provider or reallocated actual investments because of something they read on social media
      
  • Even for high net worth individuals with more than $1 million in investable assets, 25% seek investment advice from social media.

While many firms are proceeding slowly and cautiously into social media, it seems many of our licensed financial professionals and our wealthy customers are adopting social media with more haste. In fact, the Accenture report notes that so many financial advisors are using social media that many are “likely flouting their firms’ current policies against this type of activity.”

Forget keeping up with the competition. Financial Service firms ought to worry more about keeping up with their own sales networks, employees and customers.

The Complete Facebook Success Formula Every Marketer Should Know

At the f8 Developer Conference in April 2010, two Facebook engineers shared Facebook’s EdgeRank formula, and since then most marketers have misinterpreted how to apply it to their own brand challenges. Simply put, this is Facebook’s equation, not your brand’s. This formula reveals how Facebook determines what will appear in users’ newsfeeds, but it does not tell your brand what is needed to drive business success on Facebook.

What Facebook shared about EdgeRank is important for marketers to understand, but it is merely a portion of the Facebook brand success formula. It is a little like the owner’s manual for your car, which is helpful for learning how to operate the vehicle but does not tell you how to successfully, safely and efficiently get from point A to point B. Marketers must recognize EdgeRank, both for what it is and what it is not.

What is EdgeRank? 

EdgeRank is Facebook’s secret sauce. It is designed to make the site as useful, engaging and sticky as possible. Its purpose is not to enhance marketers’ experiences but users’ (which ultimately benefits Facebook itself with more traffic and ad revenue, of course.)

You are probably aware that when you sign on to Facebook, your newsfeed is not simply a stream of every friend’s and brand’s posts in reverse chronological order. Facebook knows that you would not find a raw stream of posts very interesting–you are fonder of some friends than others, and not everything your friends post is equally appealing– and so Facebook filters your newsfeed. Based on your past interactions on the platform, Facebook knows who and what you find most relevant, and it applies this knowledge to make your newsfeed as interesting as possible. (For the record, I think Facebook’s current EdgeRank formula does a good job, but it has a long way to go before its filtering feels as natural and accurate as it should for users.)

To understand how EdgeRank works, you first must realize that everything that occurs on Facebook is an “edge” in the parlance of Facebook. Which of your friends’ edges you see in your newsfeed and which ones Facebook omits depend on three factors:

Ue:Affinity between user and edge creator: Facebook monitors how much you interact with friends and brands. Those people and brands that earn your engagement–liking, sharing, commenting and so on–are more likely to appear in your newsfeed. The people and brands you tend to ignore eventually disappear because Facebook (correctly) interprets that you simply do not find their content interesting.

Right off the bat, you can see the enormous challenge for brands: How can a brand possibly be as interesting to a user as his or her own friends? You can see this challenge demonstrated within your own personal newsfeed–you are presented with posts made by your friends much more often than from brands you have liked. In fact, many of the brands you have “liked” never appear in your newsfeed. This is not (just) Facebook’s way to encourage brands to use paid sponsored posts to increase visibility; instead, it is the reality of your own Facebook habits. You find the people in your life more interesting than brands, and Facebook recognizes and reflects your authentic affinity.

We:Weight for this edge: Every one of us reacts with different types of content differently–you may love videos, I may enjoy photos and someone else may prefer text. This means each content type has a different “weight” for each user. In addition, as an “edge” gains comments and likes, it gains more “weight;” thus, as others interact with an edge, it increases the likelihood that edge will appear in other people’s newsfeeds. The more your brand posts match topics and content type to users’ interests, the greater the weight of your content and the higher the likelihood your content will appear in fans’ newsfeeds.

De:Time decay factor for this edge: The last of Facebook’s EdgeRank attributes is a simple one: The more recent the post, the more likely you are to see it. You do not often launch Facebook and see something posted a week ago. Facebook knows that we are all real-time junkies–if a band is hot, a TV show is great, a meme is growing or our friends found a great party, we must know now!

Facebook’s EdgeRank is not rocket science–the more affinity an individual has for your brand, the more interest he or she has for the types of content your brand posts, the more others find your content engaging and the more timely your posts, the greater your brand’s chances of being included in a fan’s newsfeed. While this all seems obvious, marketers must take note of several vital things about EdgeRank:

  • Facebook does not exist to give your brand the opportunity for free earned media. Its purpose is to give users a great social experience, which may include the brands that authentically earn their attention.
     
  • The same rules apply to people as to brands. If your brand posts interesting content that gets people engaging, the content is seen in more users’ newsfeeds. If not…
     
  • A brand that fails to engage fans can disappear from fans’ newsfeeds. If this happens…
     
  • Your brand can become invisible on Facebook. Consumers rarely visit brand pages; in fact, Facebook reports that fans are 40 to 150 times more likely to interact with brands on their newsfeeds than going to a brand page. If you disappear from consumers’ newsfeeds, you disappear from Facebook.
     
  • EdgeRank is Facebook’s formula for keeping users’ newsfeeds as interesting and relevant as possible, but this is far from the entire equation for brand success on Facebook. Two key components for Facebook marketing success are missing, and far too many marketers overlook these.

Missing Facebook Attribute #1: Fans that matter

What is missing? Well the first thing should be evident:  Fans, but not just any fans, the right fans.

Not all fans are created equal, although you would not know this given some of the relatively desperate methods brands use to accumulate “fans.” EdgeRank tells us that brands must collect signals of affinity as quickly as possible, so the primary goal in your brand’s fan accumulation strategy should not be raw numbers of fans but collecting the right fans–ones that arrive with some level of affinity or immediate potential for affinity.

An interested customer is likely to interact with your brand, which tells Facebook he or she wants to see more from your brand. On the other hand, a disinterested fan fails to interact, resulting in the expulsion of the your brand from the fan’s newsfeed.

I have never understood why brands turn to general-interest sweepstakes and contests to earn “likes,” for this seems to offer no path to Facebook success.  The theory is that a fan acquired through these means will move up the value ladder–he or she may start as a disinterested prospect, but soon this person will become so enamored with the brand’s wonderful content that the individual will rise to prospect, then customer and finally loyal advocate. This is the traditional advertising funnel view of the brand journey, and applying it to Facebook is, in the words of the immortal Joe Biden, “Malarkey!”

Facebook’s EdgeRank prevents disinterested prospects from gaining value. A new fan who was seduced by a contest or sweepstakes will see a few posts from your brand, and if they ignore these posts (and they will), your brand is gone. When this happens, your marketing investment will have incremented a number at the top of your fan page but delivered nothing else, least of all a prospect with an opportunity to see your brand’s content within his or her newsfeed.

Brands are treating Facebook “likes” as if they are email subscription requests, but EdgeRank tells us this is not an effective strategy. Instead, you must find fans with affinity and keep that affinity to remain part of fans’ Facebook experience. The path to greater brand awareness is not to collect disinterested fans and hope your content reaches them, because it won’t; instead, brands achieve awareness on Facebook by collecting fans with existing or immediately available affinity and giving them content and interactions they will share with others (either purposely or inadvertently through Facebook’s platform.)

In my Facebook success equation, I call this “Fans to the power of Affinity.” Affinity does not grow your brand’s Facebook success mathematically but exponentially. A fan with zero affinity stands almost no chance of seeing your content; a fan with modest affinity may or may not interact sufficiently to keep your brand present within his or her newsfeed; but a fan with strong existing affinity or the opportunity to gain it immediately can be a regular receiver, engager and sharer of your content.

To affinity and beyond! (Sorry, the Disney fan in me came out there.)

Missing Facebook Attribute #2: Brand Vector

The second component that we must add to Facebook’s EdgeRank equation is brand vector. This means that your content and interactions must move people closer to the brand.

Engagement for engagement’s sake may get your brand on fans’ newsfeeds, but your brand must drive marketing value and not merely be seen. It is not enough to capture attention; you have to capture hearts and minds. If you collect “eyeballs” but fail to change perception or behavior around your brand, you’ve failed, no matter what your fan count or “talking about this” number says.

Brands have long fallen into the trap of settling for mere likeability and engagement. One of my favorite pre-social-era examples of this is Taco Bell’s Chihuahua. For years, Taco Bell ran ads with the popular pup telling people “Yo Quiero Taco Bell.” The dog abruptly disappeared from airwaves because the Chihuahua was more effective at selling T-shirts and plush animals than he was at selling tacos. In the language of the social era, Taco Bell settled for engagement but lacked brand vector.

For a more recent example, look at Progressive’s recent social media PR event. Angry customers flooded into Progressive’s fan page to protest the company’s handling of a claim. Progressive has the most popular fan page in insurance, at least as measured in simple metrics–4.7 million likes and 30,000 people talking about the brand–but despite those amazing numbers, Progressive saw little to no advocacy in the midst of the company’s negative PR event. It is easy to see why: Flo posts lots of fun and games, but where is the discussion about risk, protecting families, the value of insurance or why Progressive is worth consideration? There is little brand vector evident in the engagement Flo creates, so Flo is just another popular character. That’s great if Progressive produces sitcoms but is of dubious value if Progressive wishes to change awareness, consideration and intent around its financial products.

Here, in its complete form, is the entire Facebook success equation for marketers. Not just Facebook’s EdgeRank formula, but also the inclusion of the right fans and the right messaging. What do you think? Have I missed anything? Your comments are welcome and appreciated.

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