Reality finally bites for social media

More trouble in social media land. Insiders at consumer goods giant Unilever recently confessed that some of their brand teams were questioning whether increased investments in social media were proving their worth.

Mark Ritson

Some brands had discovered that a pound spent on in-store promotions was delivering up to 50 per cent better return than one spent on social media. That’s quite a disparity and, according to the source, it is leading to several brands switching investment away from social and back to sales promotions.

It’s a big move for any FMCG company, but a particularly major one for Unilever, given that it has been held up as one of the most socially switched on of organisations. Its chief executive Paul Polman had predicted that social media would soon overtake traditional media as the company’s key tool for driving brand preference, and the story from its chief marketing officer Keith Weed is similar. He has repeatedly claimed that social media’s return on investment (ROI) is more measurable than television, and usually superior too.

Despite the hyperbole it seems many of Unilever’s actual marketers working across brands like Marmite, Timotei and Radox are questioning whether social is such a superior approach after all.

But what’s been really interesting is watching the social media experts react to the Unilever news. As a relatively young and brash discipline, social media has spent the past four years promoting its potential for greater ROI versus traditional tools. Thus far the narrative has been all about the switch from traditional media to social. The idea that a company - and one of the leading exponents of social media at that - has shifted away from social towards old-fashioned tools has caused quite a stir in the past week.

One section of social media exponents simply refuses to contemplate the idea that any company could favour an old-fashioned tool over the shiny new approach. Laurent Francois, former head of 360 Digital Influence for Ogilvy France and a teacher of social media marketing at the ESCP business school, provided a typical example of the denial approach.

According to his blog, Unilever was clearly “missing the point” because consumers are “no longer passive targets that you can simply feed with coupons and vouchers”. That might have been the claim at the last social media conference Francois attended, but patently Unilever’s experience suggests consumers are just as interested in coupons and vouchers as they ever were.

Another response was to critique Unilever’s approach. ‘Don’t hate the game, hate the player’ was the theme of Stephan Dahl’s blog. Dahl, a senior lecturer of marketing at the University of Hull, analysed Unilever’s approach to social media for Marmite and concluded that the reason for the brand’s poor showing was weak execution, not a fundamental problem with social media.

“Sales pitches, incentives and no interaction - everything that social media should NOT be!” observed Dahl. “Is it really surprising that Unilever found that the ROI from this sort of social media campaign was less than running sales promotions in shops?”

Of course, all this is the usual social media nonsense. The real story is that marketers are finally beginning to apply some measures to assess the ROI of their efforts. Once they do that they can do the one thing the social media mavens have counselled against: compare the value of social media with other options, apples to apples. And, in many cases, they are discovering the hullaballoo drummed up by the marketing media and various industry events is not quite all it was cracked up to be.

Crucially, Unilever did not suggest it had given up on social media. Some brands are happy with their ROI while others are apparently moving away from the approach. That’s important because it confirms that social media’s impact on marketing is heterogeneous. In some cases it changes the game and introduces wonderful possibilities and, subsequently, impressive ROI.

But in other cases - the majority I’ll wager - social media becomes a minor addition to the mix and no more than a catalyst for TV or other traditional activity. And then, in a final set of cases, social media does not make any sense at all. Because of brand positioning, the consumer decision-making framework or the nature of the product category, it is not a worthwhile investment.

That might explain why several industry studies are reporting that the number of marketers who agree social media is an important tool for their business is starting to fall. This is not a signal that social media is worthless or that its bubble is about to burst. It just means we are starting to treat social media like any other option in the marketing mix.

Welcome to the mature stage, social media - we’ve been expecting you.

Readers' comments (23)

  • Interesting article.

    "Because of brand positioning, the consumer decision-making framework or the nature of the product category, it is not a worthwhile investment."

    Couldn't agree more. I don't want a 'deep and meaningful' engagement on twitter with Andrex on whether I scrunch or fold. I couldn't care less. I just want something to... well you know.

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  • The reason it is called Marketing Mix, is because it takes a mix of elements and approaches to make it work. Taking a hysterical stance either for or against Social Media is unhelpful to the debate. Social Media on it's own is unlikely to work for a brand and POS discounting on its own is likely to devalue the brand over the long term. There will be categories and sectors more or less suited to engaging with and having a conversation with their customers. This is about understanding your customers and their motivation for buying. Different approaches will work for different customers with different buying motivations. I think it would be the unwise marketer that would cut social media' opportunities for engagement from their armoury unless they were very sure that those marginal customers gained had little value. POS is still infinitely easier to measure than social engagement.

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  • Now the real question is: how to measure ROI of Social Media. We can measure paid media in facebook, but what about the ROI of brand pages? Paid media done in facebook can be done even without owning (and spending our efforts) a brand page. Has anybody measured the ROI of a brand page?

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  • Dear Mark,

    I'm really surprised that you totally avoided to mention my real argument. I invite your readers to have a look at my point of view on Unilever:

    I guess you needed a random "social media" guy in order to fill your paper. But it's somehow dishonest.

    What I say in my post (the title is explicit: don't only measure your brand success with direct ROI indicators) is not that good old tactics are dead. Not at all; I just say that you need to avoid to fall in a binarian approach: social media marketing is neither good neither bad, it all depends on a bigger picture. And I'm going to tell you a secret: couponing - or direct marketing - can be part of a social strategy.

    You're also dishonest on another point: I, again, quote Paul Polman (the big boss of Unilever, see who he is?) in my post, who totally expresses this idea. So in your article, mentioning that I'm "against" Unilever approach is so wrong as I directly source, quote and promote their new strategy.

    You wanted to enjoy yourself, taking a former Ogilvy guy, probably geek. Who's the cliché?
    You could have called me, dropped me an email. I hope that what you do for Marketing Week is different from the methodology you sell to your own clients.

    Otherwise, they won't have to go to the "shiny" new approach (can you tell me what it's about?); they'll just have to leave a pretty blurry and confusing pitch.

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  • Isn’t the real issue that Social Media thinking is dominated by tech folk who finish every sentence with ‘dude this is awesome!’

    I wonder if this will follow the same pattern as the tech bubble (where only a handful of ecommerce companies survived)

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  • In the fickle world of FMCG very little trumps what you can pull off in store, but this article could have made that point against just about any media type.

    "Reality finally bites for TV, we only run multi-million pound campaigns so that we can tell retailers we're doing so and they'll put our product at their front door."

    As has been mentioned in the comments though, there's clearly a point at which just throwing more money into in-store promotions erodes the value of your brand (or whole category) and isn't wholly sustainable, so efforts which genuinely build a preference among consumers (however slight) for the long run have a value above what they turn around in sales that week. There's certainly plenty of social media which doesn't do that, but when it does the consumer connection it starts to build is tangible (and it may even surface your brand at just the right moment close to the point of consideration).

    Perhaps I work for an FMCG anomaly but we've seemingly done huge things in social media and yet our spends would never approach the same levels that we put into store. All things in moderation right?

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  • In this context, this slideshow may be of interest. Hits a few nails on their heads. Title: How to Fail.

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  • Laurent,

    You've totally missed the point of Mark's blog. I read your article and whilst there is, of course, some substance to what you are saying there's the usual fancy (some may say pretentious, not me of course) vernacular about binarian (aren't they a baddie in Doctor Who?) approaches and 'living brands' and so on.

    What Mark and significant others have been saying for years is that Social Media is oversold, overrated and under analysed for ROI (be that instant or in the future). The denialists have an easy answer for all of this which I noted you also used in part: 'you can't expect instant results'. 'You don't understand the concept', 'it's about brand building' etc. etc. ad nauseam (literally). Of course there are brands that can use social media better than others, but they have a certain position and psychographic target market that makes it a natural fit – but that doesn’t mean all major brands should spend millions on it as many did, getting carried away with the Emperor’s new clothes? Yes, ‘liking’ Prada or Panerai might make me look cool to my friends, but if I drink down the local boozer in Luton it’s hardly relevant?

    The fact is that it was a huge zeitgeist thing a few years ago that everyone 'got into' and if you didn't you 'didn't understand the new, digital market'. That's why there are Facebook sites for power tools, sanitary products, projectors and pile cream (probably) with the number of likes usually somewhere south of 100. A complete waste of time and money, but the CEO didn't want to appear out of touch and old fashioned and, frankly, reading your blog it's very easy to get carried away in a world of binarians (exterminate!), living brands and existentialist digitisation (ok, I made that last one up). As one of the other posters said, I don't want to 'engage' with Kleenex, but I do need my backside to post-evacuation. Binarian or otherwise...

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  • Let the mud slinging begin!
    I thought Mark's article was very balanced. He was not saying Social media was bad or sales promotion was bad. This just started with Unilever saying that promotion had (in some cases) a better ROI. I'm sure PR wizards are quietly chuckling that it's not them that this time it's not them justifying ROI. It's just some media do things better than others (a DM ad we did for Virgin got 7 times the sales of a 'Creative' ad). So as Mark said in his last line - social media is coming of age and being treated like any other mature media so needs to wash its spotty teenagers face and grow up.

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  • Horses for course I think! Of course social media for some business can be a very effective tool for engagemnet and brand builidng and positioning, but for others it may be no use at all.

    I think the problem with social media is that non-marketers (Many senior Managers and Directors) hear a lot of people banging on about how great it is and enjoying social media courses - where without fail they show the same 'growth of social media' video- and put pressure on people like me to embrace it and deliver success through.

    This is to the potential detriment of other elements of the mix and there is danger there. How many times I have heard..."Richard we need to drive business into X as their behind budget, tweet about them will you". If only it was that easy. Worse still when I express my opinion that Social Media is not a major tool - with reasoned arguments about our market, customer decision making process and strategy - I get a recation which suggests I am a ludite who "just doesn't get it"!

    So it is somewhat refreshing to see the merit of the media being debated!

    Also Mark, it would be great to hear you response to Laurent. Will we get one?

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