Why are all brands social?

There’s a lot of talk recently about social media and brands. Martin Sorrel says that 33% of WPP’s total revenues of US$16.5 billion are from digital and has set a target of 35-40% of revenue to be derived from digital by 2018. As a leader in the communications industry this is a significant shift, so what’s all the fuss?

According to Deloitte’s Global Human Capital Trends 2015, Culture and Engagement is the most important issue companies face around the world. 87 percent of organizations cite culture and engagement as one of their top challenges, and 50 percent call the problem “very important.”

Shockingly, despite this challenge, a substantial proportion of the respondents (22 percent) report that their organizations have either a poor program to measure and improve engagement, or no program at all. Only 7 percent rate themselves excellent at measuring, driving, and improving engagement and retention.

There’s a growing realisation that this is not just a fad but a seismic shift in the global communications industry. This falls into two parts; firstly the power that big data has unleashed and the resulting ability to profile and target consumers in previously unimagined detail; secondly the social media phenomenon that has so far opened the door to instant multi-user dialogue between over a billion users worldwide and that’s Facebook alone, add another 500 million for Weibo, plus 500 million for Twitter, Pinterest 200 million, Instagram 100 million and you begin to get the picture.

However amongst all these burgeoning numbers it has been difficult to put a finger on exactly what role all these links, posts and tweets are playing in changing consumer habits and buying decisions. Advertisers have been sceptical. Now there’s a dawning realisation that its all for the good, but we are not really sure how good and why. Advertisers have always had a deep-seated need for ROI and so far that has been difficult to define in social.

Earlier this year the Harvard Business Review published the results of an interesting study by Wes Nichols, CEO of MarketShare a global predictive-analytics company. He showed how traditional methods of measuring ROI on marketing spend no longer apply, or are fuzzy at best. The analysis revealed, for example, that TV ate up 85% of the budget in one new-product campaign, whereas YouTube ads at only 6% were nearly twice as effective at prompting online searches that led to purchase. Search ads, at 4% of the companyʼs total advertising budget, generated 25% of sales.

Source: Harvard Business Review, March 2013

The challenge then is more than ever to be sure that you have a clear idea what your brand stands for before you enter the social media arena – of course as a brand you are already there whether you like it or not. If you don’t your consumers will decide for you and it may not be what you intended.

However that’s only the first half of the story. The study showed marketers commonly measure the performance of each of their marketing activities as if they work independently of one another, the so-called swim-lane measurement. This may result in significant over, or under attribution of advertising revenues because ads in one medium can exert a powerful influence on, or assist, those in another. Swim-lane measurement ignores those assisted effects. The results showed that traditional measurement had dramatically underestimated the ‘halo’ effect that social media has when combined with other media. So why is this?

All brand owners focus on the power of persuasion and the ability of their brand to connect with the consumer to drive the ultimate buying decision. Using traditional media it has always been a challenge to ‘get on the side of the consumer’ using predominantly ‘one-to-many’ communications channels. Now social media has created a paradigm shift in the way brands communicate and has once and for all passed the ball from the brand owner to consumers to take ownership of the brand themselves.

However, more than this, there is finally a channel that has the power to create an intimate relationship with brands, bringing people in closer touch with the emotional core or ‘essence’ of what the brand is about. This has always been the holy grail of brand owners, understanding why our brand matters to our customers and connecting them to that need. What better way than to give them ownership?

The challenge then is more than ever to be sure that you have a clear idea what your brand stands for before you enter the social media arena – of course as a brand you are already there whether you like it or not. If you don’t your consumers will decide for you and it may not be what you intended. That’s not always a bad thing. Timberland never expected their boots to become a fashion item, but Hip-hop reinvented them and raised the brand to a new level. However the brands that have surged on the social media boom, such as Red Bull, have always been clear what they stand for in the minds of the consumer and have used the creativity of the social media landscape to develop a unique position in the minds of their target audience.

How you do this, whether its F1, X-games or Felix Baumgartner skydiving from space, is a separate issue. The main point is that, more than ever, brands need to have a clear idea of what they stand for, why they matter to people and an inspiring way of telling that story, so consumers can take ownership of it and make it their own. Then, if you have a well-defined brand, social media can be the channel that helps take it to the next level.

Photo: RedBull Stratos