In the last 12 months there have been $76 billion dollars in social business IPOs and more than $1.5 billion dollars in social business acquisitions. LinkedIn, Facebook, BazaarVoice, Radian 6, Vitrue, and Buddy Media are now all either part of large companies or have become well-funded public companies in their own right.Yet, with each major event the market finds itself doing some soul searching. Doubts about either valuation or value creation hound every conversation, and despite the attention lavished upon social media by hundreds of millions of consumers and businesses alike there remains a debate: are we engaged in mass delusion or mass enlightenment?
Personally, I have never felt more certain that the naysayers are 100% wrong. Here is why.
We are in the middle of one of the most dramatic shifts in the history of the communications landscape. Cheap processing power, ubiquitous network access, mobile computing, and the democratization of the tools of self-expression have given almost everyone the ability to share their thoughts and ideas for free, worldwide. Through the trust and respect of your friends or followers, network effects ensure that every idea has the potential to reach and influence an unimaginably large audience.
Increasingly, the home of this activity is a collection of centralized platforms that enable consumer interaction at greater volumes and with less friction than was possible even 36 months ago. To no ones surprise, once it became apparent that Facebook, Twitter and other social networks were going to be viable consumer engagement platforms, marketers began to salivate over the prospects of reaching these enormous audiences with targeted and relevant messaging.
There was, and is, a problem however. The history of modern marketing has, primarily, been the history of brand marketing. For 100 years marketers have sought to combine the best ideas, with the best copy, and artwork to create objects that are magnets for consumer engagement. Brands then seek out an optimal mix of mass audience attention via magazines, radio, television and outdoor, place their beautiful work product… and wait for people to show up in stores. In aggregate this kind of activity resulted in a $500,000,000,000 market for brand advertising in 2011.
What is shocking to anyone under the age of 30 is that the amount of money spent on traditional brand advertising has not really changed very much since the advent of the Internet. Despite all the upheaval of the last three decades, just 10% of the world’s total marketing spend is placed online. This is not because brand marketers are stupid, old, or lazy. It is because over the last 20 years the Internet has failed brand marketers at every turn. To put it simply, the Internet has proven to be the perfect direct response marketing medium, but a wasteland useless to any marketer that cannot sell their product directly online. If Pampers, Coca Cola, and Nissan could have spent more money in digital they would do so. They just never could. Until now.
For the first time since the Internet became available hundreds of millions of consumers are consistently congregating in a single place. At the same time, consumer behaviours are rapidly shifting toward an ever more permissive model of sharing and privacy. Individuals want to share their lives online. They want to interact with companies they approve of. They want to tell their friends about the latest and greatest piece of content they have found. The opportunity to unlock the $500 billion brand engagement opportunity online has finally arrived and it has come in the form of social media. Facebook knows this and so does Google. Brands that effectively unlock this opportunity will have an unparalleled competitive advantage: they will be the first brand marketers to succeed via the Internet. It will happen.
Social marketing, and more specifically authentic engagement at scale, is proving to be the key to unlocking and achieving the brand outcomes marketers are desperate to find in digital. As a result, meaningful budgets are being allocated to social marketing and engagement. Even GM, who famously pulled all their Facebook advertising on the eve of the IPO, continued to spend three times its ad budget on developing earned and owned engagement with consumers via Facebook.
So what’s wrong?
The single biggest issue is measurement. Without sound measurement marketers lack the ability to judge the effectiveness of their work and speak the language of CEOs, CFOs and CMOs around the world. Unfortunately, sound measurement has been hard to obtain in social at any price. Rather than correlating social engagement to well-defined brand goals, many marketers have attempted to justify spending in social by reporting on followers and likes. Others have employed weak proxies like ad equivalency spend or simply transposed the maths from search and banner campaigns in an attempt to attribute conversion.
These approaches diminish – or entirely miss – the true impact that social engagement at scale has on brand-based business outcomes. Trying to bolt on television or performance measurement models to social just won’t work.
Fortunately, after nearly half a decade and thousands of articles calling for a return on investment in social marketing, we’ve finally reached the point where we can stop uselessly calling for an “ROI of social media” and get on with the business of measuring it.
How? Welcome to the era of performance brand marketing where measurement of social engagement using big data will transform the way brand marketers view the internet.
After collecting and analysing the real time social engagement of over 30,000 brands, hundreds of millions of social accounts, and over 15 billion social signals a month through our Social Business Index at Dachis Group, I’ve seen it. I’ve seen client’s eyes pop and jaws drop when we show them the detailed information of their customer, employee, and partner/vendor advocates worldwide. It. Is. Exciting.
Big data analytics finally allows marketers to identify, measure, and manage what is positively impacting their brand. Social media activity harvested from the entire open social web with technologies like Hadoop, Cassandra, Mahout and Pig combined with advanced analytic techniques like natural language processing, semantic analysis, machine learning, and cluster analysis can reveal the true consequences of marketing actions online.
These developments enable a whole new world of brand measurement for digital marketers. Unlike most approaches to web analytics that can only attribute directly measurable consumer action, big data analysis of social performance offers campaign data that correlates with impact on brand. For example, in Super Bowl XLVI we used big data to analyse the actual engagement of all the Super Bowl ads during the game. The traditional measure provided by USA Today AdMeter suggested that Coca-Cola had done rather poorly, yet when we examined the actual levels of consumer response and engagement Coca-Cola’s was top of the charts.
The insights that these new measurement techniques creates must then in turn inform campaign execution that helps brand engage authentically at scale. The challenge is daunting. A typical brand’s extended social ecosystem of company, employee, partner and advocate accounts ranges into the hundreds of millions of potential unique contacts. The sheer number of people, accounts, and permutations in the data make the opportunity to engage meaningfully with that audience almost unfathomably large.
To reach the promise of authentic engagement at scale, many forward leaning brands are beginning to coordinate these voices to amplify and focus the brand’s identity. IBM is reported to have 30,000 employees authorised to tweet. New York Life supports and helps coordinate independent insurance agents across the country. Companies like Red Bull and Nestle drive world-class advocacy programs. And Nokia runs a best in class influencer management program to support and educate experts in the mobile space. The list goes on and on.
This fundamental shift in marketing can only happen with the use of big data to foster engagement at scale. The world of brand marketing has shifted from brands communicating at people through mass communications, to a world where brands are created, built and amplified to communicate with people through a mass of communicators.
Ultimately, big data will enable brand marketers to genuinely understand, measure the impact of, and effectively targeted investments against their efforts to engage in social; and thus allocate meaningful brand marketing dollars to social engagement initiatives amplified by paid media support. I believe that this impact will more than justify a huge valuation of not only Facebook, but whichever other social platforms are eventually able to offer brands not yet another form of advertising, but the ability to truly engage at scale.
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