Earlier this month, I had the pleasure of speaking at the Advertising Research Foundation’s Audience Measurement 7.0 Conference. I co-presented with Elizabeth Morgan, senior vice president of Business Development at Visible Technologies, a leader in social media monitoring, analytics, and services for enterprises globally.
During our presentation, “Meshing Social Media Activity and Sales: A Real-World Pilot,” we outlined the effectiveness of social media and other digital marketing strategies employed by CPG companies and retailers to generate buzz and drive sales.
Marketers want to know how the resources they invest in social media programs convert to measurable benefits. SymphonyIRI and Visible Technologies executed a project based on data from a leading, worldwide snack food manufacturer to better assess how companies can quantify the buzz created through their social media programs.
There are five social metrics that convey the impact of social media on sales: volume, the number of aggregate mentions of the brand across all social media channels; frequency, the pace of references to the brand; influence, the potential impact of the individuals and groups driving conversation about the brand; reach, the penetration of your brand and engagement efforts into the target audiences; and sentiment, the tone of influencer reactions to your brand.
For a year, SymphonyIRI compared changes in a single product’s online buzz to changes in that product’s sales. SymphonyIRI found that changes in that product’s sales correlated positively with the social media surrounding that product.
SymphonyIRI analyzed the relationship between the five social metrics with point-of-sale data consisting of sales rate, average price, distribution (number of items) and in-store merchandising (price reductions, features and displays) from over 65,000 stores in over 290 categories, using a time-phased regression analysis.
During SymphonyIRI’s investigation, the company integrated a campaign with Zynga’s Farmville game that allowed players to harvest the snack food company’s branded crops, create new products and earn virtual goods. As a result, buzz increased the month after the campaign started, as did sales. According to the research, a spike in sales occurred during the third month, and then another occurred after the introduction of Farmville in the tenth month. The company estimated an average monthly social incremental of 12.4 percent, concluding that there is a clear relationship between social media and sales ROI.
SymphonyIRI and Visible Technologies will continue their research to better understand social media’s impact on sales. While our initial study points to social media activity leading to social buzz that impacts sales, there are several variables that influence the success of social media. In order to fully determine the relationship between social media and sales, SymphonyIRI will also research campaigns that did not involve heavy social media, and observe changes in sales. The company will also incorporate data from marketers’ ad campaigns, such as ad impressions and gross rating points, in order to more precisely to gauge the impact of social media.
Regardless of our initial findings, there are still barriers that we need to overcome going forward. We need to break down management’s skepticism, learn how to incorporate social media as connective tissue in the marketing mix and devote time and effort to building relationships with consumers through the various social media channels.