A senior marketing executive at Coca-Cola sent the digital marketing world reeling when he told a conference audience that he sees no link between social media marketing and sales.
Well, no, actually, he didn’t. What Eric Schmidt, senior manager of marketing strategy and insights at Coca-Cola, actually said was this:
“But when Coca-Cola put buzz sentiment data into the same analytical framework it uses to evaluate other digital media” Mr. Schmidt said, “We didn’t see any statistically significant relationship between our buzz and our short-term sales.”
That’s an important distinction and one that the company scrambled to clarify. But by then, the damage had already been done. The rumour that Coca-Cola, one of the world’s biggest companies and largest marketing spenders, doesn’t believe in social media as a marketing channel, was spreading like wildfire.
As in most cases, truth is more nuanced than headlines. Integrated social media marketing comprises a lot of different channels and tactics. They work in concert and, together, they absolutely produce a lift in sales. The combination of offline and online media (TV, print, digital and social) has proven extremely effective from an ROI standpoint.
The thing is, “buzz” — engagement, conversation volume, sentiment, or any of those so-called “soft” social media metrics — tend to have an indirect influence on sales. It’s an influence that can’t necessarily be observed overnight, the same way that issuing a coupon, sending out an eFlyer or running a search campaign can. But does that mean it’s useless?
There’s an important lesson here: Companies who measure channels in isolation risk putting all their budgetary eggs in one basket at the bottom of the sales funnel. Of course, picking the low-hanging fruit is always the most attractive from a return-on-investment perspective, but at some point, you have to plant the seeds and water the fruit, too. Stop doing that and your crop of fruit will all but disappear in a season or two.
Schmidt also accurately notes that the measurement tools available in the industry thus far for social media are imperfect. Sentiment is a particular culprit: Most algorithms that claim to measure social media sentiment, while improving, are still correct only part of the time. It’s extremely difficult for a machine to judge human emotion. And basing important business decisions on the fact that sentiment has climbed or dropped by a point or two, when there are millions of dollars at stake, is not something that most companies feel comfortable doing — and justifiably so.
But that doesn’t mean you can stop measuring. Companies who simply look at “return on engagement” or soft metrics like engagement, follower count or sentiment, without attempting to tie them to the sales cycle are doing themselves a massive disservice. All of these metrics can be tied to business objectives, if we understand how they impact one another.
So the Coca-Cola controversy isn’t really controversial at all. Schmidt simply stated what ought to be a self-evident truth: “buzz” doesn’t have a linear, one-to-one, immediate impact on sales. But social media is far, far more than that. It can encompass Facebook campaigns or YouTube videos designed to get people sharing and talking, true. But it can also encompass anything with any kind of interactivity. Social ad extensions in search, social interaction at the point of sale, ratings and reviews on sites like Yelp or Google+, Pinterest conversion funnels, Facebook local promotion campaigns… the list goes on and on. All of these things impact sales, and they can all be measured as part of a concerted, integrated digital marketing plan. Social media is not just one thing. It is not just “buzz”.
Interested in finding out more? Contact DAC today!