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Does
Investing
in Social
Media Create
Business Value?
A Study on the Sales Impact of Integrated
Social Media Marketing



                              Irfan Kamal           Dr. Walter Carl
                               Senior Vice                Founder,
                                 President   Chief Research Officer
                          Ogilvy & Mather             ChatThreads
2                                  DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                   OCTOBER 2011




    Table of Contents
    Executive summary: 5 things you should know                                            3

    Introduction                                                                           4

    Research                                                                               5

    What we found: Brand exposure—TV dominates                                             6

    What we found:Social media and sales—integration matters                               7

    What we found: Social media and brand perception—social media works rapidly            8

    Practical implications: 7 ways to use the findings                                      10

    Methodology details                                                                    11

    Acknowledgments                                                                        12

    About Social@Ogilvy                                                                    13
3                                     DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                          OCTOBER 2011




Executive summary:
5 things you should know

I
  s exposure to social content—on online           2 Integration matters. Exposure to social
  social sites like Facebook and Twitter—            content was most consistently effective
  effective in rapidly shaping brand                 when it was combined with exposure to
perceptions or driving sales? To help answer         other types of media channels.
this question, Ogilvy and ChatThreads
enlisted approximately 400 US restaurant           3 Social media is a top driver of impact. Out
consumers who tracked and reported 5,295             of the 20 channels analyzed, social media
touchpoints with five restaurant brands               was No. 1 or No. 2 in magnitude of impact on
across all major types of media. As part of          spend and consumption.
the Ogilvy-ChatThreads Integrated Social
Media: Sales Impact Study 2011, we also            4 Social media exposure is directly linked with
collected pre- and post-exposure data on their       changes in brand perception. Social media
spending, consumption and brand perceptions.         by itself is particularly effective at rapidly
                                                     impacting brand perception—exposure to
What did we find?                                     social media generated the largest impact
                                                     on brand perception over a short (one week)
1 Social media exposure is directly linked           period of time.
  with increases in sales. Integrated social
  media (social content + one or more other        5 Brand exposure in social media is low.
  channels) exposure is linked with significant       Weekly social media exposure to brand
  increases in spend and consumption—for             mentions was relatively low (24% of panel)
  example, social media + PR exposure was            vs. television branded exposure (69% of
  associated with a 17% spend increase               panel), even in this selected high social
  compared to the prior week without these.          media consumption group of consumers.
4                                                                     DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                                                             OCTOBER 2011




Introduction


A
      lthough two-thirds of the online                                                  To answer that question, it’s useful to
      population is active in social media,1                                            understand the impact of media mix—not
      there’s still uncertainty among brands                                            theoretically, but in practice. Many brands are
about the real return on investment from                                                talking about “owned, earned and paid” media
social media engagement. That’s to be                                                   models, believing the combination must be
expected, given the rapid growth of the                                                 stronger, but there’s little clear evidence of
medium. Still, with an estimated 70% of                                                 that to date.
brands on target to increase their social
media budgets by more than 10% this year,2                                              Some key questions faced by brands include:
there’s increasing pressure to understand just
what the value of all these so-called fans and                                              How does exposure to integrated social
followers really is.                                                                        content impact key metrics such as sales
                                                                                            and brand perception?
Is there the potential for brands to drive
improved revenue and/or preference by                                                       If integration matters, what are some of the
engaging in these channels?                                                                 channels to consider aligning?

                                                                                            Are there situations where social content
                                                                                            exposure works by itself?




1   Nielsen: “By the end of 2008, social networking had overtaken email in terms of worldwide reach. According to the study, 66.8% of Internet users across the globe
    accessed ‘member communities’ last year, compared to 65.1% for email.” Reported by Mashable, http://www.mashable.com/2009/03/09/social-networking-more-
    popular-than-email.

2   Seventy percent plan to increase their social media budget by more than 10% this year, according to a poll from Effie Worldwide, Inc. and Mashable. http://www.
    mashable.com/2011/04/19/marketers-social-media-spend. Also, according to a November 2010 survey of business executives around the globe by StrongMail, nearly
    two-thirds of companies will increase spending on email marketing, and 57% will put more dollars toward social media marketing. Search took a distant third place, with
    41% of respondents indicating they would spend more. Reported at: http://www.emarketer.com/Article.aspx?R=1008135.
5                                                                     DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                                                             OCTOBER 2011




Research
                                                                                            The study, which ran in two staggered time periods
                                                                                            from January 20, 2011, to May 6, 2011,
                                                                                            captured a total of 5,295 interactions with five
                                                                                            different restaurants.


Research to date has been conflicting. We’ve                                             actually noticed at any point during the
seen survey data from Edison Research                                                   tracking period—moving beyond direct clicks
showing the link between social networks                                                or opinions. We chose the Quick Service
and sales—24% of social network users cited                                             Restaurant (QSR) category for two key
Facebook as an influence on their buying                                                 reasons:
decisions.3 However, we’ve also seen evidence
from Forrester Research/GSI Commerce                                                    1     The higher frequency of purchases allowed
suggesting that less than 1% of website                                                       us to capture changes in a relatively short
sales are driven by direct clicks from social                                                 time period.
networks.4 Which is it? Is social media really
moving the needle on important business                                                 2     The existence of QSR multichannel media
measures or not?                                                                              programs allowed us to look at the
                                                                                              interactions between more than 20 brand
To help move along our understanding of                                                       touchpoints, including social media, PR,
social media impact, Ogilvy, along with                                                       TV, print, radio and out of home (OOH).
BrandEncounter™ research platform provider
ChatThreads, decided to design a study to                                               We provided 404 US restaurant consumers
specifically address these questions. Our                                                with ChatThreads’ BrandEncounter™
study was designed to look at the impact on                                             touchpoint tracking tool to capture all of their
sales (and perceptions) of what consumers                                               interactions.

TOUCHPOINT EXAMPLES                                                                                                           It’s important
                                                                                                                              to note that
                                                                                                                              we specifically
                                                                                                                              looked at changes
                                                                                                                              in purchase,
                                                                                                                              consumption and
                                                                                                                              attitudes. It’s not
                                                                                                                              hard to imagine
                                                                                                                              that fans of a
                                                                                                                              brand spend more
                                                                                                                              than non-fans,
                                                                                                                              so we were only
                                                                                                                              interested in lifts
                                                                                                                              over and above that
                                                                                                                              baseline.


3   “The Social Habit II: The Edison Research/Arbitron Internet and Multimedia Study 2011,” Edison Research/Arbitron, 2011.

4   “The Purchase Path of Online Buyers,” Forrester Research/GSI Commerce, March 16, 2011.
6                                     DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                          OCTOBER 2011




What we found:
Brand exposure—
TV dominates

S
      ocial media touchpoints in the QSR           of consumers noticed a billboard ad for
      category are part of a larger paid,          one of the five brands (7% share of the paid
      owned and earned media landscape.            media touchpoints). Twenty-four percent
TV advertisements dominate the paid media          of consumers encountered a social media
landscape. Sixty-nine percent of consumers         touchpoint—defined as status updates,
noticed a TV ad for one of the five brands          company brand pages, updates and feeds
during a seven-day period, with TV ads             on Facebook and Twitter, online videos on
representing 24% share of all touchpoints.         YouTube and other venues, blogs, online
The second most frequently noticed paid            ratings and reviews—during a seven-
media touchpoint was OOH, specifically              day period, representing 5% share of all
billboard advertisements. Thirty-six percent       touchpoints.


        RELATIVE EXPOSURE TO DIFFERENT TOUCHPOINTS
7                                      DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                           OCTOBER 2011




What we found:
Social media and sales—
integration matters

W
         e looked at the change in purchase            People who were exposed to social media
         and consumption of food before and            (for KFC) were seven times more likely to
         after the brand interaction reporting         spend more than they did the previous week
period. The following are key findings from our
analysis of the data:                                  Social media + OOH exposure (across the
                                                       entire category) was linked to a 1.5× higher
Social media, particularly when combined with          likelihood of increase in how much people
OOH, PR or TV exposure, is associated with             spent or bought
significant sales (purchase and consumption)
changes. The following are the major social         One of our most interesting observations was
media impacts on sales that were identified          that exposure to multiple channels was most
during this study:                                  often associated with sales impact. In four
                                                    out of five cases with significant associations,
  People who were exposed to social media           consumers were exposed to multiple
  + PR (across the entire category) increased       channels. The specific exposure combinations
  their spending by 17% over the previous           that were associated with sales impact were
  week                                              social media plus OOH (twice), social media
                                                    plus PR, and social media plus TV.
  People who were exposed to social media +
  TV (for Wendy’s) were twice as likely to buy
  more than they did the previous week


           SOCIAL MEDIA IMPACT ON SALES
8                                        DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                             OCTOBER 2011




What we found: Social media
and brand perception—social
media works rapidly

I
  n contrast to the interaction effects with          This is probably due to the short time period
  traditional media driving purchase and              (seven days) for reporting—but it confirms
  consumption behavior, brand perception and          that social media can have a rapid impact on
brand favorability over the short time period         attitudes. Other media, including television,
studied were largely driven by social media           are expected to have a longer-term impact.
touchpoints on their own.
                                                      The following are the major social media
When it comes to shifting brand favorability          impacts on brand perception and favorability
rapidly, social media appears strongest. Of           that were identified during this study:
the significant results around shifting brand
perception, only one in four involved traditional        People encountering KFC social media
media in addition to social media. Social                touchpoints demonstrated a 250% increase
media was largely responsible for shifting               in their perception of KFC as a “great dining
perceptions of brand favorability, “best value”          experience”
and “great dining experience.”




        SOCIAL MEDIA IMPACT ON BRAND PERCEPTION
9                                         DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                           OCTOBER 2011




Brand favorability for people exposed to            The Taco Bell case was driven by the social
McDonald’s social touchpoints increased             sharing of controversial news stories about
five times over the change in people not             the ingredients used in Taco Bell’s meat
exposed                                             products in Q1 2011.

Also, among those exposed to McDonald’s             There was also evidence that social media
social touchpoints, there was a 45%                 and OOH (specifically, billboard ads) led to
increase in their perception that McDonald’s        a 2.6× higher shift in the perception that
provided the “best value” for the money             Subway “tastes great,” but due to only 4.5%
                                                    of consumers encountering this combination
Conversely, consumers who were exposed              of Subway touchpoints we treat this result as
to social media and public relations                directional.
touchpoints for Taco Bell had a 220%
LOWER shift in their perceptions of Taco
Bell as providing a “great dining experience”
10                                     DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                           OCTOBER 2011




Practical implications:
7 ways to use the findings
1   Increase customer and prospect exposure         5    Use social experiences to drive changes in
    to engaging social content. We know social           brand perception. The data demonstrate
    content exposure has business impact, but            that social content can change your brand’s
    actual exposure is remarkably low, even in           image. Incorporate social content into
    a social media savvy audience. Increasing            branding programs and track perception
    exposure to social content should impact             metrics.
    sales and brand perception.
                                                    6    Plan social content in a way that has
2   Integrate your media for maximum impact.             the best chance to bring out the brand
    Consider online-, search- and place-                 qualities you want emphasized. Create
    based ads that tie into the themes that are          your conversation starters and other
    resonating in social media.                          engagement tactics to help bring out the
                                                         types of messages and discussion that will
3   When evaluating sales impact of social               reinforce your brand’s core attributes and
    content, look beyond just direct clicks.             promises.
    Think of ways to track how exposure has
    an impact on both online and offline sales:      7    Keep social content fresh, and allow for
    for example, with surveys, loyalty program           authentic self-expression. There was
    tracking or coupons.                                 lively discussion on many of the brand
                                                         social media presences, both negative and
4   Monitor social media closely. Identify and           positive.
    respond to negative WOM or press. The
    study shows these negative discussions do
    impact brand perception.
11                                       DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                            OCTOBER 2011




Methodology details

F
   or this study, Ogilvy and ChatThreads             past month (for example, visiting Facebook,
   selected five large QSR brands with                reading a blog post or viewing a YouTube
   active social media presences: KFC,               video). Seventy-five percent were a brand fan
McDonald’s, Subway, Taco Bell and Wendy’s.           or follower of at least one QSR brand, while
                                                     25% comprised a control group matched
ChatThreads’ BrandEncounter™ platform                for favorability, QSR visits, and social media
was used to collect and analyze the data.            activity but were not fans/followers of any QSR
BrandEncounter™ enlists consumers armed              brands.
with their mobile phones to report brand
encounters and reactions immediately, at the         Participant demographics were as follows:
time of experience. Over a period of seven
                                                        Female: 67%
days, participants report the brand, type of
touchpoint (e.g., saw billboard, saw TV ad, saw         Median age: 34
print ad, heard a radio ad, read a news article,
                                                        Had annual household incomes less than
spoke to a friend, noticed Facebook status
                                                        $50,000: 47%
update, visited brand page, read a Tweet, etc.),
and consumer sentiment about the touchpoint.            Geographic distribution: South: 38%;
Consumers submit any type of encounter                  Midwest: 24%; West: 20%; Northeast: 18%
and are not limited to a prescribed list. All
submissions are automatically time- and date-           Had mobile phone with a data plan that
stamped. Participants also have the option of           allowed them to connect to the Internet and
adding pictures and notes to the data. Pre- and         send emails: 79%
post-surveys are conducted for consumers to             Had unlimited SMS/text messaging plan:
measure changes in behavior and intentions.             80%

Four hundred and four US consumers                   To minimize the impact of QSR brand fans
participated on a rolling seven-day basis,           or followers who already spend more
submitting 5,295 touchpoints between 1/20/11         than others, we looked specifically at the
and 5/6/11 (two staggered time periods). This        relationship between touchpoint exposure
study was designed to look exclusively at the        and pre- and post-changes in purchase
immediate impact of exposures: participants          (consumption, spend). Thus, we only report
tracked their exposure during a seven-day            results for lifts over and above a consumer’s
period, and provided pre- and post-data on           baseline level of purchase and consumption
their consumption and spend. Participants            activity. We looked at a short time frame (one
were screened for three criteria: 1) having a        week) to focus in on the immediate impact of
favorable view of at least one of the five QSR        the touchpoints, and only report statistically
brands; 2) making recent QSR visits (at least        significant results (95% confidence interval, p
a few times per month); and 3) being active          < 0.05).
on at least two social media venues in the
12                                                                     DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE?
                                                                            OCTOBER 2011




Acknowledgments



About Ogilvy & Mather                                                                  About ChatThreads
Ogilvy & Mather is one of the largest                                                  ChatThreads provides real-time media mix
marketing communications companies in                                                  impact analysis, tracking how, when and
the world. Through its specialty units, the                                            where consumers come into contact with
company provides a comprehensive range                                                 brands and analyzing how these encounters
of marketing services, including advertising;                                          contribute to purchase behavior. ChatThreads
public relations and public affairs; branding                                          believes that the most important impressions
and identity; shopper and retail marketing;                                            are real impressions—what the consumer
healthcare communications; and direct,                                                 actually notices. These touchpoints are
digital, promotion and relationship marketing.                                         tracked using ChatThreads’ BrandEncounter™
Ogilvy & Mather services Fortune Global                                                platform. ChatThreads clients include leading
500 companies as well as local businesses                                              brands and their agency partners such as
through its network of more than 450                                                   Coca-Cola, Frito-Lay, Hamilton Beach, Illy,
offices in 120 countries. It is a WPP company                                           Kraft, Microsoft, BzzAgent and House Party.
(NASDAQ: WPPGY). Ogilvy & Mather provides                                              For more information, visit http://chatthreads.
an integrated approach to social engagement                                            com.
for clients, comprising social strategy,
community, commerce, content and analytics.
For more information, visit http://www.ogilvy.
com.




© Ogilvy & Mather, 2011. All rights reserved. ChatThreads and BrandEncounter are trademarks of ChatThreads Corporation. Ogilvy is a trademark of Ogilvy & Mather. All
other trademarks, service marks, logos, and product or service names are the property of their respective owners.
About Social@Ogilvy

S
      ocial@Ogilvy is the largest social media marketing communications
      network in the world. Named 2011 Global Digital/Social
      Consultancy of the Year by The Holmes Report, the practice
leverages social media expertise across all Ogilvy & Mather disciplines,
offering an extensive list of services within the foundational business
solutions – Listening and Analytics; Social Business Solutions; Social
Media Marketing and Communications; Social Shopping; Social CRM;
Social Care; and Conversation Impact.

For more information, visit social.ogilvy.com and connect with
us at www.facebook.com/socialogilvy, www.twitter.com/
socialogilvy, www.slideshare.com/socialogilvy.

Contact: John.Bell@ogilvy.com

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Ogilvy ChatThreads Social Media Sales Impact Study 2011

  • 1. Does Investing in Social Media Create Business Value? A Study on the Sales Impact of Integrated Social Media Marketing Irfan Kamal Dr. Walter Carl Senior Vice Founder, President Chief Research Officer Ogilvy & Mather ChatThreads
  • 2. 2 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Table of Contents Executive summary: 5 things you should know 3 Introduction 4 Research 5 What we found: Brand exposure—TV dominates 6 What we found:Social media and sales—integration matters 7 What we found: Social media and brand perception—social media works rapidly 8 Practical implications: 7 ways to use the findings 10 Methodology details 11 Acknowledgments 12 About Social@Ogilvy 13
  • 3. 3 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Executive summary: 5 things you should know I s exposure to social content—on online 2 Integration matters. Exposure to social social sites like Facebook and Twitter— content was most consistently effective effective in rapidly shaping brand when it was combined with exposure to perceptions or driving sales? To help answer other types of media channels. this question, Ogilvy and ChatThreads enlisted approximately 400 US restaurant 3 Social media is a top driver of impact. Out consumers who tracked and reported 5,295 of the 20 channels analyzed, social media touchpoints with five restaurant brands was No. 1 or No. 2 in magnitude of impact on across all major types of media. As part of spend and consumption. the Ogilvy-ChatThreads Integrated Social Media: Sales Impact Study 2011, we also 4 Social media exposure is directly linked with collected pre- and post-exposure data on their changes in brand perception. Social media spending, consumption and brand perceptions. by itself is particularly effective at rapidly impacting brand perception—exposure to What did we find? social media generated the largest impact on brand perception over a short (one week) 1 Social media exposure is directly linked period of time. with increases in sales. Integrated social media (social content + one or more other 5 Brand exposure in social media is low. channels) exposure is linked with significant Weekly social media exposure to brand increases in spend and consumption—for mentions was relatively low (24% of panel) example, social media + PR exposure was vs. television branded exposure (69% of associated with a 17% spend increase panel), even in this selected high social compared to the prior week without these. media consumption group of consumers.
  • 4. 4 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Introduction A lthough two-thirds of the online To answer that question, it’s useful to population is active in social media,1 understand the impact of media mix—not there’s still uncertainty among brands theoretically, but in practice. Many brands are about the real return on investment from talking about “owned, earned and paid” media social media engagement. That’s to be models, believing the combination must be expected, given the rapid growth of the stronger, but there’s little clear evidence of medium. Still, with an estimated 70% of that to date. brands on target to increase their social media budgets by more than 10% this year,2 Some key questions faced by brands include: there’s increasing pressure to understand just what the value of all these so-called fans and How does exposure to integrated social followers really is. content impact key metrics such as sales and brand perception? Is there the potential for brands to drive improved revenue and/or preference by If integration matters, what are some of the engaging in these channels? channels to consider aligning? Are there situations where social content exposure works by itself? 1 Nielsen: “By the end of 2008, social networking had overtaken email in terms of worldwide reach. According to the study, 66.8% of Internet users across the globe accessed ‘member communities’ last year, compared to 65.1% for email.” Reported by Mashable, http://www.mashable.com/2009/03/09/social-networking-more- popular-than-email. 2 Seventy percent plan to increase their social media budget by more than 10% this year, according to a poll from Effie Worldwide, Inc. and Mashable. http://www. mashable.com/2011/04/19/marketers-social-media-spend. Also, according to a November 2010 survey of business executives around the globe by StrongMail, nearly two-thirds of companies will increase spending on email marketing, and 57% will put more dollars toward social media marketing. Search took a distant third place, with 41% of respondents indicating they would spend more. Reported at: http://www.emarketer.com/Article.aspx?R=1008135.
  • 5. 5 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Research The study, which ran in two staggered time periods from January 20, 2011, to May 6, 2011, captured a total of 5,295 interactions with five different restaurants. Research to date has been conflicting. We’ve actually noticed at any point during the seen survey data from Edison Research tracking period—moving beyond direct clicks showing the link between social networks or opinions. We chose the Quick Service and sales—24% of social network users cited Restaurant (QSR) category for two key Facebook as an influence on their buying reasons: decisions.3 However, we’ve also seen evidence from Forrester Research/GSI Commerce 1 The higher frequency of purchases allowed suggesting that less than 1% of website us to capture changes in a relatively short sales are driven by direct clicks from social time period. networks.4 Which is it? Is social media really moving the needle on important business 2 The existence of QSR multichannel media measures or not? programs allowed us to look at the interactions between more than 20 brand To help move along our understanding of touchpoints, including social media, PR, social media impact, Ogilvy, along with TV, print, radio and out of home (OOH). BrandEncounter™ research platform provider ChatThreads, decided to design a study to We provided 404 US restaurant consumers specifically address these questions. Our with ChatThreads’ BrandEncounter™ study was designed to look at the impact on touchpoint tracking tool to capture all of their sales (and perceptions) of what consumers interactions. TOUCHPOINT EXAMPLES It’s important to note that we specifically looked at changes in purchase, consumption and attitudes. It’s not hard to imagine that fans of a brand spend more than non-fans, so we were only interested in lifts over and above that baseline. 3 “The Social Habit II: The Edison Research/Arbitron Internet and Multimedia Study 2011,” Edison Research/Arbitron, 2011. 4 “The Purchase Path of Online Buyers,” Forrester Research/GSI Commerce, March 16, 2011.
  • 6. 6 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 What we found: Brand exposure— TV dominates S ocial media touchpoints in the QSR of consumers noticed a billboard ad for category are part of a larger paid, one of the five brands (7% share of the paid owned and earned media landscape. media touchpoints). Twenty-four percent TV advertisements dominate the paid media of consumers encountered a social media landscape. Sixty-nine percent of consumers touchpoint—defined as status updates, noticed a TV ad for one of the five brands company brand pages, updates and feeds during a seven-day period, with TV ads on Facebook and Twitter, online videos on representing 24% share of all touchpoints. YouTube and other venues, blogs, online The second most frequently noticed paid ratings and reviews—during a seven- media touchpoint was OOH, specifically day period, representing 5% share of all billboard advertisements. Thirty-six percent touchpoints. RELATIVE EXPOSURE TO DIFFERENT TOUCHPOINTS
  • 7. 7 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 What we found: Social media and sales— integration matters W e looked at the change in purchase People who were exposed to social media and consumption of food before and (for KFC) were seven times more likely to after the brand interaction reporting spend more than they did the previous week period. The following are key findings from our analysis of the data: Social media + OOH exposure (across the entire category) was linked to a 1.5× higher Social media, particularly when combined with likelihood of increase in how much people OOH, PR or TV exposure, is associated with spent or bought significant sales (purchase and consumption) changes. The following are the major social One of our most interesting observations was media impacts on sales that were identified that exposure to multiple channels was most during this study: often associated with sales impact. In four out of five cases with significant associations, People who were exposed to social media consumers were exposed to multiple + PR (across the entire category) increased channels. The specific exposure combinations their spending by 17% over the previous that were associated with sales impact were week social media plus OOH (twice), social media plus PR, and social media plus TV. People who were exposed to social media + TV (for Wendy’s) were twice as likely to buy more than they did the previous week SOCIAL MEDIA IMPACT ON SALES
  • 8. 8 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 What we found: Social media and brand perception—social media works rapidly I n contrast to the interaction effects with This is probably due to the short time period traditional media driving purchase and (seven days) for reporting—but it confirms consumption behavior, brand perception and that social media can have a rapid impact on brand favorability over the short time period attitudes. Other media, including television, studied were largely driven by social media are expected to have a longer-term impact. touchpoints on their own. The following are the major social media When it comes to shifting brand favorability impacts on brand perception and favorability rapidly, social media appears strongest. Of that were identified during this study: the significant results around shifting brand perception, only one in four involved traditional People encountering KFC social media media in addition to social media. Social touchpoints demonstrated a 250% increase media was largely responsible for shifting in their perception of KFC as a “great dining perceptions of brand favorability, “best value” experience” and “great dining experience.” SOCIAL MEDIA IMPACT ON BRAND PERCEPTION
  • 9. 9 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Brand favorability for people exposed to The Taco Bell case was driven by the social McDonald’s social touchpoints increased sharing of controversial news stories about five times over the change in people not the ingredients used in Taco Bell’s meat exposed products in Q1 2011. Also, among those exposed to McDonald’s There was also evidence that social media social touchpoints, there was a 45% and OOH (specifically, billboard ads) led to increase in their perception that McDonald’s a 2.6× higher shift in the perception that provided the “best value” for the money Subway “tastes great,” but due to only 4.5% of consumers encountering this combination Conversely, consumers who were exposed of Subway touchpoints we treat this result as to social media and public relations directional. touchpoints for Taco Bell had a 220% LOWER shift in their perceptions of Taco Bell as providing a “great dining experience”
  • 10. 10 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Practical implications: 7 ways to use the findings 1 Increase customer and prospect exposure 5 Use social experiences to drive changes in to engaging social content. We know social brand perception. The data demonstrate content exposure has business impact, but that social content can change your brand’s actual exposure is remarkably low, even in image. Incorporate social content into a social media savvy audience. Increasing branding programs and track perception exposure to social content should impact metrics. sales and brand perception. 6 Plan social content in a way that has 2 Integrate your media for maximum impact. the best chance to bring out the brand Consider online-, search- and place- qualities you want emphasized. Create based ads that tie into the themes that are your conversation starters and other resonating in social media. engagement tactics to help bring out the types of messages and discussion that will 3 When evaluating sales impact of social reinforce your brand’s core attributes and content, look beyond just direct clicks. promises. Think of ways to track how exposure has an impact on both online and offline sales: 7 Keep social content fresh, and allow for for example, with surveys, loyalty program authentic self-expression. There was tracking or coupons. lively discussion on many of the brand social media presences, both negative and 4 Monitor social media closely. Identify and positive. respond to negative WOM or press. The study shows these negative discussions do impact brand perception.
  • 11. 11 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Methodology details F or this study, Ogilvy and ChatThreads past month (for example, visiting Facebook, selected five large QSR brands with reading a blog post or viewing a YouTube active social media presences: KFC, video). Seventy-five percent were a brand fan McDonald’s, Subway, Taco Bell and Wendy’s. or follower of at least one QSR brand, while 25% comprised a control group matched ChatThreads’ BrandEncounter™ platform for favorability, QSR visits, and social media was used to collect and analyze the data. activity but were not fans/followers of any QSR BrandEncounter™ enlists consumers armed brands. with their mobile phones to report brand encounters and reactions immediately, at the Participant demographics were as follows: time of experience. Over a period of seven Female: 67% days, participants report the brand, type of touchpoint (e.g., saw billboard, saw TV ad, saw Median age: 34 print ad, heard a radio ad, read a news article, Had annual household incomes less than spoke to a friend, noticed Facebook status $50,000: 47% update, visited brand page, read a Tweet, etc.), and consumer sentiment about the touchpoint. Geographic distribution: South: 38%; Consumers submit any type of encounter Midwest: 24%; West: 20%; Northeast: 18% and are not limited to a prescribed list. All submissions are automatically time- and date- Had mobile phone with a data plan that stamped. Participants also have the option of allowed them to connect to the Internet and adding pictures and notes to the data. Pre- and send emails: 79% post-surveys are conducted for consumers to Had unlimited SMS/text messaging plan: measure changes in behavior and intentions. 80% Four hundred and four US consumers To minimize the impact of QSR brand fans participated on a rolling seven-day basis, or followers who already spend more submitting 5,295 touchpoints between 1/20/11 than others, we looked specifically at the and 5/6/11 (two staggered time periods). This relationship between touchpoint exposure study was designed to look exclusively at the and pre- and post-changes in purchase immediate impact of exposures: participants (consumption, spend). Thus, we only report tracked their exposure during a seven-day results for lifts over and above a consumer’s period, and provided pre- and post-data on baseline level of purchase and consumption their consumption and spend. Participants activity. We looked at a short time frame (one were screened for three criteria: 1) having a week) to focus in on the immediate impact of favorable view of at least one of the five QSR the touchpoints, and only report statistically brands; 2) making recent QSR visits (at least significant results (95% confidence interval, p a few times per month); and 3) being active < 0.05). on at least two social media venues in the
  • 12. 12 DOES INVESTING IN SOCIAL MEDIA CREATE BUSINESS VALUE? OCTOBER 2011 Acknowledgments About Ogilvy & Mather About ChatThreads Ogilvy & Mather is one of the largest ChatThreads provides real-time media mix marketing communications companies in impact analysis, tracking how, when and the world. Through its specialty units, the where consumers come into contact with company provides a comprehensive range brands and analyzing how these encounters of marketing services, including advertising; contribute to purchase behavior. ChatThreads public relations and public affairs; branding believes that the most important impressions and identity; shopper and retail marketing; are real impressions—what the consumer healthcare communications; and direct, actually notices. These touchpoints are digital, promotion and relationship marketing. tracked using ChatThreads’ BrandEncounter™ Ogilvy & Mather services Fortune Global platform. ChatThreads clients include leading 500 companies as well as local businesses brands and their agency partners such as through its network of more than 450 Coca-Cola, Frito-Lay, Hamilton Beach, Illy, offices in 120 countries. It is a WPP company Kraft, Microsoft, BzzAgent and House Party. (NASDAQ: WPPGY). Ogilvy & Mather provides For more information, visit http://chatthreads. an integrated approach to social engagement com. for clients, comprising social strategy, community, commerce, content and analytics. For more information, visit http://www.ogilvy. com. © Ogilvy & Mather, 2011. All rights reserved. ChatThreads and BrandEncounter are trademarks of ChatThreads Corporation. Ogilvy is a trademark of Ogilvy & Mather. All other trademarks, service marks, logos, and product or service names are the property of their respective owners.
  • 13. About Social@Ogilvy S ocial@Ogilvy is the largest social media marketing communications network in the world. Named 2011 Global Digital/Social Consultancy of the Year by The Holmes Report, the practice leverages social media expertise across all Ogilvy & Mather disciplines, offering an extensive list of services within the foundational business solutions – Listening and Analytics; Social Business Solutions; Social Media Marketing and Communications; Social Shopping; Social CRM; Social Care; and Conversation Impact. For more information, visit social.ogilvy.com and connect with us at www.facebook.com/socialogilvy, www.twitter.com/ socialogilvy, www.slideshare.com/socialogilvy. Contact: John.Bell@ogilvy.com