Posts Tagged ‘ROI’
Thursday, December 22nd, 2011
[Our open door writing policy is in full effect again today with Strategy Executive, Katy King, picking up the blogging reigns to talk about a recent piece of extra-curricular activity she indulged in around that most talked about of modern media events: X Factor - JW]
Back in early October, when the UK’s latest series of the talent/music competition ‘X Factor‘ was kicking off, I set myself the challenge of trying to use Twitter to correctly predict who would be eliminated each week. I knew that the ‘heads had completed a similar piece of work with their Haye vs Klitschko analysis a while back and I wanted to give it a shot myself.
To make things a little bit more interesting (and without endorsing gambling in any way, shape or form!) I decided place a £5 bet on each prediction. Naturally, I set up a blog to track my progress, and resigned myself to the possibility of losing up to £50 over the next three months. Ah well.
Each week I measured the amount of conversation each contestant generated on Twitter and then, on top of that, I analysed how positive or negative that conversation was. It was with this information that I would predict which contestant would gain the least votes, lose the sing off and ultimately be eliminated.
However, I didn’t have an exact formula.
For example, in Week Six of the competition, I had to make a decision whether to bet on Misha B; a good contestant who had generated 27,000 tweets (which were 52% positive) and Kitty Brucknell, an equally well-talented [if slightly unhinged] girl who had generated less than 13,000 tweets, but were slightly more positive (57% positive). In this case, I decided that in total there was less advocacy for Kitty, and therefore she was more likely to be eliminated. My judgement proved to be correct, but this certainly wasn’t the case every week.
My project got off to a good start. I correctly predicted mismatched boy band “Nu Vibe” would lose the first public vote after finding that 58% of Twitter conversation about them was negative. The week after, the fact that there was very little Twitter conversation about Sami Brookes suggested to me that there wouldn’t be many people voting for her either. My hunch proved to be right, and I won again.
However, even when I was getting it right, it became clear that Twitter conversation was not an entirely accurate representation of the public’s voting intentions.
In Week Two, even though resident bad boy [and soon to be disqualified] contestant, Frankie Cocozza, generated the most Twitter conversation (much of it positive), he still appeared in the bottom two of the public vote. In fact, even though Frankie generated the most tweets of any contestant for the first four weeks, he actually never reached higher than 6th place in any of the public votes.
Similarly, contestants such as Craig Colton, Sophie Habibis and ‘The Risk’ were all eliminated when they appeared to have a healthy amount of support on Twitter.
In the chart above, you can see that Frankie (red line) generated higher levels of conversation than the other contestants, before he was sent home for bad behaviour in mid-November. In contrast, the amount of tweets about Little Mix (the light blue line) grew steadily over the weeks, leading ultimately to their overall victory.
Oh, and in case you were wondering why tweets about Frankie Cocozza reappeared right at the end of the time line, it’s because he accused Wayne Rooney of being smelly. And Wayne Rooney replied.
Hilarious.
In total, I correctly predicted who would be eliminated 6 out of 9 times using Twitter as a guide. I ended the project £5 up overall as well as a healthy reality check about how seriously we should take Twitter conversation. What I learnt was something I should have already known, positive conversation (advocacy) does not always lead to action (in this case, voting).
See also: slacktivism / clicktivism
It’s been claimed that Twitter can predict box office hits and even the stock market. After undertaking this experiment, and having learnt from 1000heads’ previous analyses of Twitter conversation, it’s clear that analysing Twitter conversation is a useful and interesting exercise, but it’s by no means a fool proof way of predicting the future.
Merry Christmas everyone, I’m off to spend my winnings…
Thursday, September 16th, 2010
Last week I hosted an event with the social psychologist, digital marketer and editor of SocialCommerceToday.com Dr Paul Marsden for WOMMA UK. His presentation on social commerce, below, is well worth a look.
As Marsden puts it, social commerce involves either bringing the water cooler to the cash register, or the cash register to the water cooler: either way, locating peer to peer socialising, sharing and reviewing at the places where we actually buy. Groupon, Diesel and Levi’s are all companies that have shown how successful this can be.
He gave a rousing call to arms for word of mouth practitioners to take ownership of the social commerce space and apply their creativity to this relationship, and I completely agree. Looking at how WOM can drive and optimise every element of a business – retail, product development, marketing, HR, outdoor, billing and so on – is at the heart of our approach.
Social commerce is simply WOM applied to retail and point of sale.
It’s one great way of using WOM to optimise business, and one of the easiest to prove ROI. It’s not the only element. It works best when combined with a WOM approach to the other consumer touchpoints. But it is often overlooked in favour of focusing on how social affects marketing or customer service.
It recalls one of my favourite 1000heads visuals: WOM is about social interfaces, not social media.
Thursday, June 24th, 2010
It’s the big question in word of mouth: what is an advocate worth?
Well, according to research Syncapse and Hotspex have just released on eMarketer, on average $136.38. The study looked at the Facebook fans of the 20 biggest corporate brands on the site, and calculated the fans’ worth from a combination of how much they spent on the products, loyalty, recommendations and earned media.
In fact, for many food and beverage brands on Facebook, fans spent more than double on the brand than non-fans.
This reiterates the findings of a study earlier this year, which showed that consumers were more likely to buy from or recommend a brand after becoming a Facebook fan or follower.
It’s an interesting start to WOM ROI, although of course the real impact of advocacy goes far beyond Facebook, to cover not just the other social media platforms but real life conversations too.
Facebook fans are a notoriously passive group, and just clicking on a ‘become a fan’ button represents none of the participation and opinion-giving that true advocacy entails. Of course, there’s an exciting implication here. If these guys earn so much for a brand, how much more valuable must the fans be who actually bother to upload photos and videos, write detailed, passionate reviews on their pages and blogs and forums, and take that enthusiasm to the dinner table and the school gates?
Working out the ROI of an individual advocate beyond a single platform is a mighty complex task, but we’re getting there. For now, research like this indicates just how powerful that proactive, cross-platform advocacy is.
Tuesday, January 19th, 2010
We all love cheap now, right? The It-bags; the £35,000 cocktails; the massive mortgages; all those hallmarks of pre-recession mid-noughties extravagance are so… well, so 2006. Nowadays we brandish our Aldi own-label beans as if they’re a mark of social responsibility.
It’s nonsense, of course. We don’t value these mass-produced items, and we feel more nourished by the idea than the taste of our cut-price beans. We know that cheapness comes at a price: the sweatshop workers; the unsustainable farming methods; the two-for-one bulk. Cheapness always bites back. It’s temporary. It’s wasteful. So why is still so often cited it as a positive attribute of ‘social marketing?’
The social world rewards time and attention more than money and ads, so that’s what brands need to invest in. You don’t get passion, excitement, emotional fidelity and ongoing human loyalty by throwing a one-size-fits-all digital asset, or the odd chirpy tweet, into cyberspace. And no, those clever kids who created Facebook and Twitter haven’t done the expensive work on brands’ behalf and served them up a free marketing channel on a digital plate. They’ve given us new social spaces – accessible places where humans love, talk, create, trust, influence, and buy – but brands have to inspire those spaces with enthusiasm and loyalty.
Brands have crept into word of mouth marketing with predictable scepticism and caution, offering a tiny handout for an experimental advocacy programme here, or a piece of basic conversation monitoring there. It’s understandable – this can be a scary new world for companies constrained by annual budgets and rigid structures – but it’s also a waste. When they’re still happy to throw thousands at a microsite (does anyone want to gambol in a branded playground any more?) or a few hundred grand at a TV campaign (that research shows no-one’s paying attention to any more) – both of which have a pretty short shelf-life – it seems extraordinary that they’re reluctant to give a far more lasting marketing approach the equivalent financial respect.
What word of mouth, done right, really offers is not cheapness but good value. By doing less but better, in a highly strategic way, brands can achieve extraordinary results.
I’ve written more about this topic over on my monthly column for Admap, but I’d love to know what you think. Do you think this just self-interest talking or do you agree? If you work in the industry, are you starting to push back on clients on this front? How can we better get brands to value WOM?
Tuesday, June 2nd, 2009
Measuring the value of a word of mouth strategy always involves two elements: getting some reassuring metrics to execs who think in terms of reach, eyeballs and direct sales; and educating companies about the new and different ways in which WOM brings long-term value to them.
The metrics can in fact be more precise than traditional measurements such as vague print circulation figures or possible viewers of a TV ad. We can track the volume of WOM directly stimulated by a project; measure the wider engagements with that content to show how the WOM ripple has spread; calculte the financial value of a positive unit of conversation (and the cost of a negative unit of conversation) for a brand using sales data and industry research; collect statements of intent from those who have come into contact with those conversations and been influenced by them; and overlay internal sales and marketing figures to show correlations between their activity and WOM.
The second type of measurement is a little more tricky, as it asks companies to question some of their entrenched beliefs about ‘value’ and move away from a reassuring but possibly misleading reliance on numbers. It includes demonstrating the power of quality engagement with fewer, more passionate and vocal advocates rather than ‘viral’ spread to a large number of disinterested people; examining how word of mouth has impact on all areas of a business, not just in marketing but internally; and – something we are particularly evangelical about at the moment – demonstrating how an effective WOM strategy can shift the emotions that adhere to a brand in social media, stimulating a range of positive emotions that are key in securing long-term loyalty and sales.
Jay Deragon has been posting some great stuff on this subject onThe Relationship Economy blog; particularly good recent articles include last week’s examination of the NPV (net present value) of social media and yesterday’s piece on investing in knowledge. As he says:
Each day more businesses are awakening to the power of the social web and there is one thing separating the successful from the unsuccessful: Knowledge. Without knowledge a business can quickly get lost in the “sea of social technology” losing precious time doing unproductive activities without achieving a desired result. Money is a derivative of knowledge. The lack of knowledge is a derivative of cost.
Deragon’s belief that brands need to cultivate this learning internally is spot on – internal knowledge and skills transfer is an essential part of our work. It not only ensures that a WOM strategy has longevity and cut-through within a company, but helps execs and employees alike understand the sometimes unfamiliar yardsticks of value that a WOM strategy should be measured against.
