Warc Blog

Social media generates ROI

4 July 2013
LONDON: Social media can be effective at driving brand sentiment, enhancing consumer engagement and increasing brand loyalty, as well as generating a potential ROI of more than 3:1, a new report has claimed.

Research for the Internet Advertising Bureau UK (IAB UK), a trade association for digital advertising, examined more than 4,500 quantitative survey responses and 800 research panel interviews, as well as the social media pages of three FMCG brands over an eight week period, in order to assess the impact of social media at various stages in the purchase funnel.

It found that four out of five consumers would be more inclined to buy a brand more often in the future after being exposed to a brand's social media presence, while 83% of consumers exposed to social media would trial a brand's product.

All three brands considered experienced an uplift in sentiment after implementing their social media campaigns, of 22% in the case of food business Heinz, 19% for tea company Twinings, and 17% for snack foods brand Kettle.

The IAB suggested that for every £1 spent in social media, a potential value of £3.34 could be generated.

The study also revealed that posting regularly about a new product drove greater likelihood to trial, as was demonstrated by Heinz Beanz's promotion of its new Snap Pots during the research period.

"In the case of encouraging trial for a newer product line, frequency becomes even more important to support the new concept, as the IAB study illustrates," commented Ian McCarthy, Heinz's Marketing Manager.

Ian Ralph, the Director at Marketing Sciences who conducted the research, noted that social media could turn brand customers into brand fans. "By making people love, not just like your brand, you're more likely to drive future purchases and increase sales," he said.

Writing in the current edition of Admap, Bryan Urbick of the Consumer Knowledge Centre, cautioned against reliance on the easily measurable metrics of social media, such as 'likes' and 'retweets', and argued that social must shift product.

He referred to the salutary example of Pepsi's Refresh project, which saw the brand reallocate substantial budget away from traditional media into a social-media driven cause-marketing program supporting local organisations.

The campaign was deemed a success according to standard social media metrics, such as 'likes' and 'followers', yet Pepsi lost 2.6% of the US carbonated drinks market over the same period.


Data sourced from IAB, Admap; additional content by Warc staff

 
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