Social media gains ground

08 February 2012

NEW YORK: Social media is gaining importance as part of the marketing toolkit employed by consumer goods companies, a survey of major brand owners around the world has revealed.

Oracle, the services firm, and the Economist Intelligence Unit, the insights group, polled 221 executives, 54% of which agreed social media had been central to their efforts to engage shoppers in the last year.

This fell behind in-store marketing on 73%, co-marketing schemes with retailers on 61%, print and TV ads on 60% and consumer loyalty programmes on 59%, but it beat corporate websites on 52%.

When discussing key channels for the coming year, in-store marketing posted 74%, while social media claimed second position on 73%. Digital marketing logged 66% on this metric, up from 53% at present.

"The rules of engagement are very different," Venky Balakrishnan, Diageo's VP, marketing innovation, said. "Rather than just talk about it, our actions must reflect what our brands stand for, and we have to give consumers the opportunity to participate and co-create with our brands in a responsible way."

In the next year, 74% of the panel intend to use social media for promotions, 63% hope to capture consumer feedback, 62% plan to offer customer service and 59% will opt for paid advertising.

"With social media, you can test, learn and expand quickly on a limited budget," Howard Friedman, SVP, marketing, at Kraft Cheese & Dairy, said. "You don't have to spend a million dollars to see if something works."

Some 72% of companies reported that their ability to gather "big data" has improved in the recent past, and 58% believed they were "very effective" at using the insights yielded.

"Social media, and Facebook in particular, is proving to be extremely rewarding in helping us listen to and understand consumers and to help our brands build different types of relationships with consumers," Alex Tosolini, Procter & Gamble's vice president, global e-business, said.

Another 23% of firms are working to sell their products directly to customers, such as through Facebook, their official websites or storefronts on platforms like

"Linking the storefront into our website and Facebook page makes it easier and more accessible for consumers to buy Solo products while they are already engaging with the brand online," Chris Klem, director of consumer marketing at Solo Cup, which makes $1.6bn from paper cups and plates per year.

Overall, 70% of interviewees said their direct-to-consumer marketing as a whole was intended to raise brand awareness, 69% pointed to increasing sales and 59% wanted to enhance customer interactions.

Data sourced from Economist Intelligence Unit; additional content by Warc staff