Data from social media forums can be a valuable tool to gain insight into what your customers are thinking. But, cautions Dominic Field, U.S. leader of the media sector for Boston Consulting Group's Technology, Media & Telecommunications practice, marketers must view it through a filter.
Just as with focus groups, he says, social media commentary runs the risk of being a forum for passionate advocates and detractors.
“We’ve done research showing the vast majority of what you pick up falls under a high spike on the negative side, or a high spike on the positive side,” notes Neal Rich, a marketing specialist project leader in Boston Consulting Group’s Chicago office. “It’s difficult to know how that projects into the real universe of people out in the physical world.”
This schizophrenic outlook can be mitigated by incorporating social media data into qualitative and quantitative research and tracking mechanisms. “You also need the human analytic capability within the marketing function to be able to synthesize and derive insights and business recommendations for the CMO,” Field says.
Are CMOs ready to embrace social media data as a valid information source? Rich claims there are significant barriers based in attitudes held by marketing executives. Paramount among these are the reliance on the marketer/agency structure, as well as the reluctance of marketers to think about consumers not as an audience for their messages, but as assets to be used in crafting the messages.
And then there’s the question of return on investment. “There is something about digital [expenditures] that marketers are just now beginning to understand,” says Rich. “The ratio of media to production and labor is fundamentally different. For a TV campaign, 90% of the spend would be in the media buy, and 10% would be to pay for the shoot, the talent, and the agency to create the ad asset.
“When you get into social media, it might be 40% of the total campaign [budget] in actual media assets, and 60% in labor and production. It’s a very different economic mix. It is a different type of money than what you use in TV.”
Whether a marketer is able to get a return on its social media investment will depend on two factors, says Rich. “Can you get enough scale from that small group of people [which serve as a focus group], and how much business they actually do generate” in their roles as buyers and advocates.
Ultimately, he adds, the question is whether social media investments will pay for themselves on an ongoing basis. “That will be based on the size of the brand’s offerings, purchase frequency, the industries it serves and margins.”
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