A Coca-Cola Co. study finds online buzz has no measurable impact on short-term sales, but online display ads work about as well as TV, said a company executive in a presentation at the Advertising Research Foundation's Re:think 2013 conference in New York today.
It's a stunning admission for a company who's flagship brand has 62 million fans, more than any other brand on Facebook. But Eric Schmidt, senior manager-marketing strategy and insights at Coca-Cola, isn't giving up on buzz just yet. And he cautioned against reading too much into the research, noting that it covers only buzz, not sharing, video views or other aspects of social media.
But when Coca-Cola put buzz sentiment data into the same analytical framework it uses to evaluate other digital media, Mr. Schmidt said,
"We didn't see any statistically significant relationship between our buzz and our short-term sales."
That was at a 95% confidence level, but even stepping back from that high standard, he said showed buzz affecting sales by only 0.01%.
Mr. Schmidt asked.
"Is that the end of the story? I would say no. This is one study on a set of brands in a particular company within a certain segment of the consumer-packaged-goods industry. It is by no means a generalized result that applies to all industries. "
Now Mr. Schmidt said Coke is looking to refine how it measures buzz, for example by getting a better idea of how many people buzz actually reaches rather than just counting the raw publicly available comments from such sources as Facebook, Twitter, blogs and YouTube.
Coke research was far more favorable for other forms of advertising.
- Digital display advertising - Coca-Cola found digital display advertising on average to be 90% as effective as TV at generating sales on a per-impression basis.
- Search advertising - Search was 50% as effective as TV.
- Out-of-home advertising – As effective as search advertising.
- Radio advertising - Radio ads came in between TV and search.
- Print advertising - Print ads scored slightly more effective than TV.
One problem Coca-Cola has is determining whether buzz is actually positive or negative in the first place. In one 2010 study where Coke pulled out more than 1,000 social-media messages randomly and had human raters compare them to automated sentiment analysis by one vendor, there were widespread differences.
Mr. Schmidt said.
"When we say it's positive, the machine about 21% of the time says it's negative. That can cause some problems in our understanding of how buzz impacts sales."
Machines have the most trouble judging sentiment in longer posts such as those in blogs or Facebook and do much better on Twitter, he said.
It's important to get digital reach and viewership data on par with TV and to accurately measure buzz in order to get more accurate return-on-investment analysis for all media, Mr. Schmidt said.
Mr. Schmidt said.
"Digital ROI has to be a financial measure that allows us a consistent measurement of business performance over time."
And that also lets marketers make informed tradeoffs between media.
COMMENTARY: In May 15, 2012, Forbes interviewed Alison Lewis, senior vice president of marketing for Coke in North America. Ms. Lewis thinks the best campaigns are those that weave 30-second TV spots and social media together to feed on each other and get consumers more engaged.
Ms. Lewis said.
"The reality is that we’re learning our way through this stuff (social media). The consumer engagement model is changing. It’s really about networks, connectivity and conversations, and the combination creates scale through those connections."
According to Ms Lewis,
"Tablets and smartphones will become the first screen, though when I can’t tell you. So you have to go to an engagement model with paid, owned, and earned media–and shared media [not just ads]. She talks about a 'liquid and linked landscape.' We have 40 million Facebook fans, 10 million in the U.S. We want to engage that earned media before and after paid media."
Lewis then outlined a case study of Coca-Cola’s last Super Bowl ad campaign. We recognized that idea first was going to come from digital, she says. We started from digital first, then thought about the 3o-second spot. So we created a live screen integrated with a traditional advertising purchase and social media.
The stars were the iconic polar bears, watching the Super Bowl live with you while drinking Coke. We shipped different spots to NBC and literally decided real-time depending on the outcome of the game which spot to air. It had never been done before.
Ms. Lewis said.
"We placed a big bet in saying digital first. NBC had 2 million on their live screens. We had 9 million on our stream. Also 9 billion views, had to change to a larger server. It was the largest social TV event ever. 70 million pre-game impressions. So, massive, massive result, and it really taught us about engagement with television."
Old world was about placement of messages. New world is about movement of stories.
Lewis expanded on her presentation in a conversation with conference emcee and Federated Media executive chairman John Battelle:
Q: Did you measure impact on sales?
A: Absolutely. It wasn’t all the Super Bowl, but our first-quarter results in North America were very strong. The combination of the Super Bowl, the Oscars, NASCAR.
Q: Can you invest in marketing without those huge tentpoles such as the Olympics?
A: Tentpoles are very beneficial in building a rallying you can build around. But there are ways to drive engagement without that big event. But you need that big story.
We did a Jen Aniston Smart Water viral video–talking about a viral video. The whole two-minute thing was her talking about how to make a video go viral. Within 24 hours, we had a million views and within a week, 10 million views on YouTube. Yes, it was Jen Aniston, but it wasn’t just that. It was about the cultural mindset on the Web. Well, maybe.
Q: What is the liquid link strategy? Good question!
A: Liquid is that stories have to be able to be spread. It’s thinking of the view you have that can be spread. Link is leveraging your network.
Q: Great editorial and great content comes from voice and point of view. When you take a stance, you have to be politic–such as the Coke polar bear campaign with the World Wildlife Fund that alluded global warming. Do you need to take a point of view?
A: We won’t take a point of view on that. But we take a point of view on polar-bear habitat going away because the ice is melting. That’s a fact.
The fact that Coca-Colar has increased its Facebook fan base from 40 million in May 2012 to 62 million today, is worth something to one of the world's best known, and obviously well liked brands. Maybe you cannot measure with precise accuracy the ROI of your social media, but you can quantify loyalty, earned media and shared media by the number of fans you have on Facebook.
The point that I was trying to make by citing the above article by Forbes, is that social media should be part of a fully-integrated marketing program. Maybe not all 62 million are posting comments or clicking the "Like" button all of the time, but you can assume that they are loyal Coca-Cola consumers to a certain degree. They represent a real number if you want to measure earned media.
Courtesy of an article dated March 18, 2013 appearing in AdAge CMO Strategy and an article dated May 15, 2012 appearing in Forbes
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