WHITE PAPER

DELIVERING ON THE PROMISEFIVE WAYS TO DRIVE BRAND EFFECTIVENESS WITH SOCIAL MEDIA

With 80% of American adult Internet users actively engaging with each other and brands online, the importance of social media is hard to overstate (Figure 1). Malcolm Gladwell, bestselling author of The Tipping Point and Blink, describes today’s socially networked world as the greatest paradigm shift since the rise of the Baby Boomers in the 1970s. “What we have today,” Gladwell said at Nielsen’s 2012 Consumer 360 conference, “is a set of people whose default proposition is not the hierarchy, but the network. And what is the network? It is people looking horizontally rather than vertically for information. It is open, not closed; flexible, not disciplined; and it is decentralized, not centralized.”

This new network paradigm means that companies must be smarter than ever about how they engage with consumers. The days when companies could tightly control brand messaging and progress consumers along a linear purchase funnel have ended. Consumer decisions and behaviors are increasingly driven by the opinions, tastes and preferences of an exponentially larger, global pool of friends, peers and influencers. Consumer Packaged Goods (CPG) marketers now share control of the brand’s essence, image and voice. Brand objectives and success metrics need to be re-imagined. According to Forrester Research, 92% of marketers believe that social media has fundamentally changed how consumers engage

DELIVERING ON THE PROMISEFIVE WAYS TO DRIVE BRAND EFFECTIVENESS WITH SOCIAL MEDIA

1

FIGURE 1: HOW PEOPLE USE SOCIAL MEDIA TO ENGAGE WITH BRANDS: GLOBAL ADULT INTERNET USERS

SOURCE: 2012 NIELSEN GLOBAL SURVEY

NM INCITE WHITE PAPER | DELIVERING ON THE PROMISE

with brands and 93% believe that marketers need to reinvent brand building strategies to effectively engage with their consumers.

In these times of change, marketers and executives are grasping for familiar notions of Return On Investment (ROI) to bring order and to make sense of the unfamiliar, uncharted and seemingly uncertain world of social media. However, before asking the blanket question “What is the ROI of social media,” marketers should first disaggregate social media’s impact across marketing activities. Each social media use-case requires its own consideration. For paid social media (e.g., ads on Facebook or Twitter), ROI is a meaningful metric. However, it is not as relevant for other use-cases such as applying social media to generate insights for new product ideation, segmentation or messaging.

The risk of relying too heavily on ROI for all social media use-cases is missing significant opportunities to improve effectiveness across the brand lifecycle. The focus on ROI can be balanced with a more practical question: “What can I do today to drive brand effectiveness using social media?”

IMPROVING END-TO-END BRAND LIFECYCLE EFFECTIVENESS WITH SOCIAL MEDIA

Building successful brands hinges on applying social media insights at every stage of the brand lifecycle. According to P&G’s Joan Lewis (Global Consumer and Marketing Knowledge Officer),

“Consumers and brands are co-evolving and moving at a very rapid pace. We need to learn faster and really leverage our digital relationships with consumers. Social media plays a big role.” - Joan Lewis, P&G Lewis and others have articulated a compelling vision for social media in market research, recognizing its potential to build relevant and differentiated brands and strong emotional bonds with customers. Today’s most innovative CPG marketers realize that social media insights can be used in new ways to inform decision-making at every stage of the brand lifecycle, from initial

2

FIGURE 2: ROLE OF SOCIAL MEDIA IN THE BRAND LIFECYCLE

* MAY APPLY TO ALL STAGES IN THE BRAND LIFECYCLE

IDEATION

• Recognize category and consumer trends

• Identify unmet needs and white space opportunities

LAUNCH IN MARKET

• Plan and execute successful new product launches

• Complement survey research’s asking with social media’s listening*

• Understand and reach target segments*

• Measure emotional resonance and differentiating attributes

• Understand the role of social media in the the Consumer Decision Journey

trend spotting and ideation all the way to measuring ongoing brand health (Figure 2).

This approach is so powerful precisely because consumers are expressing their opinions and preferences for their own ‘decision journeys.’ They write and read blog posts about emerging needs and desires unfulfilled by current products. They ask questions during the ‘consideration’ phase and tweet about their post-purchase experience. Consumers are scattering digital breadcrumbs, highlighting their journeys, and marketers have a unique opportunity to connect these dots and boost brand effectiveness.

FIVE WAYS TO DRIVE BRAND EFFECTIVENESS WITH SOCIAL MEDIA

How can you surface fresh, meaningful insights that shape brand strategy and result in deeper consumer engagement? No matter what tools, processes, systems and capabilities your organization possesses, there are five proven techniques for achieving maximum brand effectiveness with social media:

1. Broaden your scope beyond brands to categories and segments.

While it is important to manage and grow positive brand-

related discussions, CPG marketers should tap into category-level conversations. As Figure 3 illustrates, there are over 20 times more messages about general hair care than about specific hair care brands. Analyzing unbranded conversations reveals unmet needs, provides fodder for new product development and innovation, and helps marketers craft marketing messages that resonate with the authentic voice of the customer.

It is also important to take advantage of the full panoply of social media sources. While Facebook and Twitter account for the lion’s share of social media messages, blogs and boards often contain richer content laden with deeper insights. As an example, consider the hair care messages in Figure 4, culled from naturallycurly.com and Twitter. The implication is that each social media type has a unique advantage depending on the marketing use-case.

2. Take segmentation to the next level.

In today’s social world, marketers win by developing a more intimate, nuanced understanding of the customer. Segmentation has never been more important and social media can significantly enhance your approach.

There are two important considerations to keep in mind.

FIGURE 3: SOCIAL MEDIA MESSAGES ABOUT HAIR CARE (U.S.)(JANUARY 2012 - JUNE 2012)

3

Naturallycurly.com

Twitter.com

FIGURE 4: SAMPLE BLOG POST AND TWEETS ABOUT CURLY HAIR

BRANDED NON-BRANDED

90,000

2.3 MILLION

24x

NM INCITE WHITE PAPER | DELIVERING ON THE PROMISE

The first consideration is whether you are using social to learn more about your existing segments or to uncover ‘organic’ ones. As consumers self-segment in social media (e.g., sophisticated city moms on urbanbaby.com), you are likely to discover consumer groups that represent untapped opportunities for brand and product extensions. In the case of new or expecting moms, for example, you might find organic segments like “the sage,” “the nervous nelly” and “the fashionista.” You can identify each segment’s needs, quantify the market opportunity and determine the right approach for influencing each segment.

The second consideration is related to your business context. For businesses selling or marketing directly to consumers, social media segmentation improves your ability to profile your best customers, determine what and when they are most likely to purchase next, and find others like them. And while most CPG companies do not sell directly to consumers, they still have a vested interest in understanding their end consumers and in activating their online communities on Facebook, Twitter,

forums and other social networking sites. The questions here are more about identifying and understanding the value of your most engaged fans. However, your online communities will always represent just a fraction of the overall market. You still need to develop an in-depth understanding of what makes the broader category segments tick.

3. Benchmark yourself relative to ‘expected’ outcomes.

Defining, measuring and tracking performance metrics for social media is critical for activating your online communities. Size, reach and level of engagement constitute a basic but critical starting set of social media metrics. The important point is not to dwell on absolute numbers (e.g., how many Facebook fans do I have?). The real question is how many Facebook fans or Twitter followers should you have? A brand will have an ‘expected’ level of social media performance given its size, segments, customer satisfaction scores, ad spend and many other variables. Figure 5 illustrates how benchmarking relative to expected outcomes provides true insight into brand performance. In this example, there is a clear relationship

4

FIGURE 5: FACEBOOK FANS FOR MAJOR U.S. COSMETICS BRANDS ARE CLOSELY CORRELATED TO ADVERTISING SPEND

2011 AD SPEND ($ MILLIONS)

50 100 150 200 250 300 350 400 450

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

00

FAC

EBO

OK

FA

NS

(MIL

LIO

NS)

BRAND B - MORE FANS THAN EXPECTED GIVEN AD SPEND

BRAND A - FEWER FANS THAN EXPECTED GIVEN AD SPEND

between advertising spend and Facebook fans for major U.S. cosmetics brands. Evaluating actual to expected performance, Brand A is significantly underperforming relative to its peers at that level of ad spend. Conversely, Brand B is able to generate outsized social media performance at a very low level of ad spend.

4. Create an emotional taxonomy.

Consumers today have an abundance of product choices, and increasingly, the lines of functional differentiation have blurred (e.g., virtually all laundry detergents are colorfast, so having a colorfast detergent is not going to set your brand apart in the mind of the consumer). Creating emotional engagement between your brands and your consumers has become the key to success. According to former P&G CEO A. G. Lafley, “In an environment in which consumers and retailers have more choices than ever, the capability to build

lasting bonds separates brands.” If emotional engagement is the key to success, then measuring the emotional resonance of your brands is vital. The first step is to define the emotions

that matter for your categories, brands and target customers. Marketers can rigorously track brand performance along each emotional dimension using an emotional taxonomy.

The taxonomy enables you to quickly determine where your brand is succeeding or struggling, identify and respond to competitive threats, and differentiate your brand in a crowded product landscape. An emotional taxonomy enables marketers to take the pulse of their brands and their customers, and forge durable bonds. The emotional taxonomy illustrated in Figure 6, for example, would help marketers understand that Brand 3 excels at making consumers feel sexy, beautiful and luxurious, while Brand 1 leads at making consumers feel healthy, clean and energized.

5. Tie social media to existing tools and processes.

Finally, remember that social media is, in large part, an amplifier of other media channels and strategic initiatives. Be sure to integrate social media measurement and analysis into the tools you already use to manage your business. The

FIGURE 6: HAIR CARE EMOTIONAL TAXONOMY: HOW PEOPLE FEEL

5

BEAUTIFUL

WHOLESOMEHEALTHY

PURE

SOPHISTICATED

LUXURIOUS

CONFIDENT

ENERGIZED

SPORTY

CAREFREE

SEXYCLEAN

BRAND 1 BRAND 2 BRAND 4BRAND 3

NM INCITE WHITE PAPER | DELIVERING ON THE PROMISE

emotional taxonomy described above is a perfect example. Rather than create the taxonomy from scratch, design it as a complement to your existing brand equity tools. This enables marketers to achieve real-time equity tracking, and brings immediacy and agility to what has historically been an annual or semi-annual evaluation process. Complementing traditional brand equity monitoring with a social media taxonomy empowers marketers to understand what is driving changes in brand equity values and to react quickly to risks and threats. Social media can also be used to refine traditional brand equity studies. It can help marketers rewrite questions using the consumer vernacular, or build out additional emotionally relevant attributes uncovered through social listening.

The synergy between social media and brand equity tracking is just one example; social media can and should also be tied to tools and processes used throughout the brand lifecycle. Social media is a vital input and/or complement to new product innovation processes, media mix modeling and traditional survey research.

• • •Social media has become integral to the way consumers engage with brands today. There is a clear imperative for CPG marketers to harness the power of social media insights at each stage of the brand lifecycle. The approaches outlined in this white paper have been proven out by innovative, global CPG marketers. The time is right for applying social media to achieve brand success in today’s social world.

6

About NM Incite

Global Fortune 1000 marketers rely on NM Incite solutions to discover emerging, industry-specific consumer insights and build relevant, differentiated and emotionally engaging brands. NM Incite customers are innovative, global marketing executives in brand management, consumer insights and market research at leading Consumer Packaged Goods, Financial Services, Healthcare and Technology companies. They understand that winning in today’s social world hinges on developing deeper and more provocative consumer and market insights to create superior marketing strategies, boost brand strength, develop new products, innovate in customer care and maximize the impact of marketing campaigns.

NM Incite is a joint venture between Nielsen and McKinsey & Company, bringing to bear deep expertise in measurement science and management consulting. As one of the largest global leaders in applying social media to solve marketing problems, NM Incite operates in over 30 markets, including the United States, Canada, United Kingdom, Germany, China, India, Japan and Australia.

CORPORATE HEADQUARTERS

770 Broadway New York, NY 10003-9595 United States 855.888.6904 nmincite.com

COPYRIGHT © NM INCITE