Does social media build the bottom line or is it just a virtual arms race?

Social media has become the favoured channel for engagement for many CMOs. But to what degree is burgeoning social engagement contributing to sales and revenues?

Many brands aim to make connections, drive engagement and ultimately develop (what some might call) relationships with customers. In the CMO’s armament, social media is today’s favoured weapon in the battle to lure strangers and initiate brand engagement. Indeed, a recent Marketing Week survey of CMOs cited that 56.1% think that social media drives the best brand engagement.

To what degree are ‘engaged’ consumers contributing to sales and revenues? Or is presence on social media more like a digital arms race where the end result is a stock pile of content that does not have an adequately correlated impact on sales & profitability? Is the somewhat incessant effort to consistently share and provide relevant content amounting to more than a well fed profile with a respectable number of followers?

More tools, more questions
There is no doubt that participation on social media is a convenient mechanism – if not a necessity – to adroitly connect with audiences, get a read on sentiment, and to harvest and collect data.

The recently launched Instagram Stories now has an insights tool and ‘contact’ option for business pages. Google algorithms have developed from plain old keywords to original content and Google analytics track customer behavior and channel performance. Twitter Cards enhance content by attaching photos, videos and media and enable tracking and measurement.

An array of new tools yielding data that may, in the future, be incorporated into underwriting decisions or to corroborate a claim – not a widespread reality yet but certainly an aspiration.

Marrying niche insurance products with the nimbleness of technology and better nuanced data is already a reality and opening up new uncontested revenue streams. Friendsurance, a peer-to-peer insurance concept, which rewards small groups of users with a cash-back bonus and Embroker, a data-driven insurance broker, are two examples of leading edge providers in this space.

Better metrics – beyond Google and Facebook control – are required to measure the impact of social.  twitter icon

Ten years ago, it was easier to differentiate between online and offline lead sources. Many brands do not yet have the systems to marry and integrate seemingly endless streams of data with the customer database and track engagement across multiple devices.

Therefore, it is difficult to fully appreciate the role that each channel, including social media, plays within the media mix. Increasingly, more traditional offline sources have an online component or the goal to drive traffic to a brand’s digital space via a URL or even QR codes or NFC.

Too much content turns customers off
As social media is pliable, it provides a license to package and enrich products and services with curated content. In the insurance sector this flexibility gives brands multiple possibilities.

A flexibility which must be carefully managed as much of what we see seems to be circling the globe, reshaped and republished. Some of it could be classified as ‘click-baiting’. Viewed, but not necessarily worthy of a true interaction – little more than a serve returned. The proliferation of content is not surprisingly resulting in more consumers blocking, deleting and looking for a means to control what they receive. (We say thank goodness for the migration of words to audio and video.)

On the flip side however, the Aviva safe driving competition is a good example of applying relevant well-crafted content to drive deeper engagement. A video was developed and posted so that votes could be cast via social media along with a dedicated hashtag #DriveSafer.

Setting the sights beyond the bottom line
Despite the proliferation of analytical tools, better independently established metrics – preferably beyond the control of Google and Facebook – are required to improve accuracy and wider trust in the impact of social media. During WPP’s August earnings call, CEO Martin Sorrell stated that brands are increasingly questioning their digital adspend:

“We and our competitors want better measurement, not just offline but online too. The answer is not Facebook or Google data – we can’t have the players being the referees.”

What is also needed is management to listen and contribute from the top down – to be engaged perhaps? All too often the C-suite, who are disproportionately important, are largely divorced from their brand’s social media activity.

From the bottom up, pertinent data streams need to be defined. What is most relevant and predictive for refining and focusing the volume and slant of the content delivered? Most of all, goals should be set at the outset to dictate what is measured, as analysis won’t work without a clear battle cry.

The pressure is on in the insurance sector for differentiation through the delivery of a great end-to-end customer experience – from product information and advice through to underwriting, claims management and renewal process accessible via a mix of channels.

Those on the front line have embraced the multi-faceted nature of social media to meet the complexity of these requirements. The starting point for businesses should therefore be to listen to audiences before producing yet more content. Like the internet, it is clear that there is an acknowledged value to harness, a value improved through focusing on relevance versus the bottom line.

Could this then lead to open social networks evolving into more closed, refined and relevant forums? And will we see more boundaries emerging around who receives and has permission to access and comment on the content served?