Category Archives: Marketing

Does Academic Research Provide Practical Value for Social Media Marketers?

David Berkowitz ForresterThis post originally appeared in Social Media Marketing Magazine, Issue 1, Number 4.

Research you can use; four simple words that sum up my goal for this column. It is an honor and a pleasure to take over the responsibility for writing this column from Caroline Dangson (@CDangson). Caroline established this column as a must read. Her initial three articles, “Who Owns Social Media for Business”, “Co-Creating Value with Customers” and “Twitter is Ready for Advertisers, but are Advertisers Ready for Twitter?” presented thought provoking insight into emerging trends in social media marketing (SMM). Please join me in thanking her for developing a solid foundation on which to build.

Our goal for this column is to share with you cutting edge academic research that provides utility and assists in making your social media marketing research efforts easier. Academic research in marketing is not known for either its readability or its practicality. A few exceptions exist. Academic journals that are written with an eye towards readability and containing an applied focus include Business Horizons, California Management Review, Harvard Business Review and MIT Sloan Management Review. Interestingly, none are focused solely on marketing.

In my opinion, academic research has the potential to provide value to social media marketers IFF (if and only if) it provides instruction or insight into new research tools, methods, concepts and/or constructs. In the area of social media marketing research, in general, marketing academicians lag practitioners in understanding, developing and utilizing applied research tools and techniques. The good news is that this is changing. In addition to current marketing professors who are rapidly re-tooling, a new generation of marketing researchers is making its way through some of the top Ph.D. programs in the world and these researchers are engaged in and excited about SMM.

It is the research of this group, the denizens of SMM research, that we plan to review and share with you each quarter. The goal for this column is to add value to your SMM research skillset and tool kit. This issue, two must-read articles are highlighted and reviewed. The take-aways for each are clearly identified. Once you read this column, and the articles referenced, please come back to leave your comments/questions/suggestions because learning isn’t unidirectional.

The two, initial, journal articles for review are:

Hoffman, Donna L. and Marek Fodor (2010), “Can You Measure the ROI of Your Social Media Marketing?”, MIT Sloan Management Review, Vol. 52, No. 1 (Fall), pp. 41-49.

and

Hansen, Derek L. (2011), “Exploring Social Media Relationships”, On The Horizon, Vol. 19, No. 1,  pp. 43-51.

Can You Measure the ROI of Your Social Media Marketing?

Because this article has been out for a while, this is not the first review. A good overview of both the article and the importance of determining return on investment (ROI) in SMM is provided by Angela Hausman.  Hoffman and Fodor challenge SMM researchers to adopt a new approach:

“Effective social media measurement should start by turning the traditional ROI approach on its head. That is, instead of emphasizing their own marketing investments and calculating the returns in terms of customer response, managers should begin by considering consumer motivations to use social media and then measure the social media investments customers make as they engage with the marketers’ brands.” (p. 42)

They offer 4 C’s (instead of 4 P’s) to identify the key motivations for social media interaction: connections, creation, consumption and control as well as two case study examples of social media marketing failures. However, the real benefit (take-away) offered by this article is the sample metrics provided on page 44, some easy to operationalize and some more difficult to operationalize. The final gem provided by this article is a traditional 2 x 2 matrix entitled “Strategic Options for Social Media Measurement”. Using the sample metrics based on the strategic options available should provide a solid framework for developing a ROI unique to your business model.

Exploring Social Media Relationships

Hansen’s article offers immediate utility. In my opinion, he sums up the purpose of the paper brilliantly:

“This paper describes some of the techniques and tools needed to make sense of the social relationships that underlie social media sites. As relational data are increasingly made public, such techniques will enable more systematic analysis by researchers studying social phenomena and practitioners implementing social media initiatives”. (p. 44)

The paper documents the development and release of an incredible open source network analysis add-on for Excel. Hansen explains the concept of network analysis and social network analysis (SNA). The later builds on the former and is perfect for studying SMM relationships.

He justifies the study of SNA on page 45:

“Viewing the social world as a network can provide many insights not obtainable in any other way. Social network maps provide overviews of social spaces, highlighting subgroups and individuals that hold important positions within the network. Tracking changes in a network over time provides a powerful evaluation tool that measures previously hard-to-capture insights about social capital development, community formation, and marketing campaigns”.

The take-away from this article is the description of the power of the open source network analysis add-on for Excel: NodeXL. He even shares he is using NodeXL in his courses at the University of Maryland.  For those of you who don’t know me, my life revolves around open source. This add-on excited me so much that I purchased Microsoft Office just to use it (it won’t work in my beloved OpenOffice). After four days of playing with NodeXL, it is clearly a tool that you should explore in order to strengthen your SMM research skillset.

Future columns will be more succinct, but will follow the same format. Each quarter, two “must-read” academic research papers will be highlighted for your benefit. If you have any suggestions for future topics or manuscripts to review, please feel free to contact us.

Finally, since the goal of this column is to add value to your SMM research skills, we end with two questions: 1) Do you find this approach helpful? and 2) Did this column provide you with any take-aways that you can use?

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New England in Fortune’s 100 Best Companies to Work For

CapeCod by laura padgettThe recent edition of Fortune Magazine (07 February) identifies the 100 Best Companies to Work For. Living in New England, it was easy to assume that the majority of firms identified were going to be local firms. For without question, we’re the best at innovation, entrepreneurship, creativity, information technology and marketing – just ask us!

The reality of the situation paints a less than optimistic picture for our region. Of the 100 Best Companies to Work For, only eight are located in New England.

New England in the Fortune Top 100 Best Comanpies to Work ForThree are in the top 50 (Boston Consulting Group, Stew Leonard’s and Bingham McCutchen). Congratulations to the Boston Consulting Group for being ranked second nationally. You really are our cash cow. Stew Leonard’s climbed the most over its 2010 ranking and Bingham McCutchen dropped the most. Four are from Massachusetts, two from Rhode Island and two from Connecticut. Missing are companies from New Hampshire, Vermont and Maine.

The eight New England companies identified employ a total of 26,488 people and have a total annual growth rate of -1 percent. Certainly we can do better. Check that – our long term sustainable economic viability requires that we do better. Make your company fun, rewarding and exciting to work for today. The next list comes out in 11 months. The time has come (to borrow an extreme sports cliche) to go big or go home.

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Facebook Advertising: The Power of CPM

Facebook by Ray-Franco Bouly, on Flickr

Facebook advertising is becoming a necessity, not an option, especially in regional and local markets. Ease of use and the ability to target geographically and behaviorally are benefits associated with using Facebook for advertising, as is reasonable cost-per-click (CPC) or cost-per-thousand (CPM)  pricing. Which of the two options (CPC vs. CPM) should you select? The answer is easy – it depends on your advertising objectives.

The default option when advertising on Facebook is CPC. If your goal is action, for instance to stimulate click-throughs to a custom landing page for data collection or sales, then CPC may be the best option. If the goal of your advertising campaign is exposure and/or branding, then CPM may be your best option. To compare the two, I devised and ran two small test campaigns, both with the same goal: to drive traffic to a business fan page in an attempt to increase the total number of fans.

The results were interesting and somewhat mixed. The outcome of the CPC campaign was not overly impressive, although the end cost was reasonable on both a cost per click basis (75 cents) and in total. Over a five day test period, fan page “likes” increased by four. Personally, I found the metrics generated by Facebook for CPC campaigns to be rudimentary and less than adequate. That is, I desired more information than what was provided.

Using a similar ad and employing the CPM option yielded much better results overall, but at a higher cost per click. The metrics provided when selecting the CPM option were much more desirable than the default metrics provided when selecting the CPC option. The table below shows the results of the second test campaign.

SecondFanCPM

The second campaign resulted in over 500,000 verified impressions when targeting Facebook users 18+ located within 25 miles of the business over a ten day period and 34 clicks. The 34 clicks resulted in 28 additional “likes” on the fan page for a conversion rate of 82.35 percent. So although the CPC rate is higher ($1.47 per click), the benefit of selecting the CPM campaign is apparent when taking the motivated states sequence into consideration (attention/awareness, interest, desire, action). Where else can you reach 1,000 people, targeted geographically and behaviorally, for 9 cents?

Please keep in mind that the two campaigns are as presented: small trials to see which option is preferable.  No A-B testing for ad copy or graphics was performed. But based on the results achieved, the best option (in my opinion) is CPM because of the metrics provided and the full consideration of the AIDA objectives. To be effective, you’ll need to run a variety of tested advertisements with frequency.

How do you plan to use Facebook to advertise your business?

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