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Each issue of CMO Close-up features an interview with a CMO, as well as other marketing executives answering that issue's "Big Question."
This week's feature:
Close-up with Laura Howard, CMO, ECI Telecom
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Some question payoff of social media efforts
Kate Maddox
Story posted: April 6, 2009 - 6:01 am EDT
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As companies look for more cost-effective ways to market in a down economy, many are turning to social media campaigns, employing a host of tools, from YouTube videos to applications on Facebook and Twitter.
But the question arises: Are these measures really paying off for marketers, and how are they able to prove ROI?
“Most people seem to be doing it on faith,” said Paul Gillin, principal of Paul Gillin Communications and a BtoB columnist. “There have been some measurements of social media. The most popular ones are uplift in brand awareness and cost-cutting in areas such as research.”
However, he said, “I can't see any indication of revenue growth measurements that people are using. The perception now is that the ROI on social media is good, if only because the "I' part of the equation is so small.”
According to a report published last month by research firm Aberdeen Group, 21% of best-in-class companies plan to boost their social media marketing budgets by more than 25% this year.
Best-in-class companies, according to the report, are those with exceptional performance in proving return on marketing investment, improving the likelihood that customers would recommend their products and services, and improving their customer acquisition rate.
The report, “The ROI on Social Media Marketing,” was based on an online survey of 275 senior marketers at a diverse sample of enterprise companies, conducted in January and February. Aberdeen found that more than half of those companies said it was somewhat difficult (39%) or very difficult (20%) to make a business case for investing in social media marketing initiatives.
However, despite these difficulties, 68% of best-in-class companies have a process in place for monitoring social media; 58% have dedicated resources devoted to social media marketing; and 61% host community online platforms.
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GOOD PRELIMINARY RESULTS
Those companies that are investing in social media as part of their marketing strategy say they are getting good preliminary results.
IBM Corp. has aggressively used social media in its marketing efforts for more than a year, employing thousands of bloggers, dozens of online communities and social media campaigns around specific products.
“We think of it as a collective versus a controlled approach,” said Kathy Mandelstein, director of worldwide marketing programs for IBM Rational Software, which has been using social media for the past year to promote its Jazz Technology Platform products.
For example, the group just launched the second phase of “Mr. Fong Lost in Space,” a viral video campaign that encourages users to help the fictitious character Mr. Fong find his way back to his IT team on Earth, using IBM Rational Software products.
The campaign makes heavy use of social media, including Facebook and Twitter profiles of the characters in the campaign (Mr. Fong, Mr. Long and Ms. Song) as well as videos on YouTube and other video-sharing sites.
“Social media really helps us bring the product promise to life,” said Patrick Leclercq, associate director of interactive marketing at OgilvyInteractive, New York, which developed the campaign.
“The more people who are familiar with the characters, the more they will understand the brand promise. The whole point of this campaign is not only to have people do what we want—register, and download the product and test it—but to create affinity with Mr. Fong and also with IBM.”
So far, the campaign is proving successful, according to the metrics IBM is using. The first phase, which debuted in September, garnered e-mail open rates of more than 20%, click-through rates of up to 3.3%, more than 5,000 video plays on third-party sites, almost 10,000 video plays on the IBM site and an average time spent on the site of nearly five minutes.
IBM continues to develop its social media marketing efforts, and to that end it has established a social media task force, made up of marketing managers and other executives from IBM's different business units. The task force meets monthly to discuss topics such as how to use social media for marketing and tech support and to establish guidelines for its use.
Cisco Systems is another marketer that has made wide use of social media in its marketing efforts, including blogs, viral videos, online communities and social networks.
Last month, it launched a new campaign called “The Realm,” which uses superhero figures and social media to engage security professionals and IT users. The campaign, developed by Ogilvy Los Angeles, features a series of webisodes in which superheroes with names like “Wall” and “Trace” fight off security threats to the enterprise.
The webisodes, which are running on the Cisco site as well as on YouTube, are being promoted heavily through such social media networks as Facebook and Twitter, as well as by bloggers.
“We are leveraging social media and have reached out to top security bloggers and invited them to start blogging and create conversations about these superheroes,” said Marie Hattar, VP-network systems and security marketing at Cisco. “We have folks tweeting and blogging about them so we can keep the dialogue going.”
Hattar said the first phase of the campaign is designed to generate awareness, while later episodes will point to specific offers, such as migrating from older PIX firewalls to the new ASA firewalls.
“When we have some of those offers out, we'll look at click-through rates and downloads,” she said. “Ultimately, you are looking at the number of leads. Migrating from PIX to ASA is a pretty quick follow-through, so we will be tracking leads very closely.” M
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