Reality finally bites for social media

More trouble in social media land. Insiders at consumer goods giant Unilever recently confessed that some of their brand teams were questioning whether increased investments in social media were proving their worth.

Mark Ritson

Some brands had discovered that a pound spent on in-store promotions was delivering up to 50 per cent better return than one spent on social media. That’s quite a disparity and, according to the source, it is leading to several brands switching investment away from social and back to sales promotions.

It’s a big move for any FMCG company, but a particularly major one for Unilever, given that it has been held up as one of the most socially switched on of organisations. Its chief executive Paul Polman had predicted that social media would soon overtake traditional media as the company’s key tool for driving brand preference, and the story from its chief marketing officer Keith Weed is similar. He has repeatedly claimed that social media’s return on investment (ROI) is more measurable than television, and usually superior too.

Despite the hyperbole it seems many of Unilever’s actual marketers working across brands like Marmite, Timotei and Radox are questioning whether social is such a superior approach after all.

But what’s been really interesting is watching the social media experts react to the Unilever news. As a relatively young and brash discipline, social media has spent the past four years promoting its potential for greater ROI versus traditional tools. Thus far the narrative has been all about the switch from traditional media to social. The idea that a company – and one of the leading exponents of social media at that – has shifted away from social towards old-fashioned tools has caused quite a stir in the past week.

One section of social media exponents simply refuses to contemplate the idea that any company could favour an old-fashioned tool over the shiny new approach. Laurent Francois, former head of 360 Digital Influence for Ogilvy France and a teacher of social media marketing at the ESCP business school, provided a typical example of the denial approach.

According to his blog, Unilever was clearly “missing the point” because consumers are “no longer passive targets that you can simply feed with coupons and vouchers”. That might have been the claim at the last social media conference Francois attended, but patently Unilever’s experience suggests consumers are just as interested in coupons and vouchers as they ever were.

Another response was to critique Unilever’s approach. ‘Don’t hate the game, hate the player’ was the theme of Stephan Dahl’s blog. Dahl, a senior lecturer of marketing at the University of Hull, analysed Unilever’s approach to social media for Marmite and concluded that the reason for the brand’s poor showing was weak execution, not a fundamental problem with social media.

“Sales pitches, incentives and no interaction – everything that social media should NOT be!” observed Dahl. “Is it really surprising that Unilever found that the ROI from this sort of social media campaign was less than running sales promotions in shops?”

Of course, all this is the usual social media nonsense. The real story is that marketers are finally beginning to apply some measures to assess the ROI of their efforts. Once they do that they can do the one thing the social media mavens have counselled against: compare the value of social media with other options, apples to apples. And, in many cases, they are discovering the hullaballoo drummed up by the marketing media and various industry events is not quite all it was cracked up to be.

Crucially, Unilever did not suggest it had given up on social media. Some brands are happy with their ROI while others are apparently moving away from the approach. That’s important because it confirms that social media’s impact on marketing is heterogeneous. In some cases it changes the game and introduces wonderful possibilities and, subsequently, impressive ROI.

But in other cases – the majority I’ll wager – social media becomes a minor addition to the mix and no more than a catalyst for TV or other traditional activity. And then, in a final set of cases, social media does not make any sense at all. Because of brand positioning, the consumer decision-making framework or the nature of the product category, it is not a worthwhile investment.

That might explain why several industry studies are reporting that the number of marketers who agree social media is an important tool for their business is starting to fall. This is not a signal that social media is worthless or that its bubble is about to burst. It just means we are starting to treat social media like any other option in the marketing mix.

Welcome to the mature stage, social media – we’ve been expecting you.



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