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INDEX:
SOCIAL LEADERBOARD:
week-on-week performance of top 3 luxury car brands
SUMMARY
Missing the digital gravy train
RECONNECT GRADE:
o o o BMW AUDI MERCEDES-BENZ
ABOUT SHACK
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SOCIAL LEADERBOARD
14th September 28th September 2012
80%
79%
51%
Historical Ranking
93% 86%
84%
79%
79%
80%
82%
65% 46%
40% 31% 51%
4th-17th Aug
15th-28th Sep
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SUMMARY
12.0%
10.0%
8.0%
2.0%
3.0x BMW (W11) 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x 3.2% 1.4% 1.9% 1.1% BMW (W12) Audi (W11) Audi (W12) Merc (W11)
Merc (W12)
3.1%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Notes: 1. 2. Size of the bubble indicates unique active users Engagement frequency: Average interactions per active user
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TAKING STOCK OF THE WINDFALL
The festive season will see car companies increasing inventory at showrooms to meet the spike in demand. Luxury car brands are anticipating a 20% increase in sales starting with Navratri. "Usually, we deliver only one car a day on an average, but on Dasara we have around 12 deliveries scheduled this year and the sales have gone up by 15% compared to Dasara last year," said an official from the Mercedes Benz showroom at Madhapur. Companies are spending on tactical promotion to convert consumer interest and into sales so that they can clear out inventory and also remain on course to achieve their sales targets.
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time the launch during the festive season is aimed at boosting sales volumes. Sales volume of the Q-series (especially the Q3) is pivotal for Audi to achieve its goal of market leadership in 2013. Accordingly, the company has invested significantly in BTL activities such as the Quattro Drive Event to demonstrate the superiority of its 4X4 drive experience. On the digital front, Audi live streams the events and conducts contest mainly on Twitter to boost engagement levels. Audi India's Marketing Head Michael Perschke plays an important role in connecting with influencers such as Gul Panag on Twitter in order to increase the aspirational value of the brand. However, contests are note very effective for lead generation because the participation is mainly from aspirants. Therefore, it doesn't double up as an effective strategy during the festive season. BMW is releasing a new variant of the X1 in November 2012. In order to clear out the old inventory, it has offered the existing version at a discounted price for a limited period during the festive season. The company is adopting a strategy of pushing out the promotional message through its social channels as well as paid advertising. Surprisingly, the promotion does not appear on the platform that matters most for sales - the brand website. The company is making the common error of mistaking digital as a medium that creates demand. While the fact is that the web only influences people
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already inclined to make a purchase. A report released by Google India in 2011 stated that 65% of car buyers do their research on the net before making a purchase. As a result, we observe a big gap between the actual outcome and the desired one.
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their intended purpose. Brands will be better served to spend this money on direct channel like mailers to qualified leads. b. For a luxury car brand that sells ~10,000 units in a year, the active audience on its social channels is largely comprised of aspirants. The aspirants play an important role in maintaining the engagement levels. But the main brand objective during the festive season is to generate leads and convert into sales through offers and discounts. Therefore, aspirants are not the main target group and spending on contest and promotions to keep them engaged is a bad marketing decision. To illustrate this point, we look at the potential ROI for the Quattro drive contest done by Audi India.
We assume that the social media team of Audi has at least 2 people (Copy writer, Community management) responsible for the daily management of the brands social platforms. We estimate a monthly salary of INR 40,000 50,000 and approximately 40% (c.4 hours) of time spent on managing the channel. Suppose it takes the team about a weeks time to conceptualise the contest, organise it, despatch prizes and handle complaints. That gives us a total employee cost of INR 10,000-13,000. Based on a total of 10 winners and an average of INR 10,000 worth merchandise per person, we arrive at a total cost of prizes of INR 1,00,000.
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We also try to estimate the opportunity cost of this activity. The media spend, instead, could have been used on campaigns such as direct e-mailers providing a better targeting to the brand. Suppose a targeted e-mail is sent to 2000 potential consumers, out of which at least 20 make an enquiry and 2 get converted. Assuming an average pay-out of INR 40,00,000 per car sold and net cost of 1,11,500 it provides us with a net opportunity cost of INR 78,88,500.
Therefore, Total Cost = Average employee cost + Prize Money + Opportunity Cost Total Cost = INR (11,500+1,00,000+78,88,500) Total Cost = INR 80,00,000
Compared to this, the brand engaged even less than 100 users through the contest. That provides us with an approximate cost of INR 80,000 per user.
Therefore, it is evident that short term tactical contests aimed at boosting engagement levels havent been effective in yielding results during the festive season when the primary objective is to generate leads and increase conversion.
RECONNECT GRADE
Shack Companis. All Rights Reserved. Social Leaderboard: Luxury Car Brands
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BMW tied up with Delhi Half Marathon to reinforce the brand message of efficient dynamics. The event connected with 21 in 1000 members out of which merely 8 in 1000 showed improved awareness.
Reconnect Grade
1.1%
1.0%
Reconnect Grade
4.0%
2.1% 2.0% 0.8% 0.8%
0.6%
0.3%
0.1%
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RECONNECT GRADE
As we have asserted in a previous report, one-off contests are not effective in translating into relevant buzz around an event. It was no different during the Quattro golf cup. Only 15 in 1000 members amplified the event buzz as against 51 in 1000 participating.
Reconnect Grade
4.0%
2.9%
2.0%
1.6%
0.6% 0.1% 0.1%
0.1%
Reconnect Grade
1.2% 0.4%
0.1%
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RECONNECT GRADE
The new B-class launch was met with mostly positive reactions. ~20 in 1000 members are impressed with the value proposition and feel that the launch will improve Mercedes market share in India.
Reconnect Grade
Reconnect Grade
4.0%
2.0% 0.3%
0.2% 0.2% 0.2% 0.1% 0.1%
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About the Social Leaderboard
The Leaderboard updates the results derived from our internal tools and methodologies on a bi-monthly basis, based on which we will bring out our conclusions. Shack uses a proprietary grading mechanism ShackMatrix to derive the Authority, Activity and Reconnect Grades, which are key determinants of a brands social presence. Read more about the Matrix and Grades.
Why Communities?
Create, Connect, Curate The Shack Manifesto for Building Communities
With the social online world becoming an important cog in a customers relationship with a brand, there is a need for a common language that can give meaning to the seemingly unstructured social data scattered across platforms that represents a brands interaction with its core community. As has happened with the introduction of any new communication medium, practitioners are making the mistake of using the measuring stick (such as views and reach) of traditional advertising media to gauge success in the social web. For over a half a century, we have been thinking about
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marketing in terms of campaigns with a very clear beginning, middle and an end. But the online digital world is currently in the process of being rebuilt around people and what we know as the social web, in a few years, would simply be the web. Therefore, long term success for brands depends on leveraging these human relationships to create a strong sense of community around products, concepts and values that are dearest to the brands.
Activity Grade: Measures the level of activity on existing channels. Re-Connect Grade: Measures the extent to which community members connect and identify the brand with the attributes desired by it.
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Data Methodology
We take online performance as a holistic concept. While size of the brands community and level of activity are important factors, the profile of the TG, the authority of the brands platforms and its recall are also equally important ingredients. In calculating the ShackMatrix, we assign weights to the different metrics on individual platforms in order to combine them into a single comparable grade that is relevant to the digital objectives of the brand. The weights are decided based on the relative effectiveness of the platform to a brands community as well as the brands own digital goals.
Disclaimer
While reasonable effort has been made to ensure accuracy of data, Shack is not responsible for any damage caused by individual decisions based on it.
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About Shack
Shack is a digital marketing company which brings together brands and their customers in carefully crafted, wholesome communities, providing exceptional experiences for all.