July 2012

BRANDGYM
RESEARCH PAPER 6
By David Taylor
Managing Partner
Can social media
show you the money?
www.thebrandgym.com
Introduction
About the research
In this, our 6th global survey, we ask Can Social Media Show you the Money?.
The rst part of the research was with over 100 senior marketing professionals
across Europe, Africa, Asia, the USA and Latin America, covering a broad range
of sectors. In addition, we did research with 1000 consumers each in the UK and
USA, to compare their actual use of social media* with how marketers think they
use it. Read on to see how wrong most marketers are!
We have brought to life the ndings with examples
from our work on brandgym projects, and through
interesting case studies we have come across in
our blogging and book writing.
* To clarify, this study focuses on the creation of content
using social media (e.g. Facebook pages, Twitter feeds)
and not online advertising on social media sites.
Social media is a red-hot topic today. Social media
is sexy, shiny and new. And its also a bit scary, with
headlines screaming that the whole world of marketing
is changing, and that old media like TV advertising is
dead. However, data on the brand and business building
effects of social media is thin on the ground.
We felt it was time to cut through the hype and hysteria
around social media, to better understand the role it can
play. We wanted to nd out: Can social media show
you the money?
In this paper we look at the following areas:
Why social media is hot: what are the key drivers of
social media usage by marketing teams?
The limitations of social media: why social media has
a limited role and is far from replacing old media.
How social is your brand?: accepting the limitations of
social media, what role can it play for your brand?
What consumers really want: the real reasons for
consumers using social media from brands are not what
marketers think.
Key platforms :
Which social media
channels to focus
on, and why.


1 | JULY 2012 | BRANDGYM RESEARCH PAPER 6

Can social media show
you the money?
Hype
More
Hype
Even
More
Hype
SOCIAL MEDIA
MARKETING

The brandgym partners
www.thebrandgym.com
2 | JULY 2012 | BRANDGYM RESEARCH PAPER 6
Its what cool brands do:
The research conrms our belief that the key driver of social media usage by brands today is fashion,
not facts. Keeping up with trends was by far the main reason given by marketing directors for their
use of social media. This scored much higher than any hard evidence, or even gut feel, on the business
building effect of social media.

Part 1: Why social
media is hot
Its good for business (we hope):
Given the lack of evidence, a surprisingly high 58% of marketing directors believed social media
was a driver of business growth, although most of these saw it having a minor role (33%) rather
than a major one (25%).

Action point: Cut through the hype and refuse to be a follower of fashion.
Base your use of social media where possible on hard facts about what it can do for your business
and brand.
Keeping up with latest
marketing trends
Evidence of tangible
business benets
Gut feel on business
benets
19%
21%
59%
Main driver for companies use of social media
9%
32%
33%
25%
No impact on brand or business
Helps with brand image
Key driver of business growth
Minor driver of business growth
Role played by social media
www.thebrandgym.com
0% 20% 40% 60% 80% 100%
86% 14%
83% 17%
US
GB
Impact of social media on brand use
(% of people who say staying in touch with brands is important)
Already buying
brand before using
its social media
Started buying
brand after using
its social media
3 | JULY 2012 | BRANDGYM RESEARCH PAPER 6
Sensationalist, scare-mongering messages about the demise of TV advertising
and the rise of social media are popular headline-grabbers. In reality, social
media has a limited role to play, and conventional media is far from dead.
The limited reach of social media is shown by Coca-Cola.
Its Facebook following of c.40 million fans seems huge.
However, the following shows this is not quite true:
Cocu Colu worldwide users billion
lucebook reuch oI users c
And us only c oI Iuns ure likely to be new users
based on our research above, this means a potential
increuse in penetrution oI only

Part 2: The limitations
of social media
Social media has limited reach
The key driver of brand growth is penetration: having as many people as possible using you at least
once a year. Loyalty measures, such as frequency of purchase, are actually similar between brands
in a given category. Therefore, the key to growth is reaching as many people as possible, especially
light and non-users, to drive penetration . And this is where social media has serious limitations.
Our consumer research shows that
over 80% of people were already
using a brand before they started
interacting with it on social media,
with less than 20% new users. This
means social media has a limited role
in driving penetration of your brand as
youre talking mainly to existing users.
And if you think you can make them
more loyal, you are ghting the facts
of brand growth: loyalty levels across
brands are similar in a given category.
This means that trying to grow share
by Increasing loyalty is a losing game.
www.thebrandgym.com
4 | JULY 2012 | BRANDGYM RESEARCH PAPER 6
Advertising is far from dead
Advertising, especially on TV, is far from dead. Old media still has the central role to play for most
brands, for several reasons:
keach advertising has the reach you need to drive penetration.
kOI TV advertising has the highest ROI of any medium, according to econometric research by
Thinkbox. And this ROI is actually up +22% in the last ve years, owing to growing commercial TV
viewing and lower costs.

Part 2: The limitations
of social media
What about word-of-mouth?
Word-of-mouth is often portrayed as a key reason for
brands to be active on social media. In reality, 90%
of word-of-mouth conversations about brands still
take place ofine, primarily face-to-face, according to
research by Ed Keller and Brad Fay. As they say, Online
social networks are far from the Holy Grail of marketing.
A far bigger and more powerful force is real world, face-
to-face conversation.
Action point: Ignore the hype about the demise of old fashioned marketing, it still has
a key role to play for most brands. In reality, social media has a supporting role in amplifying your
marketing, given its limited reach and the inability to plan the size and nature of the audience.
|annab|e conventional advertising allows
you to plan the size and targeting of your
audience In contrast, social media is a lottery.
Its impossible to predict how many people of
what target will like your Facebook page or
watch your YouTube video.
Ignition most viral online success stories were
originally driven by TV advertising. For example,
Old Spices The man your man could smell like
million ou1ube views wus ignited with
the most conventional form of old media there
is: a TV advert in the Superbowl.
www.thebrandgym.com
5 | JULY 2012 | BRANDGYM RESEARCH PAPER 6
Accepting the limitations of social media, what role can it play for your brand? To start with,
you need to get real about the role of brands in general in peoples day to day lives. Only 7% of
UK people saw social media as being very important for staying in touch and interacting with
brunds with the US slightly higher ut 1his is dwurIed by the importunce oI Iriends und Iumily
(39%/50% in the UK/US). These results help explain why people like on average only 9 brands on
Facebook, compared to an average of 200+ friends.

Part 3: How social is
your brand?
0%
10%
20%
30%
40%
50%
60%
Use social media to stay in touch/interact with...
(% Very Important)
GB
US
Friends/Family
39%
50%
Hobbies
9%
16%
Everyday
products/services
7%
14%
0%
10%
20%
30%
40%
50%
60%
70%
GB
USA
80%
90%
100%
TOT 16-64 16-24 25-34 35-44 45-54 55-64
Social media usage in P4Weeks
How social is your
brand?
Even within this minor role for brands,
not all brands are equal. In the league
table of brands liked on Facebook,
consumer goods products come rock
bottom (8%), in research by DDB. At
the top were brands from media (55%),
churities und Iushion
These results reect the fact that most
brands are just not that social. If social
media is a virtual pub or cafe where
conversations happen, would people talk
about your brand? Would people want
to read your brands weekly magazine,
or watch its daily TV show? If your brand
is closer to pasta sauce than Prada, then
the answer is probably a resounding no.
How young is your
brand?
A further point to bear in mind is how
important younger people are to your
brand, given their higher usage of social
media. If you are a brand like Axe, Nike
or Levis where this a key audience,
social media will play a bigger role.
www.thebrandgym.com
6 | JULY2012 | BRANDGYM RESEARCH PAPER 6
Can you sell online?
A nal factor to determine the role social media can play for your brand is the link to selling more
stuff. If online is a key sales channel for your brand, then social media can be a revenue driver, not
just a communication medium. An example of a brand like this is The X-Factor, a reality TV singing

Part 3: How social is
your brand?
Action point: Dont spend more than 5-10% on Social Media, unless you
are a social brand, selling online. Evaluate how social your brand is and the importance
of online sales. For most everyday brands this will show that social media should take up no more
thun c oI your time und money
The score for Kelloggs is in line with our
survey, with 2/3 saying they are allocating
less than 5% of their budget or less to social
media. The % of team time allocated is
higher, with half allocating 5%+ to social
media, conrming the labour-intensive
nature of creating a stream of content.
Beermat business plan:
ou cun score your brund out oI on the
questions posed in this section. In this highly
sophisticated media model, the total score
is the % of your budget to spend on social
media, as shown in the example on the right.
0%
10%
20%
30%
40%
50%
60%
70%
% of time/budget allocated to social media
0%
3%
9%
1-5%
47%
60%
5-10%
32%
17%
10-15%
7%
5%
15%+
7%
13%
% Team
% Budget
How social /10?
How online /10?
How young /10?
TOTAL /30 = %Budget
8
5
7
20%
6
1
9
16%
2
1
2
5%
X-Factor / Idols TV show Lynx / Axe Kelloggs
contest, similar to Idols in other markets.
The brands UK Facebook page had a whopping 3.7million
fans and it helped generate online revenue by people
buying iTunes tracks of the weeks songs and by
encouraging mobile phone voting for who stays on the show.
In contrast, for consumer goods brands the link to selling
more of the core is much more in-direct. The best an
FMCG brand can do is link to an online shopping site, but
this is still a niche channel, accounting for only 3% of the
grocery market.
www.thebrandgym.com
7 | JULY 2012 | BRANDGYM RESEARCH PAPER 6
Consumers DONT want a conversation with brands
Assuming you are going to allocate some time and money to social media, how best to use this?
What do consumers want from your brand? Well, here Marketing directors seem to be out of touch.
About oI murketers believe thut consumers wunt u wuy conversution with brunds 1his ruises
expectations about how involved consumers want to be in creating content themselves. In reality, a
mere 5% of consumers said they used brands social media for this reason.
In contrast, desire for useful information and deals is much higher than marketers think. This means
you need a stream of distinctive, relevant content and attractive promotional offers to be active on
social media.

Part 4: What
consumers want
99% of consumers dont interact
The low interest in 2-way dialogue is conrmed by data on the top 200 brands on Facebook, done
by the Lhrenburg 8uss lnstitute L8l Only oI people who liked u brunds lucebook puge were
interacting with it, based on the metric People Talking About This (total likes, posts, comments,
tags, shares). In other words, 99% of people were on the brands Facebook page to consume
content, not create it.
0%
5%
10%
15%
20%
25%
30%
35%
Why consumers use social media from brands
40%
What Consumers Do (GB/US)
What Marketers Think
Useful, helpful
info on brands
45%
41%
29%
Getting deals/
promotions
29%
12%
Interesting,
entertaining
brand-created
content
25%
27%
2-way
conversation
with brands
32%
5%
www.thebrandgym.com
Content is king
Brands need to create a stream of distinctive, relevant content on social media, and this has several
implications. First, this needs a new skill-set. You may need someone with writing or journalistic
experience to lead the creation of brand content, either in your team or an agency partner. And, like
a newsroom, you have to react on the spot to important events and consumer comments. Marks &
Spencer work on a 2-hour response time to comments in social media, for example.
8 | JULY 2012 | BRANDGYM RESEARCH PAPER 6

Part 4: What
consumers want
Content creation, talent and speed were all seen as being
difcult for over of our marketing directors, topped only by
the challenge of proving ROI.
The key challenge for a newsroom is to have a stream of
interesting, impactful news that can make headlines. This is
where brands with large ranges of products and services, such
as retailers, have an advantage of more to talk about than the
limited offer of most product brands.
Action point: Content is king - hire an editor You need an editor to lead content
creation: you may have to hire in or sub-contract to someone with writing or journalistic experience.

0%
10%
20%
30%
40%
50%
60%
70%
37%
Extremely difcult
Difcult
80%
90%
100%
54%
Proving ROI Right talent to
create content
Creating relevant
content linked
to my brand
Quick response
to consumers
18%
34%
25%
39%
13%
34%
10%
Which social
media channels
to focus on
49%
The Gatorade newsroom -
monitoring social media in real time.
Social media challenges
www.thebrandgym.com
9 | JULY 2012 | BRANDGYM RESEARCH PAPER 6

Part 5: Which social
media platform?
Action point: Focus your effort on the platform that has the biggest reach
with your consumers For most brands thats likely to be facebook.
has by far the biggest audience (900 million) and give more ability for brands to
create interesting content. The key challenge on Facebook is creating bite-sized bits of compelling
content, given that 90% of people consume brand content as part of their news feed, not on
the brands Facebook page as you might expect. You have to stand out amongst the news from a
persons c.200 friends to be seen.
has a much smaller role to play, given its even more limited reach. It has fewer
members million And brunds pluy un even smuller role thun on lucebook the UKs top
brunds 1witter Iollowing is only oI their lucebook Iollowing 1he muin role oI 1witter Ior brunds
is a new-age helpline, most relevant for complex service brands, and following celebrity CEOs. For
example, the CEO of US retailer Zappos, Tony Hseieh, has 2.4 million followers, almost 200 times
the following of Zappos.com.
Whilst every marketing director dreams of a YouTube sensation that goes viral,
we suggest that viral success should be seen as a bonus to your conventional media plan, not the
main objective. Firstly, the key drivers of virality seem to be sex, humour and spectacle, and these
my not t with your brand. And more importantly, YouTube success is a lottery. For every viral
success, many more lms fail to y.
With a better understanding of what
consumers want from social media,
where should you focus your limited
time and money? After all, social media
enthusiasts like to scare us by showing
an ever expanding plethora of platforms.
Our marketing director survey conrmed
our belief in a focus on Facebook and a
supporting role for Twitter and YouTube.
Brands own websites also came out as
being extremely important.

Extremely important social media platforms: Marketing Directors
www.thebrandgym.com
For example, we worked with the Carling Black Label brand in South
Africa on a digitally-empowered activation called Be the Coach.
This allowed soccer fans to vote via mobile phones to actually pick
the teams for a special cup match between South Africas top 2
teams, the Kaiser Chiefs and The Orlando Pirates.
An umuzing million votes were cust in weeks And the cumpuign
has helped improve brand imagery, most often used and volume.
During the match fans could vote via SMS for the player they
wanted to substitute.
10 | JULY 2012 | BRANDGYM RESEARCH PAPER 6

Part 6: Beyond
social media
Action point: Think beyond social media
Bigger opportunities may come by looking beyond social media to other digitally empowered ideas.
Other examples of digitally enabled brand activity include
the Nike+ alliance with Apple that allows you to track your
runs with your iPod or iPhone, and Gillettes launch of an
online subscription service for getting re-ll razor blades.
Whats our digital strategy? is the wrong question
Social media is only one aspect of the digital world brands operate in today. In fact, Whats our
digital strategy? is the wrong question. A better question is Whats our strategy for a digital world,
as this opens up opportunities beyond social media.
Conclusions
In response to the question Can social media show you the money, the jury is still out. On the upside,
social media can amplify the rest of your marketing mix with limited extra budget, though you need to invest
in people to create great content. However, you need to cut through the hype to understand exactly what
role it can play, and avoid feeling pressurised to just do it to keep up with marketing fashion. Specically:
Socia| medias supporting ro|e given its limited reach, social media is far from replacing old
media and is rather there to amplify the rest of your mix.
Most brands are not socia| or on|ine if your brand is closer to pasta sauce than Prada, social
media should probably use less than 10% of your budget.
Content is king most consumers want interesting content, not interaction, and you need a
new team to create this.
Iocus on Iacebook it has the biggest audience and opportunity for creating content. Twitter
is tiny. And YouTube viral videos are a lottery.
1hink beyond socia| media there may be other, bigger digitally-powered opportunities to
build your brand and business.
Anne Charbonneau (Benelux/France)
M: +31 611 64 34 07
E: anne@thebrandgym.com
Silvina Moronta (Latin America)
M: +54 (9) 3436612393
E: silvina@thebrandgym.com
Prasad Narasimhan (Asia)
M: +91 8951939090
E: prasad@thebrandgym.com
11 | JULY 2012 | BRANDGYM RESEARCH PAPER 6
www.thebrandgym.com
Diego Kerner (Latin America)
M: + 54 (9) 11 5 058 5900
E: diego@thebrandgym.com
David Taylor (Managing Partner)
M: + 44 (0) 7789 202 564
E: david@thebrandgym.com
David Nichols (Managing Partner)
M: +44 (0) 7787 148 806
E: davidn@thebrandgym.com
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We ure u network oI 6 senior brand coaches helping companies gain and retain brand leadership.
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