The UK’s Marketing magazine this week posted an intriguing article outlining how Unilever was “shifting focus from social media to word of mouth”.   In fact, as the piece acknowledges, it’s not that Unilever is turning its back on social media as such, but that the global fmcg power is demanding more from it.  Unilever’s  Debbie Weinstein is quoted as saying “We are now looking to develop broader social CRM programmes and trigger advocacy through word of mouth.” – with outcomes such as ‘Likes’ being insufficient.

Unilever is right to demand more from social media.  We’ve noted recent strong evidence that engagement levels in social media are very low for most brands, and that the primary driver of social media conversations is social signaling on the part of consumers;  when emotional ties are key, offline WOM provides more impact for brands.

So, how much advocacy can social media realistically trigger for fmcg brands?

If we take the US, Unilever’s Dove is among the 50 most talked about brands, and with 79%  positive sentiment the advocacy levels are good.  But social media was referenced in just 1.8% of Dove conversations – much less than many other media/promotions channels.  In the digital space, our data shows consistently that brands’ own websites are often more powerful in driving advocacy, even for fmcg brands where there is relatively little transactional content.

This does not mean that social media is incapable of driving advocacy – but it’s far from the only or most effective channel if scale is required.  Of course it may still deliver good ROI – but if that’s the issue then measurement needs to be broader than social media itself.  Our data shows that in personal care for example, over 80% of advocacy from social media occurs offline.

So, Unilever’s impressive brand portfolio can and often does benefit from strong advocacy – and the evidence is clear that there’s still a big role for traditional paid-for media and promotions alongside digital;  as we’ve noted before, there is a clear warning from robust empirical research about  over-reliance on social media.

With this week’s Facebook IPO filing, a lot of big numbers are being bandied about:  An estimated $5 billion initial offer, and perhaps between $75 and $100 billion for the total market valuation.

Facebook also represents big numbers to brand marketers: An audience of nearly 1 billion consumers, and the growing legions of brand fans – often tens of millions –marketers have accumulated on Facebook.  Social media pundits often liken them to an army of brand advocates, ready to engage on a moment’s notice.

The only problem with this scenario is that it turns out most fans are quite unenthusiastic about playing this role.  After the initial click to “like” the brand, they rarely interact again with the brand on Facebook.  That’s the headline finding from a new study, just released by the prestigious Ehrenberg-Bass Institute for Marketing Science in Australia.  The Institute summarized the findings as follows:  “Big Brands Snubbed by Fans on Facebook.”

According to Dr. Karen Nelson-Field, who led the study, “many brands moved quickly onto Facebook when it emerged as the new frontier for reaching an audience but it has since proved a challenge to engage with who claim to ‘like’ them.”

More specifically, the researchers looked at Facebook’s “People Talking About” metric to better understand consumer involvement with brand pages for which they are considered fans..  “People Talking About,” which was launched in October 2011, is designed to be an engagement metric for Facebook fan pages.  It measures people who contribute any type of content to a fan page, including initial liking, liking specific content on a page, posting to a wall, commenting, sharing a post or other content, answering a question, photo tagging, sharing a deal, or any other way a user can share interactions with brand pages.  The Ehrenberg-Bass study analyzed these consumer interactions for the top 200 brands on Facebook during a six week period last fall.

The result?  Only a very small number of fans–1.3% according to the study–engage with the fan pages during the course of a week.  And many of these are the result of an initial “like.”  Among those who have already liked the brand in the past, engagement drops to a mere 0.45%.

The results are consistent with research I have written about previously, which also showed “of the ten brands with the largest number of Facebook fans – 20 million fans on average – just 0.45% are active fans.”

As I wrote then, “Facebook has tapped into a powerful social need of consumers around the world, and has amassed an extraordinarily large audience.  But it has not yet unlocked the secret to engagement with advertiser brands.”

Dr. Nelson-Field agrees, calling 0.45% “not a totally miserable figure,” but rather, “a sobering one, particularly given engagement is supposed to be what differentiates Facebook from other mass reaching media.”  And, she continues, “This doesn’t mean we don’t think Facebook is an important part of the marketing mix – we do – we simply encourage marketers not to spend a disproportionate amount of time and money trying to facilitate engagement or drive loyalty when we know that’s not going to happen with the push of the ‘like’ button.”

This is further evidence that brands must think holistically about social engagement, and consider all the media/marketing channels that drive consumer word of mouth and brand advocacy.  Driving fan engagement on social networking sites is one vehicle among many.  As we have said before, “all media are social,” suggesting there are multiple touch points that can be deployed by marketers to unleash advocacy. And the behaviors that define engagement need to be looked for offline as well as online.

I have written previously about a groundbreaking academic study that highlighted how fundamentally different online conversation is from offline word of mouth.  The headline finding from that research, released in late 2010 at a conference convened by the Wharton School and the Marketing Science Institute (MSI), was clear:  “Online data does not reflect well the offline behavior. Word of mouth is not channel neutral. One cannot automatically generalize the results from online to offline.”  This is particularly relevant in light of the fact that social media – despite its rapid rise to prominence – still accounts for less than 10% of all word of mouth.

The authors of that research have now released a new working paper that sheds further light on the question of offline versus online word of mouth, and why it matters to brands.  In this analysis the focus is on brand characteristics and how those relate to the word of mouth channel consumers choose to deploy.

According to the authors, Professors Renana Peres, Ron Shachar, and Mitch Lovett, “consumers spread the word on brands for three fundamental purposes: functional, social, and emotional. In brief: the functional driver is the motive to provide and supply information; the main social driver is the motive to send social signals to the environment [such as expressing uniqueness, self-enhancement, and a desire to socialize or belong]; and the emotional driver is the motive to share positive or negative feelings about brands in order to express these emotions or balance emotional arousal.”  Each of these drivers, the authors argue, “is composed of different needs, or motives that play a role in consumer decision making. Each of these motives, in turn, suggests a set of brand characteristics that play a role in stimulating WOM.”

The analysis is based on a very large set of data including online word of mouth (provided by NM Incite, the joint venture between Nielsen and McKinsey), offline word of mouth (provided by the Keller Fay Group), brand equity (provided by Brand Asset Valuator), and custom research on brands (conducted by Decipher). Approximately 700 US brands in total were analyzed, spanning 16 product categories, covering the period from 2007 – 2010. So this is a very comprehensive and robust research undertaking.

The primary drivers of online word of mouth, the authors find, are (in order):  social, functional, and emotional.  The primary drivers of offline word of mouth are the reverse:  emotional, functional and social.  “Offline conversations, which are mostly in one-on-one settings, are more personal and intimate by nature and thus allow people to share emotions such as excitement and satisfaction. Online WOM, which usually involves ‘broadcasting’ to many people (e.g. twitter), is more appropriate for social signaling (e.g., uniqueness).”

These results about the motives associated with WOM via different channels may explain why the breakdown of brand categories varies so widely by online versus offline.  Media, autos and technology dominate online – all three carrying with them significant social currency in terms of what’s new, interesting, and worth sharing with others if your goal is to show that one is “in the know.”  Meanwhile, numerous other categories are heavily underrepresented in online venues relative to offline.  And yet the value of recommendations in those categories, which come primarily offline, is every bit as important and related to business success.

Category Distribution of Offline and Online Word of Mouth

What does this research mean in practical terms? It means that marketers can’t choose a “social strategy” without first understanding the motivations of consumers to share.  Online social media will be most effective if you have a new product or a new message for which social currency will be gained by sharing. But if you are seeking to tap the emotions that come with strong brand satisfaction and excitement that comes as a result of a recent purchase or exposure to an advertisement, then look for ways to help consumer share those stories offline where they will have their best chance for success.

Offline and online:  These are two different channels, requiring different marketing strategies.  They are not mirrors of each other, and by no means redundant.   Marketers who are searching for the best way to unleash consumer conversation about products, services, and brands, need to take a holistic view and create strategies that are appropriate to the drivers of brand WOM, both those that are expressed online and those that take place offline.

UK department store John Lewis hit an apparent bulls-eye over the Christmas season, achieving the kind of viral success with its seasonal TV ad that all marketing directors crave, with four million hits on YouTube.   Most brands today are desperately figuring out how to create content which is also shared widely and quickly.

Is this a realistic strategy, or is it the marketing equivalent of hoping for a lottery win or X-Factor success, rather than setting your sights on a more attainable career plan?  Looking at the latest stats on what is being shared suggests the ‘lottery win’ analogy is the reality for many brands and categories – something obviously desirable, but you’d best not plan your life or brand strategy assuming it will work.  Moreover, it’s clear that the branded content which is shared is not a good indicator of which brands are talked about.

Thus, the John Lewis ad duly appears in Unruly Media’s viral video chart of ads shared in the UK during 2011, but the reality is that much of the content in this list is best described as ‘sponsored entertainment’ rather than messaging about the brand itself (e.g. T-Mobile’s Royal Wedding film, or Ken Block Gymkhana).  In a typical week only a handful of true ‘ads’ get shared by large numbers – this week’s UK chart shows ads for VW, Mr. Block & his shoes, and the Vinnie Jones/British Heart Foundation spot, but these top 3 only just manage a little over 10,000 sharings, and outside the top 20 you struggle to reach 1,000.  Even if one share generates 10-20 views, it’s hardly mass media for most brands.

For print media, Facebook data shows a similar pattern – the role of brands in the big shareable stories is limited, and apart from promotions/coupons, little print advertising gets shared.

The reality is that sharing is heavily orientated towards entertainment (especially music videos), and brands often play second fiddle.  Keller Fay data shows that most brand-related conversations cover a much wider range of brands/categories and topics, not reflected in these viral charts.  These more everyday conversations will have more impact than content-sharing for many brands.  This does not mean that these brands’ communications have no impact, or have no word of mouth effect – simply that online sharing is only one measure of viral impact, albeit a highly visible (for video) and desirable one.

Brands face a dilemma – whether to go all-out for viral success with some clever entertainment that may not support the brand very much, or focus on more straightforward (‘traditional’ if you prefer) brand messages that might not go viral as easily or overtly.  And that last part is the key – WOM impact goes beyond direct sharing of content online.  Our view is: make your brand the star, with a brand message that is shareable—online, of course, but offline too.  Give your brand fans something to talk about and share, and they will spread your message for you.

As the trade press continues to focus on the year that was in 2011 and forecasts for the year to come in 2012, social media remains a hot topic of conversation. Two reports have come out recently making the case that email remains a big and effective part of the social story.

In his keynote address to MediaPost’s Email Insider Summit, Tynt CEO Derek Ball noted that despite the growth of Facebook, sharing via email has gone up over 20% in the past 18 months.  “We call email the original social network because it really is social,” he says.  About a week later came a report in Marketing Profs that two-thirds of business leaders (68%) say they plan to integrate social media with their email marketing efforts in 2012, suggesting the value of a hybrid solution.

These two reports caused me to wonder where exactly email fits relative to other online media when it comes to word of mouth, and how has that changed over time?  Our analysis compares not only social media versus email, but also IM and texting given the growing importance of mobile in the social mix.  The basis for the analysis is my firm’s TalkTrack study, which provides a continuous monitor of people’s online as well as offline conversations about products, services and brands.  A number of interesting findings emerged:

First, brand-related conversations via social media have been on the rise, as one would expect given all the press about social media and that sharp rise in social media usage. However, on an absolute basis, people are still more likely to talk about brands via email than via social media. And, as it turns out, the proportion is even bigger (and still growing) for brand-related conversations via IM and texting.

Thus, 45 percent of technology-enabled brand conversations happen via IM/text, up a few points from the year prior. A third (32%) occurs via email, representing a 5-point drop since last year. Just under a quarter (23%) takes place via social media (up 3 points from a year ago).

There are important age-related differences here. The profile of those who use email to “talk” about brands generally mirrors the population as a whole, while youth (teens and 20-somethings) are disproportionately represented among those who talk about brands via social media and via texting/IM.

This all serves as a valuable reminder that social marketing comes in many shapes and sizes, and that the marketer’s social playbook needs to take advantage of any channel that helps to spark and support consumer conversation. Here we highlight the role of social networking sites relative to other ways people can communicate online; elsewhere we have broadened the discussion to include offline conversations as well, and the role that “traditional” media can play in driving conversation.

Taken as a whole, it’s important to remember that all media are social, as we’ve said before. It follows, as well, that all digital channels are social.

In Steve Jobs, Walter Isaacson talks about the seven industries that Steve Jobs revolutionized:  personal computers, animated movies, music, phones, tablet computing, digital publishing, and retailing.

As we approach Thanksgiving and “Black Friday,” the most important day in retail, let’s consider how the Apple Stores changed business retail, which is the topic of Chapter 29 in the Jobs biography. It’s easy to forget how dismissive experts were when Apple decided to enter the retail business in 2001.  “Maybe it’s time for Steve Jobs to stop thinking quite so differently,” wrote Business Week.  Of course, the Apple Stores went on to achieve record breaking success, despite such doubts, because they had a mission that was about more than providing a place for transactions with customers.  Jobs envisioned the stores as a center of consumer conversation–word of mouth–for the entire Apple enterprise.

As Isaacson explains, Jobs realized in 2000 that for Apple to be successful, it needed to have a way to communicate directly with customers, and the best way to do that was with retail stores.  But it’s not just a conversation between Apple’s employees and its customers that matters, but also customer-to-customer communications.  “In July 2011, a decade after the first ones opened, there were 326 Apple stores,” recounts Isaacson.  While the stores proved to be very successful from a sales perspective, “the stores did even more.  They directly accounted for only 15% of Apple’s revenues, but by creating buzz and brand awareness they indirectly helped boost everything the company did.”

In other words, retail for Apple was not only a sales channel but also a word of mouth channel. The Apple stores became a center of consumer conversation—those that happened on premise, as well as the stories of a great shopping experience shared later, at the water cooler or over the kitchen table.

There is a valuable lesson for all brands here.  According to research by my firm, the Keller Fay Group, 5% of all brand conversation actually occurs inside stores.  While not a very large percentage, it is a very large volume, as consumers are exposed to in-store brand conversations some 750 million times per week.  One of the real benefits of a strategy which focuses on retail environments is that word of mouth conversations that take place in a store are by far the most likely to have active recommendations to buy or try the brand being discussed, and they have the highest levels of purchase intent.

What sparks in-store conversations?  Some are driven by the product package itself, and some as a result of in-store displays or videos.  Some are just a matter of people shopping together and talking about the relative merits of one brand versus another, or about which brands are offering deals that day and are therefore worth buying. But retail is also a place where people can see and sometimes sample products that excite them, and share the excitement with friends or family in the store.

This is the key to Apple’s highly successful retail stores – they are a place to shop and buy, but they are also a place to experience Apple products and get caught up in the emotional energy that seems to just compel visitors to talk to one another.

With the holiday shopping season upon us, it’s a strategy that all brands should be thinking about.   Is your brand doing all it can to maximize its word of mouth at retail?

Imagine you have an important marketing investment decision to make, and you have what you think is clear and compelling evidence. Then, you subsequently learn that in fact you are overestimating the impact of your investment by as much as 40%. You’d be pretty upset.

This is what may be happening today as marketers seek to understand and quantify the impact of their social media investments, according to a new analysis by MarketShare. It is one of several thought provoking points put forth by Pat LaPointe, EVP at MarketShare, in a recent piece in the Journal of Advertising Research (JAR) about the relationship between “traditional” and “social” media.

Business investment in social media is on the rise, a statistic most recently reinforced by a survey released recently by the ANA (Association of National Advertisers). But how should marketers look at their social media investment vis-à-vis their investment in traditional media? Should spending on social media come at the expense of investment in traditional media forms? That is an issue that is not so well understood yet.

LaPointe calls “traditional” media the “rock in the pond” of social media. By this he means, “When the message delivered by traditional media is either very good or very bad, the media message reverberates throughout the social spectrum like shock waves through a still pond hit by a rock. This ripple effect can add substantially to the overall impact of traditional media and boost the financial payback significantly. Modelers regularly miss this insight if their methods are set to read the impact of the social media alone, or are looking only at the online tactical elements. In both cases, the digital tactics get far more attribution than they really deserve. This, in turn, can cause many marketers to underestimate the real value of traditional media and over-estimate the digital elements—sometimes by as much as 40 percent.”

LaPointe further notes that campaigns which rely on social media alone tend to be either unexpectedly expensive, in that they succeed due to discounting to abnormally low levels to encourage engagement and virality; or they have a very low probability of success (“one-in-a-million, perhaps?” says LaPointe) because they are attempting to catch “creative lightening in a bottle.”

These insights shed additional light on a fundamental finding that readers of this blog will know what we at the Keller Fay Group espouse, namely the importance of an integrated approach to social marketing. Online voices are important, but offline still accounts for the overwhelming majority of brand conversations. And while a positive customer experience is a critical driver of positive brand advocacy, advertising and other forms of marketing play a key role too. Our research shows that about half of all consumer conversations include references to media/marketing . . . led by paid advertising.

Further, we have written that when it comes to “social value,” all media are social and that in several important ways “traditional” media have a far more compelling story to tell than the leading social networking sites.

What do we mean by this? The audience for social media platforms like Twitter and Facebook have appealing qualities for marketers: They have larger “real world” social networks than the average American; they talk more about brands each week; and they are more likely to make recommendations about products, services, and brands across a range of categories. But when compared to the audiences for “traditional media,” Twitter and Facebook do not stand out as leaders. When it comes to which audiences have the largest social networks, wsj.com is the leader by a wide margin; neither Facebook nor Twitter is in the top 10. When it comes to which audiences have the most brand-related conversations per week, Vogue’s audience is the leader; again, neither Facebook nor Twitter break the top 10. The same pattern holds when it comes to which media audiences are the most likely to make product recommendations, or which have the highest concentration of influencers – Twitter and Facebook frequently are in the middle of the pack.

The MarketShare analysis provides important additional evidence of the important relationship between these traditional media and social marketing. Strategies to deploy social networking platforms should not be put in a silo and asked to perform a solo act, particularly if performance and profitability are your goals.

At a conference earlier this year, an executive from Facebook declared that social networking sites like Facebook deliver “word of mouth at scale.”  He went on to say, “This is what marketers have always tried to bottle up.  The social web is finally allowing us to do that. This is word of mouth on steroids.” The notion that social media is word of mouth on steroids is a comment I frequently hear others make, as well.

Last week, I came across an article documenting “The 100 Most Engaging Brands on Facebook” for the month of September.  At first blush, the numbers appear to be impressive, indeed.  Topping the list was Facebook itself with 53 million fans, followed by Coca-Cola (34m), Disney (28m), Starbucks (25m), and Red Bull (22m).  Rounding out the top 10 were McDonalds (10.4m), ZARA (10.1m), Walmart (9.2m), H&M (8.3m) and Blackberry (8.3m).

I say “at first blush” because the report included not only the total number of fans, but also the number of “active fans.” The ranking, released by FanGager (a social media fan engagement platform), uses the word “active” to refer to “people liking or commenting, tallied cumulatively.”

The drop from “fans” to “engaged fans” is dramatic.

For example, of Coca-Cola’s 34 million fans, 56,000 are “active.”  That is just 0.2% of the total.  The Disney story is similar, with just 0.3% of the total fans qualifying as active.  Starbucks fared a bit better, with 1.3% of their total fans (42,000 people)being active.  The most extreme example from the brands with the 10 largest numbers of fans was McDonalds, with only 3,892 active fans (which rounds to 0%), according to FanGager.  Even Facebook itself, with the largest number of fans, has only 0.1% who are active.

All told, of the ten brands with the largest number of Facebook fans – 20 million fans on average – just 0.45% are active fans.

Rob Norman, North American CEO of GroupM, spoke to this very issue recently saying that the wrong numbers tend to dazzle agencies and marketers alike.  Fan engagement is a better metric than the absolute number of fans, he said.  “That’s where the real value is.”  And he too, noted that engagement numbers are just a small fraction of the total.

Let’s contrast these social media fan engagement figures with the number of offline conversations for some of these brands, as measured by my firm, the Keller Fay Group.  In the US alone, Coca-Cola enjoys 860 million offline conversations during an average month, including 442 million active recommendations to buy or try Coke.   Compare that to the 56,000 active users on Facebook.  Which one sounds more like word of mouth on steroids?

For Disney, there are 125 million offline conversations in a typical month, and 61 million active recommendations on behalf of the brand.  Compare that to Disney’s 83,860 active Facebook fans.  And Starbucks enjoys 119 million offline conversations during the average month, of which 67 million are active recommendations.  Starbucks had 76,000 active fans on Facebook during a recent month, said FanGager.  The list can go on, and the story would be the same.

Facebook has tapped into a powerful social need of consumers around the world, and has amassed an extraordinarily large audience.  But it has not yet unlocked the secret to engagement with advertiser brands.  GroupM’s Irwin Gotlieb thinks the solution is for advertisers to “think less about physical channels and more about emotional channels.”  We at Keller Fay agree, and I have written recently about the importance of emotions as a conversational trigger and engagement glue.

In addition, we believe brands must think holistically about social engagement, and consider all the media/marketing channels that drive consumer word of mouth and brand advocacy.  Driving fan engagement on social networking sites is one vehicle among many.  As we have said before, “all media are social,” suggesting there are multiple touch points that can be deployed by marketers to unleash advocacy.  And the behaviors that define engagement need to be looked for offline as well as online.

At a recent event in Seattle sponsored by the Word of Mouth Marketing Association, Heather Oldani of McDonalds told the audience, “For brands, showing emotion is the new black.”  It resonated with the audience, and was one of the most tweeted takeaways from the event.

Oldani’s comment was a continuation of thoughts she had shared in September when she was the keynoter at the PR News Platinum Awards luncheon.  At that event she explained further:

“Listening, having a conversation, and building long-term relationships are all key traits that we as humans possess and employ at various times.  However, it hasn’t been until recently that the idea of connecting these ‘human elements’ to brands has been made. Ella Luna from IDEO declared at a recent design forum here in NYC, in which Fast Company quickly authored, that in today’s environment, being human is the ‘new black’ for brands. Specifically, and increasingly, companies are looking to show a more human side to their communications and the way in which they share content and involve others with the brand.  They are taking on traits like humor, honesty and openness in the campaigns they activate and in their ongoing communication and dialogue with key audiences.”

Oldani went on to say, “Every brand or organization has a story. It is those that tell it the best that will win.  And bringing a level of humanness to the stories you want to share and to your overall brand communication is key. ”

The importance of emotion and of storytelling was also a key theme in my presentation at the same WOMMA event, and a topic I have written about previously.   Most brands today appreciate the importance and value of word of mouth and social marketing.   And in pursuit of strategies to build more and better word of mouth, many focus first (and sometimes only) on the channel through which word of mouth can be spread — Facebook, Twitter, experiential marketing, etc.; or on the people who will share word of mouth — activating influencers and brand advocates, for example.

However, job one in creating a successful word of mouth strategy is to focus on your story – why should people talk about your brand?  You need to fill in the blank:  “When people talk about me, I hope they will talk about _________.”  Only after you have focused on your story, does it then make sense to focus on the people who will help you to tell your story, which in turn should be followed by the question of the best channels.

Further, it’s not just about having any old story to tell.  Ideally, it’s an emotion-filled story.  Research by my firm has found that strong emotional content is key to people’s desire to pass along things they hear about brands, either though word of mouth or online sharing.

More specifically, we have found that positive word of mouth is more “viral” than negative, and in particular conversations with positive emotions are especially viral.  While there is an assumption that people are more likely to spread negative news or experiences than positive, this turns out not to be the case.  On an overall basis, people are far more likely to have positive conversations about brands than negative.  And, they are one third more likely to tell others about conversations in which they hear positive things about brands versus when they hear negative things.

A similar conclusion was reached by Wharton professors Jonah Berger and Katherine Milkman when they undertook a study of the “most shared” articles appearing in the New York Times.  They found that positive stories get shared more than negative ones.  And the ones that are especially likely to get shared are emotion-laden stories– in particular, ones that inspire awe.

With the growing recognition of the value of recommendations, many marketers are now trying to uncover the keys that will trigger conversation and sharing.  The takeaway from these research studies is that while it’s common to assume that bad news travels further than good news, and that “funny”, “quirky” or “clever” are the keys to helping something “go viral,” this is just not true.  Give people things of value and they will share it (e.g., the utilitarian items such as coupons or tips for healthy living); or give them something that will drive strong emotions (what psychologists call “activation”) and they will feel inspired to share it with others.

To all of this, McDonalds’ Oldani reminds us that brands also need to bring humanness to what we say, what we share, and the stories we tell.