Monday, January 10, 2011

Online PR delivering sales

In research for Google, Boston Consulting revealed that the UK ecommerce sector is worth £60 billion and is growing at the rate of £6 billion every year.  

For companies and their agencies, this is a huge opportunity. For organisations harnessing the power of social media this is an awesome opportunity (http://goo.gl/cPYDQ).

This post explores how effective social media interventions have been in delivering real tangible returns and how effective and knowledgeable consultants working as social media partners can deliver effective results.

Traditionally the relationship between most PR activities and sales has been tenuous. Today, the direct link between online activities and very tangible outcomes, including sales outcomes is pretty common.

Old Spice Sales Double With YouTube Campaign
 “Old Spice Body Wash sales jumped 27% in the six months to July 2010, 55% in the latter three months and 107% in July, according to research firm Nielsen Co,” reported Emily Glazer, of Dow Jones Newswires. (http://goo.gl/oKDuK).

It would seem that the old output, outtake and outcome model of PR measurement has lost the outtake road block. Online PR delivers customers. 

We know from eConsultancy research that the majority of companies have difficulty measuring the return on investment (ROI) from social media. Almost two-thirds of respondents (61%) say their organizations are “poor” (34%) or “very poor” (27%) at measuring ROI (http://goo.gl/lPJnf).

 However, working closely with people who do have the numbers, including website traffic data, marketing and sale returns as well as using effective monitoring, the stumbling blocks to finding the cause and effect derived from online interactions is not quite as hard as many believe.
More generally we can use results based case studies that cover a wide range of PR sector practice to get valuable insights from Olde Spice to computers.
Lauren Fisher writes in The Next Web that ‘Sony have proved the power of Twitter with a fairly covert social media campaign that incentivised people to purchase their products and it worked. They reported an increase in Sony Vaio sales from Twitter in that period of $1.5 million. This is a pretty impressive figure and also puts into action this new way of buying – social commerce,’ (http://goo.gl/GD5B).
Of course, many people look at the claims that have come across the Atlantic but the results are just as compelling from case studies in the UK.
For Asos, a Facebook campaign achieved s 2.6% increase in ASOS Denim sales and a significant increase in the number of weekly new fan sign-ups during the 2-week campaign period, (http://goo.gl/6K2XI).
While the UK may have fewer case studies, there is every reason to believe that the UK should be even more responsive.

The Boston Consulting report shows that the UK is exporting internet goods and services at the rate of £2.80 for every £1 imported with an online advertising sector worth £13bn.

What is more, its per capita internet involvement (including online purchasing) is globally competitive and ahead of the USA, Germany, France and Italy.

 Bearing this in mind, it is useful to examine best practice worldwide. They offer experience and ideas that can be adapted and re-purposed by the savvy consultancy. There are any number of such examples and we have chosen a representative few in this paper.
Domino's credits Facebook and Foursquare promotions for lifting online sales by 61 percent in the U.K. and Ireland during the first half of this year compared to the same period in 2009. The international pizza chain also announced on Monday that web-based sales now account for 33 percent of its revenue, compared to 26 percent in 2009.
http://goo.gl/yI4ob
There is no doubt that practitioners’ do need to have a comprehensive view of the facilities that are available for best practice online. The lines are blurred between different communication practices and the adoption by a PR consultancy may be equally used by a marketing promotion company or other agency.

Shoppers using the Wet Seal  mobile phone tool are 40% more likely to buy something, and buyers spend 20% more. "Shop with friends" users become buyers at 2.5 times Wet Seal's average conversion rate online.


The iPhone app generates about 5% of Wet Seal's overall Web traffic, and the app has been downloaded more than 65,000 times. Girls look at about 500,000 outfits a week with their iPhones -- traffic that spiked to about 750,000 a week the two weeks before back-to-school.

Facebook has become one of the largest marketing bases for store traffic, thanks to coupons and campaigns, and one of the biggest drivers of traffic to WetSeal.com
http://goo.gl/Xr1uu


The value of using social media marketing is not confined to the biggest of clients. As one might expect big consumer tech companies should do well. But it comes as something of a surprise that they can be sufficiently light of their feet to create real returns using Twitter.

 Dell’s big announcement that they tracked $3 million in sales through their Twitter account came over a year ago in June 2009. What we are seeing now though, is a shift in user behaviour that shows we’re now more likely to purchase through social media. http://goo.gl/QANW

Even the smallest enterprise can benefit which means that consultancies with social media ready practitioners can help contribute sales to even the smallest account.

Curtis Kimball, the man behind the enormously popular Creme Brulee Cart in San Francisco, has quickly amassed over 12,000 Twitter followers in a little over a year. He knows that most of his business comes from people who follow him on Twitter because Twitter is the only way you can find the cart’s location for the day, says Kimball, a former construction worker turned creme brulee expert. “It gives people a valid reason to follow me,” he says. http://goo.gl/FUoZ


Last October, Dentist Dr. Vaksman signed up for a Groupon deal in San Francisco, and received 320 new patients because of the deal, which was for a patient exam and x-ray. The Vaksmans say that the deal propelled the five month old business in the right direction and boosted its patient base significantly.

The ability to adopt ideas from around the world is important for clients and consultancies and there are any number of examples to choose from.

Examples include  Delta Airlines which introduced a flight booking option through their Facebook page. 
Gap recently ran an offer with Groupon that offered users the chance to purchase a $50 giftcard at $25. This earned them $11 million in revenue.

Public relations, using social media can come up with really creative ideas that can even help turn underperforming capacity into a marketing win.

Every Tuesday, Joie De Vivre’s Twitter account will Tweet an exclusive deal to its nearly 10,000 followers. Followers have only hours to book the steeply discounted room rate. For example, this past Tuesday, it offered $79 rooms at the group’s Galleria Park Hotel in San Francisco in November and December. The company also operates similar deals for its 5,000-plus Facebook fans on Fridays.
In less than a year, Joie De Vivre has booked over 1,000 room nights through these types of deals—rooms that otherwise would have stayed empty. 

One of the most common responses consultants get is that social media is confined to consumer facing PR. A study by eConsultancy reveals that this is not true. Their research shows that there is not a significant difference in the extent to which B2B and B2C organizations are engaging with social media marketing (http://goo.gl/KWMgJ). Perhaps this shows that even B2C has a long way to go and justifies the Boston Consulting Group’s projection of growth at the rate of £6 billion per year.

The Direct Marketing Association expects digital marketing channels, driven by social media, to overtake traditional platforms, in a new report.

While direct mail is currently the top avenue for businesses, online channels are expected to surpass it within the next 12 months, according to TMCnet. Social media is the top emerging platform for many B2B firms, with 88 percent maintaining a social media presence. Professional sites, such as LinkedIn, are the most popular, followed by microblogs, including Twitter.

TMCnet quotes the DMA as saying, "these results clearly underscore the recognition that marketers see the need to experiment with new marketing channels which offer the opportunity to break through the marketing clutter with more personal and engaging messaging."

Social media is part of a multi- billion explosion of marketing and sales activity. It is effective at delivering very tangible results. There are case studies from around the world that have relevance in the UK, one of the top most active e-economies worldwide.

Every sector can benefit and there is significant evidence that growth in this sector is set to outperform other marketing communications sector over the next few years.

The online marketing model has gone through many transformations in the last decade. The turn of the century idea that ‘in your face online advertising’ would work was quickly dismissed as users just left such sites in a huff.  Pay per click remains useful but as the power of search emerged as the number one way to find new information, Search Engine Optimisation came to the fore. Now, we have seen that the power of the online community and how it can translate into real sales and behaviour changes. The shift from broadcast to community plays into the hands of the online PR practitioner used to holding conversations.
Understanding this transformation is really important because of what is at stake.

Online sales are predicted to grow at the rate of 10% per year. Put another way, which organisation can pass up an opportunity to take a slice of £6 billion next year and which organisation can withstand the shock of consumers disserting their traditional marketing effort by going online.

This is a journey. A chunk of Facebook and trickle of Twitter is not a strategy. If the objective is to take a slice of £6 billion, it may mean some serious conversations about business models as well as development of essential social media strategies to participate in exploitating the fastest evolving part of a growing economy.