Brand engagement is one of the many themes of distributed marketing.

The New York Times published an article yesterday regarding some struggles that Nike is facing in its ad campaigns. Numerous themes that I have discussed in this space in recent months were apparent while reading this.

The article noted that Nike is facing a big challenge in driving brand engagement amongst large segments of their potential overall target market. Much of this is a challenge surrounding the new media environment. From the mid 1980s through the early 2000s, Nike was able to create iconic ads that were memorable and talked about, driving not only brand awareness, but also positive brand beliefs and brand engagement. Today, Nike is still strong in terms of brand awareness, but some have openly wondered if brand engagement is there.

In the 1990s, Nike would primarily use TV, print, radio and out of home advertising. The media landscape is much more complex now than it was at the turn of the century. Although cable TV channels were well entrenched by 2000, there’s been even greater fracturing of TV audiences since then. Pretty much all brands using TV as a form of advertising have struggled with this, so this is not a unique challenge to Nike. Print and radio do not have the reach that they did in 2000, and out of home has changed as well. A significant pain point for Nike, and for a lot of brands, is effectively distributing, optimizing and managing content across a number of channels.

A helpful item to evaluate Nike’s presence in the social media space comes from last week’s article of “Where’s the ROI in Social Media (Part Two)” That article featured discussion of a thought leading piece on the topic from an MIT Sloan Management Review article. The MIT piece had a chart of relevant metrics of social media applications. Nike has some robust Follower and Likes numbers on Twitter and Facebook respectively. They have over a million Twitter Followers and over 12.6 million Facebook Likes. Nike has other sub feeds on both sites like Nike Basketball, Nike Tennis, Nike Women, etc. All have pretty decent quantity of Follower and Like numbers. There were two things I found interesting though when looking over Nike’s Facebook and Twitter presences. First off, as of the morning of April 15, no new content had been posted on the main Facebook and Twitter feeds of Nike since April 2. New content is the lifeblood of any social media presence. Also, I noticed that Nike’s People Talking About This (PTAT) was a little low. Nike has 12,632,400 Likes but only 69,869 PTAT. That is a PTAT of 0.5%, which is below the industry average PTAT of major brands of 1.4%. To be fair, certain subfeeds of Nike that I found on Facebook exceed the 1.4% PTAT.

Another item that is likely of concern for Nike is that the brand ranks 5th in loyalty amongst those ages 18-24, traditionally a key demographic in apparel. This alone is not cause for concern, but it does underscore some other themes from above. A significant percentage of 18-24 year olds have had economic difficulties (both in the US and globally), a factor that is troubling a lot of consumer brands these days. The brand loyalty stat is likely correlated to some degree with some of the low PTAT numbers on Facebook. There’s been some thought that under 25s are not drawn to Nike because of the perception that it is popular with older generations. While there have been cases of brands not resonating with certain generational cohorts over time, often times when a brand doesn’t connect with an age segment, the explanation as to why it happens encompasses numerous factors.

At this point, I wouldn’t perceive that Nike is in need of a full scale brand revitalization. Nike has $24 billion in annual sales to its name, and gross margins rose for the first time in 2 years during their fiscal 3rd quarter, which ended February 28. However, should Nike not overcome content management and digital marketing challenges that exist, greater brand revitalization efforts may be needed in the future to stem a tide of declining market share.

Engaging in the right thought processes regarding social media ROI is a part of achieving social media success.

In February, we posted Part One of this series. Part One was meant to be just an introduction to the topic. Part Two is a more in depth look, emphasizing mindset to measure ROI.

One of the thought leading pieces on this topic came from a 2010 article in the MIT Sloan Management Review. Although a number of the examples are rather dated at this point, most of the key themes touched on in the article remain true today, even with the drastic changes in social media in the 2 and a half years since it was released, confirming the classic saying of “the more things change, the more they stay the same”.

The MIT article indicated that traditional based efforts to measure ROI in the social space have been unsatisfying. By following this topic closely, it is easy to understand that perspective. There is a deluge of information out there on the topic. “Social Media ROI” on Google brings up 24 million+ results and “ROI Social Media” brings up 44 million + results. With so much information out there, how can one be absolutely sure that they are gaining a good perspective? Much of it would depend upon the original sourcing of the article. Like in the brand management world, reputation of the brand (in this case, publishing body) is everything. This is why I strongly feel that the MIT Sloan Management Review is a quality source to use as a framework for discussion.

The MIT article authors felt that the ROI model should be changed. They state:

“Effective social media measurement should start by turning the traditional ROI approach on its head. Instead of emphasizing their own marketing investments and calculating the returns in terms of customer response, managers should begin by considering consumer motivations to use social media and then measure the social media investments customers make as they engage with the marketers’ brands.

Handling the measurements this way makes much more sense. It takes into account not only short term goals such as increasing sales in the next month via a social media marketing campaign, or reducing costs next quarter due to more responsive online support forums, but also the long-term returns of significant corporate investment in social media.”

I like this approach because customer perception is a driving force in managing brands effectively. Brands exist due to the positive perception of how a brand solves a problem for a customer.

Almost every source of information on this topic, including the MIT article, encourages brands to define objectives or Key Performance Indicators (KPIs) of social media participation. I agree with that notion. Every brand needs to know where they are going in order to find a way to get there.

Common goals for participation in social media are increasing revenue and reducing costs. These are important, but the MIT article defines sub goals such as brand awareness and brand engagement. Brand awareness is the first step leading to purchase, so the idea of measuring brand awareness is key. Engagement matters as well, because a consumer that feels a connection with a brand on some level moves further along the AIDA model (Attention-Interest-Desire-Action), one of the fundamental components of marketing. Engagement could easily be classified as a sign of Interest, and certain engagement actions could also be classified as fostering Desire.

Brand awareness and brand engagement are accompanied by word of mouth as metrics of measurement in social media. These categorizations cover a wide spectrum of events and brand managers are well served to realize what these metrics are, a key step in taking action to guide their respective brands towards more positive social media outcomes. Although I don’t agree 100% with the way that the authors classify outcomes (there are instances where events are lumped into multiple categories, something that can be perceived as confusing), the framework remains valuable.

Brand awareness metrics will depend upon the type of social media presence that is being measured. With Facebook and Twitter, number of Likes & Follows respectively are the key metrics. With YouTube, number of video views is a key measure of awareness. Unique visitors to a blog helps to measure how well the blog is doing. Positivity and negativity are measured. There is a famous saying that “all publicity is good publicity”. I’m certainly not one to believe that. I believe that negative brand awareness can be detrimental to the fortunes of brands.

On Facebook, brand engagement metrics include number of comments & Likes on Facebook and the People Talking About This (PTAT) function, something not mentioned in the MIT article because it hadn’t been created at the time of publication. PTAT measures a variety of functions. On Twitter, number of @replies is a way to measure engagement. With blogs, number of comments on a blog and time spent on the blog count as engagement measures. The authors considered number of return visits under brand awareness, but I consider it brand engagement as return visits indicate more content consumed over an extended period of time. With a blog, it is usually a good thing if there’s an audience that regularly returns. With YouTube, seeing lots of comments is a key indicator of interest.

Word of mouth metrics involve re-posts on Facebook, retweeting on Twitter, reblogging or sharing blogs in the social media space, sharing of video, etc. The more of this, the better when the context of the sharing, re-posting or retweeting is positive.

It is apparent that these 3 categorizations are dependent upon actions of existing and potential customers. Therefore, it wasn’t unexpected that the authors said:

“effective social media strategies put the brand to work for the customer”

That idea is one of the larger scale evolutions in the promotion aspect of marketing in the last 10-15 years. Prior to Web 1.0 and Web 2.0, this idea existed, but it wasn’t as prominent because consumer interaction with a brand moved at a slower pace than today. Take for instance the story of bourbon brand Maker’s Mark. The brand made a decision to reduce the alcohol content of their signature bourbon offering. The social media outcry was so significant that the plans got shelved in less than a week and the re-formulated Maker’s Mark never made it to stores. In 1985, the New Coke re-formulation made it to market for a few months before negative consumer perceptions led to Coca-Cola reversing course. Now more than ever, the public has greater influence over brand decisions.

Social media is here to stay as a part of the marketing mix. It is a two way, real time avenue of communication between consumers and a brand. The metrics of evaluation discussed are means of social listening. If a brand receives negative feedback in their social media efforts, it is a sign that the brand likely needs to adjust some component of their communication and/or other aspects of the marketing mix. Understanding what the consumer thinks and feels about the brand is an essential step in the mindset of getting to a positive ROI in social media efforts. Without the correct means of measurement, a brand is less likely to know what leads a social media to positive outcomes, most importantly an ROI that delivers measurable impact on the income statement.

Next time, I’ll evaluate some mathematical equations that have been proposed to measure social media ROI. Stay tuned!