Is Social Media Necessary for your Bottomline

Is Social Media Necessary for Your Bottomline?

By Sujata Ramnarayan, Ph.D.

A recent HBR blog decried the amount of resources spent and talk by marketers on social media. Some of the criticisms included:

—–Is social media adding to the bottomline? #NOPE

—–Is there an opportunity cost to using social media?

—–The metrics for evaluating social media are wrong

—–Sixty percent of U.S. adults who use social media say that social media sites have no influence on their purchase decisions and only 5% say that they have a great deal of influence

—–Technology changes fast – look at MySpace and Friendster

I would like to address the points raised by the author of the HBR blog in light of historical changes, context, and data.

Is social media adding to the bottomline? #YES

Social Media
A tweet does not maketh a purchase. Here I would like to quote, John Wannamaker – considered the father of advertising – who said “I know I am wasting half of my advertising dollars, I just don’t know which half.” You do waste some of your dollars or viewership of posts in social media. The difference though, as in all digital formats, is that you can measure how much you are wasting and how much you are gaining. The number of followers or likes or retweets is certainly not a measure of direct addition to the bottomline. It is a measure of awareness and level of gained attention. There is an entire psychological process that the customer goes through before awareness turns into purchase. How many times do you check out a product before you decide to purchase, especially one that you have never purchased before?

Is there an opportunity cost to NOT using social media?

Social Media Tradeoffs
Absolutely. Like any other channel, there is an opportunity cost to using or not using any media. The fact of the matter is that customers are spending more time at digital venues, including social media channels. The amount of time on social media sites is increasing across different demographics. There are always tradeoffs involved when choosing different media. These tradeoffs are between how much to spend between traditional and digital, how much to spend between different digital channels, and how much to allocate in resources between different social media channels/efforts (blogging is generally placed in the same category as social media, although it is technically content). However, as I said in my book, content – timeless and timely – is the currency of social networks. These tradeoffs are no different than what has always been the case when deciding on optimal allocation (optimal being the word of consideration here) between traditional channels of Television, Radio, Print etc. The choice of channels needs to be strategic, as does the combination of channels. Social is a long-term customer relationship building strategy as much as it is about creating awareness and facilitating social discovery – in other words, increasing reach.

The metrics for evaluating social media are not wrong but need extension to attribution, and….

The metrics for evaluating social media need to be extended (not necessarily wrong) – mainly to extend it to attribution. If the choice is between spending time and /or dollars between only email and social, there is a way in which you can integrate the two by providing something of value so you receive something of value (i.e. email address). This continues the relationship building process and of course, measurement, that connects the different stages of the sales funnel for better attribution. Email is still checked more often than social media channels, but social offers reach that can extend beyond your current audience.

What you gain from investment in social media is not always purely about numbers (structured data). It is also about what you gain in terms of unstructured data that could turn into valuable information. While a product rating of 1 or 5 tells me that a certain customer is happy or unhappy, it does not tell me why. Social media conversations can yield insights that reflect lack of internal checks and balances in place. Historically, sociologists recognized the role of word of mouth communication in the spread of products and ideas. This was captured by Everett Roger’s model of product diffusion to show how early adopters of products tend to be different and lead the way to an early majority of adopters. Social word of mouse is no different except it can be tracked (an advantage) better than word of mouth communication. On the other hand, to measure word of mouth communication, researchers needed to turn to surveys of self-reported behavior. Email does not give you this rich resource of information that social media conversations do due to its lack of easy interactivity.

Forty percent of U.S. adults using social media are influenced in their purchase behavior by it

The author says that 60% of U.S. adults using social media are not influenced in their purchases by social media conversations. This means that 40% or 4 in 10 are influenced in their purchase decisions by social media sites. In fact, 68% percent of survey respondents responding to a survey by Nielsen said that they trust consumer opinions posted online, up 7 percentage points in 2013 from 2007. As we all know, data needs to be always evaluated in the context of the respondent population and the phrasing of the question. Depending on who is reporting the data, anywhere form 37% to 53% of Television viewers reported being influenced in their purchase decisions by Television advertising. Given that social media is a new medium, an influence rate of 40% is remarkable.

Technology changes fast – Look at time shifting

Technology does change fast and marketers need to keep moving along with that, while investing in channels that are likely to last longer, channels that still have a wide reach, and emerging channels that are likely to grow. Television, while claiming a larger audience, is not a growth medium in its current form. Instead, paid for – advertising free media – like Netflix is gaining an audience. Cable television services are now being replaced by online services. Time shifting is adding another element of challenge as well. In such cases, it is valuable for companies to develop their own audience that they can actually communicate with, while continuing to widen their reach. Unlike traditional broadcasters, Netflix knows who is watching what program at an individual level. That should change as traditional networks enter streaming entertainment as well.
Television did not make companies successful. Their creative strategies in using the medium did. Social media is the same way. It is a channel. Success depends on fundamental marketing principles. These are to create awareness, interest, and desire to bring prospects to the Website, make them purchase, re-purchase, and make recommendations to others. These fundamentals should still be driving your social media strategy and your investments in social media.


Marketing in a World of Digital SharingSujata Ramnarayan, Ph.D. is a Marketing Consultant focused on improving performance  through data-driven insights and strategy. She is a former Gartner Group Analyst/Professor, and the Author of Marketing in a World of Digital Sharing. Her writings have been published at and other publications. Follow Sujata on Twitter @mktgnugget and check out other articles by her here.

Internet Users Stay Social on Two or More Social Networks

Internet Users Stay Social on Two or More Social Networks

By Sujata Ramnarayan, Ph.D.

I said earlier on in 2012 in my book, that different social networks are not being used the same way or by the same people to the same extent. There are stark demographic and behavioral differences among users of the different social networking sites.  Despite the remarkably enviable amount of time spent on Facebook, there are differences in the profiles and behaviors of users of these sites with direct implications for marketers.

The latest study conducted by the Pew Research Center sheds light on which of the social networks continues to find favor among the audience and which ones are gaining more traction lately.  Although Facebook continues to maintain its significant lead over other social networks in its penetration and comfort level among users, it appears that people in general are gravitating toward other social networks as well. The top ones continue to be LinkedIn, Twitter, Instagram, and Pinterest after Facebook. Each of these networks has seen growth in the last year when compared year to year, except Facebook which has stayed the same while clearly staying a leader (although, Instagram – owned by Facebook- has seen the most significant growth from 2013-2014 among the other networks)


Note: Data includes only U.S. adult internet users

Fifty-two percent of U.S. adults interviewed by the Pew Research Center mention using two or more social networks. The fact that the demographics are predominantly different amongst some of these networks (LinkedIn users who are graduates, younger age group on Instagram, and a greater percentage of women on Pinterest) indicates that these demographic makeups have not changed much since 2012. These networks continue to attract different types of users with some overlap. It is possible that people are slowly getting more comfortable with the concept of social networks and are beginning to open up to more than Facebook as their comfort level rises.

The frequency of use of social networks other than Facebook still lags way behind with 70% of Facebook users using it daily compared to significantly less for other social networks (See Figure below).

Instagram, Twitter, and Pinterest, all three saw latest increase in growth across different types of users. LinkedIn continued to penetrate a college educated audience.

The latest trends are good and bad for marketers. The good news is that potential customers are showing more interest in using social media in general. However, the frequency of use varies amongst them, making Facebook an important component of your strategy given the level of penetration. For B-to-B segment (and for B-to-C segment), Twitter will continue to be important even despite a relatively lower level of daily active use.  Just as customers are gravitating toward two or more social networks, so should marketers.

Pen, Paper, and Data Visualization

Pen, Paper, and Data Visualization

By Sujata Ramnarayan, Ph.D.

Books worth melting for v3

“Use a picture, it is worth a thousand words….” – those words are credited to a newspaper Editor, Arthur Brisbane, 1911. It stays true today as pictures and videos are shared more on every social network and are becoming an important tool for marketers to master among many other technologies coming their way. Instagram with its constant feed of photographs was the fastest growing social network last year. According to Facebook CEO, Mark Zuckerberg, most of Facebook will be videos in five years. Infographs are the raging technology of the day in content marketing and data visualization is a necessity in presentation of data.

You have to admit though that it is easier to keep information simple even when using pictures. There is sophistication and elegance in simplicity i.e. using pen and paper . In my recommendation of books worth melting for, I recently came across one titled “Back of the Napkin,” by Dan Roam that sets out exactly to do that – simplify with elegance. I can do justice to its review only by using what the author intends to teach you to do. Here is a summary of the book using pictures, pen, and paper – and a smartphone .

Any concept is better understood when presented visually.


Data Visualization 1

You do not need to be an artist to do that.

Data Visualization 2

You just need a few tools.

Data Visualization 3

You need a few figures we can all draw.

Data Visualization 4

Then use your imagination!

Data Visualization 5

As applicable in business,

Data Visualization 6

as in comic strips.

Data visualization 7


This book will round out anyone’s set of skills, especially in an age of photos, infographs, and data visualization. As the author says, the “Back of the Napkin” is for solving problems and selling ideas with pictures. Now try it out for yourself. If you found this useful, please share.

frontbookcover smallSujata Ramnarayan, Ph.D. is a Marketing Consultant focused on improving performance  through data-driven insights and strategy. She is a former Gartner Group Analyst/Professor, and the Author of Marketing in a World of Digital Sharing. Her writings have been published at and other publications. Follow Sujata on Twitter @mktgnugget and check out other articles by her here.

Most Useful Social Networks for Marketers

social media conceptMarketers are spending, on average, six or more hours per week on social media. Facebook and LinkedIn are cited as the most important social networks, depending on whether you are a B to C or a B to B company.  Twitter is a distant third for both segments of companies and both mention blogging as being important to them.

Marketing Nugget bottomline for Marketers:  Invest in social media. If you are focusing on B to C, invest more marketing efforts into Facebook. If you are a B to B company, invest more marketing efforts into LinkedIn and blogging.LearnMore-Blue-Primary-16




Marketing in a World of Digital Sharing



Are you drowning in social media noise and chaos?

Authored by Sujata Ramnarayan, Ph.D.

Like most marketers, you are drowning in social media noise and chaos.   Businesses have simply jumped in without tying social media outcomes to any business objectives.
The purpose of this book is to help you:
– See how social media fits into your overall marketing strategy
– Understand how best to develop social media with allocation among different tools
– Figure out the extent to which social media is relevant to your business or department, and how best to implement it given an increasingly digital world of sharing and an empowered customer voice

Publishers Weekly says “Ramnarayan provides a detailed, contemporary primer that illuminates the promise and peril of the brave new world of social media. Ramnarayan herself acknowledges that social media is no panacea—her crisp presentation, with chapter summaries to highlight the main pointers, confirms that companies that choose not to listen to customers stand to lose ground to competitors who do.”


“Sujata Ramnarayan’s excellent book does several things that I have not seen in other treatments of this subject. She takes a reasoned perspective on a topic that is often full of hyperbole. The book is filled with advice for the marketer that is both practical and strategic. It helps the marketer to leverage social media where it can best impact business performance. I highly recommend the book.”
- Gordon Wyner, Editor-In-Chief, Marketing Management

“This practical guide to social media marketing cuts through the noise with clear advice on how to turn strategy into practice. With the help of effective charts and analysis, the reader can gain real insight into social media’s influence in corporate marketing. By showing how building quality content in social media is no longer an option for corporations, this is also a lesson in building a brand by listening to your customers. ”
-Rajesh Subramaniam, SVP, Global Marketing and Customer Experience, FedEx Services

Are you Listening? – What Customers are Saying about Target

The data breach at Target Corp. affects 110 million customers in the United States which is equivalent to almost every single household in the United States possibly being affected. It has led to many articles being published, commented on, and many tweeting on the breach. An analysis of social data on Twitter and social commentary on a New York Times article reveals sentiments expressed by customers.

The news on the number of customers affected by the data breach at Target came out in installments – 40 million, 70 million, and then 110 million. Earlier in December, the company admitted a breach into its systems that resulted in stolen credit card information on customers that had shopped at its stores in the United States from November 27th to mid-December. Later, it admitted to a larger breach that had been going on over a longer time-frame.

 Figure 1: Analysis of Tweets on Target Data Breach

Analysis of Tweets on Target Data Breach

Analysis of Tweets on Target Data Breach

Customers to Target: Stop Calling us “Guests”!

An analysis of data from Tweets (see Figure 1 above based on social data analysis) and a separate analysis of comments generated by an article in the New York Times reveals a lot about what customers are thinking that the retail industry should be paying attention to. While the data from tweets reflect immediate reaction, they reflect shock at the enormity of the breach. Customers are unhappy that the information came out in installments and kept growing. Further analysis of data from over 1500 tweets over a 30 minute time period showed four segments of consumers. There were those who were shocked at the fact that the number had reached 110 million as revealed by the following tweet:

“@Target First 40 million, then 70 million, now 110 million?? Is it safe to say we’ll be at 200 million by next week? #JustBeHonest”

While Target might have released the data slowly to lessen the impact of disclosure on holiday sales, many questioned why it came out in installments and how much more was yet to come. It actually resulted in more tweets being generated on the new breach. The tweets on news of further breach accounted for a second segment.

A third segment focused on talking about the cost to Target because of lawsuits and impending probes. As one tweet mentioned even more than an impact on sales long-term, the costs add up due to other steps to be taken up in cleaning up the mess. Target itself admitted to seeing a lower percentage of sales at its stores after the disclosure.

There was a fourth and largest segment to which it was business as usual at Target, with mild remarks on the breach. Here is a sample of tweets reflecting this sentiment:

 “How do me and my mom manage to spend 300$ at target ….

“My mom went all the way to Target for some freaking popcorn?

“Can u shop safely at Target anymore?”

so there was this bag that target had and i had wanted it since forever and now i have it and i am in love”

In general, the tweets reflect concern for security when shopping at all retailers than specifically about the Target brand.

Comments on a New York Times article, however, revealed unhappiness over the way Target handled this entire disclosure process (See Figure 2 below).

Figure 2: Analysis of Social Commentary on Target Data Breach

Analysis of Social Commentary on Target Data Breach

Analysis of Social Commentary on Target Data Breach

The fact that the numbers affected ballooned over time brought forth concern regarding leadership and concern about security. Many suggested that customers use cash instead. The conversation also revolved around how Target should stop using the word “Guest” when its does not treat them as such. If there is one sentence to describe the reaction of these customers, it is as follows:

“The arrogance of Target astounds;

Stop calling us your Guests.”


The impact of the breach is already clear. While the damage is done, it has made it important to usher in newer chip based credit card technology. This has also resulted in arguments between retail and financial institutions on who should bear the cost and burden of new technologies. The cost of such a breach is not just in identity theft at the individual level but a rise in black market for fraudulent credit cards that has impact on banks, law enforcement agencies, and retailers.

Next Steps

It is clear from the analysis that Target did not handle the disclosure process very well. The fact that the disclosure came out in installments, while increasing in its revealed damage – both in numbers and extent – only made it worse. The analysis reveals that Target customers hate being referred to as “Guests” and then treated in a way that is devoid of any protection and smacks of a lack of authenticity on its part to its customers. This breach is sure to make some customers weary in the short term of shopping at Target. However, this is a much bigger issue of protecting customer information with appropriate technology at all retailers so as to avoid larger costs resulting from an aftermath of such crisis. Some customers did suggest using only cash, while admitting that they never have enough on hand. While this might be a wish, it is likely to stay a wish for consumers in today’s economy. At least in the short term though, some customers are using cash only as stated here. As some of the tweets revealed, the larger impact is likely to come from other sources such as monitoring and probes.

Target is well-advised to take some steps to make its customers feel safer about shopping. It is clear that its customers dislike the use of the term “Guests” to address them. The ritual of calling its customers “Guests,” is perceived as just that – a ritual. It does not reflect a culture of caring. While its customers appreciate many products at its stores, the relatively higher quality compared to Walmart, and the fact that it is better stocked than Walmart, the company could do more to build its brand health. Starting with taking steps to make customers feel secure about doing transactions at its store and taking the lead among retail could be one such step. Target Corp. Chief Executive Gregg Steinhafel’s call to banks and other retailers to adopt chip based card technology is a step in the right direction. This is an opportunity for Target to lead the way for other retailers.



Which Half of Your Google Search Advertising is Being Wasted?

Which half is being wasted – branded vs non-branded keywords

We all know the 19th century adage “I know half the money I spend on advertising is wasted; I just don’t know which half.” Online click trackable advertising promised to change that. It seems it has. It turns out that “branded keyword” advertising is not effective for well-known companies. Companies with known brand names would do well to re-allocate the money they are spending on search engine marketing to other areas. In a recent HBR blog, Professor Fisman referred to a preliminary study by eBay that calls into question the effectiveness of Google advertising for big well-known brand names. In an elaborate and controlled experiment conducted by eBay, its researchers found that when Google (or Yahoo! or Bing) search advertising was discontinued for a sample of its potential audience, traffic to the site continued to perform as well as it did in areas in which Google “brand keyword” (defined as any keyword that is simply the company or product name or includes the name of the company such as “eBay shoes”) advertising was still being used. This study underlines

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Book Giveaway For Marketing in a World of Digital Sharing: Are you drowning in social media noise and chaos?

Marketing in a World of Digital Sharing

by Sujata Ramnarayan

Giveaway ends March 31, 2013.

See the giveaway details
at Goodreads.


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Are you passing the Customer Qualification Process?

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