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Finally ó 3 Scientific Studies with Real Insight into Social Media - 2/12/2014 -

Pratik Dholakiya
The latest social media data tells a fairly consistent story: Audience retention and interaction are key ó reach is secondary.

By Pratik Dholakiya

Despite a growing number of tools available to measure the ROI of social media, many of the claims made by social gurus come from their gut. Therefore, few things are more refreshing in social media than hard evidence, and thatís why I love looking at what peer-reviewed, scientific studies have to say on the manner.

It turns out social media may be even more influential than we have imagined ó just not in the way we thought. Letís take a look.

1. Sales and Facebook ó Only the Interactions Matter
Social media marketers argue that social networks arenít useful as a broadcast medium. Very few organizations have taken this advice to heart, opting instead to find ways to extort "likesĒ out of their audiences.

Take a look at a recent joint study by the National University of Singapore and Nanjing University. A team of three professors worked together with a small Asian retailer to investigate how Facebook influenced sales. And this was a case study if ever there was one, because the data they had to work with was phenomenal:
  • A database of 14,000 customers, including actual sales data
  • Facebook API data
  • Collaboration with the Facebook Data Science Team
And instead of measuring some meaningless metric like the number of Page likes, they:
  • Measured which customers saw which posts and comments
  • Used text analysis to quantify the information richness and emotional sentiment of them
  • Categorized them into marketer-generated versus user-generated, and direct interaction versus indirect interaction.
These guys arenít amateurs. They performed all kinds of statistical voodoo tricks to control for the possibility that people were joining the Facebook page because they were already going to spend money, not the other way around.

The end result was definitive. On average, if you joined the Facebook Page, you spent about $22 extra with the organization. More importantly, the difference was entirely explained not by the simple act of joining the page, but by the interactions that took place on the page. Here is what they learned:
  • Broadcasting on Facebook really was pointless. When it came to interactions with the company only direct interactions influenced sales.
  • Only positive interactions boosted sales. Itís probably not surprising that when it came to direct marketer-user interactions, only positive interactions boosted sales. It might be surprising that the information richness of these interactions didnít seem to matter either.
  • User-generated content influenced sales far more than anything the company did. Paradoxically, the most influential user-generated content was positive and indirect, at least when it came to sales.
  • Whether user-interactions were direct or indirect, information richness had a positive impact on sales. When it came to direct interactions between users, only information richness influenced sales. The positive or negative tone of the interaction didnít seem to make a difference.
We can shorten this down to a relatively small list of takeaways:
  1. If you can do only one thing on Facebook, encourage information-rich interactions between your users, both direct and indirect.
  2. If you can do two things, interact with users directly and stay positive when you do.
  3. Recognize that while positive, indirect interactions have the strongest influence on sales, all information rich interactions help improve sales, and both direct and indirect interactions play crucial roles for different reasons.
Now, itís important to recognize with studies like these that whenever we say something didnít influence sales or didnít have an impact, we canít necessarily generalize that. Itís still possible that broadcast-style messages could influence sales in some circumstances. And, itís still possible that positive comments could hurt sales, or that itís better to be information rich when youíre communicating directly with your audience.

One thing that stands out to me is that brands are using Facebook alone to influence sales. They arenít trying to drive referrals to a site or get anybody subscribing to a blog. Thereís no all-out content marketing going on, so I wouldnít rule out the fact that you can influence sales with indirect communications. But this study does make it clear just how powerful user interactions are, and why they might even be more important than anything your organization produces on its own.

So, how do you build this audience of users to interact with each other? Is it with shareable content?

2. Viral Marketing? Yeah, About ThatÖ
Everyone says that if you want to succeed in the world of social media, you need to produce content that is worth sharing. Iím certainly not going to all-out disagree with that premise, but if you think itís top priority, this next study is going to shatter a few preconceptions.

The study is called "The structural virality of online diffusion,Ē a team effort by Microsoft Research and Stanford University, led by Sharad Goel. In this study, they analyzed events as they spread through Twitter to understand how and why topics start trending on the platform.

They looked at roughly 1 billion events as they cascaded through Twitter.
And we all know how this works: The most popular tweets get shared with friends of friends of friends. Itís that six degrees of separation thing, right?


True, they did find that the most popular events on Twitter were more viral than the average Tweet. But the correlation between virality and popularity was surprisingly low: 36 percent. Itís impossible to predict how viral a piece of content is based on how popular it is, and even the most viral events could see audiences of just a few hundred.

More importantly, after looking at a billion events on Twitter, the researchers didnít find a single case where, on average, one person would "infectĒ more than one other person ó not even viral videos and petitions spread in a manner that we would typically consider viral. The most popular events had elements of both broadcast and viral campaigns.

In the previously discussed study, we found that the best way to influence sales on social networks is by encouraging audience interactions. With this second study, we can expand that to realize that if you want to have an audience large enough to interact with itself, viral marketing isnít the way to do it.

Instead, you need to focus on retention.

Itís actually fairly common for sharing activity to expand your reach by 20 percent, as previous research by the same lead author has uncovered. If you could keep every single person who saw your content, and you could expand your reach by 20 percent each time, you would only need to publish 120 pieces of content to grow your audience from one person to 3.2 billion. Therefore, since itís fairly easy to expand your initial reach by 20 percent, it should be immediately clear whatís really keeping your audience from growing.

Most experienced social marketers can quite effortlessly expand their initial reach by well over 20 percent, but most of them will also lose an even larger portion of their audience with every piece of content that they publish.

Therefore, if you want to grow, stop thinking about producing content worth sharing, and start thinking about how to produce content worth coming back for.

And thatís a very different mindset.

Thereís another important insight from this study: the role of influencers. If content never actually spreads in the exponential form viral marketers have imagined, it stands to reason that the best way to reach a large audience is to reach somebody who already has a large audience.

Of course, this is exactly what audience retention is all about: becoming an influencer yourself.

By working with influencers, you not only reach a larger audience, you also spend time with people who know how to keep one, and learn lessons in the process.

3. Earned Media: Traditional vs. Social
If I asked you to name one market sector where social media definitely influences sales, Iím probably not taking a big risk in assuming that you wouldnít say, "microlending.Ē Nevertheless, a study conducted by assistant professors from the University of Pittsburgh and Carnegie Mellon University and published in the Journal of Marketing Research, discovered exactly that.

"Earned mediaĒ has become a bit of a buzzword in the Internet marketing community lately, but itís easy to forget that earned media existed long before the Internet in the form of media coverage. This study looked at both.

The researchers considered 14 months of actual daily sales data about a microlending marketplace. Kiva is a nonprofit organization with a mission to connect people through lending to alleviate poverty. They didnít use any paid media, so there were no paid campaigns to interfere with the analysis. Hereís what they did consider:
  • Data on coverage in newspapers, magazines, television, radio, blogs, and discussion forum posts
  • Blog content published by traditional media organizations, like newspapers, which were considered traditional media
To make sure that they were measuring the impact of media coverage, rather than the impact of demand for information about Kiva and microfinance, they used Google Trends as a control measure. They also controlled for the holidays and owned blog content and press releases.

They found that all three main types of earned media significantly impacted sales:
  • Traditional earned media events earned them about 894 new sales and 403 repeat sales.
  • Each blog post earned them about 90 new sales and 63 repeat sales.
  • Each community forum post earned them about 99 new sales and 48 repeat sales.
After digging deeper into the data, however, they found some surprising revelations:
  • If you look at percent changes in community posting, this influenced sales 30 times more than percent changes in traditional media coverage.
  • Using the same approach, changes in blog posting frequency influenced sales three times more than changes in traditional media coverage.
  • Blog posts had an influence on traditional media coverage.
  • Community posts had an even stronger influence on blog posts.
In other words, it would be extremely foolish to assume that the traditional media coverage was more important than the community activity. In reality, sales were being primarily driven by community activity, reflecting what we learned in the first study. Just as importantly, blog and traditional media coverage were being driven, in part, by community activity.

This study also brings with it an important insight: these discussions were taking place on forums, and most of the discussion was taking place on Kivaís own forum. Forums have been largely forgotten by social media marketers, even though more people visit forums than read blogs. About 45 percent of American social media users visit a message board at least once every 24 hours. This study emphasizes just how important they are as a part of your social media strategy.

Doesnít it make much more sense to encourage interaction on a platform that you own rather than on a social media platform filled with distractions and algorithms you donít control?

We canít always wait for the data to catch up to our hunches, but we are foolish if we ignore it once it arrives. The latest social media data is telling a fairly consistent story that associations must pay attention to: Audience retention and interaction are key ó reach is secondary.

Pratik Dholakiya is co-founder & vice president of marketing of E2M Solutions and OnlyDesign. He invites Association Media & Publishing members to contact him directly with any questions about these three studies.


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