Despite the strong interest, many firms are struggling with social media
In recent years, there has been a significant interest in social media strategy. As a result, the search term has increased significantly: Google Trend data noted a 700% increase.
However, despite the strong interest in social media, many companies are struggling with social media. Studies by Geyser and Independent revealed that many companies don’t know what they need to do regarding social media.
Geyser (2021): “Firms do not really understand what they should do.” As a result, managers often pass social media strategy to junior, less experienced staff hoping they will do something good. But, as we all know, hope is not an effective strategy.
The Independent (2021): >50% of firms don’t understand how customers use social media. As a result, they found their social media advertising ineffective.
I once worked with one of the world's largest FMCG companies. The company realized social media is important, so they invested hundreds of thousands of dollars in an Instagram campaign. Soon, the company's Instagram account was full of nice product pictures. However, the return was disappointing, i.e., the sales upside was limited as the company's consumer base wasn't active on Instagram. The marketing director later admitted that the entire campaign was a failure. She told me: "Instagram doesn't work. We wasted a year and $320k. But the return is zero."
Typical in business: Blind targeting of social media platforms
This case is not unique to this FMCG company. As a strategy practitioner, I observed this problematic tendency: Companies often go straight to the most popular social media. However, this approach is not the best, as randomly targeting social media doesn’t always work. Studies told us many firms struggled with popular social media platforms:
Alignable (2021): 53% of UK firms found Facebook & Instagram advertising ineffective.
Danzinger (2021): Fewer than 20% of Luxury companies found Facebook advertising very effective. Even luxury companies, which have big marketing budgets, suffer this malady.
Another client of mine is a multi-billion dollar manufacturing company. When the covid-19 pandemic hit, up to half of their workers were sick, halting many production lines. In desperation, they launched a massive recruitment campaign on Linkedin, Instagram, and Twitter. The campaign attracted many positive receptions from the media. But failed to trigger applications (very few people applied). This is because many of the targeted audience (i.e., potential factory workers) were not on those social media platforms. As the Communication Director was familiar with LinkedIn, Instagram, and Twitter, he unconsciously thought that everyone would be on those social media platforms too. Unfortunately, that is merely a bubble bias.
Personal research I conducted in 2019 shows that knowing your audience does pay. As shown by the graph below, conducted for one of my clients, the largest social media platform is not always the best. Another platform can often be more effective, depending on your target customers.
Generic Social Media Strategies can guide companies on which social media platform to focus on...
Many companies would like to use social media to engage more prospective customers and grow their business. But most have a limited marketing budget and don't have much time to run many marketing campaigns. They don't know which social media platform to focus on or which customers use which social media. Big companies can solve these questions by launching in-depth market research. However, many smaller companies could not afford the cost of extensive market research – nor have the expertise and time to manage one.
Therefore, in this blog, I would like to propose generic social media strategies for smaller companies -- something simple that they can adopt easily. These generic strategies were developed based on my research: 2,971 UK households were surveyed using the proportional quota sampling technique (quota set on Gender, Age, and Region) with Mean Absolute Deviation between 0.7-2.7%.
The key findings are as follows:
First, 87% of UK adults regularly use social media. This means social media cannot be ignored.
Second, 70% of UK adults regularly use Facebook. It is the most popular social media in the UK, far more popular than the second rank, YouTube, with 45% adoption. This means if a Company does not know which platform to leverage, it cannot go wrong with Facebook.
Third, about 74% of UK social media users regularly use multiple social media platforms. 2 implications: a) Companies can engage consumers across platforms for deeper interaction; b) Companies can focus on certain platforms without worrying whether they will be able to reach the customers.
Fourth, certain social media platforms are commonly used together, i.e., Instagram, Messenger, and YouTube. This means companies can limit the number of social media platforms they target by leveraging these three platforms.
Fifth, demographic and behavioral attributes can explain which social media platforms are likely to be regularly used by a consumer, e.g., Age effect: Snapchat is skewed toward younger adults; Interest: YouTube is popular for consumers who are interested in music; Hobby: Instagram has many users who regularly go to the gym. This is fundamental: By considering consumers’ demography and behavior, UK B2C companies can identify which social media platform to target.
Based on these findings, we can draw a set of generic social media strategies as illustrated by the matrix below.
The matrix above depicts the four different social media strategies, depending on whether the company has limited resources (the horizontal row) and knows its target customers (the vertical column).
If a company has limited marketing resources and limited knowledge of its target customers, then the company should focus on Facebook only. This is because Facebook is the most popular social media in the UK, used by 70% of UK adults regularly. If a B2C company does not know which social media it should leverage to engage its target customers, it cannot go wrong with Facebook. We can call this strategy the Facebook Strategy. Don’t spread the thin resources across many platforms.
If a company has more extensive marketing resources but limited knowledge of its target customers, then it should leverage Instagram, YouTube, and Messenger (in addition to Facebook). This is because we found that these three social media platforms tend to be regularly used together with other social media platforms. We can call this strategy the Top Basket Strategy. More resources allow firms to spread a wider net.
If a company has limited marketing resources but deep knowledge of its target customers, it should focus on a single platform with the highest adoption probability for its target customers. This is because particular demographic and behavioral attributes can explain which social media platforms are likely to be regularly used by a UK consumer. I provide the detailed odds ratio below. We can call this strategy the Best Platform Strategy. Companies should focus on one platform, most likely used by their target customers.
If a company has more extensive marketing resources and deep knowledge of its target customers, it should be on 2-3 platforms with the highest adoption odds for its target customers. This is because: i) three-quarters of UK social media users are not exclusive to a single platform; and ii) by considering its target customers' demographic and behavioral attributes, a firm can better identify which social media platforms are regularly used by their customers. Again, the detailed odds ratios are provided below. We can call this strategy the Targeted Basket Strategy. Companies can use the targeted-basket strategy, i.e., engage customers across 2-3 platforms with the highest odds.
How to calculate the odds for your social media strategy
If you are interested in the Best Platform Strategy or the Targeted Basket Strategy, then the table below will be helpful for you. The table shows the odds of customers using a certain social media platform based on a known attribute. For example, the odds of people who are interested in Antiques regularly using Facebook is 1.31 (roughly 30% more likely to use than not to use). But these same people are less likely to use YouTube as the odds of using YouTube is only 0.77 (about 25% less likely to use than to use).
Why are we thinking in odds? So that we can make intelligent decisions even when we don’t have the complete information. Think of the Poker example. Good cards mean the odds of winning is high. But there is no guarantee of winning because you don’t have all the information in your hand.
Similarly, think of medical knowledge. For example, we know smoking increase the odds of lung cancer. But this doesn’t mean a smoker will automatically get cancer. Many other factors are in play (genetics, fitness, lifestyle, food, etc.). It is the same in business: We often don’t have complete knowledge of customers and can only think in bets.
Let me illustrate how the table works. Consider the case of John (name has been changed to maintain confidentiality). John is the owner and CEO of a start-up that sells fashionable childrenswear. John has some ideas about his target customers, i.e.,
They have children.
They are interested in fashion.
They live in London.
They regularly do fashion and clothes shopping.
They enjoy owning good quality things.
They are active in social media.
Like most companies, John has a limited marketing budget, doesn’t have an in-house marketing expert, and is short of time. So, what is the best social media strategy for John?
Since John has some knowledge of his intended target customers, even if it is not complete, and since John has a limited marketing budget, the most appropriate strategy we recommend is the best platform strategy (refer to the 2x2 matrix above). This means John should focus on a single platform that his customers are most likely to use.
But which platform is that? The table above comes in handy. With it, we can translate the known attributes of John’s target customers into odds. For example, John's target consumers have children. So, we take the odds for child status. John’s customers are interested in fashion. So we take the odds for interest in fashion. Once we have all the odds, we can compute the overall odds by taking the product of all odds.
The best platform for John’s case is Instagram. The odds are higher than 4 to 1 (probability higher than 80%). Imagine if John randomly chooses Twitter. His chance of success is much slimmer -- the odds are less than 1 to 2 (probability lower than 33%).
Conclusion
In sum, generic social media strategies are valuable because they help B2C companies develop more effective social media strategies – even when the companies do not have a complete understanding of their target customers and unlimited marketing resources.
However, two caveats:
Unfortunately, the odds provided above are UK-specific. If you are interested in other markets, let me know.
Even when you know where the consumers are, you still need to understand how to engage the consumers on social media best. But that is a topic for another day. This is all I have for today.
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