TECHNOLOGY

Taking Social Media Marketing to the Next Level

BY Patrick Kuehn and Daniel Ripes

Social media is so ingrained in today’s culture that we forget Facebook is already a teenager, while Snapchat has just graduated preschool. Other social media — including LinkedIn, Twitter, YouTube, Instagram and WhatsApp — have joined them to gain an impressive user base. In the second quarter of 2017 alone, 110 million people started using social media for the first time, increasing total users to 2.9 billion globally.

Beyond their initial role as vehicles for communication and social expression, however, each social media application has also become a revenue-producing engine. And marketers have been eager to pay for access to a social media audience that is not only growing quickly, but is enriched with data that enables targeting around individuals’ likes and dislikes, demography, affinities, buying behaviors and much more.

Even setting audience growth aside, Facebook could be considered the greatest data management platform ever built, because its users self-declare demographic and psychographic information on a daily basis. Every Facebook “like” and “follow” represents extremely powerful third-party data for brands to harness.

The impact of social media on top line sales is undeniable. A recent study shows that social media is now the primary driver of all website referral traffic. U.S. social commerce sales — purchases made directly from social media posts — grew from $3 billion in 2012 to $14 billion in 2015. The most up-to-date marketers are riding the wave, spending $31 billion on social media ads in 2016 — nearly double what they spent just two years ago. And while Facebook continues to dominate the space, all social media platforms are advancing monetization strategies around their expansive user bases.

Most marketing executives have been scratching their heads as to how to take social media to the next level and show a measurable return on investment in it. Indeed, only 16.3% of CMOs report having the ability to quantitatively show the impact of social media on their business; in a seeming contradiction, they expect to expand social media spend by 89% in the next five years.

We’re now at that Holy Grail point where with social media, marketers can gain a measure of offline return on ad spend by taking sales data and matching it within Facebook to determine whether a product was purchased by someone who had seen an ad. And where POS data isn’t available, geo-based targeting and tracking is an alternative optimization strategy. This scenario drives people toward in-store coupons pages, for example using geo-fencing to measure “directions to the store” page visits.

We’d like to share some additional ways marketers can optimize their return on the investment they make in social media.

Targeting
An important recent innovation in marketers’ use of social media has been the ability to allow first-party data to be easily and inexpensively ingested in multiple ways. Examples of this capability include Facebook’s Custom Audiences, Twitter’s Tailored Audiences, and Snapchat’s Snap Audience Match. It is possible to align campaign objectives by audience within these platforms, either by using offer ads to reintroduce a brand to audiences who have not made a purchase in the last 6 to 12 months, or by introducing new products and increasing purchase frequency with dynamic product ads. Targeting has thus reached a level of granularity that is producing better results for every dollar spent.

A logical next step for marketers using social media for targeting is lookalike audiences — that is, prospects that have many similar attributes to your top customers. Lookalike targeting isn’t a new concept — all platforms have their own methods of reaching “similar audiences” — but none of them seems to have extrapolated to having insights about the modeling and what is behind it. Rather than relying on one platform, marketers might consider leveraging a social ad-tech solution such as 4C Insights.

There are two reasons why this is a good idea. First, there is no certainty that first-party audiences will match demographically with lookalike audiences, since factors such as age, gender and location may be equally weighted among likes and interests within the algorithms. Second, and more obviously, the platforms will sometimes inflate the cost-per-impressions on their lookalike audiences.

Brands need to make sure that they have the Facebook pixel installed on their website — something that may seem obvious, but in fact many sites don’t have this tracking code properly integrated. Facebook’s remarketing pixel can help target all site visitors for up to 180 days at a granular level, giving brands a leg up in their targeting efforts.

Measurement
Even with today’s data-driven approach to marketing, many brands are still using outmoded performance measures such as shares and likes, which do not translate into return on investment. Now there are ways to report on actual business goals achieved through social ad spend — typically sales and/or in-store visitors. Measuring offline conversions within the social media platforms is relatively straightforward as long as analytics and tracking have been properly implemented and maintained.

As mentioned above, Facebook and other platforms now allow marketers to connect offline transactions and events to their digital media efforts, providing a more objective measure of offline return on ad spend.

The importance and evolution of the social media platforms is nearly unparalleled in digital marketing. Until very recent years, businesses used social networks only to communicate to audiences that already knew them, or that may have been liked or shared by that audience. With this new ability to ingest first-party data for targeting and measurement, brands can now reach current customers, and find new ones, more often. This, combined with the fact that social media is driving more direct sales, makes it almost a certainty that the power of social platforms will only continue to increase and multiply.

Patrick Kuehn is senior VP, Sales and Marketing at ObjectWave Corp., a full-service provider of digital commerce solutions ([email protected]).

Daniel Ripes is VP of global partnerships at Rise Interactive, a digital marketing agency specializing in digital media, analytics, and customer experience ([email protected]).

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TECHNOLOGY

Study: Digital sales drive fraud transaction volume

BY Deena M. Amato-McCoy

Fraud volume has risen sharply in the last year — an issue that’s being blamed on online channels and sales of digital goods.

Online fraud is outpacing e-commerce sales volume as the monthly average of fraudulent transactions jumped from 206 to 238 incidents, according to LexisNexis Risk Solutions’ report, “2017 True Cost of Fraud.”

While prevented fraudulent transactions have increased from 236 to 257, the level of fraud as a percentage of revenues has also inched upward from 1.47% to 1.58%. Every dollar of fraud cost merchants $2.77, up from $2.40 a year ago.

Online channels and sales of digital goods, particularly international transactions, are the biggest culprits of fraudulent transactions. When it comes to the cost per dollar of fraud, merchants with international transactions have significantly higher incidents than merchants with domestic-only transactions. This coincides with the rise in account hacking and takeovers, the study reported.

New access channels and payment methods, including mobile wallets, the EMV rollout in the United States, and digital channel applications are also making the regulatory and payment landscape more challenging for merchants, according to the report.

Other findings include:

• The loss incurred among merchants with digital and physical goods has increased 63% since last year, rising from $2.18 to $3.56.

• A slight drop in debit card fraud was reported among e-commerce and m-commerce merchants, likely the result of chip/PIN use. However, credit card fraud remains high, with debit card fraud remaining high among merchants selling both physical and digital goods.

• When discussing the top three challenges that retailers are facing, identity verification remains the highest for the online channel. However, top mobile channel issues vary, suggesting there is more complexity in this channel.

“With online fraud outpacing reported growth in e-commerce sales volume, we can point to EMV implementation at physical retail stores as a cause,” said LexisNexis Risk Solutions VP of fraud and identity management strategy, Paul Bjerke.  “Also in the digital space, botnet fraud also has risen dramatically, which correlates with the rise in e-gift card volume and fraud.”

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TECHNOLOGY

The drivers influencing where consumers shop for groceries are…

BY Deena M. Amato-McCoy

Shoppers may not be loyal to specific grocery brands, but they are partial to those with the best price, quality, availability and convenience.

Whether shopping online or in-store, consumers want options when it comes to where they purchase their everyday groceries and supplies, according to a report from Acosta. Not only are customers hopping from brand to brand, 76% of weekly shoppers visit more than one retailer each week for groceries, according to” a report from Acosta.

The study, “Trip Drivers: Top Influencers Driving Shopper Traffic,” revealed that 67% of shoppers visit approximately between two and three retailers weekly. But they are not just hitting random brands. Instead, they will only do business with companies that offer the best prices, quality, availability and convenience.

For example, when it comes to price, 60% of consumers reported shopping at more than one retailer because “some products are priced lower at certain retailers.” Only 45% of millennials cite price as a key driver of retail hopping – this generation is more prone than the average shopper to vary their shopping based on where they are and specific brands.

However, more shoppers are choosing which store to shop based on how much they like the store brand (53% of shoppers versus only 34% in 2011).

Fresh food is also driving grocery store trips, especially as many time-starved shoppers are visiting stores in search of that evening’s dinner. When it comes to weekly shopping trips however, 37% of shoppers make multiple trips weekly to ensure their food is fresh.

From old to young, each generational group makes multiple trips or receives multiple deliveries to stay stocked with the freshest food. This includes millennials (65%), GenXers (47%), boomers (25%) and Silents (22%), or those born between the mid-1920s to the early-to-mid 1940s.

Fruit (31%) and deli-prepared foods (29%) drive most of fresh food’s dollar growth, respectively.

Brands can help establish a loyal shopper following by delivering innovative products that align with consumer demand, and by consistently delivering quality, valued products to develop a level of trust. For example, 41% of consumers shop at more than one retailer because “some retailers carry better quality products in certain categories.”

Meanwhile, 33% of shoppers go to more than one retailer due to not finding all the products/brands they want at one store.

Brand preference drives traffic across all income brackets, including among 37% of shoppers with household incomes above $199,000, and 28% of shoppers with household incomes below $20,000. Forty-three percent of shoppers said that brands simplify the selection process when shopping at multiple grocery stores, according to the study.

“Shoppers appreciate having options, which is why we are seeing a rise in hopping from store to store for weekly grocery trips,” said Colin Stewart, senior VP at Acosta. “People are motivated by not only good deals and fresh products, but also by brand loyalty, which can impact their decisions to either keep returning to a particular store, or hopping to another.”

According to the study, personalization is another key strategy in connecting with shoppers and creating not only brand loyalty, but also store loyalty. “No retailer can be everything to everyone, but by knowing what motivates your shoppers, whether it be price, fresh foods or brands, make a commitment to the satisfaction of your shoppers to keep your location in their shopping mix,” added Stewart.

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