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May 18, 2010
Proof Positive: Social Media Increases Sales

I enter the blogosphere at my own risk, forgetting the time-management tip I learned earlier; it had something to do with keeping distraction at arm’s length, I think. My worst enemy is an intriguing writer, a fact I’ve known forever but only recently acknowledged. I lie to myself, chalking it up to higher learning, but the truth is that I’d waste an entire day if given the opportunity.

Therefore, I’ve changed my habits to reading foolish rants and poorly written blogs, choosing subjects of absolutely no interest. My head's been filled with a lot of crap lately, the inane ramblings of others adding “color” into an otherwise gray, mundane world. It sounds crazy, but it works to free up time to complete things for which I am paid.

Ironically, an ad-industry veteran writes one of the worst blogs. It's 
seemingly an outright attack on advertising at present compared to the writer’s self-proclaimed and glorious past. He’s a hard read, somewhat pitiful, really. I’ve named him Bad Bob in an effort, I suppose, to keep from maligning his character, a ridiculous endeavor considering he takes no prisoners; he spreads rumors of industry happenings, categorically denouncing agencies, industry professionals, and creative executions.

While I dislike his writing, something draws me forward. Surely his 30 years of experience in advertising has to yield some sort of hidden value.

Recently, Bad Bob unleashed a rant on, of all things, social media. Spittle must have flown while he proclaimed, no doubt with the swagger of certainty, social media was incapable of directly affecting the bottom line, increasing the sales and profits of a business. He cited a couple of examples that should not be included, one being Dell’s claim, before denouncing social media. He even used the F-word: fad.

Due to his experience, I thought about his remarks. 
I began stepping through the scenarios. 

Lately, I've been searching for answers, as I was certain Bad Bob was wrong. I know I have read reports that proved him wrong. After sifting through hours of research by Nielsen, Hubspot, and multiple others, my examples showed that social media increased every online measurement parameter except sales.

Bad Bob, and his veteran intuition, was making my life difficult. 

Deciding to stop the search, I moved on to other tasks, though I knew the ex-advertising pro wasn’t absolutely correct. I’d witnessed social media engagements that ended with sales. He had a valid point thus far.

I yearned to confront him with data to prove him wrong but needed stronger information -- something to show a direct link between social media and sales. I needed a case like that of Dell computers.

Dell’s ran a couple of social media studies. One claimed that over an 18-month period, Dell’s sales increased by $1 million. However, Bad Bob belittled this claim for various reasons, the main one being that Dell did not set a benchmark prior to measuring sales. While many believe Dell’s claim, it shows direct correlation between offering discounts on Twitter and increased sales, yet it’s not an ideal study. I decided to use it as an example of success, pending investigation. Call it a desirable outcome, a goal, or an example of social media’s capabilities.

My goal was to find recent proof that case studies, lacking other media support, used social media to increase sales or profits. It’s a fool’s errand; there’s much more to social media and advertising than increasing the bottom line. However, since Bad Bob set the parameter, that’s what I’ll use. While I’d like to deliver it to Bad Bob, it doesn’t matter; it’s something that I need to refute, if only for personal reasons.

After changing the search area from research reports to news, three examples of direct correlation follow.

They’re recent, written within the past 30 days, and the successful outcomes cannot be attributed to any other media efforts. The increased sales are a direct result of social media engagement.

TKG Advertising

TKG, an ad agency with three employees, neared ruin as 2008 closed. The agency’s clients had cut budgets in half, leaving it on the edge of bankruptcy. Julie Kreisler, founder and CEO, had to act quickly. Kreisler bet it all on social media.

The plan was to mix PR and social media, build a following, and increase sales. The only thing TKG needed was a guinea pig. They found one in Alegria Cocina Latina, a restaurant located on the ground floor of their office building.

pro-bono effort launched in August 2009 and ended 10 weeks later in November 2009. Result: In the fourth quarter of 2009,, Alegria’s sales increased 10 percent. 

Steaz Tea

Steaz, an organic tea maker, chose
Chemisty as their agency and launched Steaz in 1,500 Target locations.The agency opted to use both search and social media due to three concerns: 

  • Audience: Moms buy tea and also are heavy social media users.
  • Timing: Just weeks ahead of the nationwide launch, the message had to move fast.
  • Budget: The budget didn’t allow many options.

Chemistry based the campaign on a few key elements:

  • Social media monitoring sites SocialMention and Viralheat.
  • Twitter allowed for a party with organic food and drink choices.
  • PPC Search was used to drive consumers to the coupon page.
  • Facebook ads increased Steaz’s fan base.
  • Eric Schnell, a Steaz founder, is an avid health enthusiast who is very charismatic. He became the voice and face of brand Steaz.
  • A 68,000-person e-mail list received two offers, so online coupons were pushed.

It resulted in 50,000 coupons-downloads, 20 percent redeemed the coupons, 6,000 social media mentions were recorded; and over 3,000 new fans joined Steaz. December 2009 proved to be the best in their history, as sales doubled.  

Italian Winemakers

Italian winemakers, in an effort to increase sales in an economy endangered by Greece’s bankrupt state, looked to social media to increase sales. The region’s exports fell 6 percent in 2009, partly due to the global recession.

Italian wine ranks second globally for sales, with neighboring France secure in the top spot.

Because blogging and updating social media pages don’t require capital, many of Italy’s winemakers have taken to social media to engage consumers in a global market. Others in the area aren’t willing to change, as tradition runs deep among Italy’s winemakers, creating a barrier to success.

As a result, one winemaker’s aggressive blogging and social media-engagement plan doubled online sales compared to those in previous years. The vineyard uses no other advertising.

Clearly, social media engagement is capable of influencing the bottom line. We can either debate the validity of current examples, waiting for better ones to emerge, or take the initiative and set up a social media-engagement strategy to determine our own results. Each day spent debating -- or waiting -- is another day of lost opportunity.




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Jeff Louis: Media Planner, Brand Project Manager, blogger, and aspiring writer. Please leave a comment or get in touch with Jeff on Twitter. As always, thank you for reading!

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