DIFFUSION and Lucas make their mark on new Lowy Cancer Research Centre.

DIFFUSION and Lucas Melbourne's work has featured in the opening of the new Lowy Cancer Research Centre in Sydney on May 28 2010.

The new centre features a bold strikeout sans serif word mark incorporating colours from the building’s architects Lahz Nimmo.

The new centre was opened by Australian Prime Minister Kevin Rudd, NSW Premier Kristina Keneally and its main benefactor, chairman of Westfield Corporation Frank Lowy.

DIFFUSION principals Stephen Byrne and Monique Defina-Nancarrow and Lucas were responsible for the development of the new centre’s brand strategy, positioning and creative brand development. It was a year long project working with a joint working party between the two institutions as well as key sector influencers and stakeholders.

DIFFUSION strategy director Stephen Byrne and Lucas director Chris Lucas said they were proud to have been invited to develop the “make your mark” on cancer graphic idea - part of the main platform for the centre’s brand.

The $127 million research facility is at the University of New South Wales’ Kensington campus and houses 400 cancer researchers from both UNSW and the Children’s Cancer Institute Australia for Medical Research (CCIA) is the largest in the southern hemisphere.

Enter at your own risk: the real value of social media-based brand engagement.

Let’s be straight. Brand engagement does have quantifiable financial benefits. Increasingly this type of engagement via social media also has quantifiable benefits, it’s just no one knows what exactly they are, yet. So while the latest and only social media study reluctantly admits this, real financial bottom line value is still only partially proven.

By any standard definition brand engagement is an emotional connection or attachment developed during repeated and continuing interactions with a brand. Over time this should accumulate through satisfaction, loyalty, influence and excitement and other factors. Organizations who engage customers to the point where they are moved to a behavioral change do so by creating opportunities for emotional connections through consistent and positive experiences. Social media seems an opportunity for some brands to develop such opportunities, albeit at least turn any negative ones into positive.

However, alongside other media and non-media forms, social media is and should be regarded as just one part of a suite of engagement channels for brands. So, for example, a brand’s appearance or lack of presence on Twitter or Facebook, might harm its perception or level of engagement, it’s just that it won’t hurt if the current levels of engagement are low. And regardless, for some industry sectors it purely demonstrates a rational and logical extension of their core business activity.

In July the WetPaint/Altimeter Group released its ENGAGEMENTdbReport aimed at measuring how deeply engaged the top 100 2008/9 global brands were in a variety of social media channels and, more importantly, understand if a higher engagement correlated with financial success. Unremarkably, the study understated one of the key defining aspects of these rankings – that the level of financial success generated by the brands had already put them a top 100 brand. A position not defined by some other event or cause like social media.

WetPaint/Altimeter claimed their study not only measured the level of engagement but also the depth. They evaluated and scored each brand’s engagement in various channels and found the more a brand leverages multiple channels, the higher the level of engagement is (seems to make sense!) Ranking Starbucks as the most engaged brand, with a presence across 11 social media-based channels, they also linked exponential growth in the depth of engagement with continued growth in the channel.

Not surprisingly, it also found engagement differs by industry and with media usage. So the most engaged industries are naturally Media and Technology and the least, Financial, Apparel and Food & Beverage. In addition, the study found distinct target audiences can influence the level of engagement eg. Toyota’s media channels used to promote Prius are different to those used by either Mercedes or Porsche, again this would simply represent segmented buyer behaviours.

But what interested me the most, despite all claims to the contrary, was that the study admitted NO ONE has the data to determine whether there is a direct cause and effect between financial performance and social media engagement. While it claims companies “deeply and widely engaged in social media surpass their peers in terms of both revenue and profit performance by a significant difference”, it also points out these findings don’t necessarily imply a causal relationship between these two but POWERFUL implications, whatever that might mean.

So while it comes as no surprise that one of the least connected brands at 98 was AIG, the world’s most successful brand Coca Cola is tagged as a wallflower and is down at no 51. Go figure the financial relationship there between brand and performance.

There’s nothing particularly revelatory in statements like “a customer oriented mindstep stemming from deep social interaction” generates superior profits thus enabling further engagement investment and a virtuous circle of increasing profits. But social media is, within the primacy of media, a marketing and communications tool for brand engagement in the same way point of sale, packaging, store design, direct mail are.

So how does the Wetpaint/ Altimeter study contribute to the dearth of research on the effectiveness of social media?
1. Social media engagement effectively enables direct and two way communication for the brand. This is new
2. Brand engagement can be better managed and measured via social media
3. The cost and revenues that accrue from this engagement can be directly measured and accounted for
4. Social media is purely digitally driven. Though the by products from which it is derived are not
5. Social media brand engagement is governed by levels of participation in the same way any other engagement is. Active, latent, pro-active etc
6. Social media enables deep and broad brand engagement
6. Digital brands aren’t necessarily social media brands but it doesn’t hurt they are

What the study also reveals is that social media enables brands via this form of agency to quantify the value of the brand engagement and subsequently contribute to brand valuation. The contribution of brand engagement to financial value is already factored in many valuation models but this partition of the contribution is something that can effectively stand alone. We are yet to see how that might happen and who might use this.

So while the WetPaint/Altimeter study contributes to our understanding regarding the level and extent of brand engagement via social media, there’s really not enough evidence here of a direct financial return is not surprising. Indeed page six of the Altimeter report confirms the link between social media engagement and financial performance is not proven. Unlike one of the often quoted quantitative models, the Harvard Business School’s Sears Model, which proves a direct correlation between internal employee brand engagement and financial return in the vicinity of around 20%. .

And another study conducted in June last year for Adobe (not ranked by Wetpaint/Altimeter) by Forrester Consulting developed another model and demonstrated a 66% return. This study examined the total economic impact and potential return on investment companies might realise by increasing investment in engagement initiatives, with an emphasis on using both existing and emerging technology touch points such as social media.

It wasn’t extensive research (200 companies surveyed and six in-depth interviews) but Forrester did use what it calls a Total Economic Impact (TEI) methodology to measure impact. TEI not only measures costs and cost reduction (areas that are typically accounted for within IT) but also weighs the enabling value of a technology in increasing the effectiveness of overall business processes such as customer communication.

Forrester found three main results – firstly, increasing investment in online customer engagement through Internet-based channels improved the efficiency and effectiveness of customer interactions and the customer experience. Secondly, improved efficiency translates to reduced overall cost of sale as well improved internal staff productivity (much like the Sears Model) and thirdly, like the Wetpaint/Altimeter study, improved effectiveness translates to improved top line revenues resulting from higher purchasing frequency and improved customer value. Overall, the value of the ROI around 66%.

However, while the study focused on Adobe products and their introduction as part of a wider technology strategy, it still confirmed one of the main but unproven conclusions from Wetpaint/Altimeter. Those organisations with higher financial returns were those that developed a deep connection with their customers using online channels such as social media, ultimately raising customer awareness and purchase intent. Just ask Dell about its oft cited Twitter experiment.

In a turning bay: some questions on the future of brands in social media.

This is a conversation I had recently on the future of brands and social media with Jenni Beattie, Director at Digital Democracy, a Sydney based digital communications consultancy.

Stephen Byrne: I want to start with some work Forrester did in April last year when they outlined the five phases of the social web. They are:

1) Era of Social Relationships: People connect to others and share

2) Era of Social Functionality: Social networks become like operating system

3) Era of Social Colonization: Every experience can now be social

4) Era of Social Context: Personalized and accurate content

5) Era of Social Commerce: Communities define future products and service

Forrester study found that the technologies will trigger changes in consumer adoption, and brands will need to follow, resulting in these five distinct phases.

I don’t think technologies are going to be the only triggers for new consumer adoption. My view is that the marketing of brands as we know it in a state of flux. What we are seeing, to use a French phrase, is an “eventment”, where for example, social media and technology are combining to mitigate against many of the old marketing paradigms. You only have to look at what’s happening on the agency level.

Jenni Beattie: I believe the marketing of brands as we know it has fundamentally changed. Today consumers expect to have a say, be able to feedback and make a mark on a brand. This can be as simple as using review features on websites to user generated content such as naming a brand.

After spending time in digital market research, you can see how the social web is impacting that discipline. In the past it was very much a parent-child relationship with the researcher asking a very set question and the respondent answering. Today, more interactive forms of research such as online community research are taking place with a more ‘organic’ flow to the questioning i.e. the participants driving and forming part of the research. Good examples of innovative research can be seen from international companies such as Fresh Networks and PeanutLabs.

SB: In the final phase Forrester projects consumers will rely on their peers as they make online decisions, whether or not brands choose to participate. Socially connected consumers will strengthen communities and shift power away from brands and CRM systems; eventually this will result in empowered communities defining the next generation of products.

I’m not sure if I accept this phase. It’s like the worst effects of crowdsourcing and consensus politics. I don’t think we’re going to get an entirely technology driven brands, as Forrester’s analysis implies, but there is certainly some dramatic changes occurring with regards to consumer empowerment and in terms of brand preferences.

JB: There will be an increase in consumers defining products and services. Online branded communities created by Dell, Starbucks and P&G are already helping give customer feedback and in turn helping to define the future products and services.

A good international example of innovation and consumers defining brands was when The Grocery Manufacturers Association (GMA) of the USA awarded Kettle Foods, Inc. one of the two 2008 Awards for Innovation and Creativity. Kettle Foods, Inc. won the award for its “People’s Choice” campaign. The campaign combined “consumer interaction, PR and R&D into one program. According to the press reports the company has had than 11,000 new business leads, more than 7,000 new flavour suggestions, and 75,000 unique Web site visits all for a low cost investment”

As far as power shifting away from CRM systems I don’t believe that to be the case. CRM will reinvent itself, Gartner refers to this as Social CRM. Gartner analysts say “There’s operational CRM, analytical CRM, and now there’s collaborative or social CRM”. Today CRM budgets are looking towards more social applications such as Twitter that are at the coal-face of customer service.

SB: Right now there seems to be a lot of confusion between social media and the definition of community. The idea of community is right now as fairly elusive one and is being bandied about like it’s some sacrosanct term. Community built around consumption is, for me fairly transitory. It reminds of an unruly mob during the time of the Paris Commune. We’re not going to get a whole lot of sense out of this right now.

Then there’s these dire warnings coming from people like Forrester, that brands will be excluded from consumer choice because somehow they are now being defined by communities and no longer by the brand owners themselves. I think this is both disingenuous and untrue. Forcing brands out of their hands via social media created communities is only part of the story. While even as early as 2005 Tomi Ahonen and Alan Moore warned marketers, in their prescient work Communities Dominate Brands, that if they didn’t cut loose the shackles of the traditional advertising agency and TV network model they would lose their brands. I’m seeing many of the same warnings again this year, particularly in the wake of the great financial crisis. But what real, if any, changes have we seen to this paradigm? No brands have fallen by the wayside because they didn’t have a social media strategy or because they continued advertising in traditional media.

JB: Brands may not fall by the wayside as such but brands will become stronger because of their consumer engagement strategies. For example, the well known Dell Hell scenario certainly impacted on that organization negatively but by engaging with the community they have come back stronger and more relevant to their client base. If they hadn’t done that who knows where that organisation will be.

Some brands come to social media like Dell in a ‘reactive’ fashion knowing they now need to engage with consumers due to a negative event/issue. Other brands initiate the online engagement strategy ‘proactively’, understanding it will add value to their knowledge base, understanding the client better, product development and customer service.

SB: Ahonen and Moore predicted the consumer and their connected communities, would select the products and brands that are engaged in the most relevant dialogue with them. Somehow this would become the centre of a new modern and sustainable marketing model. While I think there are some massive shifts occurring, I don’t think we’re quite there yet with this because I’m not sure anyone understands these kinds of ROIs yet.

JB: First of all, it is important not just to focus on ROI but measurable goals and each company will have varying goals. Social media marketing is typically a long term investment so to set short term ROI goals is going to be difficult. Setting ROI for a specific short-term campaign is more logical i.e. we spent X dollars taking this campaign to the market place and X dollars in sales. There are many intangible benefits from social media marketing such as increased loyalty from customers, insights and R&D innovations and better customer service many of these are hard to equate with a dollar value.

There is a balance when setting ROI expectations. Many social media audits have an AVE advertising value equivalent metric assigned. This stems from the AVE metric that the public relations industry used but discredited about a decade ago saying it was simplistic and backward looking rather than useful for future strategic planning. Unfortunately, just as in the traditional PR world many c-level execs still want the $ figure and so in the social media marketing world the metric is still used but with some hesitation.

SB: There’s already a view that Web 2.0 and pervasiveness of new community archetypes make demographics dead, but I don’t see this is as too different to these axiomatic definitions of community.

JB: If companies were using demographics as the only avenue for ‘understanding ‘ their customer then, yes demographics are dead. Companies need to have a relationship with the customer rather then simply put them in isolated boxes. Let’s face it boomers today don’t act like middle-aged people years ago – times have changed so the context for those demographics has to change as well.

As far as using demographics to reach consumers via social media marketing, that is still relevant but rather than just understanding income levels and postcodes we need to understand how they relate online and what sites they are using. We need to understand their technographic profile. For example, women 55 plus and men 55 plus operate differently online understanding this will mean you can engage with them more effectively.

Gartner published research on what they call Generation V (virtual) indicating that the generation isn’t defined by specific demographics but by the way they use technology i.e. a behavioural categorisation. Elements of this categorisation incude accomplishments, how they build and share knowledge and their preference for different media channels.

Let’s not throw out the ‘baby with the bathwater’ demographics are not dead but demographic elements need to be relevant to social media marketing.

SB: One of the things I am seeing is the built around the question of measuring influence in social networks and communities. I’m not sure if brands are really measuring this and how much use, if any, they are making of influence metrics.

JB: There are a myriad of ways to measure influence in social networks and the impact of social media marketing. Normally there is a mix of qualitative and quantitative measurements.

To set your measurements you need to set your marketing objectives and relate the metrics to those. For example, if you want to raise awareness of a new product or service attention metrics such as the amount of views of your content are important if you are after sales metrics than you need to look at actionable clicks rather than just views.

I like to break the metrics down into Visibility Metrics (i.e. getting seen) and Engagement Metrics (what people do once they see your content site). So, for example. engagement metrics would include items such as links shared, comments on blogs etc.

SB: I don’t think we’re really in a position to say that brands and companies without a social media strategy are going to find that customers will go elsewhere.

JB: Yes, It may not be quite as apocalyptic as that but recent research looking at brand relationships has shown that on average they are 15% stronger for digital consumers. Even products such as motor fuel and hair care (as shown below) can be impacted favourably by engaging with the consumers online.


Some brands will have more synergy with social media marketing than others. A good example is the non-profit area, where there is already a lot of passion and energy around their company or cause. For example, the United Nations Refugee Agency recently launched their Causes page on Facebook. They reached 50,000 members in just under seven days, raised just over $50,000 and boosted their Facebook fan page to 20,000 fans.

Having said that even brands that you would think would have less ‘talkability’ in social media such as tax (think H&R Block) have done well using social media strategies.

Let’s not forget that while some may think that social media marketing is radical and very new in reality Doc Searls and David Weinberger (the founders of The Cluetrain Manifesto) were spouting social media marketing many years ago.

SB: One of the problems is how social commerce is really going to work. Given the growing failure of traditional advertising in almost all media forms, the real question now is how are brands going to be sold in the future.

Commbank takes its brand offshore.

In a move not reminiscent of the Coles Group (see DIFFUSIONblog 4 September 06: Is McCann set to give Coles a Walmart?) Australia's Commonwealth Bank has abandoned the creative work of its traditional Australian agencies and moved to US west coast agency, Goody Silverstein.

The move, reported this week in the Sydney Morning Herald, is certain to raise the hackles of incumbents STW and probably most other agencies in Australia.

More interestingly was the Herald columnists' assertion that "Australian companies (spell A_D_V_E_R_T_I_S_I_N_G) have for so long lacked any imagination or will to back interesting and engaging advertising and the ability of the communications sector to propose anything marginally outside of the predictable is remote."

Certainly that's been DIFFUSION's recent experience of adland as it seeks to perpetuate a mythic status as marginal thinkers and strategists. In fact, what we have seen is that most agencies seem content to rest on poor stale concepts and ideas and will not look for people outside the industry to change this. So, who can blame Commbank?

Just ask Optus, Singtel's Australian telecomms arm. There about to do the same thing to their Australian agencies for much the same reason. M and C Saatchi is likely to get the shove, and not without reason. Optus' "animals" were being used when I worked for Cable and Wireless in London, which dates from the time when Optus was owned by the former global carrier. So perhaps they need to be looking further afield or agencies in Australia need to work a lot harder?

The SMH doesn't let matters rest there. They put the boot in, describing senior marketing staff in Australia as "creatively retarded marketing managers". There's something in that as the dearth of great creative and well thought out brand strategy in this country is much the fault of clients as it is of agencies. Have a good look around at how they recruit senior marketing appointments. It's all through, in most cases, headhunters who work to set formulas and like their clients, rarely go outside the "predictable".

You reap what you sew.