Earlier this month, race fans and media alike were shocked when Formula 1 CEO Bernie Ecclestone gave an interview with Campaign Asia’s Atifa Silk where he gave controversial statements regarding promotion to young fans and the value of social media. In short, Ecclestone said he’d rather get to the 70 year old audience with “plenty of cash” instead of marketing to the younger generations of race fans. He also called himself old-fashioned, stating he saw no value in the “nonsense” of social media.
Ironically enough, the interview spread like wildfire over the internet, newswires and social media sphere. Through the outcry on social media, Ecclestone’s name was trending in no time as the story continued to pick up momentum. Face-palms happened collectively around the world, with media and fans asking if Ecclestone had finally lost all of his marbles. Not all were in disagreement, however, with a small percentage questioning the validity of his statements and the ripple effect taking place.
Both topics of young fans and social media are huge on their own, and many could go on for days about each topic. However, both are also intricately linked. Instead of merely spouting off an opinion based on personal and professional experience, we’re also going to take a look at the data behind these two subjects. I apologize in advance for the length of this piece.
I’ll be frank. Although my job in public relations requires everything from interview booking to event activation to press release creation and distribution, my area of expertise is social media. I make a living converting digital interpersonal communication into real relationships with the brands I represent. To outsiders, it’s just a medium in which to send out information with no return on investment. To me, it’s a social science that can certainly be measured, and to which value can be assigned. Bernie’s view on television reflects my own of social media.
In his recent interview with the Formula One CEO, Atifa Silk asked Ecclestone how the race series could widen its reach beyond television. His reply:
“I’m not interested in tweeting, Facebook and whatever this nonsense is. I tried to find out, but in any case, I’m too old-fashioned. I couldn’t see any value in it. And, I don’t know what the so-called ‘young generation’ of today really wants.”
There’s no question that one of the biggest blocks Ecclestone built Formula One on was a successful and profitable television coverage model. The man knew television and used it to alter the history of the sport. However, technology has never ceased to stop evolving and whether we individually choose to change with it or not, the lifestyle of modern man has changed. What television was in the 1970s or 1980s isn’t what it is 2014, and what television means to older generations isn’t the same as the younger generations of today.
This is reflected in a 2013 survey from the US Department of Labor, which showed that Americans 75 years and older spend 4.1 hours a day watching television, whereas Americans ages 15-19 only watch 2.2 hours a day. A study released earlier this month from Flurry showed that in the past nine months alone, time spent on mobile devices in the United States has grown by 9.3% to beat out the average time an American watches TV per day.
If people are spending more time on their mobile devices than television, does that mean mobile devices are more effective? Not necessarily, but it does show that more attention should be paid to mobile devices and what they can offer.
The Value in Social Media
A common misconception about social media is that it is impossible to track or assign value to.
There are several ways to determine the value of social media, the biggest or most comment being being:
– Return on Investment (ROI): ROI is usually used more by upper management, looking for a direct correlation from a social media post to cash flow. It’s one of the most time consuming ways to assign value, but not impossible. Here’s just one example of how this could work: A brand launches a campaign with a multi-pronged approach to include magazine, web and social media advertising. The magazine ad includes the company website and a phone number, (800) 555-1111. The website advertising includes banners on multiple websites, linking to the company website and uses the phone number (800) 555-2222. The social media posts use a link to the company website and encourages users to call the phone number (800) 555-3333.
Although each phone number is different, they go to the same call center, each being logged into the tracking system. It can be costly, but there are many services available to track each of these numbers through to the final point of sale, logging which of the three approaches closed more sales. As for the web tracking, countless services provide data from every visitor, including what previous website brought them to that page and the path of the visitor on the site. Depending on the depth of the tracking system, companies can track a user from the second they visit their website from twitter to when they make a purchase. Like anything, this hypothetical example of tracking ROI leaves room for inaccuracies in the data. What if the user sees the magazine ad, checks out the company twitter first, then calls the phone number correlated to the tweet? Technically social media would get the point for phone call, despite the fact that the magazine ad put the ball in motion.
– The Value of an Impression (view): One way to assign a value to an impression is to determine what that brand would have had to pay had they decided to pay for a marketing campaign to net the same results. Long winded example: One of my favorite things about social media is the ability to track how far a social media post can go. Magazines can easily track how much of their product was distributed, but can they track where else it goes after that? Whether it’s my dentist or car dealership, there are always magazines available from the last decade. Is my view of that 2008 issue being tracked? Doubtful. Is it being estimated? I hope so. As for television, Nielsen ratings are one of the main ways to gather data, yet makes assumptions based on small percentages of viewers, among other things. Using twitter as an example, through an analytic service, in a manner of seconds, I can pull up any tweet from any account I manage and track not only how many retweets it received, but also how many extra views it received based on those retweets.
In September, I posted Part I of a Roundtable featuring motorsport participants sharing their thoughts about how to get into the racing industry. As you can see below, this specific tweet received 12 retweets.
— Kelly Brouillet (@K2theBru) September 4, 2014
On that day, I had 2,039 followers. Because of those 12 retweets it received, that particular tweet earned a total of 15,056 views. In the following 4 hours alone, my website views were eight times higher than my daily average, with over 60% of them tracing back to that first tweet. Not only was the Roundtable getting views, but the view count for every other page on my site increased, including my store traffic.
This brings us to Facebook ads. With Facebook advertising, you choose a target demographic (say, 13-70 year olds who like auto racing and automobiles, etc), and based on the demand for that demographic, Facebook advertising charges you per view. Based on a recent campaign I ran for a client, each impression for that advertisement cost me $0.003. My tweet was free and reached 15,056 people. But if I wanted to pay Facebook to advertise it to a similar demographic, it would cost me $45.19. Therefore, I estimate value of that tweet to be $45.19. Even if I didn’t see a direct ROI, I am still able to track the value of the post that I would have spent if I paid for it via Facebook advertising (Google Ads are another option). The value of an impression can differ from brand to brand based on their target demographic, and this is just one example in which to do so. I should also note that the stronger relationship a brand has with its follower base, the more valuable those impressions are.
One of the best things about social media is its free. The only thing it costs you is the time to manage it. What’s it worth to a brand to have a role designated to interacting with their target consumer? Last winter, TUDOR United SportsCar team Flying Lizard Motorsports* hired me for the sole role of providing information and interacting with their fans on their twitter account. Previously, the account had only been used to make big announcements and share press releases. The result? From 2013 to 2014, replies from the fans increased by over 15,000%, retweets increased by 2,200% and the overall views increased by 4,494%. For brands concerned about the relationship they maintain with their users, that’s huge!
If we were to take $0.003 value from earlier and assign it to this 2013/2014 comparison, the team twitter account received $145,200 worth of twitter impressions in the 2014 race season, all for the cost it took to pay me for my services (which I guarantee is not $145,000). In addition to that, the fans build a connection to the teams and drivers. They buy tickets to races, or merchandise from the store. It never stops at just a tweet.
Bernie claimed that soon social media will start charging for any post that is remotely commercial. Social media outlets like Facebook, twitter and Instagram continue to be completely free. Brands can promote to their existing fan base at absolutely no cost. If they want to pay the outlets to promote outside of their fan base, they can for relatively cheap. “Facebook will start charging” rumors have been flying since the company started in 2004. This is a company that understands its user base and how to leverage social media. According to the New York Times, Facebook currently as an enterprise value of 193 billion dollars. Yes, billion ($193,000,000,000). Another fun statistic just released from Facebook’s investor reports: revenue for the third quarter for Facebook in 2014 increased 59% from the third quarter of 2013, to a whopping total of $3.20 billion. Believe me, they’re just fine making their business model work as-is.
How do you choose the right medium for you?
Depending on the target demographic and goals and even what the brand is, some social media avenues are worth more than others. A recent study by SumAll showed one Instagram follower is worth 10 twitter followers. How do you choose which platform is right for you? How do you choose which platform is right for you? The best thing you can do is learn your target and learn the usefulness of each medium. This infographic is one of my favorite go-tos for brands trying to learn how to connect.
Are the Younger Generations Worth our time?
“I say to some of these people who start this nonsense about social media, look what tobacco companies tried to do—get people smoking their brand early on because then people continue smoking their brand forever.”
Tried? According to tobaccofreekids.org, 90% of all habitual smokers start at or before the age of 18. According to the Centers for Disease Control and Prevention, Camel increased its marketing spending from $27 million in 1989 to $43 million 1993. The result: Although their adult market share remained unchanged, the number of youths purchasing their brand of cigarettes increased by 64%. Despite Camel’s new found popularity with youth, by the end of 1993, Marlboro still held the largest stake of adolescent smokers as most preferred brand, and according to a 2013 CNN survey is worth $69 billion dollars, #8 of ten in the most valuable global brands, behind Microsoft in #7. Tobacco companies tried to get consumers while they were young and they were wildly successful.
Tobacco companies were so successful in reaching adolescents as tomorrow’s consumers that the rest of the world finally decided to play catch up. In 1998, all 50 of the United States reached agreements with tobacco companies for the main purpose of reducing smoking, especially among adolescents, according to the NCAA. The Master Settlement Agreement (MSA) required tobacco companies to give states only a minute a portion of their revenue to be used to target youth for anti-smoking campaigns. Based on a report issued by Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society Cancer Action Network, American Lung Association, Robert Wood Johnson Foundation and Americans for Nonsmokers’ Rights, at the beginning of 2014 (with fiscal budgets complete), the states were estimated to spend only 1.9% of the $25 billion they received from tobacco companies to spend on anti-smoking efforts. Tobacco companies for the win.
Bernie hit the nail on the head in regards to smoking companies and their desire to reach young people. Tobacco companies saw the value in getting tomorrow’s consumers while they were still young.
According to the US Chamber of Commerce Foundation, the Millennial generation (born 1980-1999) is shaping up to be the most educated generation yet, with the majority of Bachelor degrees being in business. In fact, more than 27% are following Bernie’s path and are already self-employed entrepreneurs. If Bernie could gain one thing from the foundation’s report on Millennial annual purchasing power, it should be this–and this is huge:
“A more consistent estimate is $200 billion of direct purchasing power and $500 billion of indirect spending, largely due to the influence on the spending of their mostly baby boomer parents. With Millennials’ peak buying power still decades away, marketers would do well to establish relationships with this consumer force. The biggest lesson when marketing to Millennials is that organizations must know and use social media.”
TUDOR United SportsCar driver Jordan Taylor* is one of the easiest examples to use when discussing the power of not just social media, but social media on a young audience—which he estimates makes up about 40% of his fan base. In January of 2013, Taylor announced to his social media followers he would grow his hair out to resemble the mullet of his youth, one his social media followers had seen often in throwback pictures.
“After a few months, as it got longer and longer, it just kept getting more and more popular,” said Jordan. “I won the GRAND-AM Championship at the end of 2013, and every interview I got on, they were more interested in talking about my hair than the championship. Once I realized how popular it was and how long it was, I wasn’t just going to cut it off to cut it off. So I decided to make a raffle out of it with some big prizes to really get people interested. I had big supporters behind us, like Watkins Glen, Continental Tire, and Chevy.”
Jordan set up a raffle and promoted it through his twitter, Facebook and Instagram accounts and set a goal of $10,000 for the one-month campaign. Instead, though his own social media and the support of race series and team sponsors, the mullet raised $14,000, all proceeds going to Camp Boggy Creek and Camp Anokjig. The mullet-cutting took place at Watkins Glenn during a TUDOR Championship race weekend, effectively garnering even more attention from the media. Taylor credited TV interviews, an Associated Press interview, radio appearances and more that centered on the mullet, with his racing career taking a back seat to the discussion.
“My biggest surprise was just the overall response from all the people on social media,” said Taylor. “I don’t know most of these people in person, just through social media. So the raffle really let me get to see what kind of people they were and how generous they could be for charity. I can honestly say that my personal fan base, however big or small it may be, is almost directly related to my social media presence. At any autograph session, I’ll be asked by a few people for a #JTFacial with them. And if you don’t follow me on social media, you’ll have no idea what that means. I have a pretty unique take on social media. I use it to show people more of who I am away from the race track, rather than just using it for all ‘business’ type things. I show a bit more personality than most of the other guys out there, which helps connect with fans on a personal level.”
Konica Minolta Business Solutions* manufactures business and industrial imaging products and also is the primary sponsor of Jordan’s No. 10 Chevrolet Corvette Dallara Daytona Prototype race car in the TUDOR Championship. Konica Minolta President and COO Rick Taylor praised Jordan on his social media efforts and the value they add to the program’s sponsorship.
“Beside the on track performance and exposure, the social media benefits Jordan brings is one of the most important aspects of our sponsorship,” he said. “Our customers are doing more of their research online before they ever talk to our company. Anything that improves our online image adds to our opportunity to sell in the future. Millennials are clearly the biggest users of technology. They are the buyers of the future for our products. From that perspective Jordan’s demographic is perfect for our next generation customer base”.
When asked if Formula One could benefit from marketing itself more, Bernie replied, “What could we say to people? It’s pretty obvious what we produce and what we do. Either people like it and buy or don’t like it.”
Can you imagine if potential race sponsors said that? “Rolex sponsor a race series? Why? It’s obvious we sell watches. Either people buy them or don’t.” Continental Tire: “It’s obvious we sell tires. That five year old in the stands can’t buy them. Why bother?” Or even bigger, if Red Bull or Ferrari said something of the sort to Bernie himself.
It that were the general attitude towards marketing, sponsorship and public relations in the sport, it would simply cease to exist. If I said that to one of my clients, there’s a strong chance I’d be let go. That statement reflects no desire to grow and expand to new audiences, nor to build stronger relationships with existing fans.
Bernie’s opinions were based on the fact that he self admittedly did not understand the power of a young audience or social media. I’ve worked for Bernie types before, and the best thing they can do is trust their brand to someone who understands young people as well as the power of social media, in addition to older forms of media. Public relations and marketing isn’t a “this or that” business, despite the fact that many from older generations, based on my experience, choose to look at it that way. You can have races broadcasted on TV as well as streamed on mobile devices. You can promote your brand through social media and magazines. You can use different approaches to reach senior citizens and young people.
A race series can promote just as easily as a race team or driver can, sometimes even in additional ways drivers and teams can’t. They have access to an entire paddock’s worth of personalities, sponsor gear, drivers, manufacturers, etc. They are only restricted by the limitations they set on themselves. The beauty of social media effectiveness is that it is in the hands of the brand and how they choose to use it.
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Post entry completion: dna Analysis released a news article where Reuters quoted Bernie denying select statements of the controversial Campaign Asia-Pacific interview. Unfortunately, with his history of controversial statements, it’s questionable how many will believe him, at this point. Any publicity is not good publicity, especially when you chip away at the credibility of your brand. Then, when you want them to, people have little faith in your brand or the truth behind it.
*The views of this piece do not necessarily represent those of Flying Lizard Motorsports, Jordan Taylor and Konica Minolta Business Solutions.