Wine Social Media Pays Off
Industry leaders discuss ROI at Wine Industry Technology Symposium
Napa, Calif.—Most wine companies have embraced social media as a marketing tool, but many wonder: Does social media sell wine?
On Tuesday, organizers of the Wine Industry Technology Symposium at the Napa Valley Marriott devoted an entire seminar to the subject. (To see more photos of the event visit our Facebook page at facebook.com/winesandvines.)
Susan DeMatei of consulting firm WineGlass Marketing moderated the session, titled Does Effort Equal Results? She quoted a survey that found about half of wine marketers see an impact on sales due to social media, but only 37% of them believe they can measure the impact of their social media efforts.
Almost as many, 28%, say they can’t, and 88% want better ways to measure the data.
Quantifying social media
Karena Breslin, vice president for digital marketing at Constellation Brands, said that as a publicly held company Constellation has a responsibility to provide a return on investment (ROI). “We can’t afford waste,” she stated.
As a result, she makes sure the company’s efforts are targeted and relevant—and she has numbers to demonstrate they work.
Between 2012 and 2013, Constellation reduced its cost per “like” on Facebook by 63%, while growing its community by 2.3 times. The goal isn’t merely to increase the number of “likes” or the size of the community, however, but to drive the business forward. The effort did just that: Breslin said the Facebook campaign resulted in 37% higher sales due to the digital marketing efforts as well as 4 million fans and $42 million in retail sales.
Another Facebook ad campaign focused on Arbor Mist. It resulted in fans being 2.6 times more likely to buy than others. A fan spends 31% more per household, and fan households increase spending more long term (nine months). Breslin said Constellation gained 431,000 Facebook fans who accounted for $1.3 million in sales—six times the cost of the Facebook ads.
Breslin added that if Constellation had converted more high-spending Facebook users, they could have reaped $1.3 million more.
The company is also better targeting its efforts in television advertising—notably for Black Box, a premium wine sold in 3-liter bag-in-box packaging for around $20. It now sells 6 million boxes per year.
Breslin said one reason for the success was that Constellation was able to directly tie TV ad buys to potential for wine sales: The company targeted TV shows that attracted consumers with high potential for buying wine.
In 2012, sales were up 38% and attracted 88% of buyers new to boxed wines. The efforts raised household spending by 11%, but ROI was only 50%.
In 2013, sales were up 183%, with 80% of buyers being new to boxed wine (a figure bound to drop with success). Household spending grew by 17%, and ROI was up to 160%.
Breslin said that this increase in ROI after the first year is typical. The first year involves learning and seeding, and the payoff comes thereafter.
Exploiting mobile computing
To keep its efforts relevant, Constellation also made sure that its messages worked on mobile devices. In particular, it used Shopkick for four campaigns. This program rewards consumers for visiting a store, scanning product UPC codes and other activities. “It drove 1.2 million product suggestions and moved about 130,000 units,” Breslin said. Eleven percent of the consumers bought the products at an average ROI of 327% relative to the spending.
Breslin said that the majority of Constellation’s efforts are in Facebook because that’s where the consumers are. For Constellation’s Kim Crawford wines, for example, 49% of fans increased purchases, and they buy an average of three bottles each. That totaled 7 million in retail reviews for the past six months and 1.4 million word-of-mouth recommendations.
Finally, a Facebook ad campaign for Clos du Bois in fall 2013 increased household sales by 6.45%, with higher trial and repeat buying. Again, the first year’s ROI was only 50%, but Breslin expects a big lift as the campaign continues.
“There are more than 80 million digital wine consumers,” Breslin said, and she is planning to target more of them. “Technology allows us to track 96% of purchases.”
She concluded, “You can measure the ROI on social media efforts, and they pay off.”
Wine Sisterhood’s experience with QR codes and apps
Aliza Sherman of Mediaegg, a pioneer in efforts to work with women on the web, related her experiences with Wine Sisterhood, a program that originally was intended as an online community for women to connect about wine but grew to include food, travel, fashion and eventually a wine company. It’s part of Terry Wheatley’s Canopy Management wine company.
Its wines include Wine Sisterhood, Middle Sister, Monogamy, PromisQous, Purple Cowboy, Haute, Good Daughter, Slow Dancer, Cowgirl Sisterhood and a private label, Girl & Dragon for Target.
The company markets exclusively using digital media except for a few related sponsorships.
Its efforts have included many using QR codes. “You may have heard that QR codes are dead,” Sherman said, “but they’re not.” She reported great success using the codes, but only when they’re used correctly.
“Don’t just send QR code users to a generic website,” Sherm an said. “You want specific goals. They won’t read pages of text, but short videos work.”
Surprisingly, Sherman doesn’t recommend sending viewers to a sales site. “It’s unlikely that they’ll buy,” she said. Instead, she suggested having goals such as capturing visitors’ contact data for email campaigns. “Email is far more credible than social media,” she said. “Email is still the most effective digital-marketing tool.”
You can also measure everything about email: where it goes, what links are opened and other results.
Another approach is getting consumers to download a useful application for their smartphones. The company did this at South by Southwest, the Austin, Texas music festival popular with young consumers and influencers.
Wine Sisterhood developed a coaster (with pink text and images) printed with a QR code that allowed users to download the “Drink-u-lator” app, which helps plan how many bottles of wine, beer and booze to stock for a party.
Constellation gave out the coasters at their party, but also covertly distributed them at other events during the festival. The effort was deemed quite successful as it collected many email addresses for future campaigns.
Sherman noted that knowledgeable designers can produce fancier QR codes in different colors, too, but at the smallest recommended size (1 inch square), the basic black code works best.
In all cases, however, she advises using a QR code that allows tracking—the basic free ones often don’t. “The cost is low anyway: creating the code and perhaps inexpensive hosting.”
Oddly enough, one good place for QR codes is on websites, where they can be used to download apps for smartphones. They can also lead consumers to Facebook or Twitter feeds.
Sherman also had some advice about creating apps. “Many companies charge $25,000 to $100,000, but others will do it for less than $5,000.” She advises looking for programmers in out-of-the-way places with low costs—not in New York or Silicon Valley.