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  1. Analysis
July 31, 2012

Social media: food industry continues to network

Despite concerns over returns or on the ability of social media to reach a mass audience like other forms of communications, the food industry is increasing its use of sites like Facebook and Twitter to market their brands or connect with consumers.

Despite concerns over returns or on the ability of social media to reach a mass audience like other forms of communications, the food industry is increasing its use of sites like Facebook and Twitter to market their brands or connect with consumers.

Social media “has fundamentally changed how consumers engage with brands”. That is the message from over 90% of marketing executives, according to a survey from US analysts Forrester Research.

Online networks are now integral to the marketing strategies of many businesses, with almost 22,000 companies now thought to have a Facebook page.

And, for all that, there are criticisms the rate of investment for social media campaigns is difficult to measure, while others feel it remains incapable of building up the kind of mass audience associated with more traditional forms of media. 

Nevertheless, the growth in the number of people using social media continues to rise. In April, the number of Facebook users worldwide broke through the 900 million barrier (compared with around 660 million for the corresponding period in 2011), equivalent to more than 12% of the global population. Facebook’s global user base is set to reach one billion at some point during the third quarter of 2012, with moderating growth in the UK and the US being offset by increasingly rapid take-up in India and Brazil in particular. 

Similar growth is being experienced by other social media websites. Twitter now boasts over 400 million registered users, with the number of active users expected to reach 250 million by the end of 2012. LinkedIn, meanwhile, now has over 160 million members spread across more than 200 countries, although almost 40% are located in the US. More than one trillion viewings took place on YouTube in 2011, with over 70 hours of video being uploaded every minute as of May 2012. 

These figures, however, should be treated with a degree of caution. Evidence uncovered during the summer of 2012 found that some Facebook accounts were registered to subscribers using false identities, a situation which has major implications when businesses use social media for advertising purposes, for example. Rather than chasing the number of ‘likes’ on Facebook, it is now considered better industry practice to use social media to identify and thus market to hyper-targeted consumers, using demographic data such as age, sex and region.

From a business perspective, social media is attractive owing to its growing user base, as well as the growing share of advertising revenue taken by the likes of Facebook. The flotation of Facebook in May was one of the most eagerly-anticipated in recent history, and initially appeared to confirm investors’ confidence in social media. However, although Facebook was valued at US$104bn, its share price fell sharply afterwards, amid claims over-optimistic forecasts for the company were given to investors beforehand.

Facebook’s revenue growth also slowed in the second quarter of 2012, although it still reached $1.18bn and founder Mark Zuckerburg insisted the company would continue to expand.

“Our goal is to help every person stay connected and every product they use be a great social experience,” Zuckerberg said. “That’s why we’re so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends.”

Despite concerns over ROI or building a mass audience, many food manufacturers and retailers continue to build followings on social media, and are actively using it in their marketing.

“Social media has grown exponentially over the last decade and it has created a platform for a more holistic approach to showcasing Sainsbury’s products and communicating with our customers,” Joel Dawson, head of digital marketing at UK retailer Sainsbury’s, says.

“As a customer focused organisation, we totally embrace the opportunity to foster an open dialogue with more of our customers. These extra platforms allow us to cost effectively communicate what we’re doing to even greater audiences, providing a two way conversation with our customers and improve all areas of our business.”

Sainsbury’s rival Waitrose, meanwhile, insists social media is “really important” to the business. “It increasingly touches every area of our business, and we’re committed to ensuring our customers can engage with us through the channels that are the most relevant to them,” digital communications manager Julie Randall says.

And some suppliers argue social media can play a role in their NPD strategy. “We are now looking to develop broader social customer relationship management programmes and trigger advocacy through word of mouth… we are using social media to feed into innovation and research and development,” Debbie Weinstein, senior director of social media innovation at Unilever, says.

Companies are taking to social media with the primary aim of seeking greater levels of engagement with their customers. Furthermore, the perception exists in many quarters that businesses not using social media risk missing out on an increasingly powerful branding and promotional opportunity. 

On a brand level, social media continues to influence new product development – for example, some launches have been confined to social media audiences, while competitions and opinions shared via websites such as Facebook remain popular. Food manufacturers and retailers have also taken the opportunity to involve their fans and followers in marketing activity, often by encouraging them to act as ‘brand advocates’ Specific examples are reviewed in more detail in the second section of this briefing.

On a wider level, social media can also act as a useful link between companies and events. Cadbury’s Spots v Stripes campaign marking its sponsorship of the 2012 Olympics is one such example, which led more than 120,000 people to participate in related sporting events. Cadbury also plans to let its Olympic hub visitors share their experiences on Facebook via an Oyster-style card – this will allow people to upload photos and messages to Facebook when scanned.

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