What's the Return on Winery Social Media?

Social media is a requisite for a successful brand, but the ROI is still elusive

by Andrew Adams
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A robust social media presence can eventually lead to wine sales.

San Rafael, Calif.—No one in the wine industry, or any consumer industry, is going to try and argue a brand doesn’t need a presence on social media.

But the value of a winery’s tweets, likes or Instagram followers, and what type of return that activity brings to a winery is still somewhat elusive, at least to the objective eye of an economist who studies the wine industry.

Steven Cuellar Ph.D., a professor with Sonoma State University’s School of Business and Economics Wine Business Institute, assembled five case studies of wineries finding success with social media campaigns and ran a regression analysis on each, looking for something that couldn’t be explained or modeled by observable factors.

In one case, a Napa County winery in 2009 hired a social media manager who worked for the company for about a year. During that year, the winery halted and reversed a trend of declining sales. “When you see the graph of sales shooting up, it makes a good argument for positive effects for social media,” Cuellar said in a presentation on his work.

Where’s the social media effect?
Yet when he went back and modeled how that same winery’s sales would likely have performed taking into account the traditional marketing promotions it also conducted during the same period, changes to its pricing and the overall improving U.S. economy, he saw a similar increase. The same was true for the other social media success stories Cuellar analyzed.

Cuellar’s discussed his analysis during the recent WiVi conference in Paso Robles, Calif., and he’s made similar presentations at other conferences on social media. His comments aren’t particularly well received. In a later interview with Wines & Vines, he said he’s well aware his conclusions are “highly controversial” and can make social media managers rather defensive. Cuellar has been in touch with a few firms that measure the “buzz” of social media and a couple of those are open to working with him. “If I can get that data then I can have another measurable I can throw in my regression,” he said.

VinTank, which has been tracking the world of wine in social media for years, made headlines this week with the announcement of its acquisition by the global digital marketing and communications firm W20 Group. That deal is a major validation of the message VinTank’s founders Paul Mabray and James Jory have been pitching for years; the old-fashioned wine industry needs to wake up to the power and potential of social media.

In the statement announcing its acquisition, W20 Group stated that VinTank is “one of the leaders in contextual customer engagement and is uniquely positioned to bring its innovation solution to any industry.”

W20 Group president Bob Pearson said “VinTank provides us with a way to create agile audience engines for a brand, where we can learn what an audience is doing online, understand what content they like, evaluate who they follow and respect and, ultimately, redefine what ‘customer relationship management’ means.”

In a March 2012 blog post on VinTank’s website, Mabray wrote the question of ROI on social media “is a topic that has become tired and vapid and rarely yields satisfactory answers for those asking the questions. I’ve talked about it over, and over, and over again and I too feel my answers are becoming cliché.”

Still Mabray goes on to make several points on how social media does bring a return on the time and money spent managing and engaging on social media. He posits a social media presence is a basic requirement of a company, like having a website or phone number, and having an active profile does provide a return in tangibles such as lower wine club churn and by supporting other promotions. Social media, Mabray writes, has also become a necessary pillar to support the overall health and success of a business like human relations or accounting.

Connections bring the return
It’s that customer relationship, however, which has long been regarded as the most valuable part of a company’ social media presence.

Jason Haas, the general manager of Tablas Creek Vineyard winery, which produces about 25,000 cases in the Paso Robles area, has written about using social media on the winery’s blog and in an opinion piece for Wines & Vines. He said Facebook posts, tweets, Pinterest pins and the rest aren’t about getting customers to buy your product but rather to connect with your brand. When those customers do have an opportunity to buy wine or visit a tasting room, the goal is that it’s your winery’s social media presence that makes them your customer. “I just don’t think that’s what people look for in social media,” he said of special wine sale offers or other promotional content. “People who use it that way are swimming upstream.”

He said if he uses the winery’s Facebook page to promote a tasting room special or flat rate shipping on wine orders to the 6,000 to 7,000 people who like Tablas Creek on Facebook such a post could provide one or two orders. The same offer made to the winery’s wine club members in an email can generate 150 orders.

But when those people who do like Tablas Creek on Facebook visit the Paso Robles, Calif. area they may very well visit the winery’s tasting room because they enjoyed a photo of, say, one of the winery’s resident alpacas.

Maintaining and expanding those social networks may just have to be something built into a winery’s marketing budget and perhaps can’t be accounted as a hard cost, Haas said. “Still they’re tools that are incredibly valuable and relatively inexpensive for what they give,” he said.

Cuellar of Sonoma State said he’s a fan of social media himself and doesn’t discount its power to build brand loyalty and improve customer relations. “Keeping in contact with your customers is a good idea whether it’s real life interaction or online,” he said. “It’s always good to have multiple touch points with your customers.”

What he can’t countenance as accurate, however, is a common method for calculating the value of social media in which a company takes a sample of Facebook users who like the business and compare that to a sample of people who buy a product but don’t like the business on Facebook. If those Facebook likers buy $100 more of a product per year than non-likers and the company has 1 million Facebook likes, social media managers will often tally the social media effect at $100 million. “You can’t make that comparison,” Cuellar said. “You’re really comparing apples and oranges.”

He said if someone “likes” a business they likely already purchase its products and if a consumer has purchased a company’s product but doesn’t “like” them then they really aren’t that much of a brand support. The analysis is really an inaccurate comparison of a company’s best customers to its worst, he said. “There’s no way of getting around that fact.”

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