When I set out to explore how wine brands measure ROI on digital media channels, I wanted to illustrate the range of both investment and scale. So I started with what I thought were examples from opposite ends of the spectrum: Constellation Brands (the world's largest producer and marketer of wine) on the one hand, and Cornerstone Cellars (a small 10,000-case producer in Napa and Oregon) on the other. Though their dollar investments are, in some instances, truly far apart, I also found interesting points of intersection.
Which means that, though this post looks at two very separate case studies, the differences are hardly black and white. I consider this the first in a series of posts on the subject that will explore other strategies and nuances of wine brands' approach to ROI.
Today we'll look at three areas of concern: the evolution of ROI in wine, benefits of online outreach for smaller brands in particular, and choosing the right platform to communicate.
How Digital Media ROI Has -- and Hasn't -- Evolved
Quantifying ROI, especially when it comes to digital media, is not as slippery or elusive as it used to be. "With the advances in technology today, it’s possible to understand the context of sales," said Karena Breslin, Vice President of Digital Marketing at Constellation. "It’s been absent from the conversation for a long time and it really doesn’t need to be anymore."
What's interesting is the mix of traditional marketing tools (like surveys) and their implementation through online platforms, in order to understand and analyze that sales context.
Breslin said that, particularly for small to medium-sized brands, surveys are a minimal- to no-cost option. For the smaller brands in their portfolio, they sometimes lean on surveys administered through Facebook to understand purchasing behaviors and the makeup of the brand's online community. Results indicate that fans are "advocates of the brand, often drinking at a higher frequency than non-fans, and subsequently they're much more loyal," Breslin said.
Take Kim Crawford as an example, the New Zealand producer within Constellation's portfolio that does well on social media. Breslin's team found that 48.9% of people surveyed indicated they increased purchases of the brand since becoming a fan. The number of bottles purchased per trip (three, on average) is also noticeably higher, even though Kim Crawford is at a higher price point than other brands in their portfolio.
Bottom Line Benefits for Smaller Brands
Craig Camp, managing partner at Cornerstone Cellars, mixes traditional and new technologies in a completely different way. He begins his day combining research and developing content marketing; that's the more traditional part.
“The rest is just looking for people to talk to,” he said. He identifies prospects using tools like Twitter lists and Vintank.com’s geofencing functionality, and he's seen results: he attributes a full 10% of his Yountville tasting room traffic to social media outreach that he has personally initiated.
"I know the ROI because I feel it every day," he said, from personal emails to face-to-face interactions. "Outreach is a necessity for a small winery. We need to talk to people directly, to communicate what we do, and it's a major part of what's going on for us."
Camp identifies the strategies that make his outreach successful:
- "The advantage of a small brand online is that I have my focal point," he said. "We’re telling a very personal story, and our followers are really talking to the people making the wines and making the decisions."
- "Geofencing was made for Napa Valley," Camp said. Vintank, which built the geofencing functionality Camp uses, monitors social media conversations about wine and analyzes data from millions of brand mentions, filtering out the prospects most likely to be a Cornerstone customer. Camp, one of Vintank's earliest adopters of the technology, is alerted when those prospects enter the geographically-defined area around his tasting room. He then reaches out to them, usually via Twitter.
- Prospecting is a sales tool, of course, but Camp thinks of it more as relationship-building. "You connect with the person and they come in a few hours later," he said. "These people that are checking in love to be contacted. They're social media people, they're announcing they’re here. We see lots of people from the Bay Area who are involved in the industry, and they think it’s really cool that someone’s reaching out to them that way."
It's What You Say AND Where You Say It
Cornerstone Cellars calls it relationship-building; Constellation calls it community management. It amounts to the same thing: delivering the right content to the right people at the right time and on the right platform.
Both the content and the platform have changed in recent years, as a result of policy adjustments by the platform and delivery focus by the brands. Constellation, for example, used to leverage Facebook ads to build their online fan communities. "But now we've shifted our perception on how we assess our performance," Breslin said. "It's no longer about reach and frequency. It's about how you get the community to engage and build overall loyalty."
Camp has also experienced a shift in his approach to Facebook. "It's not whether I like it, it’s whether my customers are there," he said. "Now that it’s become a pay-to-play platform, it makes it tough on a small producer to use it effectively. They used to encourage you to get a lot of likes, but then they charge you more to advertise."
Both Camp and Constellation diversify their outreach well beyond Facebook, though Breslin admits that the ability to grow sizable communities on platforms like Instagram and Pinterest is not as robust.
For this part, Camp finds Google+ to be an interesting, smaller community that's more connected in some ways. "They're kind of the refugees looking to communicate," he said. He's also seen a growing interest in the Delectable platform. "Sharing the wines you like makes a statement about what you think is good wine," he said.
For him Instagram is beneficial for tasting room staff to use through their iPads. "We have an iPad-based POS system," he said, "so the staff is constantly using them to take pictures of guests and it's automatically posted onto Facebook and Twitter."
Cathy Huyghe writes about the business and politics of the wine industry. Follow her on Twitter @cathyhuyghe.
