Dropping The Mic On Online Wine ROI (TMRW Engine’s 2016 Digital Wine Report)

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image: TMRW Engine

So much of the material upon which 1WD was built consists, essentially, of opinion pieces (in fact, four or five years ago I sat on a panel focused specifically on opinion writing alongside Lettie Teague and Jon Bonne, about which I imagine both of whom are still scratching their heads).

But over the years, I’ve tempered (well… by my standards, anyway) the opinion-heavy pieces here in favor of conclusions that can be drawn from data. The older that I get, the more I want to see opinion bolstered by something other than the biased, fallible memories of people’s experiences (including my own).

Which is why I get royally pissed at the the wine world’s penchant for defaulting to the data-devoid opinions of entrenched personalities, particularly when it comes to denying the return on investment (ROI from here on out) of wine online (usually with the concept of social media directly in the cross-hairs).

While it seems common sense that their must be at least some ROI for wine brands in talking directly with their consumers (which is part and parcel of what social media online can catalyze), remember that data trump opinions, even when those opinions align perfectly with common sense.

Fortunately, the wine world now has some compelling data that demonstrate a plausible link between online social interactions and ROI. Yes, in terms of real people actually spending real money on wine…

The data come to us via the 2016 Digital Wine Report, an effort by TMRW Engine (a sort of successor to Vintank), Vin65, Wine Direct, and W2O Group. I’ve been given access to the full report, and there’s too much great information in it to distill into a single blog post (even one as long as I’m apt to write). However, we can focus on the mic-dropping, money-shot ROI portion, which is a manageable load (see what I did there?… sorry…).

First, here’s why the results of the report matter; the volume of data analyzed is significant (when I asked Paul Mabray about the timeline of the data, he estimated that the majority of it spans five years):

image: TMRW Engine

Second, the methodology employed for distilling the data looks pretty legit:

image: TMRW Engine

Here’s the statistical breakdown from the report, for the more geekily-inclined among you:

“To understand customers and brands, we analyzed the interactions that wine customers were having with wine brands on every major social channel. Using TMRW Engine, we were able to put a dollar value against customer engagement on social. Findings were synthesized based on results observed from Pearson correlations, linear multiple regressions, and non-parametric Mann-Whitney U, and Kolmogrov-Smirnov tests”

Good so far? Ok, let’s talk about the why for a second. Ok, more like for a minute. Or three.

I’ve long said that when it comes to wine, we live in the single most competitive time in the centuries-long history of the product. The TMRW Engine report does a nice job of summarizing the particularly thorny challenge that this competition represents:

“There is NO OTHER consumable consumer good product that has wine’s level of selection. This competition will continue to grow as the US adds more wineries (we now exceed over 8500 US wineries and approximately 17K US brands) and as the industry is seen as an inviting target for foreign wineries/brands due to our continual consumption and growth.”

In other words, if you have wine to sell, it’s very, very, very difficult to get that wine noticed. And, not to throw our wine biz friends into a deeper pit of depression, it’s not going to get any easier according to TMRW:

“The top 5 wholesalers in the US (Southern, Glazers, Republic-National, Charmers, and Youngs) together have revenues of roughly $23 Billion… So to put that in context, that means that to get meaningful distribution, over 150K products are vying for meaningful mindshare from 2-5 wholesalers per state who also sell beer, liquor, and other items.”

If you want to get noticed in that level of competitive mess, you either need a billion-dollar marketing budget, or you’d better be good at guerilla marketing. Actually, one could argue (god knows that I have) that guerilla marketing is one of the only viable tactics available to small wine brands, and the use of social media is, essentially, guerilla marketing.

This is why the results of the TMRW Engine report are, for me, so compelling; their analysis of all of that online social wine-related data showed the following juicy tidbits:

image: TMRW Engine

Put another way, if you do social right when it comes to wine, you do, in fact, sell more wine. Customers who engage with wine brands on social media even in amounts as small as ONE interaction can see that customer uptick their sales.

Now, more work would need to be done on all of these findings to get any deeper insights into causalities and the quality of the interactions, including which ones work best, etc. The report suggests as much:

“If brands seek to effectively leverage social as a marketing tool for increasing customer value, wine brands need to engage 1:1 with their customers in order to cultivate deep engagement.”

But the bottom line – and it’s an exciting one, especially for smaller brands – is that engaged online wine customers spend more money on wine.

I repeat: THEY SPEND MORE F*CKING MONEY and the spend it BUYING F*CKING WINE.

I suppose that the lesson here is that any wine brand that doesn’t want to see an uptick in spending for the general online wine-buying populace should remain dismissive when it comes to the ROI potential of social outreach.

Have fun with that, guys.

Cheers!

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