Thursday, June 04, 2009

In Tweetum Lucrum?

I had the misfortune recently of having to sit through a few presentations on how wineries can use social networking sites like Twitter, Facebook, Myspace, etc. to further their own marketing ends. Maybe it was the sheer lack of data in the presentations, but frankly I don’t buy it and my read from the other attendees suggested that they felt the same way. I just don’t think that wineries will be able to effectively use these sites to sell their wines, at least not in enough quantity to justify the investment of time and money. 
And certainly not enough to justify spending $10k/Mo for 6 months as some people are looking to do!
Let me give you my reasons:

1. Wine consumers crave an authentic experience. Without a doubt, the continued proliferation of wine brands and the inertia of the industry to consolidate as beer and bourbon have done is the ability of a winemaker or winery owner to give a consumer a genuinely personal experience. The only way for this to happen in web 2.0 is for winemakers and winery owners (not heads of the marketing department!) to commit several hours each day to blogging, facebooking, tweeting, etc. I know lots of winemakers and lots of winery owners and exactly zero of them have the time to commit to this. Even during a strong economy, these people are working non-stop and have no time for that “instant-response” needed in social media. I see many wineries start down this road with the best of intentions, but then they can’t follow through with something so minor as a simple blog update, due to time constraints. My own Twitter personality suffers form exactly this...maybe when I'm on the road I can tweet occasionally, but otherwise I just don't have the time to post in a stream-of-conciousness fashion.
2. As a corollary to the above, concepts like Murphy-Goode’s (a brand owned by Kendall-Jackson) are doomed to fail because they lack authenticity as well. Wine consumers want to hear from the winemaker or the owner, they don’t want some hired gun whose full-time job is to tweet and give status updates to be selling them on a brand made by somebody else. They want Mr. Murphy or Mr. Goode (neither of whom is involved in the brand anymore) to give them updates and tell them about their “honest” “artisanal” and “hand-crafted” wines. In the Jackson’s favor, they do have David Ready Jr. as the winemaker (the original partners being Murphy, Ready & Goode), but even so the tweets they get more than likely will be from the person they hire and not him. This also invites the consumer to look for Murphy-Goode's winery in the hopes of finding the authenticity they desire, only to sadly have them realize that the M-G team sold the brick & mortar facility they had to a Sonoma custom crush company and the wines are now made at various K-J wineries instead.
[2a.  In the application legalese fine-print for the job referenced above, there is a nice clause about how the "Winery" doesn't need to hire ANYONE if they don't feel they have the right candidate in their applicant pool. Now this is boiler-plate standard release clause for the "Winery" to back out of the deal should they feel it isn't going in the right direction...but should they actually NOT HIRE anybody for the position then they risk losing any sort of authenticity and credibility they might have otherwise. I mean, they've already reaped the rewards of this whole stunt, right? I have seen many, many Tweets, articles, emails and blog postings about what appears to the outside world as a Dream Job in the wine industry (and its been described as such in many articles)...if they then DON'T hire, they look like they've been shilling the brand the entire time because of all the media buzz they've collected to date. Plus, they're owned by K-J which just laid off 15~20% of their workforce a few months ago, and let's face it, there's already enough bad feelings in the industry regarding the business moves that Jess Jackson and his team have made in the past 25 years. Add to that impression a guy who sacks his labor, continues to buy expensive horses, and then pays $60k to someone to sing like a canary (Tweet!) about his wines. Albeit that they were apparently solid business decisions which have put them ahead of the pack in many ways (some might say ruthlessly), but a failure to cement this carrot-and-stick-type-PR-event would do nothing but reinforce the already jaded consumer that K-J was more interested in the mighty $$ than in the reality that people now expect them to make good on the reward they offered for keeping this brand in the public consciousness for the past few months. And why do I use "Winery" in quotes when I mention this topic?...because the "Winery" is K-J, not the M-G that many people might associate with the brand on the face of the offer. The stakes are high for a failure to complete the deal...]

3. How to close the sale? I can see social networks generating fans and followers, but how do you get a fan to stay brand loyal when your wine is $14.99 at Safeway and Gallo’s new brand is running a deal for $11.99? Wine consumers, due to the 9,000 wine brands in this country, are notoriously fickle and have been increasingly “trading down” lately to lower-priced wines. I don’t see how you convert followers into sales, and most importantly, how do you measure the conversion from one to the other?

4. You say the answer to #3 is not to sell through Safeway but to use the internet? The internet in general has not been a boon to wine sales. Yes, there are successes out there (Wine Library), but there have been some big failures too (the first several iterations of Further, ask a winery owner or winemaker if they’re able to rely on web-based marketing, eschewing travelling the major wine markets like they were 5 or 10 years ago. Those that I run into say they’re having to do it more than ever due to the challenges of the economy as well as lack of distributor commitment to any non-corporate brands. I know I'm travelling much more than I have in the past for just this reason. Few wineries sell more than a single-digit percentage of their monthly sales through their website and most all will tell you that club sign ups come from their tasting room, not from the web and this after most wineries have had websites for 10 years or longer. If not by now, by when?

5. Being marketed to is a turn-off on the internet. Web users are increasingly bombarded with ads and messages, most of which are ignored. Overt marketers are shunned. The social network proponents concede this up front and will tell you that you have to engage on a different level. Tell your story less directly, interact with wine pages and sites other than your own, be personal not preachy, etc. Frankly, I think that just dilutes your marketing story and makes you a friend – the type of friend whose parents own a winery and whose parents expect to get free tastings and other comps when they show up. Me, I rarely buy wines from friends in the business because I expect them to bring some when they come to my house….If I’m going to buy your wine, I’ll buy it because I like the quality and/or price, not because you ‘friended’ me. 
6. In support of #5 above, I feel the need to mention the sheer lack of any sort of "style" or "etiquette" by wineries when dealing with the web currently - blogs in particular. I'll hold up a comment on my post the other day by "Trecini", which appears to be nothing but a veil blogger ID from a company shill of the same name...
I was "honored" with a comment on my post the other day by said blogger, and the entire 188 words were nothing more than a PR note re their wines. What a turn off! Talk about how NOT to do was clumsy, just outright clumsy!
And if we want to make it appear that we've "just been to a blind tasting party and discovered the wines" from said winery, maybe you should choose a blogger ID name which isn't so obviously transparent. (BTW, tracking down this ID brings you to a "blog" which was created within the past week and touts 2 [yes, TWO!] posts; the first is a word-for-word repost of the 188 words left in my comments section, the second is an ad for a wine brokerage.)
In case you're looking for the comment proper, don't bother yourself as I've already deleted it (I have a copy in my email of the original).

Now I’m not suggesting that wineries give up and ignore web 2.0 altogether, but I think it should be approached with a healthy skepticism until someone actually demonstrates that they can convert followers into consumers. Today’s wine environment is more challenging than I can remember and one’s focus needs to be on getting the best sales results for one’s time spent.

Maybe following the sales performance of Murphy-Goode would be the bellwether here. I’ll check back in six months and let you know how they’re doing.

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Anonymous Josh said...

Good God, I hope you're not talking about the recent team presentation I just gave at a large winery!

At least I gave out 2 gig USB drives to everyone there, so they got something of value!

Also, there are plenty of ways to measure. Folks just don't seem to want to, lack the skills to do so, or feel it won't help bottom line sales even if they do.

We should have coffee some time...

June 04, 2009 11:32 AM  
Blogger Wines for the People said...

Thanks for the contrarian view on the value of Web 2.0 for wineries. Having read the VinTank report, and now your rebuttal, my head is spinning and I don't know what to do when I launch my own small brand next year. I guess your point about the winemaker/winery owner (me in both cases) not having time to keep up with Web 2.0 will be true for me, too, so I don't need to worry.

Seriously, though, I hope that the Web 2.0 pushers take a look at your post. I would love to see how they respond.

June 04, 2009 3:22 PM  
Anonymous Anonymous said...

Very interesting post. I have several wineries use twitter for direct sales so data is there if you look.

I also think Murphy Goode's plan has a second risk. If the person does create a following online, when she leaves, so will her following.

June 04, 2009 8:59 PM  
Anonymous Wilma's Wine World said...

I just discovered your blog and can tell I like it all ready. I'll definitely be back for more!
Kim (aka Wilma)

June 04, 2009 10:12 PM  
Blogger St. Vini said...

@Josh: No, it wasn't yours! Maybe you would have shown me the light! Please let me know how you measure twitter to revenue conversions, would be helpful.

@Wines for the People: Good luck in your venture, you may want to do some IP research as Patrick Campbell of Laurel Glen has been making "Reds: A Wine for the People" for a loooong time. Careful of trademark issues!

@Anon: Also would love to hear some hard data. The presenters I saw had none.

June 05, 2009 9:15 AM  

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