Social Media And Marketing version 1.1 (Updated)

Social Media and MarketingSocial Media and Marketing

The rise public relations at the expense of advertising?

Social Media is on the marchSocial Media is on the march

“But by using interactive Web 2.0 tools, Mr. Obama’s campaign changed the way politicians organize supporters, advertise to voters, defend against attacks and communicate with constituents.”

Current examples of Social Media - blogsCurrent examples of Social Media - blogs

184 million World Wide have started a blog.

346 million World Wide read blogs. 77% of active Internet users read blogs.

Universal McCann (March 2008)

Current examples of Social Media - Social NetworkingCurrent examples of Social Media - Social Networking

Facebook attracted 161.1 million unique visitors worldwide in September 2008, compared 117.9 million for MySpace.

Smaller niche networks proliferate as well.

Current examples of Social Media - Product RatingCurrent examples of Social Media - Product Rating

Product rating has become common on retail sites.

Current examples of Social Media - ForumsCurrent examples of Social Media - Forums Forums - like those of Dell where customers give tech advice to other customers - have proliferated on the web.

Marketing people are falling in love with Social MediaMarketing people are falling in love with Social Media

…because to most companies Social Media is either seen as a threat to a brand, a research tool or it’s a massive - if unpredictable - low cost opportunity to reach customers.

And actually, if you are a marketer, the pre-eminence and love-in with

Social Media could not have come a moment to soon, because…

How did it come to this?How did it come to this?

Remember Boo.com? Funded to the tune of $135 million, Boo spent heavily to advertise their website. Yet in less than a year after its launch the site folded.

Boo.com had awareness, but the website was not up to scratch.

Google’s success Google’s success withoutwithout advertising advertising

In contrast Google, one of the world’s most iconic and fastest rising brands in the global Interbrand list, has spent almost no money on advertising during its sharp accent.

Why is this?

Google is the fastest riser in the global Interbrand list - from 20 to 10 in 2008.

The magna carta of the webThe magna carta of the web

Do you know what this formula is?Do you know what this formula is?

PR(U) = (1-d) + d * sumV(PR(V)/N(V))PR(U) = (1-d) + d * sumV(PR(V)/N(V))

Painting: Liberty leading the people by Delacroix

It’s Google’s PageRank formulaIt’s Google’s PageRank formula

‘PageRank relies on the uniquely democratic nature of the web by using its vast link structure as an indicator of an individual page’s value.

In essence, Google interprets a link from page A to page B as a vote, by page A, for page B. But, Google looks at more than the sheer volume of votes, or links a page receives; it also analyzes the page that casts the vote. Votes cast by pages that are themselves “important” weigh more heavily and help to make other pages “Important”.’

Google

PageRank makes the Web a meritocracyPageRank makes the Web a meritocracy

The result is that ordinary people and services and products with no brand power or marketing budgets can compete successfully for exposure with established brands - provided…

…their web pages are considered good by other web pages!

This makes the web an attractive place for This makes the web an attractive place for ambitiousambitious, , creativecreative and and smartsmart people! people! They knowThey know they’ll get noticed!

Online, good product is a powerful promotional toolOnline, good product is a powerful promotional tool

Today, if you are a digital product manager, (in other words providing an online only product) you have to ask yourself the question:

‘Do you spend on advertising or do you rather take that money to invest in better product? And then let your customers do the talking about how cool your products are.’

But what about offline?But what about offline?

UK Media Guardian editorial September 2008

“Is nothing sacred? It seems that much of what we have been taking for granted in the world of advertising is rapidly being reinvented.

Even the term "advertising" might soon be defunct. Agencies operating in the digital world prefer the word "content", suggesting all sorts of lovely free entertainment and added value rather than shameless selling.

The old, interruptive model of advertising is changing in favour of a highly-targeted approach where consumers almost welcome the messages rather than get beaten into submission.”

Brand advertising is still king offline, but…Brand advertising is still king offline, but…

Offline brand advertising (roughly indicated by way of TV) is still top, but Internet advertising is rising fast.

Online direct response advertising (roughly indicated by Google)is rising fast.

Graph: Media Guardian

QuickTime™ and aDV - PAL decompressor

are needed to see this picture.

Advertising is moving from off to onlineAdvertising is moving from off to online

AND there’s even trouble online in brand advertisingAND there’s even trouble online in brand advertising

Brand advertising is relatively small online, and there is no indication yet that it will manage to close the gap with online direct response.

Unlike offline, paid for search and classifieds (both form of direct response) dominates online.

Online revenue UK Q1 & Q2 percentages

58%20%

22%

Paid for search

Internet display(Brand)Classifieds

Reasons for brand advertising’s trouble onlineReasons for brand advertising’s trouble online

No exact measurable return on investment

Internet display advertising is sold on a cost per thousand basis. This is while online direct response is sold on cost per click. You only pay if someone clicks.

Consumers in control and avoid unwelcome messages

Attempts at interruptive ads like TV has (the brand advertising staple) with pop-ups and so-called interstitials have been a dismal failure. Users avoided sites that had them, or installed technology to neutralise them.

There’s There’s reachreach, but no , but no frequencyfrequency

Brand advertisers look to get their message to many people (reach) and do so often (frequency).

Sure 80% of web visitors do visit the top 10 sites with the most reach on the web.

But when one looks at frequency and the time spent on these top sites the picture is very different.

The web has so many channels the brand advertisers struggle to make it work in terms of both reach and frequency.

Frame of mindFrame of mind

To complicate matters even more, the web is for the most part, a lean forward medium and not a lean back medium.

It’s viewers or listeners are in actual fact users doing stuff.

They are active and not passive - they are in control.

They like getting stuff themselves (pull) and not receiving stuff (push).

The result is that they are often not in the frame of mind to pay attention to

peripheral display ads like banners.

Brand advertising is shouting - content is kingBrand advertising is shouting - content is king

To web users brand advertising seems like shouting.

Shouting is especially irritating in a world where you are leaning forward (and not passive).

Shouting seems incongruous in a world where the best stuff is always easily available at the top of search rankings at your request or available from your friends.

What is the best stuff? Content!

Public relations enjoying a good inningsPublic relations enjoying a good innings

Some of the decline in media spend, away from TV, radio and print has in fact shifted to PR. PR is often rightly seen as a cheaper way of getting your message out.

Why? As less and less advertising occupies column space in the press, hard pressed editors with less and less staff are looking for easy copy to fill their pages.

PR releases have found some fertile soil.PR releases have found some fertile soil.

Can PR rest on its laurels?

This PR renaissance could be short lived.

Without advertising, many magazine titles, papers and even TV channels will cease to exist (at least in their current form) and the available column inches with them.

Will Social Media save the marketing star?

Marketing can benefit from Social MediaMarketing can benefit from Social Media

““A social trend in which A social trend in which peoplepeople use technologies to get the things use technologies to get the things they need from each other, rather than from from traditional they need from each other, rather than from from traditional

institutions like corporations”institutions like corporations”

ForresterForrester Research’sResearch’s Josh Bernoff & Charlene Josh Bernoff & Charlene LiLi has coined a new phrase to describe the Social has coined a new phrase to describe the Social

Media phenomena.Media phenomena.

“A groundswell”

Photo: Jeremiah Owyang

Social Media - the opportunitySocial Media - the opportunity

Also comparing traditional advertising on TV and Also comparing traditional advertising on TV and Radio and print to Radio and print to ‘shouting’, ‘shouting’, Li & Bernoff says Li & Bernoff says that Social Media gives companies the that Social Media gives companies the opportunity to ‘talk’ to people.opportunity to ‘talk’ to people.

The marketing funnel problemThe marketing funnel problem

How do you get your messageto people in the funnel?

Shouting can create awareness. But shouting is less useful once a customer is aware and inside the marketing funnel.

Image: Forrester

Social Media allows companies to talk inside the funnel

It’s exactly here in the funnel where the influence of what Forrester Research calls the groundswell - is the greatest.

Once people know about a product they turn to each other for more learning. Social Media makes this a whole lot easier and dilutes the influencing power of traditional advertising.

Public relations is not shoutingPublic relations is not shouting

Press releases have always attempted to be more ‘content like’. They had to be newsworthy and authentic to make it into the media.

To achieve word of mouth the message had to truly interesting.

Good communication with a businesses’ “publics” have always been more like talking - a conversation - than shouting.

Sponsorship - also a PR preserve - can be seen a form of ‘content funding’.

How can you engage Social Media?How can you engage Social Media?Listening the groundswell

Where you monitor blogs, forums, customer ratings of products and even create communities to use as focus groups to learn more about what people think of your brand.

Talking to the groundswell

Using tools like blogs, microblogging, social networks and even viral videos to partake in the conversation.

Energising the groundswell

This is what Lego has done with its customers. It’s created an online Lego community and it gives some of its best customers free extra kit. These customers then evangelise to others about the new lego products.

Helping the groundswell

Dell has done this very successfully with its technical support forums. Customers help each other with technical problems.

PR can surf the groundswellPR can surf the groundswell

If there is a link between this phenomenon and old school marketing, it’s not with the world of ‘shouting’. It’s with the world of focus groups, market research and public relations.

What would be of particular interest to the world of PR, is the listening and talking to the groundswell.

ListeningListening

Listening is reading and viewing relevant ‘conversations’ on blogs, micro-blogs, forums, online communities, video sharing and social networking sites.

Being aware of what’s being said about a brand in the online conversation is becoming key intelligence for reputation management.

Blogs are great place to listenBlogs are great place to listen

Technorati state of the blogosphere report 2008

Bloggers are important to watch, as they are generally the first ones to use new web applications, and are highly influential in speeding adoption.’

‘As early adopters, bloggers spend twice as much time online as U.S. adults 18-49, and spend only one-third as much time watching television. While they are online, bloggers are participating in an average of five ‘Web 2.0’ activities such as RSS and Twitter.

What about the UK?What about the UK?

Data from Forrester Research Technographics® surveys, 2008

According to Forrester’s social technographics (level of participation) profile of the UK, we have a higher number of creators and critics than France or Germany, although lower than the US.

Creators are those individuals that have started blogs, posted videos on YouTube and critics those that comment on forums and blogs.

Micro-blogs as a place to listenMicro-blogs as a place to listen

“It's not just audience size that draws brands. People who use Twitter are likely to hold sway over others. A single Twitter message—known informally as a tweet—sent in frustration over a product or a service's performance can be read by hundreds or thousands of people.”

- BusinessWeek on listening on Twitter

Listening with TweetscanListening with Tweetscan

Tweetscan allows you to monitor mentions of brand names on Twitter.

You can even download their database to mine mentions of a brand in the past.

TalkingTalking

How to talk depends on your type of problem - Li & Bernoff

• Is it a complexity problem (you have complex messages to communicate);

• An awareness problem (people don’t know about you);

• A word of mouth problem (you need people to talk to each other); or

• An accessibility problem (Your customers are very hard to talk to)?

Know your problem to pick your Social MediaKnow your problem to pick your Social Media

• If your products are complex, blogs might be best to unravel their mysteries.

• If awareness is your problem, perhaps you need to take a look at Viral Video.

• Does your product need word of mouth to sell? Well, perhaps MySpace is for you.

• Do you have trouble accessing your customers with your messages? A community is what the doctor orders.

Blogs Social networks Viral video Micro blogging CommunitiesComplexity BestAwareness Also good Best Also goodWord of mouth Also good Best Also goodAccessibility Best

BlogsBlogs

Companies with a complexity problem stand to benefit from using blogs.

Software products (technology), motor vehicles, cameras (consumer electronics in general), financial services, home improvement and fashion all involve a lot of consideration

and complex options.

Blogs - fashionBlogs - fashion

Topshop’s blog Patagonia’s employee and friends blog

Blogs - technologyBlogs - technology

Hewlitt Packard’s various employee blogs

Blogs - motor vehiclesBlogs - motor vehicles

Fastlane, General Motor’s blog - written by GM’s CEO - is hugely popular and gets hundreds of comments.

Blogs - professional servicesBlogs - professional services

Forrester’s blog for marketing professionals.

Blogs from a PR perspective

If PR is managing behavior and communication to enhance reputation - then blogging has to be it’s primarily online tool. It’s can be used for:

•Corporation reputation management - responding to online conversation

•Financial and investor relations

•Managing shareholder expectations

•Promoting professional services and business to business services

•Public affairs and lobbying

•Media relations: gaining editorial coverage

•Crisis management - Response blogs

•CEO reputation management - CEO blogging

•Internal communications - Internal blogs

•Corporate identity and image management

•Publications of Annual Reports: corporate reporting

Number10 Downing street’s website is a blog

Blogs from a PR perspectiveBlogs from a PR perspective

Blogging is an easy to use, powerful and flexible platform for companies with a complexity problem to conduct their brand PR (PR that shifts products) efforts. It allows a company to speak to customers in the middle of the funnel.

But so to does almost all corporate public relations benefit from ‘talking to the groundswell’, by using a blog. (Corporate public relations are almost always complex in nature.)

Why are blogs good? The Dell caseWhy are blogs good? The Dell case

A couple of years ago, media professor and commentator Jeff Jarvis blogged

about his frustration with Dell's customer support. He wrote Michael Dell, Dell’s

founder an open letter. It created a media firestorm - online and off - known as Dell

Hell.

Why are blogs good? The Dell caseWhy are blogs good? The Dell case

Dell joins the conversation

Dell started its Direct2Dell blog, where it quickly had to deal with a burning-battery issue. It’s chief blogger Lionel Menchaca gave the company a frank and credible human voice. Michael Dell launched IdeaStorm.com, asking customers to tell the company what to do.

Dell dispatched technicians to reach out to complaining bloggers and solve their problems, earning pleasantly surprised buzz in return.

Why are blogs good?Why are blogs good?Blogs allow companies like GM to respond to postings about their

organisations in the blogosphere most effectively.

Why are blogs good?Why are blogs good?Blogs, because they are open and can be responded to, allows for companies to

have a more authentic and believable voice than a press release could achieve.

Dick Edelman’s very personal blog which casts him as a thought leader.

Why are blogs good?Why are blogs good?Avis has created there own direct channel to their customers.

Micro-blogging for talkingMicro-blogging for talkingAlthough not as ubiquitous as blogs, services like Twitter are very popular among early adopters and is growing fast.

Says BusinessWeek:

‘Businesses such as H&R Block (HRB), Kodak, Comcast and Zappos are now using Twitter to respond to customer queries. Market researchers look to it to scope out minute-by-minute trends. Media groups are focusing on Twitterers as first-to-the-scene reporters. (They were on top of the May 12 China earthquake within minutes.)’

Micro-bloggingMicro-blogging

Unlike blogging, micro-blogging is not best for complexity problems.

But it’s a very simple, easy to use and personal communications channel.

Besides listening it’s a great for:

•Announcing things;

•Internal communications;

•Customer relations;

•Managing relationship with suppliers and distributors;

•Building relationships with various buyers;

Micro-bloggingMicro-blogging

Dell opened the first for business foray on Twitter:

‘By DellOutlet's first anniversary, it had sales of more than $500,000. That's a paltry sum, compared with Dell's $16 billion in annual sales, but he had opened a new channel.

Dell has added 20 more Twitter accounts, but only two are sales-oriented. The remainder are used by Dell to engage in customer dialogue. Revenue is not key," says Dell spokesman Richard Binhammer. "What we want most is conversational engagement.…Twitter is perhaps the most intimate social media tool yet developed.” ’ - BusinessWeek

VideoVideo

‘Viral videos are best for punching through the noise – the awareness problem,’ says Li and Bernoff.

In other words where people do not know about you.

This is because video is more reductive, best for delivering simple messages. And because video is a far more emotional medium than text.

VideoVideoIf your video is particularly good at pushing emotional buttons,

chances are that it will get sent round. It will be viral.

Blendtec’s videos have become an online phenomena.

Video can also be embedded in blogs, combining awareness solutions with complexity solutions.

Social NetworksSocial NetworksSocial Networks are best used for simple ‘word of mouth’ problems. Li and Bernoff explain that word of mouth is critical for

clothes, movies, TV shows, even cars, all of them fashion products.

‘If you want to be hot and have people talking about how hot you are then Facebook and MySpace are for you’.

These networks is also good for reaching the 18 - 24 year old demographic.

Social Networks

Facebook allows for brands or products to set themselves up as pages with ‘fans’. MySpace allows for products or brands to list as normal members.

Social NetworksSocial NetworksWhen using social networks ‘shouting’ is less effective. Make sure users have the opportunity to talk to and about your brand.

Jeep’s fan page with users sharing fan photos and videos.

Social Networks and Social Applications

Applications allow messages to be more content like.But to make a good social app its important to understand the reasons why people share stuff. It is difficult to do well. Sponsoring an already successful application is one way to do it.

World vision wanted to reach a younger audienceThis ‘sponsor me’ application was their first foray into Social Media.

They achieved 1700 downloads in the first two months.

CommunitiesCommunities are an option for those with “accessibility” problems. (That is to say when its very hard to get your messages to your customers.)

Proctor and Gamble created a community - BeingGirl - to be able be part of the conversation between young girls about tampon use.

They created a community around the theme of growing up as a girl.

Communities can not be fabricated

Communities can be discovered or catered for.

But communities are notoriously hard to create. Communities only work with brands that are used as an identity totem.

Communities need strong identitiesCommunities need strong identities

Communities also work for groups that naturally support each other, like disease sufferers or hobbyists (Lego users for example).

In other words: When a brand indicates a different and particular way of being and lifestyle: • Think a particular kind of car driver (Mini or Jeep and not a Ford Ka); • Being a farmer (John Deer); • Or a youth identity (Doc Martins boots);

Public Relations - the futurePublic Relations - the future

PR - concerned as it is with the relationship between businesses’ stakeholders has an opportunity. PR can inherit the social media marketing mantle.

Reputations will be made and broken online through social media.

Perhaps when you go to your next interview, you won’t be asked how many journalist’s contacts you have, but rather the amount of readers your blog, how many contacts on LinkedIn and how many followers on Twitter you have?

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The End

Presentation: Wessel van [email protected]