Social Media and Marketing The changing paradigm

Wait a minute…..

I learned how to use Windows, eMail and the Web. Then I had to learn how to use my PDA, which I still can’t get to work right, now I have to

learn about social media ?

Well there’s a lot of buzz around social media lately but…

It’s less important to older Web users who have a lot of disposable income.

And older Web users are less likely to use social media

Millennials(13‐24)

Gen‐X(25‐41)

Boomers(42‐60)

Matures(61‐75)

Total

Socializingviasocialnetworksites,chatroomsormessageboards

78% 60% 38% 23% 54%

Maintainingaprofileonasocialnetworksite

71% 51% 30% 10% 45%

ParEcipaEnginvirtualworlds 21% 36% 35% 10% 2%

ThereisadirectcorrelaEonbetweensocialmediauseandage:olderWebusersaresElllearningaboutsocialmediaandareslowertoadoptnewtechnology

Youngerpeople,however,tendtobemorewiredandusesocialmediaonavarietyofdevicesincludingPDA’sliketheiPhone

Source:eMarketer,n=2,081January2008

Yet strong growth in social media is forecasted

With penetration of social media so high in younger age groups most of the growth will come from older web users who are not as fast to adopt new technology

but media executives still believe social media is overhyped

In the Fortune 300 today, only 15 percent of CEOs are below 50. Maybe they don’t understand the importance

of social media and marketing.

And spending on social media is anemic

2006 2007 2008 2009 2010 2011 2012

Socialnetworkadspending

$350 $920 $1430 $1815 $2085 $2360 $2610

TOTALONLINESPEND $16,900 $21,100 $25,900 $30,000 $35,000 $41,000 $51,000

%SocialNetworkoftotal

2.1% 4.4% 5.5% 6.0% 6.0% 5.8% 5.1%

USOnlineSocialNetworkAdSpending,2006‐1012(millionsand%oftotalUSonlineadspending

Ifitisamarketersjobto“gowheretheeyeballsare”thenspendingonsocialmediaisanemic

Larger organizations are also having a hard time changing

0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%

RSSFeed Blogs SocialNetwork

SmallComp LargeComp

SocialMediaTacMcsUsedbyUSMarketersSmallandLargeCompanies

But marketers have to communicate that marketing has changed •  Markets are no longer bulls-eye, demographics based islands, easily targeted.

Every market (and anyone offering anything online has a market), is composed of dynamic humans involved in instantaneous dialogue a million times over. Shift your mindset by opening up your market research to data that is not just statistical, but logical and intuitive. Behaviors and connections are the important things now.

•  Marketing is no longer controlled by companies, it’s controlled by the market, as a whole, and everyone in it, simultaneously. Your market is no longer accepting the same pitch, delivered in the same manner. It’s about two-way conversation, connecting at a deeper level than your value proposition. Understand that it’s now on your markets’ terms when, how, and why you communicate with them.

•  Participating in a conversation is not the same as “hyped-up-copy,” stop insulting your market. Realize this - indirect communication, over-communicating, scarcity tactics, and flat out hyping things up - no longer work.

•  How you measure success and failure has changed dramatically. Changes this large, create a need to re-evaluate how you measure and track, how you measure success, and even how you compile information.

•  The old mindsets regarding metrics and analytics as applied to ROI have to be adjusted or you’ll never make good marketing decisions. Time to measure qualitative brand attributes not quantitative.

And they have to do a better job with Web analytics

ThereisnoonemetricthatcangiveyoutheinformaEonyouneedonyourcustomersbuttogetheranumberofmetricsoluEonscangiveyouawealthof

informaEonastowhat,whenandmoreimportantlywhy.

Because most senior managers don’t understand Web metrics •  The top line measurement of Web analytics should always

be against business objectives, however all business objectives are not quantifiable when you’re using social media as a key brand touch point.

•  How do you measure a positive customer experience in a social media site? What can happen if a customer relates a negative brand or company experience on social media?

•  Web dashboards have to have more than numbers, they have to tell a story with insights and recommendations. –  For example, an example of paths through the site can give

you real insights into the purchase decision behavior of your audience.

•  Analysis on “cost per targeted actions” can also reduce search engine marketing budgets so that you can focus on drivers of business objectives.

Speed is a competitive advantage on the Web

•  Slow costs more. Every minute you can take out of manufacturing time, stocking time, get-to-market time, and customer response time saves the company money.

•  Speed is the ultimate customer turn on. Everyone is short of time. We hate delays, long lines, out-of-stocks. We love finding what we want and getting back to work (or play) fast. And we'll pay for speed.

•  Speed is the one advantage that big competition can't duplicate easily. Big companies are bureaucratic, dysfunctional, and self-absorbed. They don't listen, they are slow to change, and they kill momentum and initiative.

•  The Internet is all about speed; “instant gratification takes too long” •  Customers want responses in minutes, not hours or days. •  Social media is hot NOW and companies that are experimenting with

social media may be better positioned to use it for marketing as it continues to evolve.

As marketing budgets shrink more dollars are going to online

but the days of paying for clicks and impressions are over

•  Clicks on internet ads don’t measure all of a campaign’s sales impact nor the cumulative (latent) impact of ads. They also don’t tell you anything about brand building effects and the Internet ads as we once knew them may be a relic of the past.

•  It’s now about a specific action that you want your audience to take on your Website to help meet business objectives and measuring specific programs.

•  Don’t use reach and frequency as applied to the Web, that is taking old models for new media and doesn’t work.

•  Move from selling online to having a conversation online around the brand.

•  If you continue to ignore conversations with your audience you better have damn great products and brand equity.

So are CMO’s dumb or waiting for proven ROI ?

•  Despite the cultural phenomenon that Facebook and MySpace have become in five years’ time, 55% of the chief marketing officers at leading brands surveyed by Epsilon said they’re not too interested (22%), or not interested at all (33%), in incorporating the social networking sites into their marketing strategies.

•  CMOs bracing for budget reductions identified email as the channel they are least likely to cut back on versus any other tool in the traditional or digital marketing mix.

•  While just over half of the companies surveyed already use consumer data mining, 23% more said that they plan to utilize the technology in the next 12 months. 55% of those not already employing web analytics plan to do so in the next 12 months.

•  Customer loyalty and rewards programs remain polarizing, with 33% of companies already using the strategy and 17% planning to use in the next year, but 50% not using or planning to use.

Traditional marketing channels are being hurt by social media

•  More than a third -- 38% -- of all 12-to-64-year-olds online in the U.S. indicate that they regularly use social networks. And it's not just the younger population using them. A third of women ages 35 to 44, for example, reported that they regularly use the sites.

•  Over 25% of those using social-networking sites indicated that their TV viewing is being cannibalized. Even if it is a small amount of time, with the large numbers of people involved, this can add up to a lot of TV viewing hours.

And using traditional ads on social media doesn’t work

•  Social media sites are trying to find a model to get profitable but its users will determine what works and what does not and click ads won’t work.

•  When Facebook redesigned their site millions of users protested and petitioned to change it back to the older interface.

So then what’s a emarketer to do? •  First stop thinking about marketing in terms of old media (impressions,

reach, frequency). Think about the changes that have taken place within the marketing environment.

•  Communicate the changes to senior managers and influencers but lead them down the path to come to the conclusion that the Web is where you want your brand to be.

•  Start building capabilities now to handle back end social media branding efforts. Learn NOW from mistakes not later when it’s too late and your competitors are already there.

•  Expand Web analytics and ensure that you present insights as to what is happening on the Web and why and what your brand can do to capitalize on the Web and social media.

•  Stop thinking that you need a company or branded Website. It takes a lot of resources to build and maintain a branded website. Could dollars be better spent on social media platforms?

•  Learn to listen..it’s about a conversation. How would you feel if someone tried to sell you something while you were talking to a bunch of your friends?

Finally…..

Sitting on the sidelines and watching social media could hurt your brand at at time when it’s harder and harder to win customers