The case for Social Media Marketing

In recent times, social media has become a hotspot for companies to promote their brand, engage their customers and build an aura around the experience. There has been a spate of social media activity and new outlets available. Older people are also embracing social media .These trends have been providing companies a unique opportunity to allow customers to voice their opinions and help co-create brand value. The table below shows statistics that provide support to the aforementioned claims.

Source: http://pewinternet.org/Commentary/2012/March/Pew-Internet-Social-Networking-full-detail.aspx

The statistics show that there is very little variability with respect to variables such as education level, income and urbanity. Although these numbers represent the US, it is reasonable to expect rapid growth in social media use in other countries as well except in countries where there are legal restrictions on social media use.

Prerequisites for Social Media Campaigns 1

Evaluating whether social media channels are appropriate for the chosen target segment. Locating potential customers in social media. Committing enough time and resources on the campaign Willingness to take risks from time to time Deciding on incentives or catalysts for audience engagement

If the company decides that social media channels are appropriate and potentially fruitful, the company needs to involve itself in chalking out clearly the various steps involved in the process of implementing the campaign

Benefits of Social Media Marketing1

Improved Brand Awareness Idea Generation Behavioral data collection and targeted marketing More corporate website views Content Co-Creation and Engagement Publicity and “Word of mouse communication” Search Engine Optimization

Crowdsourcing:3

Companies have been inviting ideas and discussions around central themes to improve audience engagement and garner wide reach. In addition, companies are using available options on social media to invite product ideas and improve customer satisfaction. There have been many cases of companies providing people with strong incentives to create short video commercials and help co-create the brand experience. Also, entire business models have been based on crowdsourcing. For example, YouTube and Wikipedia started out as forums to enable users to broadcast or feed information to the world. Apart from these explicit cases of crowdsourcing, there have been cases of implicit crowdsourcing in which the users do not know that they are contributing towards some end. For instance, reCAPTCHA is a text entry

tool that is used on various websites to verify users. However, the users are not informed that the text that they enter for verification is used to digitize old books.

In recent times, since the advent of social media, the consumer has gained more control over marketing communications. Therefore, it is essential that companies recognize this changing trend and acknowledge changing opinions and adapt their marketing strategies accordingly.

Six Degrees Effect4

Various experiments by social psychologists have indicated that on an average any two places or people are separated by six degrees of separation. Also, there is some evidence that hints at the possibility that some people hold more influence than majority of the others.

Social psychologist Stanley Miligram conducted a “small-world” experiment in 1967 to study social networks and the nature of links that are developed. He instructed 160 students at Nebraska to send a stockbroker in Boston a letter by passing it to someone who they personally know and is closer to the final destination. The person who received the letter repeated the same task and this process was followed until the letter reached the stockbroker. Through this experiment, Milligram found that it took an average of six links to send each letter. In addition, he also found that just three friends of the stockbroker’s completed the final link for half the total number of letters that were successfully delivered. This finding lends teeth to the argument that just a handful of people hold the key to spreading ideas or marketing products.

Likewise, a similar experiment by Duncan Watts, a network theory specialist, using email threads supported the six degree of separation hypothesis although the results of this experiment did not support the claim that a just a few people form the most influential links.

Social Media Marketing Process and Decision Making

Social Media Marketing Process1

Identifying the objectives of the campaign and checking for strategic fit Performing a SWOT analysis Identifying the target audience and studying their characteristics Formulating granular goals and devising short –term and long-term metrics. Assigning optimal budget and manpower. Developing a social media strategy to engage customers and improve brand loyalty. Using the momentum gained out of social media channels to impact other channels positively. Measuring the impact of the campaign qualitatively and quantitatively and refining the methods

from time to time

Factors influencing Virality of Ideas and Messages4

Malcolm Gladwell, a bestselling author in his book “The Tipping Point”, argues that three factors play a major role in helping ideas achieve critical mass.

The Law of the few The stickiness factor The power of context

The law of the Few

Malcolm Gladwell proposes that any successful social epidemic is heavily reliant on just a few influential people who have access to key connections. The “Small World Experiment” conducted by Miligram supports this hypothesis. This law reinforces the Pareto Principle that states that 80% of work is done by 20% of the people.

According to the author, there are three kinds of influential people.

Connectors

Connectors are people who form connections that span different cultures, professions, economic circles and geographies. They have the knack of linking people and gain popularity due to positive intrinsic personality traits such as curiosity, sociability, self-confidence and energy.

Mavens

Mavens are knowledgeable information specialists whom people turn to for an informed opinion. Mavens are instinctively helpful individuals who would like to solve other people’s problems. Since they gain the trust of people that they help, Mavens play a pivotal role in “Word of Mouth” communication.

Salesmen

These people are blessed with an innate ability to persuade people and invite agreement. They are characterized by strong negotiation skills and an attractive persona.

The Stickiness Factor

This term refers to the extent to which an idea or a message is retained and spread. A message that is high on “The Stickiness Factor” remains in vogue for a long duration.

The Power of Context

This term refers to environmental parameters that play a significant role in the spread of ideas and messages. Human behavior is influenced by the surroundings and the times that we live in. For example, the bystander effect refers to a commonly observed group phenomenon that refers to cases in which people do not offer help when there are many other people to turn to for help.

Similarly, Research Studies by Robin Dunbar, a British anthropologist have pointed out the critical number of people that we can have stable social relationships with is 150.

Likewise, similar studies of the environment are critical to understand the rate of information spread and efficiency of the message medium.

Social Media Marketing Approaches

Brand as a person1

Recently, brands have been maintaining personal profiles on social networks such as Facebook, Twitter etc. This helps audiences develop a personal connection with the brand. In addition, storylines or themes help kick- start conversations and trigger a viral chain reaction.

Also, these profiles can initiate action through social recommendations. For example, if a person knows that his friend endorses a particular idea or a product, he is more likely to endorse the idea or try the product.

On social media, brands have been using one or more of the following techniques.1

Consumer Solicited Media (CSM) 1

This refers to user-generated content such as blogs, reviews, video, audio etc. Such content helps other consumers gather information about products and features and also helps the company to indirectly record public opinions and consequently adapt to changing tastes and preferences. For example, the “I love my iPod” YouTube post gained thousands of ad impressions and created a favorable brand image for the iPod. The most important feature of this approach is that it is organic, consumer driven and not incentivized. Favorable consumer solicited media content indicates high levels of engagement.

Incentivized Consumer Generated Media(iCGM) 1

This approach uses incentives such as prize money, chance to be featured on television or meet celebrities etc. Doritos utilized this strategy when it implemented the “Crash the Super Bowl” campaign

Consumer Fortified Media (CFM) 1

This approach uses already existing content from different sources to complement the main marketing message. For example, the Dove Evolution commercial was complemented by conversations by consumers in online forums and blogs and consumer engagement increased the impact and reach of the commercial.

Compensated Consumer Generated Media(cCGM) 1

In this approach, consumers are paid for endorsing brands. Companies approach bloggers, videographers and other content producers to co create the brand message. For example, the fictional Lonelygirl115 YouTube series gained mass popularity and helped promote the producers. In addition, companies can explore revenue sharing models with content producers in return for endorsing their brands. In reality, this approach favors very little consumer co-creation as the content is indirectly controlled by the company.

Metrics 7

Although various social media channels have their inbuilt analytics tools, the metrics below provide a rough idea of the most important parameters to consider for social media marketing performance evaluation.

Media Channel Metrics and ROI Evaluation

Since organizations use different media outlets such as Facebook, Twitter, Linkedin, YouTube etc., it is important to quantify the impact of each channel and outcome of marketing efforts in each channel. This will help the organization to assess the potential of different channels and identify patterns and internal strategies for each marketing channel.

Some metrics that can help compare results across and within channels are the number of visitors, leads and actual conversions. As mentioned, some channels have inbuilt tools that provide this information. In addition, companies need to factor in costs incurred to produce outcomes and perform cost-benefit analyses for different media outlets.

In the social media world, leads must be counted as a positive outcome as these people will be more inclined to influence their social circles on the value of the brand.

The Return on Investment through a media channel can be evaluated using the metric below

ROI= ((Leads+conversions)/Cost)

Conversation Rate

Conversation Rate= (Number of Audience comments/responses) per post

This number is a usual metric that provides useful information about audience engagement. This metric can be computed across different platforms using readily available analytics tools or computed through alternate means when tools are not available.

An understanding of audience engagement involves knowledge of customer traits, message mediums and mechanisms, time slots, demographics etc.

Also, organizations should aim at achieving high conversation rates through appropriate messaging that is in sync with the product’s brand image.

Amplification Rate

This metric aims at capturing “Virality” or “Spread” of an idea or message.

Amplification Rate=Number of shares per post

As in the case of computing conversation rate, this metric also needs to be captured using different techniques across different platforms.

This metric provides useful information on the types of content that gain popularity and mass reach. A strong understanding of this information along with that of other important variables such as demographics, local culture and context will help the organization improve the brand appeal of its product or service.

Applause Rate

This metric allows the organization to gauge customer tastes and adapt to changing preferences.

Applause Rate= Number of likes/post

A strong applause rate can lead to interesting consequences such as high placement on search tools and mass appeal.

Modes of Persuasion (Approach to marketing communications) 14

Persuasion is a mechanism by which a person seeks to demonstrate his point of view and help the other person achieve clarity. An analysis of communication mechanisms is important to converge on appropriate messages for different consumer profiles or target markets.

Aristotle’s work “Rhetoric” describes three modes of persuasion.

Logos

Logos is the art of persuasion through the power of logic and hard evidence. This kind of marketing communication should be approached carefully and not be confusing or misleading.

Ethos

Ethos is the art of persuasion through creating an impression of honesty or erudition. This impression can be created through many ways such as affiliation to respected institutions or sufficient levels of expertise. Ethos is extremely useful to create a strong initial impression or opinion about a new idea or product.

Pathos

Pathos is the art of persuasion through appealing to emotions. This is done by presenting a case that audiences connect with emotionally. Pathos is useful when the organization is trying to bring an apparent problem to light and propose clear-cut and practical solutions.

Through careful social media marketing messages, brands can reap positives of all the three modes of persuasion. Companies can achieve positive impact of

Logos by showcasing the brand in positive light through favorable data such as engagement metrics, fan base etc.

Ethos by getting influential or respectable individuals to endorse the brand Pathos by informing users that their friends have “liked” or purchased the brand’s products, thereby

helping people build emotional support through common social actions.

Cases of Successful Social Media Marketing by start-ups

Hokey Pokey

In 2008, Rohan Mirchandani started Hokey Pokey, an upscale ice cream brand in India. Currently, the brand owns about 15 outlets in India. Initially, the company did not have a structured business approach. As a result, their costs went out of control, prompting the company to reconsider its business model.

On preliminary research, the company found that most of the brand’s patrons were youngsters who actively participated in social media. Therefore, they wanted to formulate an effective social media strategy to engage customers and improve ROI.

To achieve strong results, Hokey Pokey initiated a research study with the help of Dr. V Kumar, Distinguished Professor of Marketing at Georgia State University.

Through the study, the company was able to come up with seven step strategy to engage customers and generate considerable buzz around the brand.

These seven steps are outlined below.13

Step 1: Monitor Conversations

Brands need to listen to related conversations in different social media platforms and identify potential influencers and learn the behavioral attributes of the target segment. In other words, it helps the marketers understand the context or the environment under which different players operate.

Step 2: Identify Influential Individuals

The brand must use behavioral data to identify potential influencers who can spread product messages or ideas. This is in line with the “Law of the few”, which was discussed earlier. The brand needs to identify three types of influential individuals-connectors, mavens and salesmen.

Step 3: Identify common characteristics of influencers

The brand must be able to pin down the common attributes that different influencers share. Brands can create profiles of individuals and categorize people by common interests. Profiling will enable brands to reach out to targeted consumers and help the brands spread relevant messages through appropriate channels.

Step 4: Locate Potential Influencers

At this stage, brands need to identify the right individuals for the social media campaign in question. This needs to done by analyzing consumer profiles and checking for strategic fit for a particular social media promotion.

Step 5: Recruit relevant influencers

Once the right influencers are chosen, the brand needs to devise effective medium of engagement such as games, contests, discussions etc. to help spread positive WOM.

Step 6: Incentivize Influencers

The company needs to identify the right incentives to get the influencers (connectors, mavens and salesmen) spread positive WOM (Word of Mouth) on social media. For a social media campaign to be successful, the influencers should be provided incentives to participate and recognition for their contribution. Incentives could be tangible such as money, discounts, coupons etc. or intangible such as a chance to be featured on the site and become popular.

Step 7: Implement Strategy and Measure Performance

The company needs to allocate enough resources to carry out its plans and invent and use performance metrics to evaluate the impact of its social media campaign.

Hokey Pokey’s Social Media Metrics 13

The research study carried out by Hokey Pokey established three main metrics to evaluate social media performance.

Customer Influence Effect (CIE)

This metric measures the influence that an individual has on other people in the network using Charles Hubbell’s network centrality theory. This metric is useful to identify the influencers or the impact creators in a network. CIE deals with an “intangible or behavioral” influence that individuals exert on others.

Stickiness Index (SI)

This metric measures the inclination of individuals to indulge in conversations around the topic of interest of the marketing brand. This metric helps the brand identify potential incentives and estimate market size.

Customer Influence Value (CIV)

This metric is used to evaluate the monetary impact that an individual creates through his own purchases and the influence that he has on others. CIV differs from CIE in that CIV captures tangible monetary impact.

Hokey Pokey’s Facebook activity provides us an opportunity to understand underlying patterns in their marketing communications.

Facebook Page Insights

The above graphic provides some information about Hokey Pokey’s primary target segment, geographical presence and engagement data for about a month.

Hokey Pokey’s strategy involves the following

Posting frequent status updates-once a day or once in two days and starting conversations.

Encouraging users to customize ice cream creations and spread their creations-Most popular ones are made available across different outlets

Intermittently posting some content unrelated to the brand such as jokes to achieve high applause and amplification rate

Utilizing the emotional connection that individuals experience on festive days, national holidays and other special occasions.

Using the time period from August 1 to August 10, during which Hokey Pokey’s Facebook page saw the highest activity, as reference, I have evaluated some performance metrics.

Conversation Rate: This is fairly low. However, the intermittent popular posts unrelated to the brand fetch more comments and responses.

Applause Rate: This is approximately about 40 likes/post.

Amplification Rate: As in the case of conversation rate, intermittent fun posts are amplified more.

Zappos Inc

Zappos started as an online shoe retailer in 1999. Through the years, the company expanded its line of business to sell clothing and other items as well.

Since its inception, Zappos has built a reputation for extraordinary customer service and healthy relationship with its employees.

Zappos has been using social media to engage more customers since 2009. They have been employing some strategies mentioned below to drive online activity and sales.

Twitter

Twitter Aggregation Page5

Zappos aggregated twitter accounts of its employees to pool together all related conversations around the brand. In addition, this move helped the brand project a sense of transparency and gain more social standing.

Facebook

Zappos prefers to utilize a top funnel approach in their Facebook ads.

Top Funnel Facebook Marketing Approach:10

Through its Facebook ads, Zappos intends to lure customers early in the purchase decision process to consider similar products. They manage to achieve this by displaying ads of general categories that are suitable for a particular target audience. On clicking these ads, the users are taken to an online catalogue of similar products so that they are aware of product choices

Zappos’ Facebook strategy involves the following

Posting frequent status updates-about three to four posts per day. Engaging fans by involving them in conversations and contests and featuring some select individuals

on the page. Sticking to brand specific marketing messages unlike Hokey Pokey which intermittently uses popular

unrelated fun-filled themes to drive conversation rate. Creating consumer profiles through an analysis of common interests of fans and comments. Mapping consumer profiles with product preferences by displaying ads that have higher click-

through rates for various consumer profiles. Responding to audience feedback –positive and negative – in a timely manner.

Using the posts from the latest week, I have evaluated some performance metrics

Conversation Rate: Zappos’ posts invite roughly 15-20 comments on an average.

Applause Rate: Zappos’ posts garner about 500 likes on an average.

Amplification Rate: There is some variability in amplification rate. Posts on contests and offers are shared more than others.

YouTube 5

Zappos encourages its employees to be social and post interesting content through their YouTube channel. Through such efforts, Zappos is able to encourage open communication with its employees and maintain high levels of employee motivation.

Social Media Lessons-Big Picture

Market Sizing and Competitive Analysis

Brands must study the characteristics of their target market and identify products that can be potentially successful for that segment. Following this, brands must study existing players and their strategies to help them continually modify their own strategies that could help differentiate their products from competing products. Since, the social media landscape is dynamic with strong new entrants presenting stiff competition, brands must invest the time and resources to adapt to changing trends.

Willingness to Listen

Brands must develop open mindedness to invite negative feedback and draw product ideas from it. Brands can send consumers a strong signal that they care for them and are taking steps to ensure better quality service and products.

At the same time, brands should be able to handle rogue comments, inappropriate content posted by individuals. Brands should apply a basic filter to weed out content that do not conform to basic norms of civility.

Brands should employ enough number of people to ensure responsiveness in social media.

Characteristics of Successful Social Media Campaigns1

Consistency:

Proposed contests and activities should be in line with brand positioning and sustainable into the future. Brands should be careful to ensure that engagement and sales do not go down when there are no discounts or offers. Brands should carry some “class” of their own.

Democracy

Brands must give consumers the freedom to express themselves and share their opinions openly.

Quality

Audience submissions must be screened for inappropriate content. In addition, brands must decide whether all submissions can be shared or there needs to be a further screening mechanism to choose the right content to be posted. In addition, brands must try to implement Consumer Solicited Media (CSM) techniques as much as possible as CSM techniques create maximum social impact.

Participation

Brands should invite participation not only through content creation, but also through other means such as inviting opinions, conducting audience polls etc.

Conclusion

Social Media presents a unique opportunity for startups to gain widespread reach. I have provided a framework for analysis using existing theories from the social sciences and introduced some social media metrics developed through prior research which could be applied to evaluate social media strategies.

REFERENCES

1. Advertising 2.0 Social Media-Social Media Marketing in a Web 2.0 World2. http://pewinternet.org/Commentary/2012/March/Pew-Internet-Social-Networking-full-

detail.aspx3. http://en.wikipedia.org/wiki/Crowdsourcing 4. http://en.wikipedia.org/wiki/The_Tipping_Point 5. http://www.ignitesocialmedia.com/social-media-examples/zappos-social-media-example/

6. http://blog.hubspot.com/social-media-metrics-ceos-cares-about 7. http://www.kaushik.net/avinash/best-social-media-metrics-conversation-amplification-

applause-economic-value/8. http://www.cnn.com/interactive/2013/06/tech/tech-list-startups/ 9. http://www.intelligenthq.com/resources/zappos-case-study-how-to-use-social-media-to-create-

a-global-brand/10. http://www.marketingsherpa.com/article/case-study/facebook-ads-zappos-strategy 11. http://www.youtube.com/watch?v=BCAq7_eJgaI 12. http://danielsethics.mgt.unm.edu/pdf/Zappos%20Case.pdf 13. http://sloanreview.mit.edu/article/increasing-the-roi-of-social-media-marketing/ 14. http://en.wikipedia.org/wiki/Modes_of_persuasion