Social Media Marketing: Do The Same Marketing Rules Apply ?

This is the 5th in a series of periodic guest posts. Catherine Davis is a marketing executive with extensive experience at Diaego, Harris Direct Online, Morgan Stanley, Discover Card, and Leo Burnett. 

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Do traditional marketing rules apply to Social Media ? Just before the holidays, I attended the CMO Club Summit in San Francisco, where the topic of discussion quickly turned to social media. Industry experts from Guy Kawasaki to Hewlett Packard’s Michael Mendenhall weighed in on whether marketers should incorporate social media as part of their overall strategy.  

Our conclusion? While social media marketing is driven by unique characteristics, the marketing evaluation process follows that of traditional media planning.  

 

When embarking on a social media marketing plan, marketers must consider the following points:   

1.  Social Media Marketing is Particularly Well-Suited to Building Brand Affinity

Estee Lauder created a powerful and actionable social media marketing campaign, where they encouraged women to try new products and have a makeover done at department store locations. Sounds ordinary? Well, post-makeover these women were photographed – and the photo was uploaded to the social networking site of their choice.  

Estee Lauder: Social Media Marketing to Women

There are fewer examples of social media driving sales.  Dell is probably the best known example.  Reuters reported that Dell attributes more than $3 million in sales to Twitter, where the company has  600,000 followers.  Considering these figures as a sole output of viral marketing, it is clear that  Dell will continue to make headway with its  integrated social media program.  

2.  Understanding  Your Target and Whether They Actively Participate in Online Social Networks are Equally Important

One of the best examples of understanding the target consumer comes from  Sears.com. The online retailer created a website for teenage girls called “Prom Premiere.” On the site, girls are encouraged to use Facebook applications and email to share photos of prom dresses with family and friends. This initiative demonstrates a concrete understanding of the target audience, as well as the purchase decision process for prom dresses.  

Sears: Prom Dress Sharing via Facebook

  

3.  Social Media Campaigns Require Scalability and Measurement

How do brands develop scalable initiatives? Take Nike’s  “Nike Human Race,” which leveraged Nike’s legacy of sponsoring local races and supporting running training programs.  By rallying an international community of devoted athletes, Nike converted 40% of previous non-consumers after only one year, and had 800,000 runners participate in the 2008 race.  

The “Nike Human Race” is clearly scalable and impactful in long-term brand building. The next level of scalability is understanding how the program translates into sales. Digital campaigns are more easily measurable, more timely, and therefore more usable in a yield management model. Put in place precise metrics to measure the marketing ROI on your social media initiative.  

4.  Make Sure There is a Strong Strategic Link to Your Product or Brand

Estee Lauder’s program works because their makeover inspires confidence in the picture a woman posts on LinkedIn or Match.com. Sears Prom Premiere made it interactive and fun to choose just the right dress for prom.  Each brand offered a product that was part of the solution and that made it ownable. 

5.  Nothing is Free – Budget Carefully

Marketers often think of social media as an inexpensive way to build a brand or promote a new product.  While there are a few high profile exceptions, that is generally false. Social media marketing requires the right resources, a budget to seed and then support the program, and time to build.  Like any other marketing campaign, maintaining realistic expectations and timeline will help lead to success.  

What’s the Bottom Line in Social Media Marketing ?

Social media can be an incredibly creative way to engage your customers and help define your brand.  If you haven’t done a social media campaign yet, begin monitoring any large or influential communities where your products or your competitors are frequent topics of conversation.  Identify the role your brand plays in their lives and how you can add value. 

Evaluate your in-house assets –many companies have a wealth of information that can be used to create and syndicate content on highly trafficked sites.  Start small and create a test and learn environment. You will quickly learn what works and should be scaled up.  If you are already actively involved in social media, take a step back and evaluate your program.   It needs to be assessed on it’s own merit and against the channels it is replacing.  It should be just one part of a fully integrated marketing program. 

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Catherine Davis was most recently SVP Marketing at Diageo, the world’s largest alcoholic beverage company including Johnnie Walker, Guinness, and Smirnoff.  She is a marketing executive who builds brands and creates new media and marketing models to drive business growth. Catherine is experienced in CPG, financial services, and online businesses and has demonstrated leadership across all marketing functions, including digital.  

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Learning From the Dynamics of Viral Marketing

In what context do viral marketing strategies work? How do on-line product recommendations develop, multiply, spread and ultimately, dwindle and die? And, can Marketers influence any of this?  

These were important questions posed by Leskovec, Adamic, and Huberman in their 2008 study “The Dynamics of Viral Marketing.” This is one of the few studies I’ve seen to actually study how on-line recommendations grow virally and how this growth impacts purchase behavior throughout the viral network.  

Viral Marketing -- When and Where Does it Work?

 

Admittedly, the study had limitations, notably that it was only four categories, just measured on-line viral activity, and included a discount incentive to help motivate purchase. But, even with these limitations, it uncovered deeper insights into the systematic patterns in knowledge sharing and persuasion online—all of which are of high interest to Marketers.  

What Did the Study Entail?

Lescovec et al. examined an online recommendation network composed of 4 million people who made 16 million recommendations for 0.5 million products. Each time a consumer purchased a book, music, or movie, he or she could  send e-mails recommending the item to friends. The first person to purchase the same item through a referral link received a 10% discount.  

What was Measured

• When and at what price a product was purchased
• If the product was recommended to others
• Whether the recommendation resulted in a subsequent purchase and discount

They then modeled the effectiveness of recommendations as a function of the total number of previously exchanged recommendations.  

Recommendation Networks Grow Slowly Over Time.

 

Important Viral Network Learnings & Insights

Finding #1:  Consumers recommended a large number of products to the same group of people. As a result, recommendation networks became heavily locally-based. For example, in the DVD recommendation network there are 182,000 pairs that exchanged more than 10 recommendations.  

Consumers Tend to Recommend Products to the Same People

 

Finding #2: Recommendation networks centered on a specific product category. That is, the people tended to focus on recommending a particular product category and thus created a “community of interest.” Having said this, most all networks shared recommendations for all types of products.  

Finding #3: Trust, influence, and perception of “spam” affected purchase. As people exchanged more recommendations, the likelihood they would purchase the product increased due to a growing foundation of trust. However, purchase likelihood increased, peaked, and then fell as consumers received additional recommendations for a specific product. A few recommendations built credibility; too many appeared as “spam.”  

Finding #4:  Most recommendation chains didn’t grow very large. In fact, most terminated with the initial product purchase, and even the largest connected networks were very small as a percentage of the total population.  

Recommendation Chains Don’t Typically Grow Very Large

 

Finding #5: 20% of recommendations accounted for 50% of sales. This is not far from the usual 80-20 rule, where the top 20% of products account for 80% of sales.  

What are the ‘Viral’ Implications for Marketers?

1. Identify the “Amplifiers.” Given that 20% of recommendations generate 50% of sales, it’s key to figure out whom the amplifiers are and focus your efforts on them.  

2. Determine Where the “Amplifiers” Congregate. Where do they exchange product information? On what platforms do they consume media? Web behavior can be linked to off-line purchase panels to quantify the effectiveness of recommendations (see “What Really Drives Web Advertising ROI”).  

3. Take Online Recommendation Networks to the next level Through Social Media Marketing. Marketers should explore development of models to measure recommendation systems on Twitter, Facebook, Foursquare, and the larger online arena. Through broader web 2.0 outreach, marketers can quantify consumer engagement on recommendation networks by volume, reach, tone, and source.  

Marketers can optimize paid media and earned media with viral marketing.

 

4. Be Wary of Creating “Recommendation-Fatigue.” A fine line exists between trust and influence in recommending a product and what is widely considered “spam.” Consumer engagement via any online channel must be done with careful consideration of earned media and buzz promotion.  

Viral Marketing: Limitations…

What’s not yet so clear from the research is how to minimize transmission “breakdown” – e.g. how do you minimize the likelihood that a product recommendation is the last one. As the research showed, most viral networks don’t grow very large. Marketers will only invest significant money if they can truly scale viral marketing programs.  

…And Future Opportunities

With the right tools and metrics, marketers can diversify their marketing plans to incorporate viral marketing strategies. The research clearly shows that viral marketing can build unique and niche recommendation networks, bolster consumer engagement, and lift sales.  

And as consumers continue to favor a digitally-based, social network-centric world, it’s critical that Marketers become more expert at viral marketing. Key to this will be identifying amplifiers, focusing on congregation points, leveraging social media opportunities—all without overdoing it. As importantly, Marketers must discover new approaches to spread and scale viral marketing just as effectively as the flu seems to proliferate every flu season.  

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What’s Wrong with Word of Mouth Marketing

It’s common knowledge that word of mouth (WOM) by people you know is the most effective advertising. Research corroborates this:

Word of Mouth — High Impact But Low Spending: Why ?

Yet, most Marketing organizations don’t behave as if it’s very important. According to PQ Media, 2008 WOM spending was $1.7B, +10% over the previous year. Estimated U.S. Marketing spending ranges from ~$500B all the way up to $1 trillion; WOM represents only 2-4% of total spend. So, why the impact vs. spending disparity ?  The answer, I think, is two-fold:

• Word of mouth remains a black box for most Marketers — it’s really hard to figure out and even harder to do well.
• It hasn’t been easily scalable–either within a persons social network or beyond.

Word of Mouth vs. Viral Marketing

Some people differentiate between WOM and viral. WOM is described as one to few, viral as one to many; as well, viral includes sharing and resharing–usually via the web. I think this distinction is largely false as WOM can become viral–e.g. the recent United Airlines guitar video (4.9M views).

Word Of Mouth Marketing

WOM should build your brand. The mainstream media love to report on highly creative viral videos–e.g. the T-Mobile sing-a-long in Trafalgar Square, etc. These videos do generate incredible amounts of viewing, but are they really building the brand ? Do they engage consumers to better understand how and why the brand is better than alternatives ?

Word Of Mouth — More Scalable in Two Directions

WOM is changing as the web enables two simultaneous phenomenon:

• Vertical Scalability – The web continues to enable new ways for consumers to share information  both within their social circle and beyond. Sharing opinions and ideas through blogs, Twitter, YouTube, Social Networking sites, etc. has vastly increased the scalability of WOM, as one person can now reach most people within their social network instantly and of course, people well beyond.
• Horizontal Scalability – The rise of social networks and OpenID, Facebook Connect and similar services will enable personal network portability. This means that friends and families–and their opinions–will be able to flow with consumers as they traverse the web and interact with products and services. So, WOM from your social network will now become available in places it wasn’t before.

Basic Elements of Word of Mouth

Given the rising importance of WOM, how can you harness this powerful opportunity for your brand ?

1) Define Who’s Talking – Within your brand users, there’s almost always a group of 10-15% of users who are “amplifiers.” These consumers have unusually large social networks and form part of their self-identity from sharing new information with friends and family. Similarly, there are important non-users who need to be identified as well — bloggers, heavy Twitter users, etc. who can disproportionately impact your brand.

2) Define What They’re Talking About — Amplifiers don’t just randomly talk about your brand. In fact, they tend not to talk about your core mainstream messaging. Why ? Because everyone already knows about it; they get no psychic reward because there’s nothing new. They tend to talk about and share things that are important to them and also new and surprising about your brand–positively or negatively. Conduct research among amplifiers to understand the main themes they are talking about.

3) Determine Which Mediums They’re Using – Where are amplifiers talking about or sharing your brand ? Off-line in casual conversations ? On-line via Facebook ? Understanding which mediums amplifiers are using to talk about your brand gives you insight into how to facilitate or enable these conversations. Do research to find out.

4) Understand What Receivers Are Doing Next – Understanding receivers is just as important as understanding amplifiers. Without a receiver there’s no WOM. Most important is to understand what receivers do after hearing a theme. Do they visit the store ? Search on line ? Visit the web site ? Consult another friend ? Share via Twitter ?

5) Test and Qualify WOM Stimuli — If we know who is sharing, what they’re talking about, in which channels, and what receivers are doing after the conversation, then what ? Using WOM themes, develop a range of stimuli — e.g. customer experience “moments of truth,” white paper/special user content, tips/how-to’s, personalized web micro-sites, etc. to help drive accelerated word of mouth. Run a small test versus control. Did you get more people to talk or share your stimuli ? What did listeners do afterwards ? Did you build your brand equities ? Increase consideration and purchase of your brand ? Which stimuli worked best ?

WOM is hard work. Like most Marketing, it starts with really understanding your consumer. But the consumer understanding work is not well understood. And WOM is even harder to drive in a systematic and disciplined way. As WOM becomes more important, it becomes increasingly important for Marketing organizations to increase their WOM capabilities and most have a long way to go. What’s your Marketing organizations WOM IQ ?

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Is the New PR Really Just the New Marketing ?

Is PR becoming more like Marketing ? I recently read a fascinating white paper by David Meerman Scott,  “The new rules of PR: How to create a press release strategy for reaching buyers directly,” an insightful dissection of the changes digital and social media are driving in the world of PR. David notes that:

“Today, savvy marketing professionals use press releases to reach buyers directly…The media has been disintermediated. The Web has changed the rules. Buyers read your press releases directly and you need to be talking their language…Your audience is millions of people with Internet connections and access to search engines and RSS readers.”

Now I don’t know about you, but it sounds like PR is evolving to be more like Marketing. Why? Because traditional media is no longer the key intermediary it once was. PR is becoming more direct–just like Marketing.

Is the New PR Really Just the New Marketing ?

What is PR ?

Historically, PR has been differentiated from Marketing in several ways:

• It communicates with multiple stakeholders, many of whom don’t buy the firms products or services — e.g. media, analysts, NGO’s, etc.
• PR addresses topics of public interest using mediums that don’t require direct payment, unlike advertising.
• PR often occurs thru 3rd parties that provide legitimacy that traditional marketing doesn’t have.

It’s clear that Marketing and PR, always uncomfortable bedfellows, are becoming more, not less, similar. For example:

• The rise of social networks is increasing the influence of opinion leaders who don’t buy the products or services, but are influential nonetheless. Someone needs to be tasked with engaging and influencing them–but who?
• Digitally enabled news releases, social media, and corporate web sites have created numerous opportunities for companies to communicate with consumers without paying anything for media. Is this PR–or Marketing?
• Traditional media is under assault by the twin forces of non-subscription based alternatives and the democratization of information and news via blogs, Twitter, etc. Who manages these new “gatekeepers?”

The Erosion of Traditional Media as Gatekeeper

The key point is that the traditional media no longer hold a near monopoly on media and publishing. Marketers can often go direct to consumers with tools long associated with PR, but without the barriers to getting published. Again, to quote David:

“The news cycle has changed…With Web-based access to information, consumers have real choices for how they learn about the world around them…Not too long ago, the only way for corporations to influence news was for their PR people to issue a press release (intended for media only)…Editors and reporters were in a power position as the filter between organizations and the public. With the old news cycle, all PR people knew the rules: The ultimate goal was to get some magazine or newspaper to write a positive story that would appear weeks or months later…No more. Information control is decentralized.”

What Does This Mean For Marketing ?

1. Marketing Must Take A Leading Role in Understanding Consumers PR Needs – In the past, PR could be trusted to know what the media wanted and what would get published. With the disintermediation of media, the need to understand consumers PR needs becomes more important. This is a task uniquely suited to the Marketing function. Segmenting various stakeholder groups, understanding their different needs–opinion leaders, users and non-users may all have different motivations–is a critical first step.
2. Marketing Must Adapt its Communication Style – News releases and other PR like channels–even direct to consumer–are not advertising. While Marketers are trained to understand how to use advertising to communicate effectively with consumers, this training is lacking when the mediums are PR centric. Consumers have different expectations of these channels and communication styles and tonality need to change with the medium. Marketers need to listen to consumers and learn what works and what doesn’t.
3. Marketing Must Drive a Content Publishing Strategy -- A simple recitation of the brand promise is unlikely to be very effective with these channels and mediums. Marketing needs to drive a clear content strategy that springs from the brand promise. Content that surrounds, supports and deepens the brand promise becomes an integral part of the PR communication strategy. Marketing needs to define and drive this.
4. Marketing Needs to Optimize the Web Site for PR – Part of the new PR model is ensuring that your web site and web capabilities can enable the appropriate new PR efforts. This includes posting news releases in a news section on your site, ensuring your news posts are search engine optimized, enabling RSS feeds to key distribution channels, optimizing brows-ability so readers can find new information, and optimizing links to related content.
5. Marketing & PR Need to Define New Governance Models – These changes beg an important question: what is the right organizational structure and governance model for the Marketing and PR organizations? Are they one or separate ? Does PR report to Marketing ? is there a division of tasks? If so, who owns what? The CMO and Chief Communication Officer (CCO) need to have a joint and aligned game plan for how to play in this new environment.

PR is going through many of the same transformational challenges as Marketing. The disintermediation of the traditional media means that Marketing will play an increasingly important role in PR going forward. CMO’s need to take notice and define how they and the CCO will tackle this new Marketing challenge.

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Build Your Brand with Content Marketing

Building your brand with content Marketing is becoming increasingly important. In the good old days before the web and social media, it was enough to simply communicate your brand’s value proposition in a highly memorable and convincing manner and watch the sales roll in. No more. Relevant content can be an approach to engage your customers and smartly differentiate your brand. In an earlier post “Publishing — The Future of Marketing?,” I described why the importance of content marketing is increasing. And Joe Pulizzi of Junta 42, in his excellent post “The Decline of Advertising and Rise of Content Spending,” explains more about the rising tide of content in the future.

Subway -- Smartly Using Content Marketing

Subway has gotten a lot of attention recently for their “fresh and healthy” positioning and impactful $5 foot long subs campaign. But equally deserving in my opinion is how they’re using Content Marketing in their Subway Kids program. This program has taken the core Subway value proposition — “fresh and healthy” — and extended it to kids. Subway Kids adheres to a couple of basic tenets that are important to good Content Marketing.

First, they’re clear about their target(s). The quick serve category serves two masters — parents and kids. And Subway Kids markets effectively to both. Check out the recent Subway Kids TV commercial showing creative kids outdoor games and see if you, as a parent, can resist feeling good about the Subway brand and what they’re trying to do for kids.

Second, Subway Kids stays true to the “fresh and healthy” core value proposition of the parent brand. Many brands line extend into secondary benefits or segments and conveniently forget the core focus of the brand or fail to reinforce it sufficiently. Not so with Subway Kids.

Subway Kids -- Using Marketing Content to Extend & Deepen the Brand

4 Smart Ways Subway Kids is Using Content Marketing

Here’s four smart ways Subway Kids is using content to engage their customers and deepen the relationship — all of which support ”fresh and healthy.”

1. Suggest Activities – Subway Kids “Get Your Family In Motion” adds relevant and meaningful content about activities that families can do together — which are healthy and active. All of the activities  surround and deepen the “fresh and healthy” positioning.
2. Explore Choices – The “Meet the Subway Kids” program provides the opportunity for kids to choose a Subway Kids friend on-line to hang out with. They can then follow the kid and see how they’re feeling, what decisions they make, and how this relates to their food choices–another route into the fresh and healthy value proposition.
3. Engage Schools — Subway Kids “Random Acts of Fitness” program  extends their core benefit to schools with calendars, stickers, educational programs, etc. designed to help teachers and parents reinforce healthy and active behaviors.
4. Educate and Inform Parents – Subway Kids offers a convenient widget which provides parents with daily nutition tips and activity suggestions .

What’s Right About Subway Kids Marketing

The “red thread” throughout the entire Subway Kids proposition is easy to see and follow — healthy and active kids. And the Kids programs all relate directly to and are mutually supportive of this theme. Now, remember the Subway core value proposition — fresh and healthy ? It’s obvious how the Subway Kids “healthy and active” proposition surrounds,  enhances and deepens the core “fresh and healthy” Subway value proposition. My only complaint is that it’s a bit difficult to find Subway Kids on their website.

Is it working ? Well, I don’t have access to Subway sales vs. target, but at least one recent book, “Brand Bubble,” by Gerzema and Lebar, identifies Subway as one of the few brands that are growing both brand market value and consumer brand equity ratings. What’s not to like about a brand that delivers compelling, relevant content that’s supportive of their core brand promise and “good for you” food ?

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