Social Media Impact – Thoughts?

The ongoing conversation. I would love to hear from others on this topic. I believe that, while difficult in some respects, social media when done right can have a big impact on brand, sales and revenue over the long term. Certainly being able to track traffic – UVs and PVs on a site are one way to see the impact if you have an existing benchmark, and the viral aspect is trackable as well.

The trick with social media is that is is constantly changing. Its not something that can be ‘turned on’ and left to run on its own. The marketplace itself is about thinking outside of the box and understanding what potential is right around the corner. Its about keeping an ear to the ground and a voice in the conversation. It is about new possibilities.

The social media industry is about understanding that anyone, even some geeky college intern can invent the next YouTube or Facebook or Google. There is no barrier to entry and there is no “on-going consistency” in the online world. It is fluid, changing, and amazingly imaginative, which makes it easier for someone to breakthrough.

Its a difficult conversation to have with some companies who don’t necessarily know what social media is let alone how to implement it. Add on top of that the desire to see results immediately and its an interesting conversation.

I still see social media as part of the overall media mix and, just like TV in some instances, while you can’t measure its direct impact, you know it has a significant impact when done righ. However, since this particular medium is constantly changing, you need to flex your measurement and conclusions as a result.

Crowdsourcing – A new social network application?

I love the Springwise newsletter. Its chock full of new ideas and companies that are making consumers lives better. In its most recent newsletter http://www.springwise.com/, there was a write up on Crowdsourcing. This is social networking at its best because it’s a platform that enables crowds (networks) to develop new ideas. It specifically talks about a company called Kluster. They have a set of project management tools to enable crowds to develop new concepts. This type of application can also be used to create brand identities, plan events or any other project that would benefit from crowd input.
Kluster joins the ranks of a few other crowdsourcing providers; Cambrian House and CrowdSpirit. Springwise states that the main advantage that Kluster has over its competitors is that it offers crowds an incentive for participating. Kluster has developed a rather creative and engaging system of rewards which we all know is critical to keeping people coming back to these types of Social Networking arenas. And, we all know if you don’t keep the content new and fresh and/or offer contributors some other reason to come back, the network will die over time.
With Kluster, members can earn “Watts” by helping solve problems or suggesting refinements or enhancements. They can invest their “Watts” and cash out if a project is purchased by a third party. This provides an opportunity for reward in a way that has never been contemplated before and I bet that more people will contribute just to have a chance at making it big with a cool idea. This is a big differentiators for social networking because, as we know, the biggest problems corporations face as they look to social media to help drive innovation and brand is keeping people coming back. As explained by Kluster: “Watts encourage users to participate and stay on target, keeping the community productive.”
In the best case scenario, the crowds will help brands create new hit products. At the very least, using Kluster will enable companies to interact with their most dedicated customers. Smaller companies can use Kluster as an instant research and development lab, enlisting (and rewarding!) the community to help ‘flesh out’ ideas that they might otherwise not be able to develop.

I like the model behind Kluster and I think it will enable many companies who are willing to embrace social media to communicate with consumers as well as give them a valuable incentive for continuing the dialog.

Executives Must Realize the Power of Social Media

I just read an article on BusinessWire entitled “Executives Must Realize and Learn the Power of Social Media” http://www.businesswire.com/news/home/20080228005828/en. The report is based on 71 phone interviews with marketing professionals in four countries – US, Canada, UK and France in late 2007. While 71 phone interviews does not a statistically significant study make, the findings are encouraging in that none of the respondents thought Social Media was a passing fad. Additionally, it validated for me the need for marketing firms to help educate corporations on how to embrace social media and leverage the capabilities to jump the curve of its competition and ensure success.
Furthermore, nearly 50% of the respondents agreed that the use of social media for corporate, brand and product marketing believe it is a vital component of corporate communications that should be monitored at the executive level and allocated significant resources. Additional findings include:

• “When asked about the uses of social media, respondents endorsed it as a strategic tool to gain consumer insights (37%), build brand awareness (21%) and increase customer loyalty (18%).”

• “…88% of U.S. respondents and 65% of global respondents were in agreement that reading and analyzing social media to understand unfiltered consumer perceptions would have the most impact on the future of their businesses. Word-of-mouth campaigns were cited as having the second greatest impact. All countries were in broad accordance at 62%, but the U.S. once again led with three-quarters agreeing on the effects of these marketing campaigns.”

• “The potentially most effective use of social media, chosen by more than 50%, is creating a user community of bloggers to provide user experience feedback. Another 47% believe using social media vehicles, such as YouTube, to generate a viral campaign would also be very effective in a product launch. Specifically in the U.S., more respondents support the idea of utilizing social media to boost the effectiveness of their social media efforts than their global counterparts.”

The article goes on to say that the early adopters of Social Media (they refer to them as the Revolutionaries) are more advanced in their understanding of social media and how to embrace it. The more cautious marketers (called the Wait –and-Sees) are only at the beginning stages of understanding social media.
Most importantly for us marketing consultants, the barriers cited for not embracing social media included lack of senior executive commitment and lack of expertise among business suppliers. The time is now for service providers to help educate companies to this new way of marketing. It validates why we started focusing our services in the space as we too saw a knowledge gap both in organizations and in suppliers at large.
For the full research report, visit www.SocialMediaInBusiness.com.

The Holy Grail of Marketing-Understanding Your Target Market

Why do some campaigns fail and others become the stuff of legend? The key is identifying and understanding your target market. You get that right and you’re well on your way to a highly successful campaign. Unfortunately, “getting it right” is one of the most difficult tasks facing the marketer. Market segmentation models can certainly help, but only if they are done right. Market segmentation models should have the following attributes in order to support your marketing efforts.

1. Segments should be sizable. This means that individual segments must be large enough to warrant segment based campaigns.

2. Segments should be locatable. This means you should be able to identify individuals within the segment so that you can reach them. Generally segmentation models that use demographic variables give you what you need to identify individual segment members.

3. Segments should be predictive. You should be able to predict purchase behavior based on the segment designation. This is one criteria that is particularly difficult to achieve.

4. Segments should be actionable. Segments need to capture the types of information needed to support marketing decisions. For example, high value/low value designation, i.e. which segments have the greatest tendency to be receptive to your brand and are likely to spend the most on your product.

5. Segments should be homogenous and distinctive. This means that individuals within the segment should have similar characteristics and that individuals within different segments should have different characteristics.

6. Segments should be stable over time. This simply means that the segment designation doesn’t change frequently.

Generally, segmentation models that combine demographic, actual consumption patterns and psychographics deliver the best results.