Archive for October 27, 2010

Fashion victim, fashionista: these are words not easily applied to me. However, I have learned one valuable lesson over the years by observing an industry that’s always on the lookout for the next big thing: if you wait long enough, past trends and patterns will make a comeback.

This is exactly to the case with social media right now. As all things social start to mature, the same evolution that took place in the digital marketing industry only a few years ago is emerging: social is fast becoming less about experimentation, and more about regular production. In fact, production is the key word in many ways, which I’ll come back to a bit later.

In recent months, a noticeable shift has taken place among the clients and prospects we’ve talked with at our agency. They fall roughly into three categories: those still experimenting with social media, those using social media consistently as a tactical add-on to their marketing activities, and those trying to make social a more central, strategic component of their marketing efforts.

As we approach 2011 budget deadlines, more and more marketers are trying to switch gears and move from using social as a tactical add-on to making it a core component in their overall efforts. Small, medium and large companies want to know how they can streamline, automate, budget, and measure social media and social marketing. How can it move from a series of handcrafted singular projects to a more consistent, more repeatable, more predictable undertaking?

We have clear answers to that. The key challenge remains implementation.

Marketing integration may have been the Holy Grail for advertisers over the last 15 years, yet the agency world became increasingly fragmented during that period of time. Many agencies that initially dismissed digital as a peripheral activity are now bent on not making the same mistake again with social.

Agencies rightfully see social as central to the future of marketing and work to develop in this space as fast as they can. Yet each agency, each discipline, looks at social through a very narrow lens that only puts the emphasis on their original core competencies. And, this is what really spells trouble for marketers.

Back to the issue of production, as mentioned earlier: It is tempting to draw parallels between social content production/earned media on one hand, and advertising production/paid media on the other hand. However, the comparison can be misleading in many ways. There are at least five key differences in social that every marketer should bear in mind:

1) Forget one-size-fits-all messages targeting “lowest common denominator” audience. Recognize that fragmentation is here to stay, and embrace it at every step.

2) Frequency and freshness of content matter more than production values. Increase your execution capability and move to rapid-fire, low-cost production cycles.

3) Campaigns have a limited shelf life, but quality content is a valuable and reusable asset. Build your library for the long term and ensure that you will be able to do “reruns.”

4) Stop thinking (and budgeting around) campaign flights and push marketing. Start thinking about ongoing engagement. Audiences can no longer be turned on and off on demand.

5) In a genuine two-way, real-time conversation, it is hard to separate the production arm from the distribution arm. Your brain is connected to your mouth for a reason.

Larger creative and media agencies have legacy economic models built around scale and size that make it difficult to adapt and operate profitably in a world of exponentially fragmented audiences and touch points. When it comes to social, the question is not whether “they get it,” but whether they can evolve to become as fast and nimble as marketers need them to be. Even Web agencies, in spite of their digital DNA, can sometimes struggle with things like video production or labor-intensive, low-tech conversational engagement.

The long-predicted new marketing paradigm is finally here. Marketers need to start thinking, behaving and organizing themselves as content producers who treat engage consumers as audiences, instead of fully outsourcing this function to external publishers. Content is still king, after all.

A new species of agencies is emerging to deliver solutions that meet this new paradigm Built from the ground up to meet the new realities of turnkey content production and distribution, agencies with a studio mindset and roots in video program production and distribution can create a competitive edge from a creative, execution and dissemination standpoint.

It’s official: Social is now well beyond a passing marketing fad. Amid this environment, marketers find it increasingly challenging to differentiate brands, products and messages. The push for a constant flow of newness is becoming a key operational requirement — just like in the fashion industry. One thing is certain:

Interesting news on the virtual goods front: it seems gift cards holding Facebook Credits are now on sale at Wal-Mart and Best Buy, expanding retail distribution that already includes Target. The in-store card sales are touted as “The quick & easy way to get premium items in your favorite games and applications” — meaning you can use them to pay for “virtual goods” in games like Farmville and Mafia Wars.

Boiling the story down to its bizarre essence, brick-and-mortar retail establishments are now selling real cards holding imaginary money to buy things which don’t actually exist. While there is undoubtedly a certain surreal quality to this news, the move seems logical enough, and I’m not one to question what people do with their money. But I believe there are some potential pitfalls for retailers who want to use Facebook Credits (meaning, virtual goods) as part of in-store incentives and promotional offers. Basically, they have to be careful not to annoy consumers by insulting their intelligence.

There’s no question that gift cards in general are very popular: they carry an obvious (but not distastefully ostentatious) value combined with flexibility which allows the recipient to choose the goods they want. According to data from the National Retail Federation, U.S. consumers spent $23.6 billion on gift cards in the 2009 holiday season.

It’s tempting, in this context, to incorporate Facebook Credits gift cards into promotional offers. The eConsultancy blog (http://econsultancy.com/us/blog/6626-q-a-scott-silverman-on-his-move-from-shop-org-to-virtual-goods ) compared two hypothetical retail offers imagined by Scott Silverman of IFeelGoods.com — one offering a consumer two pairs of jeans for $20 off, the other offering two pairs of jeans and 20 Facebook Credits — and concluded that the offer of Facebook Credits offer was more attractive to consumers. This despite the fact that Facebook Credits are worth substantially less than real dollars, as Silverman himself notes: “Each Facebook credit is worth 10 cents, so the cost to the retailer is $2, or 20% off of an order that might be $50-$60.”

Explaining his reasoning, Silverman believes that “20 feels like a pretty significant number to consumers…We believe that’ll have a high perceived value to consumers, and it will help drive them to make that purchase.” But this strikes me as a perilous approach, given the potential for consumer backlash. Essentially, it assumes consumers are so thoughtlessly naïve, and economically ignorant, that they won’t do the basic math to figure out they’re really not getting much of a reward. While some who do the math might appreciate a $2 discount on a $60 purchase, I think most would view this as a negligible amount and recognize the discount as a cheap gimmick — and a slightly deceptive gimmick at that, a bait-and-switch trying to substitute Facebook Credits for dollars.

Of course I could be overestimating the intelligence and savvy of the average consumer — not to mention the degree to which they care about being gimmicked or deceived by retailers. I suppose it’s possible most people really are that dumb and indifferent, but I’d be leery about staking my brand’s reputation on this frankly insulting assumption.

In addition to connecting people all over the world, social media is a great leveler, attracting users from all walks of life and income brackets — including the rich. A new survey from SEI Networks found that 70% of people with net worth of $5 million or more (whom I classify as the “pretty rich,” to distinguish them from the “superrich,” worth $100 million or more) are on Facebook or a similar social media site. That proportion is significantly higher than the population at large, with 61% of U.S. adults using social networks according to Pew Research Center.

Among the 70% who used social networks, 50% (35% of the total) said they use Facebook, 37% (26% of the total) said they visit YouTube, and 35% (24.5% of the total) use LinkedIn. The high proportion of pretty rich people using social media is especially noteworthy because these individuals tend to skew older than the general population, defying the conventional wisdom that older adults don’t use social media as much as younger people.

Indeed, the average age of individuals heading households worth $5 million or more is 67, according to “Affluent Market Insights,” a series of annual reports from the Spectrem Group. Meanwhile the proportion of U.S. adults ages 65+, of all income brackets, who use social media was just 26% in September, according to Pew. Comparing the numbers, it seems clear that pretty-rich older adults are far more likely to use social media than their non-rich peers. Of course, there are also a good number of younger adults worth $5 million or more (including The Situation Jersey Shore’s steroidal impresario).

However, the high penetration of social networks among the pretty rich doesn’t necessarily translate into frequent use, simply because these affluent individuals often don’t have the time, according to SEI. A mere 17.4% of respondents said they use social media on a daily basis, compared to 38% of the population at large.

That’s not surprising. Separately, the Spectrem reports showed that the most popular careers among individuals heading households worth $5 million or more are senior corporate executives, business owners and physicians or dentists — occupations which don’t leave much time for idle Facebook surfing. And another survey from PNC Financial Services Group found that 43% of wealthy business owners said they enjoyed their work so much they wanted to continue working past the age of 70.

By the way, in case anyone is concerned about the plight of the rich during the economic downturn, rest assured that these plucky, resilient survivors appear to be on the rebound. According to Spectrem the number of U.S. households worth $5 million or more fell from 1.14 million in 2007 to 840,000 in 2008, but then climbed back to 980,000 in 2009.

Social network users feel more connected to friends and family these days even as their face-to-face interactions dwindle, according to results of a new Harris Poll.

6 in 10 SocNet Users Feel More Connected
Six in 10 (59%) of social network users say they feel more connected to people now than previously. That figure is highest among 18-to-34-year-olds (63%) and females (61%). Similar percentages (58% overall, 63% of 18-to-34-year-olds, 60% of females) say they keep in touch with friends more now than in the past.

Social network users say this even as majorities admit they recently have had less face-to-face contact with friends (55%) and know what’s going on with many of their friends and acquaintances, but don’t interact with them personally or individually (60%). Negative emotional impact of this loss of personal contact appears small, as only 32% of social network users feel lonelier now than previously.

SocNet Users Value Opinions
One key statistic for marketers to note is that 60% of social network users value the opinions others share on social media. This may explain why a little more than half (53%) would rather to listen to others’ opinions on social media than share their own. In addition, only four in 10 (41%) social network users feel important when giving brand, product and service feedback.

In all cases, 18-to-34-year-old users reply in the positive more than older age groups. Most notably, 68% of the youngest users value the opinions others share on social media and 47% feel important when giving brand, product and service feedback.

SocNet Good Interface for Acquaintances
Forty-four percent of social network users would prefer to interact with acquaintances via social media rather than face-to-face. This percentage drops for interactions with friends (23%) and family (19%).

A substantially higher 59% of 18-to-34-year-old users would prefer to interact with acquaintances via social media rather than face-to-face.

9 in 10 Online Adults Use Social Media
Nine in 10 (87%) online adults use social media. Overall, the highest percentage (22%) uses social media less than one hour per week. The highest percentage of 18-to-34-year-olds (17%) uses social media six to 10 hours per week.

Most Companies Have Social Media Strategies
Reflecting widespread adult use of social media, about three-quarters (72%) of companies currently have a social media marketing strategy, according to recent data from King Fish Media, Hubspot and Junta 42.

Of the 27% without a social media marketing strategy (1% were undecided), 80% plan to have one within the next 12 months. Furthermore, only 11% of companies without a strategy definitely do not plan to implement one in the next 12 months, with 9% undecided.

How do you take your content?

In the most ambitious media play ever for a non-tech, non-media company, Starbucks on Wednesday debuted its Digital Network — an exclusive content network curated by the coffee seller and designed to enrich customers’ in-store experiences.

“The vision is for Starbucks Digital Network to be a digital version of the community cork board that’s in all of our stores,” Starbucks’s VP of Digital Ventures Adam Brotman tells Mashable.

Given Starbucks’ massive national reach, the billion dollar question is what impact SDN, so-called, will have on the broader media landscape.

“The network will immediately become a major digital property, facing tens of millions of customers every month,” writes The Seattle Times. “Last month Starbucks saw more than 30 million users logging into store networks, where WiFi has been free since last July and where the ‘SDN’ will be the initial landing page.”

Oh, and as The Seattle Times notes, “The network is largely free of ads.”

Mashable, which breaks down the ample offerings, says: “One thing that struck us about SDN is that there’s almost too much content to go around … In some aspects the experience seems saturated and overwhelming, so customers may not know where to start and partners providing premium content may find some of it gets overlooked.”

So long as content — from the likes of The New York Times and The Wall Street Journal — isn’t overlooked, it sounds like SDN could serve as a key promotional vehicle for various publishers.

As Brotman tells paidContent: “The business model is to basically act as an affiliate and to revenue share when there’s an upsell on our network.” As paidContent notes, therefore, “For the newspapers, that could mean selling subscriptions for access outside the store.”

Meanwhile, as CNet comments, SDN has the potential to popularize a whole new world of “hyper-hyper-local” content. “Not only are you in a given neighborhood in a given city, but you’re in a specific coffee shop … It’s a new, more malleable way to detect what kind of content consumers are more likely to want to pair with their coffee to go.”