Capitalizing on the Incredibly Shrinking Marcom Expense Line

Capitalizing on the Incredibly Shrinking Marcom Expense Line

Denis Hancock

July 26-28, 2010

Park Hyatt Aviara Resort

Carlsbad, CA

Where most social media marketing strategies are focused

Influencers

Where most of the money is

Co-creators

Customers

Social media marketing strategies are often narrowly focused

© 2011 Moxie Insight. All Rights Reserved. 2

Some guidelines for reaching everyone else more effectively

Spend less.

Talk less.


Social media marketing critics and advocates both love these stats

Source: Ogilvy

Source: MediaPost.com

Online spend lags activity

The social component is small, and growing slowly


The problem is the metric, not the activity

SocialMedia Cost of sending a tweet: $0

Cost of creating a Facebook event: $0

Cost of putting a video on YouTube: $0

Ability to reach customers for free*: Priceless


Marketing is going through a structural change

Current marketing budget New marketing budget

Traditional channels

Digital

Traditional channels

Digital

Savings!


A select few agencies have been thinking this way

“I want to be the agency that ruined it for every other agency in the world”

– Alex Bogusky, formerly of Crispin Porter + Bogusky

“Their view was always, if the idea is great enough, in a world that is intensely connected… the idea will run wild through the population without us having to pay for media.”

– Andy Macaulay, chairman of Zig

Source: Susan Krashinsky, “Advertising whiz Bogusky takes his leave”, Globe & Mail, 7/2/10


Sites like Facebook lower the need for “creative genius”

“It does raise huge questions about, you know, could you in the future have half the marketing budget and do it differently.”

—Richard Musson, VP of Marketing for Labatt

Breweries


New platforms are creating new opportunities

“The real opportunity isn’t for mayors – that’s limited and short sighted. Knowing that the top 5% of customers generate the majority of revenue, it’s a whole new loyalty platform. And it’s a lot cheaper than Aeroplan.”

– Phil Barrett, VP of digital and mobile at BStreet


The key driver: “ambient intimacy”

150 used to be a lot of connections. Now it’s not.


But there are other key differences to consider as well

Traditional Media Social Media

Cost Expensive Free (or very cheap)

Choice for customer Forced Opt-in

Connection with customer Indirect Direct

Impact on intended customer experience

Generally negative Generally positive

Ability to “go viral” Difficult Easier

Knowledge about who’s receiving—and sharing—the message

Poor Good (and improving)


Starbucks tapped into this opportunity early

200,000 + accepted event invite on Facebook

400,000 + viewed YouTube video

379 blog posts tied back to it

Viral buzz increased 26% overall


The potential payoffs for Starbucks are getting bigger and bigger


@garyvee drives Wine Library’s ROI in Twitter

Direct mail campaign: $7,500 200 new customers

Billboard ad: $7,500 300 new customers

Tweet offering free shipping 1,800 new customers

Source: Tanya Battalas, “Companies take on Twitter”, New Jersey Times, June 2009


Yelp: Great news for great service providers


How to think about reaching everyone else more effectively

Spend less.

Talk less.


New perceptions around media are evolving

Broadcasting = bad

Conversations = good


The “problem” is often represented something like this

Source: “Changing context,” Nokia


But there’s a problem with the notion of the “problem”

vs.

Social media enthusiast Your customer


Too many people are feeling a lot like this

INITIATING

CONSIDERING

NEEDS

IDENTIFYING

ALTERNATIVES

EVALUATING

ALTERNATIVES

SALES

CONTACT INITIAL

ASSESSMENT

ADDITIONAL

INFORMATION

ORDER

ACTIVITIES

DECISION

PROCESS

FULFILLMENT

INITIAL USE

EXPERIENCES

LEARNING &

FAMILIARIZATION

PROBLEM

RESOLUTION EVALUATION


Brand 1

Brand 2

Brand 3 Brand 4

Brand 5

Brand n

Hey consumer – talk to us! We’re

listening!

Asking them to “join in your conversation” can make it that much worse


But there is something else you can do

In the social media world, simple broadcasting

strategies are prevalent – and effective.


Twitter points us in this direction


A unique growth strategy, led by weak tie connections

Weak Ties

Strong Ties

24 | © 2010 Moxie Insight. All Rights Reserved.

Twitter is “few to many” rather than “many to many”

Harvard Study: 10% of Twitter users generate 90% of the content. “This implies that Twitter's resembles more of a one-way, one-to-many publishing service than a two-way, peer-to-peer communication network.”

Source: Twitter hype punctured by study”, BBC News, June 9th 2009. www.bbc.co.uk.


http://www.bbc.co.uk/

Twitter users are more likely to engage in commerce


This made Twitter much more different from Facebook than many realize

Facebook is a social network. Twitter is a media/marketing vehicle disguised as a social network. Big difference. And if you don't think it's changing the way information is dispersed, for good and bad, you're insane.

– Bill Simmons

ESPN’s “The Sports Guy”


@woot: Buy our stuff


@zappos: If you have a question, talk to someone else


@mashable: broadcasting the social media guide


Facebook is subtly allowing ambient networks to grow

Top versus Recent news

Fan versus Like


Companies are often getting advice like this

Don’t split the conversation stream between the organization and “just fans.” You want fans to see each other communicating online. It’s about fostering a community. To split your updates from fans signals that:

You are controlling the message

Organizational message delivery is the primary reason for the page; and

The organization doesn’t value fan content or participation as highly as its own

Source: “Facebook fan page best practices”, Livingston Buzz, November 2nd 2009


Follow it and you often get results like this


Aren’t these a little better?


What Facebook fans say they want

Source: Morpace Inc. study, as published on RetailCustomerExperience.com (April 13th 2010)

Note: consumers were allowed to answer “yes” to more than one response.


The difference between “fan” and “like” is important


Suspect

Prospect

Customer

Regular

Advocate

It connects to a new opportunity, enabled by social media

You know about the importance of these folks…

… but can you use social media to create “passive” or “occasional” advocates”?


Using “passive advocates” to win the tug of war

She loves you

She hates you

Brand

They like you

She dislikes

you

Good Bad


Shifting objectives: From conversations to impact

Instead of always trying to engage customers in conversations, use new tools and platforms to:

Give people something they want

Give people something they want to share


Stickybits.com: A new case of conversations being sub-optimal


Groupon: Cool, cheap, local experiences (if enough people buy in)


Foursquare: Connection without conversation (and cheap, cheap rewards)


One more thing…

Think Quirky.


Quirky: Cost effective innovation and marketing processes collide


Key takeaways

Spend less.

Talk less.

Think Quirky.


Denis Hancock Director of Marketing Insight

[email protected] www.denisbhancock.com

Twitter ID: @denisbhancock 416-863-8848

mailto:[email protected]

http://www.denisbhancock.com/

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Capitalizing on the Incredibly Shrinking Marcom Expense Line