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The Pros and Cons of SocialMedia Marketing

Surviving and Thriving in the Era of User

Generated Content

2010 TRUSTe. All rights reserved.

TRUSTe WHITEPAPER

55 2nd Street, 2nd Floor

San Francisco, CA 94105

415 520 3491 tel

415 520 3420 fax

[email protected]

www.truste.com
mailto:[email protected]://www.truste.com/http://www.truste.com/mailto:[email protected]


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Social media is here to stay. Since the first user-generated content (UGC) sites emerged over

eight years ago, social media marketing has quickly ascended into one of the most talked about

and most promising venues for todays enterprises and on-line advertisers.

Popular social media sites including Facebook, MySpace, Twitter, LinkedIn, and many others

are now enabling enterprises to connect with their customers cost-effectively, on a one-to-

one basis. In addition to the handful of social media giants, thousands of other industry and

personal blog sites are now gaining power and presence over users and end consumers. It is hard

to remember that just a few short years ago companies were still in control of their presence

on the Web. Now, the handful of techie guys who set up your blogs just a few years ago are

having tremendous influence over your companys image and reputation, with both positive and

negative effects. All of these social media sites and blogs have never been more powerful, and

will continue to grow in importance for the foreseeable future.

Social media marketing is much more than just placing paid ads onto social networking sites.

It also includes the writing and posting of industry articles, blogs, Webinars, and other content

on these social networking sites. All of these social media marketing activities can dramatically

increase the visibility of your company to a global audience of potential customers.

But before diving in to the lucrative world of social media marketing, it is important to first

examine the pros and cons of advertising and marketing on the various UGC sites. To help you

succeed with your social media marketing initiatives, this TRUSTe white paper will provide with

valuable tips that will help you avoid many of the common pitfalls of social media marketing.

THE GROWING WORLD OF SOCIAL MEDIA

It seems like everyone is now using social media. Consider these staggering usage statistics

posted in June of 2010 on Facebooks Web site:

50% of Facebooks 400 million active users log on in any given day

The average user has 130 friends

Users spend over 500 billion minutes per month on Facebook

More than 25 billion pieces of content (web links, news stories, blog posts, notes, photo

albums, etc.) are shared each month on the Facebook site

MySpace was one of the early leaders in social marketing, but has been recently passed in user

volume by Facebook. However, MySpace still garners an impressive following with more than 113

million monthly active users around the world.

Twitter is a relative newcomer to the social media space, but it is growing at a phenomenal rate.

From February 2008 to February 2009, Twitter achieved a 1,3821percent growth rate, according

to statistics recently published by Nielsen research.

2 2010. TRUSTe. All rights reserved.

1http://news.cnet.com/8301-13577_3-10200161-36.html


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LinkedIn also has a very loyal user base. The site currently has over 70 million members in over

200 countries. A new member joins LinkedIn approximately every second, and about half of its

members are outside the U.S. LinkedIn also has tremendous visibility with company management,

and claims that a significant percentage of executives from all Fortune 500 companies are now

LinkedIn members.

Source: The Nielsen Wire.

http://blog.nielsen.com/nielsenwire/global/facebook-and-twitter-post-large-year-over-year-gains-in-unique-users/

THE EXPLOSIVE GROWTH IN ONLINE ADVERTISING

According to comScore Inc., a global provider of digital marketing intelligence, Americans

received one trillion display ads in the first quarter of 2010 as the online advertising market

rebounded from the 2009 recession. Facebook.com led all online publishers during Q1 with 176

billion display ad impressions, representing 16.2 percent market share2.

Clearly the increasing volume of users accessing social media indicates that this is a marketing

venue that can no longer be ignored if a company wants to expand its reach to new users as

well as improve communications to its existing client base. But before you dive in, you should

first review the following top ten lists to understand and evaluate the many advantages and

disadvantages of social network marketing.


2 http://www.comscore.com/Press_Events/Press_Releases/2010/5/Americans_Received_1_Trillion_Display_Ads_in_Q1_2010_

as_Online_Advertising_Market_Rebounds_from_2009_Recession
http://blog.nielsen.com/nielsenwire/global/facebook-and-twitter-post-large-year-over-year-gains-in-unique-users/http://blog.nielsen.com/nielsenwire/global/facebook-and-twitter-post-large-year-over-year-gains-in-unique-users/


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THE TOP TEN REASONS TO LEVERAGE SOCIAL MEDIA MARKETING

Social media marketing can provide you with many significant benefits, including:

1. Leveraging your existing user base to find new customers. By using social network links,

friends can easily recommend interesting products and brands to their friends. Social media

ads or blogs will provide you with the ability to reach new customers that your traditionalmarketing approach may have overlooked.

2. Understanding the effectiveness of your advertising content. With social media marketing,

advertisers can conduct polls to see if users like their ads. Companies can save a significant

amount of money and avoid damage to their reputation with the ability to kill ads quickly if

users are rating the content or approach poorly.

3. Creating more relevant content. Advertisers can more accurately target their ads to

very specific user demographics. Social media sites usually provide the ability to select

ad recipients with specific job titles, age groups, geographies, and other criteria. These

demographics can be further refined to reflect the recipients personal characteristics and

interests including certain books read or blogs frequently visited. Social media sites can

also provide an estimate of how many people will receive the ad in the advertisers chosen

demographic, enabling enterprises to spend their marketing budgets more effectively.

4. Increasing your global presence. Social networks reach users around the world. For example,

70% of Facebooks 400 million active users are located outside of the United States.

Marketing on social media will present an opportunity to expand your reach into countries

and markets you have never approached in the past.

5. Building brand awareness and increasing customer loyalty. Companies can use social media

to interact with their customers on a more informal, friendlier basis. By asking for feedback,

customers will build a stronger affinity to your brand, which can boost your reputation and

build long-lasting relationships.

6. Improving your products and services. By enabling feedback from your ads and encouraging

open communication on UGC sites through public comments, you can gain valuable insight

into ways to improve your products and make your advertising messages more effective.

7. Saving money. Social media marketing is very cost-efficient in comparison with print media,

television ads, and other traditional marketing channels. It will be possible to reach more

leads with a smaller advertising budget. And with the exception of some of the larger sites

(including Facebook and Twitter) there are still many venues where you can get most of your

social media marketing done for free. Examples include:

a. Zozi which enables you to easily find and book things to do locally and around the world,

at a discount of up to 70% off.

b. Groupon a collective buying web site available in major US cities. Each day the site

features something great to do at an unbeatable price. But you only get the deal if enough

people join that day, so you need to invite your friends.



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c. DailyDeal a consumer site that finds great new deals on things from clothes, books,

electronics, sports, and more items every day.

d. KnowEm a site for mass social registration. KnowEm allows you to check for the use

of your brand, product, personal name or username instantly on over 350 popular and

emerging social media websites.

e. HootSuite a professional Twitter client. With HootSuite, you can manage multiple Twitter

profiles, pre-schedule tweets, and measure your success and related twitter marketing

tools, and many others.

8. Increasing the buzz of company news. Information travels at the speed of light on social

media sites. This can work to your advantage when you have good news that you want to

spread quickly. Social media can provide an excellent platform for free publicity for your new

products, services, messages, or events.

9. Learning more about your customers and target market. Companies can gain valuable

information about their client base by studying the various analytics available from the

social networking sites. You might be surprised to find out who is actually interested in your

products or services!

10. Increasing revenue. Social media can help increase the number of purchases per customer.

Users tend to visit social networks frequently, with many logging on to a particular site

multiple times per day. No other marketing channels provide the opportunity to interact with

potential customers as often as your ads and content placed on social media sites.

THE TOP TEN PITFALLS OF SOCIAL MARKETING

Although the advantages and opportunities of social media marketing are extremely compelling,

there are some pitfalls you need to be aware of. The top ten issues you need to evaluate beforeyou launch into the world of social media marketing include:

1. Loss of control over your messages. After you have created and posted your content or ad on

a social networking site, anything you publish is now fair game for others to use and comment

on. Information on social sites may or may not be accurate. Without the ability to control

comments, you open yourself up for negative publicity that you cant remove, even if it is

unfounded.

2. Online advertising is often ignored. Web users tend to ignore online ads. Many sites place ads

around user profiles or busy multimedia pages. These ads are never seen by the intended

audience since they get buried in the content.

3. Bad reviews are semi-permanent. If you receive bad press or reviews on a social media

site they can remain on the site for a very long time. One example is Yelp, which uses peer

feedback to rate various businesses and establishments. A bad review can be seen for months

or years by the sites many millions of daily viewers.



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4. The inability to accurately time ads. Social media has a degree of permanence. Once a

message is posted, it will be available by search engines for many years to come. So your ad

or blog may not be relevant when actually seen by the end user.

5. Social media marketing can be time consuming. It takes a lot of time and effort to create new,

compelling content for social media. After the content is created, it must be edited, approved,

and published. After posting, all comments must be responded to pages must be maintained.

This can take time away from other strategic initiatives that better serve company growth. It

is possible to outsource the companys social media services, but this will increase the cost of

exposure.

6. Return on investment can be hard to calculate. It is difficult to measure the immediate

impact of improved relationships and increased brand loyalty. Most social media marketing

campaigns will not demonstrate tangible results overnight. A long-term vision must be

acceptable if you decide to launch a social media marketing initiative.

7. Bad news travels fast. The existence of social media has now made it impossible to hide bad

news from the public. Information travels extremely fast on social media. You need to keep up

with the reactions (good or bad) from your followers in real time to counteract the effects of

any bad publicity that is traveling like wild fire.

8. Possible copyright or privacy infringement issues. With the ease of posting material to

social networking sites, copyrights can easily be infringed upon. It is very easy for company

employees to bypass the companys legal department approval processes, and illegally

distribute copyright protected material online without permission from the original right

holder.

9. Spreading confidential information. With UCG, your tech guys that are writing to your blog

may not being as refined or cautious when sharing company information. Printed information

typically progresses through the companys marketing, editing, and legal department beforeposting, but posting to a blog is easy and usually done by the individual contributors. With

social media marketing the filter on what should be reported to the world has been

removed.

10. The growing proliferation of internetworking of SMM sites. Internetworking sites (e.g.,

Facebooks Open Graph) have the ability to proliferate content on a massive scale. According

to the Facebook developer site3, Open Graph protocol enables you to integrate your web

pages into the social graph. It is currently designed for web pages representing profiles of

real-world things things like movies, sports teams, celebrities, and restaurants. Once your

pages become objects in the graph, users can establish connections to your pages as they do

with Facebook Pages. Based on the structured data you provide via the Open Graph protocol,

your pages show up richly across Facebook: in user profiles, within search results and in News

Feed. But users have some legitimate privacy concerns with the concept of internetworking.

Facebook users can opt out by checking a blue bar that appears at the top of the site, but

many users will not understand the need to opt out, meaning that these consumers have not

willingly agreed to share their personal information with the businesses in question.


4http://developers.facebook.com/docs/opengraph


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TIPS FOR SOCIAL MEDIA MARKETING SUCCESS

Social media marketing can provide many lucrative benefits to todays enterprises. But the path

to success has some issues and obstacles that can be avoided with careful planning and ongoing

attention. Here are a few simple tips will help you succeed with your social marketing campaigns:

How to do it well:

Provide relevant content that is good enough for people to tell their friends about

Be open and honest in all of your content and advertisements

Be consistent with your messages

Provide updates regularly to keep your content fresh

Track the social sites and blogs daily to stay ahead of any issues or bad publicity

How to botch it:

Being too pushy with your ads or content

Delivering messages with too much marketing flavor, as opposed to providing positive and

relevant content

Sounding disingenuous or insincere

Not providing content worth forwarding to others or linking from other sites

Posting ads or content, and then forgetting to update messages or track the comments on the

social media sites.

With careful planning, you can now effectively leverage social media to further your marketing

campaigns!
