social and digital marketing

Introduction to Social network and digital marketing

Introduction

The sheer number of users on social networking Web sites and their passion for the topic represents a potentially significant opportunity that marketers have yet to fully understand and tap. As today’s
social networking sites exert a much stronger pull on their members compared to other Web sites, social networks have become a potentially useful marketing tool.
Social networking Web sites represent an important media channel for reaching a diverse demographic, including, teens and young adults, women, moms, affluent consumers, and older individuals.
Indeed e xperts expect U.S. ad spending on social networks to grow approximately 200% by 2011.1
Consumers respond less to traditional media and advertising, and are moving towards consumer-to-consumer communication such as blogging, mobile messaging, comparison shopping sites, word-of mouth marketing, and peer-to-peer networks. Research states that 80% of consumers trust advice from friends online, representing three times as much trust than via traditional media . Further, one in
three Internet users visits Web sites containing user-generated content to help make purchase decisions. 2,3 This issue brief examines the opportunities that exist for marketers in social networking Web sites . Case profiles of companies, such as P&G, Toyota, JP Morgan Chase, Burger King, and Unilever exemplify how companies successfully leverage their marketing communications via social networking Web sites to achieve one or more of the following objectives:

• Improve customer understanding
• Promote issues of social concern
• Promote products and services
• Facilitate internal knowledge sharing
• Increase brand awareness

What is a Social Networking Web Site?

“Also known as a virtual community, a social network is a Web site on the Internet that brings people together in a
central location to talk, share ideas and interests, and make new friends” for Examples of social networking sites include:
1. Facebook.com
2. Myspace.com
3. Orkut.com
4. Google plus
5. Friendster.com
6. You tube.com
7. iBebo.com
8. twitter.com etc
As social networks grow, marketers view this medium as a potential tool for marketing communications. The following three trends indicate the growth of the social networking phenomenon.

Increase in number of people visiting networking Web sites
In recent years, social networking Web sites have experienced a spurt of growth in their number of visitors. A 2006 Nielsen/NetRatings study revealed that social networking Web sites experienced a 47% increase in visitor traffic between 2005 and 2006. During the same period, MySpace witnessed a 367% growth in the number of visitors.5,6
Over the past five years, the use of the Internet has increased, with interactive Web sites garnering the greatest attention. Multimedia Web sites that encourage visitors to participate in text, audio, still images, animation, video, and interactivity content forms and community Web sites , such as blogs, wikis, and social networking sites which provide visitors with interactive platforms to share common interests experienced higher growth in the number of unique visitors compared to e-mail, news, and games

Why to do marketing on social network?

  1. Improve Customer Understanding

Social networking sites offer brand owners new and increasingly targeted ways of discovering how consumers think, feel, and behave. Marketers can gain insight into consumer habits and interests by starting or participating in online forums for customers to share and learn from each other about products and services that companies offer.

Unilever successfully targeted a customer segment via a social networking Web site. As part of its marketing campaign, Unilever did not rely exclusively on social network marketing; instead, it utilized this marketing mechanism as one part of the media mix. To launch its Sunsilk brand in the United States, Unilever allocated approximately US$30 million to non traditional media campaigns to target its

desired customer segment, 25-year-old single women. Unilever focused on non traditional media to meet its target customer in multiple places such as movie theatres, bars, malls, and social networking sites. Unilever’s campaign, titled “Hairpay,” included three actors posing as stereotypical hair care specialists. The company set up profiles on MySpace for these specialists, through which it offered page visitors advice on hair care, dating, and women’s issues. This provided the company with a platform

wherein it could interact directly with its target customers and understand customers’ needs and habits.

Unilever’s MySpace profile attracted more than 4,000 online visitors in the first two weeks of the campaign eg 2 Xero x also used social networking Web sites to gain better customer insight to understand its customers’ requirements.

Xerox partnered with Second Life, a virtual world created and managed by Linden Labs, in which users play, work, and interact with each other using Internet-based characters or avatars . Second Life ’s substantial subscriber base spends millions of dollars in this virtual world. Users pay fees with actual

currency, which convert into Linden Bucks for online use. Citizens of Second Life can undertake various transactions online, and reap the profits through Second Life’s currency exchange.

Xerox views Second Life as a platform for meeting and interacting with potential and current customers. The company developed a customer-centric research and development model and involved customers in each step of their product development process. The virtual world offered potential for Xerox

scientists around the world to collaborate with customers and determine what features and products customers would like to see Xerox offer. Xerox used Second Life to launch 15 new products on “Xerox Innovation Island.” On the marketing side, Xerox provides 3D virtual demos that customers use to try products and services.

Interacting with online customers enabled Xerox’s experts to determine what features or products its customer’s wanted, setting the tone of its future marketing communications. Xerox attracted more than five million people to its Second Life virtual island.

The case snapshot below discusses Procter and Gamble’s (P&G) decision to create two premium social networking sites specifically to understand the purchasing habits of women. Procter and Gamble created an online forum for its female consumers to better understand their needs and purchasing habits. The company believed that a better understanding of women customers could enable more targeted offerings. P&G launched two Web sites aimed at creating online communities and forums for women to share their stories and learn from each other about issues such as breast cancer and careers. P&G links one of these Web sites to its People’s Choice Award and allows women to share their views on topics such as entertainment. The other site, called Capessa, provides a forum for women to discuss subjects of interest such as parenting, pregnancy, and weight loss. The company’s forayed into niche social networking, not to promote specific brands but to, undertake extensive market research of a particular customer.

Promote Issues of Social Concern

Social networking Web sites provide marketers with a well-profiled target audience who share common interests. Specifically, companies can use these Web sites as platforms to engage their environmental conscious customers in topics of common interest. Marketers can also use social networking sites to promote issues of social concern among their customer base.

The following case outlines Virgin Mobile’s strategy to partner with a popular social networking Web site to spread awareness and execute corporate social responsibility among that site’s visitors and Virgin Mobile’s users.

In 2006, Virgin Mobile USA , a mobile phone provider, promoted corporate social responsibility issues and provided teens and young adults with a platform for expressing their opinions on issues of social concern. Virgin mobile partnered with YouthNoise, a youth-based social networking Web site and Stand

up for Kids, a non profit organization focused on improving the lives of homeless children.

Social networking site YouthNoise provided Virgin Mobile a platform wherein its customers could interact with each other on a wide array of issues, share their points of view, and find ways to take action to help their communities. The site also connected the interests of customers with the work of non-profit organizations. Virgin Mobile employed various initiatives, such as allowing customers to download ringtones from its Web site and donating 100% of profits earned to non-profit organizations.

Through this partnership Virgin Mobile provides the opportunity for thousands of young adults to learn about homeless children and make a difference in their lives.

The case snapshot below profiles Toyota’s efforts to establish a Web site to drive brand awareness of its

environmentally friendly vehicle and promote corproate social responsibility.Toyota M otor Sales, USA, Inc., a vehicle manufacturer, launched a social networking Web site for its community of more than 600,000 hybrid, fuel efficient vehicles working on rechargeable battery, owners. Through this Web

site, Toyota provides a forum for its environmentally concerned hybrid owners to meet and discuss common green issues. Hybrid owners talk passionately about their vehicles, and through this community site, Toyota lets them share their reasons for driving an energy efficient hybrid car and provide statistics about themselves and their vehicles. The site als o includes fun features such as a gas savings calculator, and an

interactive distance map, which charts how fuel-efficient Toyota’s hybrid vehicles are as compared to gas-powered cars.

Promote Products and Services

As social networks provide customers with a platform to interact with one another, marketers can use these interactive Web sites to promote their products and services to a potentially larger target customer segment.

JP Morgan Chase marketed on a popular social networking site to promote its offerings to college students. JP Morgan Chase, a global financial services firm, sought to encourage the use

of credit cards among college students and foster loyalty within that target audience.

To promote the Chase credit card, the company partnered with America’s second largest social network, Facebook—an online community with a large percentage of students as members—rather than using its own Web site. Banner ads on Facebook invited members to join a special Chase network. A fter joining

a Chase online community on Facebook, customers could activate a credit card and read about improve their knowledge on prudent financial practices. Members of this online community also earned reward points for their activities, such as paying their bills on time, and could redeem these points for prizes such as TVs and DVDs.

The company supported the Facebook campaign with offline advertising designed to bring student customers to the Facebook site. JP Morgan also secured exclusivity as the official credit card sponsor for Facebook.

JP Morgan created the campaign on Facebook after conducting research that proved young people prefer to interact with brands in familiar surroundings.

Cisco partnered with Second Life to encourage communication with its business-to-business customers, launch products, and improve customer knowledge of its products and services.

Cisco, a supplier of networking equipment and network management for the Internet, uses Second Life, a virtual world where visitors can buy and sell products using virtual money, for business-to-business communications. In 2006, the company bought two Second Life islands to conduct education and

training o n Second Life, receive feedback from customers on products, and perform presentations using PowerPoint, video, and streaming audio.

The first island, Cisco Systems, features an amphitheater for mass tutorials and provides product information and product launch details. Cisco’s second island, Cisco Island, provides a community-based platform meant to take encourage people to discuss its products. This island enables the company to conduct classes , executive meetings, and provide personal technical support to customers.

Second Life enables Cisco to take advantage of the insight they gain from customer interaction. Cisco’s customer-focused islands allow consumers to access product information, listen in on executive briefings, and inform of their preferences.

Facilitate Internal Knowledge Sharing

Social Web sites provide a forum for companies to engage with geographically dispersed employees. Global companies can also use these online community Web sites as effective recruiting tools.

The case profiled below discusses IBM’s strategy of using social networking Web sites to promote internal employee interaction and facilitate efficient knowledge transfer. In 2006, IBM, a multinational computer technology company, partnered with Second Life, a 3D virtual world where visitors can socialize, connect, and create user-generated content, to establish a virtual business for IBM’s employees and customers.

The company bought 12 virtual Second Life islands to serve as a virtual meeting place for current and former employees, an information center for marketing IBM’s services to customers, and a virtual retail area for IBM customers to meet and discuss products. The company aimed to use its virtual world as a

communications tool, where its executives, geographically dispersed employees, and customers could meet and discuss its products. The company planned to use Second Life as a meeting platform to host virtual employee meetings and conferences to share knowledge internally. IBM uses a chat room environment to generate fresh ideas, bringing together employees, business partners, and customers.

Along with giving its geographically dispersed employee base a common forum to meet, IBM uses Second Life to engage customers in discussions and improve customer service.

Increase Brand Awareness

A 2007 study stated that advertisers engage consumers on social networking sites to generate brand awareness and affinity. As consumers frequently visit social networking Web sites, these sites provide an attractive and cost effective medium for branding and creating awareness.

Burger King marketed on a popular social networking site MySpace to increase its brand awareness among its target population, who frequently visited that Web site. Burger King, an international chain of fast food restaurants, rolled out a campaign on social networking Web site MySpace to reach its target population primarily composed of younger demographics.

The firm sponsored a special page reflecting the company’s U.S. marketing slogan and used popular Burger King mascot, The King. Burger King also teamed up with Fox Entertainment Group to offer popular Fox programs , such as 24 and American Dad, free of charge to the 75 million members of MySpace.

As a result, an increasing number of MySpace members visited Burger King’s page to download free recordings of their favorite Fox shows. Burger King amassed more than 120,000 “friends” who associate themselves with The King’s profile.

Honda partnered with a social networking Web site MySpace to allow consumers to create their own user generated campaigns for Honda’s new automobile. This helped the company generate interest for its new automobile and increase brand awareness.

Automobile manufacturer Honda decided to allow its customers to shape its marketing message for its new Honda Element SC in 2007. The company encouraged consumers to form user-generated online marketing campaigns. The advertising campaign for the Element SC model included a variety of animal

characters, of which one character, Gil the Crab, resonated well with the audience and gained immense popularity.

The company decided to create a Gil the Crab profile page on MySpace. Instead of using the online profile to endorse its Element SC , Honda promoted its Gil the Crab as a typical social networking visitor. Gil the Crab wrote blogs, comments, and interacted with other visitors on its profile page.

As a result of this campaign, more than 100,000 people visited Honda’s MySpace page to discuss the Element SC.

 

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