Saturday, July 18, 2009

Social Media is Not Just an Option

Social Media is a necessity. Even with the downturn in our economy, (Or perhaps because of), more and more people are online. And we are using the internet to get information and to share information.

This week I did a quick poll on Twitter asking what type of connection they were using. The result:

  • Laptop 60%
  • Smartphone 40%
  • Desktop 0%
Because of the mobility of internet access, along with the increased dependence on the internet, this is a trend, not a fad. Mediapost wrote the following about social media & brands:

Social media sites aren't where most people go to get recommendations on products and services. Even so, marketers must still try to reach consumers through social media since that's where conversations about brands are increasingly taking place.

That's one of the key conclusions of a new study on social influence marketing by interactive agency Razorfish. The report released today also includes a new index developed by the firm which scores brands based on how they're being discussed online.

For the study, Razorfish surveyed 1,000 consumers split evenly between active social network users and a broader sample of the general population. Overall, 80% belonged to at least one social network and 40% were active in two.

The findings revealed a paradox, though, in that 62% say they don't seek out brand opinions via social media but 71% share recommendations on products and services on social sites at least once every few months.

What gives? The study suggests people are influencing each others' purchase decisions even when they're not consciously asking for purchase advice.

For that reason, brands have to participate directly in these online discussions or face growing irrelevance, says Razorfish. But they have to bring credible voices that "need to be more engaging, personal, humble, authentic and participatory than traditional advertising images," advises the report.

Establishing an authentic presence in social media is where many marketers fall down, according to Shiv Singh, vice president and global social media lead at Razorfish. "Most brands aren't doing it successfully," he said in an interview last week.

Among the exceptions he points to is "Dunkin' Dave," aka Dave Puner, communications manager for Dunkin' Brands Inc., who has become the company's voice on Twitter. He's created a genial, informal persona through the microblogging service that marks a departure from traditional top-down marketing.

At the same time, Singh acknowledged it can be difficult for a corporation to entrust individual, sometimes junior, employees with such a direct role in shaping its brand. Not Pizza Hut. The restaurant chain gained attention this spring when it announced it was looking for a summer "Twintern" to be its voice on Twitter.

Razorfish advises that all brands should at least grasp how social media plays into purchase decisions. The study indicates that "social influencers," people active on social platforms, tend to hold the most sway during the consideration phase leading up to a purchase. Close family and friends play by far the biggest roles at the initial awareness and final "action" stages relating to a purchase.

Corporate bloggers typically rated at or near the bottom among influencers at each stage of the process.

When it came to specific industry sectors that appealed to users in social media, music and entertainment topped the list among categories that also included auto, retail and apparel, travel, home and garden, automotive and financial services. Only 14% were likely to interact with a financial brand compared to 46% for an entertainment one.

"Our data suggests that brands need to do a much better job engaging consumers on social platforms, as witnessed by the lukewarm reception and high level of indifference consumers have about brands in social media," states the report.

To that end, Singh said brand pages on sites like Facebook should be part of a company's overall marketing strategy and not treated as an afterthought. "If not, it's a recipe for disaster," he said. The study found that 29% of survey participants associated themselves with specific brands on social networks. And among "fans" of brand pages, 57% visited every few months or weeks.

To help brands gauge their social media standing, Razorfish also introduced the SIM (Social Influence Marketing) Score. Developed with TNS Cymfony the Keller Fay Group, the index attempts to measure a brand's reach and "likeability" based on how it's being discussed on social networks like MySpace, Facebook and YouTube. Offline word-of-mouth is also factored in.

The basic formula for deriving a brand's SIM Score involves dividing "net sentiment" for a brand by the net sentiment for its industry group. (Net sentiment = positive + neutral conversations - negative conversations/total conversations.)

Looking at several companies in the auto industry using this method Ford came out on top with a score of 31, beating out Honda (30), Toyota (18), Nissan (15) and GM (5). Ouch.

Razorfish also used the same formula to rate the auto, finance, pharmaceutical and media industries overall. Auto came out way ahead with a score of 92, compared to 6.3, 0.96, and 0.33 for the other sectors respectively, mainly as a result of simply being discussed online far more than the rest.

There were 2.1 million auto-related conversations compared to only about 200,000 for the other categories combined. "This is surprising considering the fact that the financial services space underwent immense upheaval in the last six months of 2008," noted the Razorfish study.


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