Hoover's Whitepaper: How Is Social Media Changing The Face Of Marketing? By Katie Ford

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How is Social Media Changing the Face of Marketing? By Katie Ford For years, traditional marketing involved a one-way communication effort. Through public relations and advertising campaigns, companies put forth value propositions to generate market appeal, attract and retain customers, and drive sales. However, with the rise of social media such as blogs, online forums, and social networks like MySpace and Facebook, the voice of the consumer is quickly drowning out those carefully crafted company messages. With 3.5 million brand-related conversations taking place online daily in the United States, companies are realizing that marketing to today’s technology-driven consumers means engaging in two-way communication.

INSIDE Why Companies Should Include Social Media..................1

“With the rise of social media, the transparency of information is increasing and companies are not able to hide behind their branding experts any longer,” says Micha Mikailian, founder and CEO of eBoost Marketing in San Diego, Calif. “The successful companies of the future are going to have to establish a sense of community with their customers, listen to their concerns, and get them involved in the company.”

Social Media Rules of Engagement............................... 2

Social Media Tools: Are Indeed, with democratization of information through social media, marketers are finding that consumers expect to engage in dialogue with brands rather than merely listen passively, says Eric Weaver, president of Brand Dialogue in Seattle, Wash. “Marketers who leverage these tools are showing their markets that they are not merely window-dressing when it comes to expressing an interest in their customers,” Weaver says.

Some Better Than Others?..... 2

Companies Least Likely To Benefit from Social Media........ 3

Why Should Companies Include Social Media in Their Marketing Plans?

Measuring Social Media

Experts say that social media platforms are ideal for building community and soliciting consumer feedback. Forward-thinking companies are leveraging blogs, in particular, to open communication lines between product developers and end users. Like virtual water coolers, these blogs become a meeting point for troubleshooting, relaying feedback, and offering ideas for improvement, which can result in products and services that are more relevant and useful to the consumer. Not only does this new level of “conversation marketing” enhance customer satisfaction, but it also builds community. End users feel they are a part of the company’s process and become evangelists for the brand.

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Summary.................................... 3

“Brands don’t have to spend money to attract people; they just have to figure out how they can add value to the existing conversations that are taking place online,” says Kim Gregson, an assistant professor in communications at Ithaca College in New York. Adds Weaver: “If marketers value their customers, they must consider social media as part of their brand strategy. Any Google search — typically the first place customers go to find out more about your brand — will not only turn up your official company Web site, but it will likely show customer-generated commentary on your brand — both positive and negative. Marketers who ignore this community conversation do so at their brand’s peril.” Adds Weaver: “If marketers value their customers, they must consider social media as part of their brand strategy. Any Google search — typically the first place customers go to find out more about your brand — will not only turn up your official company Web site, but it will likely show customer-generated commentary on your brand — both positive and negative.

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Hoover’s White Paper: A Guide to Marketing in the Age of Social Media

Marketers who ignore this community conversation do so at their brand’s peril.”

positive and negative commentary. Use it to learn about your market and your brand impression.

Mikailian says ignoring the dialogue opens the door for your competitors to forge more meaningful relationships with your customers. “However, it’s important to recognize that social media is more than a marketing tactic, and its success is dependent on integrating it with a genuinely open and customercentric company culture.”

4. Draw up engagement boundaries. When should you respond to a negative critique? When should you be silent? When should you ban someone from your corporate blog? Determine how you will behave in the public eye – in other words, when you’ll assert control and when you’ll let the market be itself.

What are the Rules of Engagement for Marketing through Social Media? Though technology-based companies were the pioneers of engaging consumers through social media, many household consumer brands have taken the leap now as well. From Facebook profiles to podcasts to virtual stores in the Second Life virtual world, mainstream companies like Coca-Cola, Ford Motor Co., Toyota, Whirlpool, and Target are tapping into the online action. These companies have learned – and some have learned the hard way – that promoting your brand through social media requires chucking out old marketing rules of thumb and adopting new rules of engagement. Adages like “never let them see you sweat” are mantras of yesterday. “Marketers of old generations were taught to try to displease as few people as possible and to be appropriate and acceptable to as wide an audience as possible, in hopes of maximizing revenue opportunities,” Weaver says. “In other words: high level of polish, avoid dissent, and control your image.” No more, says Weaver. Generation X and Y marketers have learned to share more with others and to worry less about façade and more about substance. “To me, they seem less concerned about appearances and more interested in being understood. They prefer to be themselves and to find others with shared outlooks and affinities rather than trying to be all things to all people,” he says. “With the search and affinity tools inherent in social media, younger marketers seem to embrace these tools more readily, compared to older marketers who are more likely to vet image and copy through management, public relations, and legal departments.” According to Weaver, companies that decide to leverage social media in their marketing plans should do four things: 1. Be transparent and honest. Consumers often assume marketers are self-interested. By being transparent, you curtail doubt. 2. Ask your visitors to provide feedback on your communication efforts. These tools allow you to easily gather feedback. 3. Be fearless. Many marketers will cringe when they get their first scathingly negative comment. You will receive both

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Cory Treffiletti, president and managing partner of marketing capital firm Catalyst in San Francisco, Calif., says a surefire way to nip negative commentary in the world of social media is to make sure your promise matches your experience. However, in the event that you uncover unfavorable comments floating in virtual space, damage control in social media operates pretty much like it would with any other medium. You must catch the negative commentary early on, listen carefully to what is being said, and then react accordingly. “If you ignore it, the momentum of the commentary will only get stronger and worse,” Treffiletti says. “Even though you might be drawing more attention to the problem initially, you’ll actually increase customer loyalty if you address it and respond. That says to the consumer, ‘We’re working on it. We hear you.’ And if you can’t change whatever prompted the negative comments, you have an opportunity to explain to your customers why that change can’t be made. This type of proactive engagement with your customers makes you a leader, not a follower.” John Cass, author of “Strategies and Tools for Corporate Blogging,” says that being genuine with your customers is the crux of success in social media. In fact, those who have tried to manipulate the system in their favor have given rise to negative new terms. One example is “astroturfing” -- the practice of representing oneself as a disinterested member of an online community when you’re actually paid by a company to post favorable comments. Another example is “ghost blogging” -- when the person doing the writing on a blog is not the showcased personality, but a hired hand. Says Cass: “I think it’s fine if, for instance, an executive gets his blogging entry ideas from peers, but he should be the only one doing the writing in the end.”

Are Certain Types of Social Media Tools Better than Others? As with any marketing plan, it’s important to take the time to study and participate in all types of social media as an audience member before engaging in marketing to those audiences. Missteps are painful — and very public. Treffiletti says that the core marketing principles of yesterday apply to marketing to tech-savvy consumers today: Identify your audience and then find the best way to reach the largest group with minimal waste. “As a general rule, bloggers are very

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Hoover’s White Paper: A Guide to Marketing in the Age of Social Media

targeted to niche groups, whereas social networks tend to be very broad,” he adds.

online metrics, such as page views, click-throughs, and number of downloads no longer apply.

Just as marketers study the media kits of newsstand publications before placing an advertisement, they should also find out which blogs, Web sites, or social networks their current and potential customers are engaging in.

“How do you know that someone downloaded the entire podcast? How do you know they listened to the entire podcast?” Weaver says. “Also, many metrics are based upon the end conclusion of a marketing effort: a sales conversion. Yet, marketing through social media is as much about building affinity as it is about a conversion. Given this, many marketers are advocating measuring social media from the perspective of outcomes: awareness or conversion. Rather than trying to measure downloads or blog comments, many suggest focusing on measuring overall results.”

Audio or video podcasts can be ideal for brands that need a personal touch — a “face” to which consumers can relate. “They can create a stronger personal connection between the team members behind the brand and their audience,” Weaver says. “These are great channels for brands that need to show more personality. However, audience quality expectations are high, so devote the resources it takes to express your brand well.” (This doesn’t mean you always need Hollywood-caliber production values, but you should do better than a shaky handheld camera with scratchy audio.) Social networks can be good channels for disseminating special offers and company information that might not be worthy of a press release but is still interesting enough to share with consumers on a particular network. “Like viral videos, social networks make it easy to spread interesting content to friends,” Weaver says. “This content will have a natural advantage in breaking through market noise, and if it’s a positive impression, it will be given more credibility than highly crafted marketing messages.”

What companies are less likely to benefit from marketing through social media? Highly regulated industries such as health care are less likely to leverage social media as a marketing tool, simply because of all the red tape surrounding company information and documentation. More than likely, the rules would put a kibosh on any real dialogue that could happen with consumers. Gregson of Ithaca College says companies that aren’t willing to put the personnel and time behind the effort should also refrain from leveraging social media. “It takes time to grow a social network and you need to give people a reason to belong — information, access to products, access to behind-the-scenes industry or company gossip,” she says. “Companies [that have set up a store] in Second Life discovered that you can’t just ‘build it and they will come.’ They might come once just to see what you did, but there has to be a reason to come back. The same is true for a Facebook page, a MySpace profile, or a blog. There needs to be good content and it needs to be updated regularly.”

Yet Gregson says some of the traditional metrics are still worth tracking and noting. She says you can measure the spread of your message by the number of bloggers who mention your company, Web sites that link to your site, friends or contacts on your social network page, and requests for more information.

Summary Social media is changing the face of marketing. The carefully crafted messages of yesterday are giving way to a more open dialogue between companies and consumers. As more of the marketplace embraces communication through blogs, online forums, and social networks, more consumers are giving unfettered feedback about companies and their products every day. Companies that don’t participate in these conversations are neglecting the reputation of their brand and opening the door for competitors to come in and build more meaningful relationships with their customers. Before engaging in social media, companies need to explore the various options available and decide which methods will likely have the greatest impact on their target audience. No matter which avenue they choose -- a blog, a podcast, a store in a virtual world, or whatever else -- marketers need to think ahead and be sure they’re devoting the appropriate resources to ensure that their content is relevant, engaging, and frequently refreshed. That’s how to fulfill every marketer’s dream -- by keeping consumers coming back for more.

About Hoover’s, Inc. Hoover’s puts you on the fastest path to business. We deliver comprehensive insight and analysis about the companies, industries, and people that drive the economy. Hoover’s global database of 23 million companies, 600 industries, and 29 million executives provides you access to powerful research and networking tools to find and connect to the right people to get business done. Learn more at www.hoovers.com.

How do you measure ROI with social media marketing? That is the (multi-)million-dollar question, indeed. Opinions vary in this burgeoning field, but generally speaking, traditional Hoover’s, Inc.

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