According to AllFacebook.com (touted as the Unofficial Facebook Resource), Starbucks (14,748,880 as of 10/8/10), Coca-Cola (13,262,027), Oreo cookie (10,693,331) and Skittles (10,289,154) have the highest number of fans (technically number of people who like the company/brand and link to it like a friend) of any non entertainment company or brand. They are the only consumer brands in the top 30, and all have done extensive marketing and promotion to attain their lofty status. But what does it mean for a company to have millions of fans? How does it generate value? Can you calculate an ROI?
Certainly there is some tangible value to having fans as a company or brand. Starbucks leverages their Facebook page to provide special offers to drive store traffic, get customer feedback, tout events (Pumpkin Spice Latte photo contest anyone?), and engage customers in product development and promotions. They also use it to tout their social good advocacy efforts (as does Coke). Interestingly enough, they don't push you to "friend" them. Coke, Oreo, and Skittles all route you through their app page which requires you to friend them, allowing them to see your profile and friends. The applications are fun (Create your own DRSL team on the Oreo cookie page , Fan downloads and contests on the Coke site, and Mob the Rainbow on Skittles), but based on the numbers only a small percentage of the fans (less than 2%) seem to be participating. More telling, the Wall comments (which would get exposure on fan pages to their friends) are relatively sparse given the number of fans. While all of these sites are adding friends at a rapid click, how is it impacting their sales and brand?
The key to social networking and engagement is not the number of fans, but their level of engagement. How often are they interacting with the brand? What are they posting about their experience with you on their own walls? Are they using other social networking channels such as Twitter to spread the word about an app or offer? These metrics are far more important that the number of fans who "friended" a brand to enter a sweepstakes or get a discount. The true success of social networking for a brand or company is to provide a forum for brand advocates to communicate with you and influence others into behaviors desired by the company. At 1800flowers.com, we started a "Spot a Mom" movement last year with bloggers which we spread to Facebook and Twitter. The goal was to get people to "spot" different types of moms (Green thumb mom, Pet lover mom, Mom of a mom, etc.) leading up to Mother's Day, as part of our marketing strategy to leave no mom behind and ensure all of them get flowers on the highest transaction day of the year for the Floral business. While we only had around 25,000 fans, we were able to influence over 6 million potential customers and exceeded our projected business goals by 9%.
The key with Social Networking is to connect and marshal your core, loyal, passionate fans to get the word out and influence their friends. Whether that's 6 people or 6 million, those are the fans you truly want to be your "friend".
Friday, October 8, 2010
Friday, October 1, 2010
P-Comm - Participatory Commerce and the next wave of Social Marketing
Its been called Crowdsourcing, Social Merchandising, Social commerce, and a host of other names. My favorite name for it is Participatory Commerce (P-Comm), which I'd love to take credit for (I will take credit for the shortened version - P-Comm), but Mark Pincus (founder of Tribe Networks and Zynga, which counts Mafia Wars, Cafe World and Farmville among its addictive online games) coined the phrase in October of 2005. Essentially, it means that the classic one way model of the marketer developing his/her product or service in a lab or back room, and then using mass marketing with a lowest common denominator messaging strategy to sell it to consumers is quickly disappearing in several categories.
In the era of social networking, everyone is not only a critic, but can also become part of the product and marketing process. Some of the key aspects of Twitter reflect P-Comm, as their users created or defined many of the key elements of the service (including the name Tweets, #tags, and retweeting). The founders stepped back and let the users decide how their service should evolve, and then fostered initiatives that seemed to gain traction. Data indicates that ratings and reviews improves conversion rates on E-Commerce sites, as 70% of online consumers indicated they trusted opinions posted by other visitors (Nielsen Global Online Consumer Survey, 7/09). Blogs attract over 80 Million unique visitors, and mommy bloggers have become a key marketing partner for advertisers looking to reach mothers (At 1800flowers.com, we worked with Mommy bloggers to launch our Spot a Mom campaign last year, with strong results). Youtube has enabled anyone with a digital camera (or digital phone) to create their own mini-movies, and the world is a better place now that everyone can share the antics of their adorable pets. Last, but certainly not least, Facebook has reconnected millions of former roommates, boyfriends, girlfriends, and stalkers while providing a steady stream of what is going on in their lives.
P-Comm will take social networking and E-Commerce to the next level. How about asking your customers to create a new product or service for your company? Or asking them what offer they'd find compelling? Maybe they could develop your logo as part of a contest? We've already seen user generated commercials which advertisers have aired on the Superbowl, so why not outsource your advertising to your most loyal customers? The opportunities to have your customers create products, services, offers, and messages that are relevant to them turns one way marketing around and creates ownership. And if customers feel part of the process of creating and marketing your product or service, they'll be more loyal and more likely to provide the most effective marketing ever created - positive word of mouth.
In the era of social networking, everyone is not only a critic, but can also become part of the product and marketing process. Some of the key aspects of Twitter reflect P-Comm, as their users created or defined many of the key elements of the service (including the name Tweets, #tags, and retweeting). The founders stepped back and let the users decide how their service should evolve, and then fostered initiatives that seemed to gain traction. Data indicates that ratings and reviews improves conversion rates on E-Commerce sites, as 70% of online consumers indicated they trusted opinions posted by other visitors (Nielsen Global Online Consumer Survey, 7/09). Blogs attract over 80 Million unique visitors, and mommy bloggers have become a key marketing partner for advertisers looking to reach mothers (At 1800flowers.com, we worked with Mommy bloggers to launch our Spot a Mom campaign last year, with strong results). Youtube has enabled anyone with a digital camera (or digital phone) to create their own mini-movies, and the world is a better place now that everyone can share the antics of their adorable pets. Last, but certainly not least, Facebook has reconnected millions of former roommates, boyfriends, girlfriends, and stalkers while providing a steady stream of what is going on in their lives.
P-Comm will take social networking and E-Commerce to the next level. How about asking your customers to create a new product or service for your company? Or asking them what offer they'd find compelling? Maybe they could develop your logo as part of a contest? We've already seen user generated commercials which advertisers have aired on the Superbowl, so why not outsource your advertising to your most loyal customers? The opportunities to have your customers create products, services, offers, and messages that are relevant to them turns one way marketing around and creates ownership. And if customers feel part of the process of creating and marketing your product or service, they'll be more loyal and more likely to provide the most effective marketing ever created - positive word of mouth.
Friday, September 24, 2010
ROT (Return on Time)
To paraphrase the Rolling Stones, "Time, is NOT on my side". With multiple e-mail accounts, Facebook updates, Tweets, Texting, cell calls, and, oh by the way, the demands of the Real World, we don't have enough time. Same is true at work. I recently calculated I was spending over 5 hours a day just on e-mail (I'm fixing that one). So with time becoming an increasingly rare commodity, it is as important to look at ROT when evaluating an investment as it is to look at ROI. Exploring that new product or partnership, revising that presentation one more time, having a meeting to discuss an issue - are they worth it? You need to look at the time spent on something through the same lens as spending hard dollars. Because the opportunity cost of your time might be even more valuable than an out of pocket investment. Are you getting the time to just sit back and think about how to move your business forward? Are you meeting with a vendor who just might be the next Google or Facebook and would offer you to get you in on the ground floor? Is there an agency who might have a game changing idea for you business? You'll only know if you meet with them, and you'll only have time to meet with them if you spend less time on low ROT activities.
Friday, September 17, 2010
Go to where the people are
Retailing hasn't always been as simple as setting up a store, either physical or virtual, stocking up with merchandise that people wanted at a price they were willing to pay, and then marketing to let customers know you were open for business. Centuries ago, merchants had to go where the people were. They'd stock carts with goods that weren't readily available and then go from town to town selling them, pricing them at whatever price they thought the customer was willing or could afford to pay. They'd go to town squares, churches, synagogues, barn raisings - wherever people gathered - so they could sell what they had brought into town. They'd get to know their customers, building relationships over the years. They'd be welcomed as an honorary member of the village (unless someone felt cheated, in which case they'd be run out of town). It was social, relationship based commerce, and it continued with Avon, Tupperware, Pampered Chef, and other door to door and house party retailers.
In the modern age, the rise of mass merchandisers changed mobile commerce to destination commerce. People started going to retailers, searching out what they want to buy rather than waiting for it to show up at their door. Retailers knew that if they marketed, they would come (or they could send them a catalog so they could shop at home), and having a relationship with your customer was secondary to having a range of products at appropriate prices. The Internet started the same way. Sites were built, banner ads were purchased, people came and shopped. Like catalogs, they used e-mail and affiliate programs to reach customers in their virtual homes or at sites they were surfing, always bringing them back to their site store.
Now that the the Social Web has transcended teens to include baby boomers, it is time to consider going back to bringing the store to where the people are and building community based relationships. Stores need to be within social networking sites, offering products relevant to customers while they interacting with them in their virtual villages. You need to be welcomed in, allowing people to discuss what you are offering, both positive and negative, and even allowing people to haggle if they want. But by engaging with them in their "town square", you have an opportunity to bring back the connection the shop cart owner had with his customers. It is the era of "social commerce". How will your business adapt?
In the modern age, the rise of mass merchandisers changed mobile commerce to destination commerce. People started going to retailers, searching out what they want to buy rather than waiting for it to show up at their door. Retailers knew that if they marketed, they would come (or they could send them a catalog so they could shop at home), and having a relationship with your customer was secondary to having a range of products at appropriate prices. The Internet started the same way. Sites were built, banner ads were purchased, people came and shopped. Like catalogs, they used e-mail and affiliate programs to reach customers in their virtual homes or at sites they were surfing, always bringing them back to their site store.
Now that the the Social Web has transcended teens to include baby boomers, it is time to consider going back to bringing the store to where the people are and building community based relationships. Stores need to be within social networking sites, offering products relevant to customers while they interacting with them in their virtual villages. You need to be welcomed in, allowing people to discuss what you are offering, both positive and negative, and even allowing people to haggle if they want. But by engaging with them in their "town square", you have an opportunity to bring back the connection the shop cart owner had with his customers. It is the era of "social commerce". How will your business adapt?
Friday, September 10, 2010
The future of content
Leveraging content assets across new, revenue generating distribution channels is a critical challenge for media and entertainment companies as the nature of media consumption shifts. The days of consumers enjoying TV, music, video, film, radio, and print content in the forms created by media companies, at the times programmers or editors wanted to deliver the content, and at the price the company choose to charge for it have faded rapidly over the last 10 years. It started with print media, as newspaper circulation eroded, replaced by real time Internet news sites and ultimately customized, on demand or streamed news feeds. It was followed by the record industry, which ignored customer demand for downloadable, individual songs and as a result saw a rapid decline in CD sales. Radio listenership has declined, with the rise in pod casts, ipods, and streaming music. Finally, over the last two years, it has expanded to video content, which is quickly shifting to the web and mobile and gaming platforms.
What this means for media companies is that they need to rethink their content and how to distribute it. Customers want their media on demand or streamed to them, to their computer and, perhaps more importantly, their mobile device. They want it on their schedule, not the media companies. They want it in time frames that work for them - 2 minutes, 5 minutes, 30 seconds. And they start with the assumption that if there is advertising (and sometimes even if there isn't), it should be free. For publishers facing significantly lower online CPM's, which are under pressure by ever expanding inventory, the math of purely ad supported online content doesn't currently work except for niche and technology oriented content. For publishers to succeed, they need to revalue their content by considering charging for it. Paid circulation magazines and newspapers generally commended higher rates than free publications because they illustrated customer loyalty and engagement while helping to defer costs. As content migrates online, smart publishers will figure out how to successfully parse their content and get readers to pay for at least some of it, creating a second revenue stream.
What this means for media companies is that they need to rethink their content and how to distribute it. Customers want their media on demand or streamed to them, to their computer and, perhaps more importantly, their mobile device. They want it on their schedule, not the media companies. They want it in time frames that work for them - 2 minutes, 5 minutes, 30 seconds. And they start with the assumption that if there is advertising (and sometimes even if there isn't), it should be free. For publishers facing significantly lower online CPM's, which are under pressure by ever expanding inventory, the math of purely ad supported online content doesn't currently work except for niche and technology oriented content. For publishers to succeed, they need to revalue their content by considering charging for it. Paid circulation magazines and newspapers generally commended higher rates than free publications because they illustrated customer loyalty and engagement while helping to defer costs. As content migrates online, smart publishers will figure out how to successfully parse their content and get readers to pay for at least some of it, creating a second revenue stream.
Friday, March 26, 2010
Social Media and E-Commerce - Fad or Fundamental Change - Interview with Steven Groves and Guy Powell
Check out my interview on "Social Media and E-Commerce - Fad or Fundamental Change" at http://www.iirusa.com/upload/wysiwyg/2010-M-Div/M2208/downloads/MeasureUp_LewisGoldman.pdf
Wednesday, January 7, 2009
Why nytimes.com should charge a subscription fee
The New York Times is one of mankind's great contributions. The paper not only features outstanding writing, terrific investigative reporting, and engaging, interesting, intelligent opinions and news, it does so consistently every day. It is one of a handful of newspapers that provides content so truly unique and special that people across the country (and throughout the world), not just from New York, are willing to pay for it with their own remote subscriptions. Except they don't have to. Despite the fact the paper is for sale in virtually every major city across the country (and many worldwide), subscriptions for the Times, like virtually every other newspaper, have been declining. With the recession and the related decrease in advertising revenue, and the rise in paper and other costs, the Times has gotten squeezed and as a result has sold assets and cut back staff. Thus the paper's competitive advantage, its world class reporters, are under siege as revenue decreases while costs have risen. Online ad revenue hasn't come close to picking up the slack, and the economy, once again, hasn't helped with online sponsorships.
My brother-in-law lives in Texas, graduated from Stanford, and subscribed to the Times for years until he decided that it wasn't worth it. Every article, op ed piece, review, photo (and many additional articles, pictures, videos, as well as blogs not available in the print edition) could be viewed for free at nytimes.com. In addition, the archives are free, so he can look up any article written over the last 20 plus years on any topic with the search engine. Going to Italy and want to look up that story you saw a few months (years) back on Turin - you can find it in seconds.
My mother once said (in another context), why buy the cow if they're giving away the milk for free. Rupert Murdoch announced after he purchased the Wall St. Journal that he was going to eliminate subscriptions and build up the advertising revenue by opening up wsj.com and building traffic. Then he started looking at the numbers, and even before the economy tanked not only decided to continue with the hybrid free/paid business model, he invested in pushing subscriptions. The fact is there is no Internet law or sacred truth that all content should be free - and in fact there is significant technical and business to business content that is currently offered only with a subscription. The Times has terrific content which people should (and will) pay for, and the company needs that revenue stream to insure that they can continue to invest the resources to deliver their best in class product every day. In fact, the Web has added the additional burden of delivering updates and new content as news happens through the day and night, requiring more journalists to cover a truly 24 hour news cycle, not to mention managing blogs and adding videos, both of which are unique to the web.
As you can see, I love the New York Times. I'd hate to think that the product's best years are behind it, and that we will lose one of the best sources of news and analysis in the world. So if they charge a subscription fee, I'm happy to be one of the first to sign up.
My brother-in-law lives in Texas, graduated from Stanford, and subscribed to the Times for years until he decided that it wasn't worth it. Every article, op ed piece, review, photo (and many additional articles, pictures, videos, as well as blogs not available in the print edition) could be viewed for free at nytimes.com. In addition, the archives are free, so he can look up any article written over the last 20 plus years on any topic with the search engine. Going to Italy and want to look up that story you saw a few months (years) back on Turin - you can find it in seconds.
My mother once said (in another context), why buy the cow if they're giving away the milk for free. Rupert Murdoch announced after he purchased the Wall St. Journal that he was going to eliminate subscriptions and build up the advertising revenue by opening up wsj.com and building traffic. Then he started looking at the numbers, and even before the economy tanked not only decided to continue with the hybrid free/paid business model, he invested in pushing subscriptions. The fact is there is no Internet law or sacred truth that all content should be free - and in fact there is significant technical and business to business content that is currently offered only with a subscription. The Times has terrific content which people should (and will) pay for, and the company needs that revenue stream to insure that they can continue to invest the resources to deliver their best in class product every day. In fact, the Web has added the additional burden of delivering updates and new content as news happens through the day and night, requiring more journalists to cover a truly 24 hour news cycle, not to mention managing blogs and adding videos, both of which are unique to the web.
As you can see, I love the New York Times. I'd hate to think that the product's best years are behind it, and that we will lose one of the best sources of news and analysis in the world. So if they charge a subscription fee, I'm happy to be one of the first to sign up.
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