Tapping the Scale of Social Networking

MySpace, Facebook, LinkedIn… the list of social networks seems as deep as the long tail of digital music. Social networks are everywhere and have been the darling of digital marketing over the last couple years. But why do digital marketers want their piece of the social pie? A few simple words… achievement of scale.

 

Why do national and international marketers still rely on television for the vast majority of their marketing dollars when everyone knows that TV audiences are shrinking, significant numbers of people are viewing additional media while watching TV so they are distracted and many people completely skip commercials using their DVRs? Marketers are looking for scale… the most bang for the marketing buck. The theory is that the more marketers bombard vast numbers of people with a compelling message, a good percentage of those people have to be paying attention. Then, a percentage of those people paying attention will take action and investigate the product or service. Then, an even smaller number will make the decision to purchase. By starting with such a large market (up to tens of millions of people depending on where the TV spot is running), marketers can quickly move the sales needle even if the medium is less effective now than it was even a year ago. So, how does this relate to social networks? Social networks are getting eyeballs in vast numbers, which is why popular networks like MySpace and Facebook have tremendously high book values. Marketers want numbers, and in theory, social networks can deliver those numbers.

 

From business-to-business networks like ITtoolbox (and its 1.3 million members) to professional networks like LinkedIn to networks of mommy bloggers, social networks are everywhere and consumers, professionals and businesses are using them. Not only are marketers taking advantage by advertising on networks like MySpace and creating applications for Facebook, such as Visa creating the Visa Business network for small businesses on Facebook, but they are also creating their own networks. For example, brands such as Luvs diapers are engaging consumers by allowing them (mothers of young children in the case of Luvs) to share their views on controversial parenting topics. The theory being that the more engaged your consumers are in conversation (with your brand as the backdrop), the more positive their view of your brand.

 

Even mobile consumers are getting involved in social networking. Based on multiple sources and its own analysis, eMarketer predicts that more than 800 million people will use their mobile phones to access social networks by 2012.

 

So, consumers are using social networks. So, what? Well, marketers have realized that if they can tap into networks, maybe they can harness the power of word-of-mouth in the digital space. Advertising programs on the likes of MySpace and Facebook haven’t been overly successful cash generators for the networks, however marketers are trying to find any way they can to gain access to the large amount of eyeballs on these sites. The successful marketers have figured out a way to use the networks themselves rather than relying on traditional digital mediums such as banner ads. One good example of a marketer harnessing a popular network was Toyota’s use of YouTube. Toyota posted “consumer” videos of people driving the Corolla. These “consumer” videos were actually shot by professionals using hand-held cameras to make it appear as if they were actual consumer videos, but it worked. A significant number of consumers mentioned the videos when they went to dealerships to test-drive the Corolla. Toyota tapped the network with videos compelling enough to pass along to friends and family… the digital world’s version of word-of-mouth marketing.

 

Social networks are used by millions and millions of people, offering the potential digital scale that marketers are craving. Banner ads can offer scale as well, but tapping (or even creating) a vast social network can lead to pass-along the likes of word-of-mouth, as well as high brand affinity and increased purchase intent. Many of you reading this article are a member of a social network. Whether it’s LinkedIn, Facebook or some other professional, business-to-business or purely social network, the number of members continues to grow at a furious pace. Are you tapping into social networks to grow your brand? Most likely the leader in your market is.

B2B Information Technology

Properly harnessing Information Technology in today’s economy can give your company a significant number of benefits, but only if it is implemented properly. IT can increase business process complexity as easily as it can improve business process if it’s implemented improperly.

 

Over the last decade, IT has offered up a vast array of business-enabling tools, including: websites, ecommerce, web conferencing, CRM systems, accounting systems, phone systems and other forms of communication.

 

The act of buying a piece of technology will not make any positive difference to your business. It’s what you do with the technology that determines if it will give you a significant competitive advantage. If you are purchasing a new system to mask a business management problem, you are not likely to see any return on your investment as IT should be viewed as an enabler not in itself a differentiator for your business. The key is how you implement the technology.

 

Questions to ask yourself if you are considering an IT purchase:

 

·          What are my objectives?

·          What will allow me to meet my objectives?

·          How will I know when I've got it? (measurement)

·          What steps must I take to make it happen?

·          Where do I invest at what level to manage risk?

 

Potential Benefits of IT:

 

·          Increase efficiency of internal company processes, such as customer service and accounting.

·          Improve decision making throughout the organization.

·          Increase timely communication with customers.

·          Increase accuracy of new business estimates by using comparable historical data.

·          Identifying market needs more effectively by understanding specific customer requirements.

·          Cross-selling of other products by highlighting and suggesting alternatives or enhancements.

·          Effective targeted marketing communications aimed specifically at customer needs.

·          Increased value from your existing customers and reduced cost associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales.

 

When implementing new IT systems, be sure to follow these rules:

 

·          Make sure you put together a plan before making a purchase that outlines the benefits of the new technology. Without a written plan, your employees will not connect their performance to the technology, they will not measure the impact of the new system on performance and they will not change their behavior to make it work.

·          All of your various IT systems must “talk” to each other in an integrated, easy-to-use system. For example, your accounting software must talk to your CRM system, as well as your marketing dashboard. Without all of these systems synced, you will not have every piece of pertinent information at your fingertips.

·          Be aware of the groups in your company that are against the process/organizational redesign. If they are not addressed openly and sold on the benefits of the change, they could be the link that makes the new process/system fail.

·          Your IT system must provide fast, clear, actionable information. If your system reports information that is not already in an actionable format, it is useless in today’s fast-moving business environment.