Advertisers Embrace Facebook, Other Social Networks

Social ad spending will become a higher priority in 2010, with the combination of mobile and social advertising generating more opportunities for advertisers to reach their target markets for branding and engagement. eMarketer forecasts that 2009 ad spending on social networks will surpass $1.2 billion when all expenditures are tallied, a year-over-year increase of almost 4%. And social-media ad spending is anticipated to grow more than 7% next year:

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According to Debra Aho Williamson, author of the report Social Network Ad Spending: 2010 Outlook:

As more marketers incorporate social networks in their business, they will no longer look at them as siloed destinations. Instead, they will look to increase the impact of their social network presence by linking it to other marketing initiatives, both online and offline.

So social network advertising is set to intersect with other kinds of advertising. Geotargeting, earned media (the additional unpaid exposure a brand receives when consumers talk about it online), social search, and social ad networks will be pivotal themes next year.

Facebook has become the preferred social network for marketers

Facebook is poised to surpass MySpace in advertising revenue. At 350 million users, Facebook is the premier destination for marketers in the U.S. and in many other countries. In 2010, marketers are expected to spend more than $600 million on Facebook (vs. $385 million for MySpace), accounting for nearly one-fourth of worldwide social-network ad spending — up from 20% in 2009:

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Facebook Pages are increasingly becoming an integral part of brand advertising.  They will become even more popular as Facebook introduces the Open Graph API, enabling branded social experiences to occur anywhere on the Web.

Williamson also says,

When companies budget for social media marketing in 2010 and beyond, a substantial portion of their expenses will go toward creating and maintaining a fan page, managing promotions or public relations outreach within a social network, and measuring the impact of a social network presence on brand health and sales.

The viability of social media advertising was reinforced during the holiday shopping season, as many retailers turned to social media destinations like Facebook and Twitter to bolster their efforts to reach potential shoppers. Kohl’s, Best Buy, and Target were among the companies that leveraged social networks for customer engagement. Online ad spending dropped overall in 2009, but the increase in buys on social networks has created opportunities for brands to increase their market share. Ad buys on these sites could account for up to 5.4% of all online advertising.

As advertisers search for new avenues to grab customers’ discretionary income, the shift away from traditional online advertising will continue to accelerate.

What’s your opinion? Do you think Facebook will surpass MySpace? How has MySpace been able to retain its revenue lead for so long? Please leave a comment!

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Facebook CEO Bares All, Embraces New Privacy Settings

While privacy gurus, security firms, and users try to decipher the implications of Facebook’s new privacy settings, at least one person is embracing them: Facebook Founder and CEO Mark Zuckerberg.

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Zuckerberg, who is usually extremely private, has opened up his profile so that anyone can see his wall, events, and photos. And what’s in the CEO’s profile? His photo album is pretty benign; Valleywag has posted their favorite images. It appears that he’s a fan of the Killers, The West Wing, and Taylor Swift. And his wall shows he actively uses Facebook’s “like” and commenting features.

Nothing has the potential to irritate the legions of Facebook users quite like a mammoth site update. Facebook says the new privacy settings make it easier to control the information users share (even though it’s really about increasing traffic and visibility). The reaction to the privacy changes was mixed. Zuckerberg’s blog post got the thumbs up from over 48,000 users, and the comments section of the Facebook blog was loaded with praise for the new rules. But there was also a lot of complaining and a brewing backlash. Instead of being thankful for having more control, most users are just confused by the changes. Those who aren’t confused are angry — or an unfortunate combination of both confused and angry.

(Remember when Facebook rolled out a minor redesign of its status feed in October? Lots of Facebook users were pretty angry then, too.)

TrueSlant’s report suggests that Zuckerberg doesn’t understand the new settings, which is highly unlikely. It’s more plausible that he’s trying to show everyone else that there’s no harm in opening up. He would certainly look hypocritical if he kept his profile limited to his friends. So opening up his profile was a smart, premeditated move — he’s leading by example. But it’s not likely to sway Facebook users who are skeptical that openness is in their best interests.

Have you adjusted your privacy settings? Do you think Zuckerberg’s move will convince Facebook users to open up? Please leave a comment!

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Top 50 Companies That Make the Best Use of Facebook

The drumbeat by marketing and public relations experts about the importance of building a social media strategy is growing louder, and with good reason. The benefits to companies large and small in this new medium are legion, and more and more businesses are taking the plunge.

But not all social media strategies are full-fledged, with some companies exerting far more effort to engage their target audiences via Facebook and Twitter than others.

Slate’s TheBigMoney.com has devised a ranking of companies based on their social media engagment. The list ranks the top 50 companies that are making the best use of Facebook, with Coca-Cola and Starbucks leading the pack. The rankings are based on number of different metrics:

Companies had to have a minimum of 200,000 Facebook friends or fans before being considered for The Big Money Facebook 50. Qualifying brands were then assessed on whether they employ a dedicated social media staff, how long the brand has been present on Facebook, and how much money it spends on the social networking site. Companies were then ranked from one to five on how often they update their Facebook offerings; the variety of material they offer; how much user interest their pages have generated; how integrated Facebook is in to the company’s broader marketing; how easy it is to find the company’s Facebook page through a search engine, and creativity and effectiveness.

Later this week, the company plans to release the Twitter 12, a list of the 12 brands making the best use of Twitter.

On its site, The Big Money offers a window into the investment and engagement by assorted businesses. Most of the companies on the Top 50 are big brands, but the scales haven’t been completely tipped toward the largest names. Coca-Cola and Starbucks may top the list, but Dr. Pepper — a company with an international presence — is ranked 38th with 906,914 fans.

The Top 10 of the Facebook 50 are:

  1. Coca-Cola
  2. Starbucks
  3. Disney
  4. Victoria’s Secret
  5. iTunes
  6. Vitaminwater
  7. YouTube
  8. Chick-fil-A
  9. Red Bull
  10. T.G.I. Friday’s

The full list is available here, or you can view  the SlideShare presentation below. (If you can’t see the embedded media, click here.)

Retailers and Consumers Benefit from Social Media on Black Friday

For retailers that jumped on the social media bandwagon in 2009, the impact on Black Friday was significant. Before heading to stores and malls this Thanksgiving weekend, many consumers scoured Facebook, Twitter, and other Web sites that track Black Friday sales to decide where they wanted to shop.

Social media has become another avenue for shoppers to compare deals and find bargains. This is especially valuable in the current tough economic environment, where making a dollar go further makes a huge difference. The rapid growth in these tools, especially this year, has made them a practical alternative for bargain hunters ahead of the holidays.

Many retailers reached out to their customers via social media this year. With plenty of consumers already using platforms such as Twitter and Facebook, companies felt they needed to go where their customers are and engage them:

  • Best Buy advertised its $500 laptop deal on Twitter and Facebook.
  • Sears held a Facebook sweepstakes to win the chance to shop its Black Friday deals before Thanksgiving and a $500 gift card.
  • J.C. Penney tweeted about its 4 a.m. store openings.
  • Office Depot tweeted its Black Friday deals, including a Vivitar digital camera bundle for $49.99.
  • Staples sent its Facebook Page fans and Twitter followers a sneak peek of its Black Friday sale.
  • Toys”R”Us gave its Facebook fans the first look at its Black Friday deals.

Target, Kohl’s, and many other retailers experimented with these tools as well. Twitter feeds were nonstop leading up to the hottest shopping day of the year, as companies maneuvered for top-of-mind position with the estimated 134 million Black Friday shoppers. Many of the consumers who crowded stores on Friday came armed with facts and advice they obtained via social media outlets and were prepared to take action the minute they walked through the doors.

There are many shoppers who aren’t interested in social media, and plenty of them still turn to the newspaper. A Deloitte study conducted by before Thanksgiving found that 40% of consumers planned to get their deal information in this manner — a considerable number of the shopping public. Some even clipped coupons, a tried-and-true recession tactic for stretching cash. Deloitte also found that 27% planned to check Web sites specializing in Black Friday deals, and 29% were going to look at flyers and mailers. Only 24% were turning to retailers’ Web sites for specials.

But for consumers who want advice from others before making purchase decisions for their limited dollars, social media is fast becoming a fundamental part of their shopping experience. Once deals are posted on Twitter or Facebook, shoppers often share them with friends and repost them. Marian Salzman, president of Euro RSCG Worldwide, said, “It’s almost crowdsourcing for opinions. We increasingly need affirmation from our peers and our loved ones and the people that create our lifestyle to feel good about where we are buying things.”

Salzman said that social media still needs to prove itself as a meaningful driver of retail sales. While companies may beckon shoppers by offering special deals — as when Starbucks let its Facebook fans print out an invitation to get a free pastry when they purchased a drink — customer loyalty isn’t always the result. “Success lies in a repeat customer,” she said.

The focus of reports on social media has been on the benefits to the consumer, but there’s a lot of upside for retailers that use these tools to engage their customers — upside that extends far beyond the ability to get in front of prospective customers in a new channel. Kasey Lobaugh, a principal at Deloitte Retail, noted social media’s market intelligence and tracking capabilities, saying many retailers like it because it enables them to track how many shoppers they’re reaching: “If you send out a URL via Twitter you know how many people clicked on that URL,” he said. Other forms of advertising, including print, can be virtually impossible to track unless there are additional mechanisms in place, like coupons or special offer codes “When you put a newspaper tab out, you have no idea of the traffic in your stores, how much was influenced by seeing an ad in the newspaper that day,” Lobaugh said.

Social media may still be an immature marketing tool, but retailers have recognized its capacity for generating sales and they are starting to take action. This year’s social media engagement was a learning experience. Next year, it won’t be optional.

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Enhance Your Brand: Create a Facebook Page

A large and growing number of some of the most valuable demographic groups are devoting more of their attention to Facebook versus other media channels. With 300 million active users and counting (plus 500,000 new users every day), Facebook is no longer just a virtual community for college students to share photos and news with their friends. Adults and professionals from around the globe have embraced the platform, including 90 million in the U.S.

This has businesses large and small asking themselves: Will Facebook really help my business? Does my company need a Facebook Page?

Why is Facebook Important to Marketers?

Facebook offers a unique marketing opportunity for businesses. More and more people are migrating to social networks, and that’s where they’re choosing to research companies, products, and services. Marketing on Facebook has a viral effect, as it does on most social media sites.

Microsoft’s recent partnership with Facebook to integrate Facebook updates with Bing paves the way for more real-time search results. Google likely will do the same with Facebook in the near future. So having an understanding of Facebook can open up new ways for marketers to reach out to their audiences and brand themselves.

Consider some of the benefits of using Facebook as a business branding tool:

  • Customer acquisition: As people become fans of a company’s Facebook page or post comments on it, they get a notice posted on the wall of their own page — where their networks see it. This increases visibility, and the viral aspect often leads to new fans. Facebook pages can also be linked to other social networking sites, increasing a brand’s reach.
  • Customer interaction: Facebook provides a forum for dialogue between a brand and its customers. This enables companies to build better relationships and to demonstrate to their customers that they care about what they think.
  • Reputation management: Direct contact with customers via comments and feedback helps companies gain a deeper understanding of  how their brand is perceived online and offers an avenue for brand enhancement and, if need be, damage control.
  • Traffic generation: As traffic increases on a company’s Facebook fan page, traffic to the its Web site increases, too. Facebook Pages also appear in search results.
  • Targeted advertising: Facebook ads enable businesses to advertise an event, a Web site, a product – any content, really. Companies can target the reach of their ads by gender, age, interests, and location. With custom filters, Facebook automatically updates the count of people who fit the criteria and gauges the size of the target market on Facebook.
  • Increased exposure: An important reason to invest time in creating an engaging page is that all the activity of your fans (from becoming a fan to posting a comment) is shared with a greater network.
  • Branding: In addition to a company’s Web site, a good Facebook Page can create brand awareness for new audiences and reinforce it for current customers by sharing valuable information with its fans and emphasizing the company’s position in its industry. Developing and nurturing an active community enhances a brand.
  • It’s free: What’s not to like about using a new, viral channel for customer interaction without paying a cent?

Here are some brands that have embraced the Facebook Pages platform and successfully leveraged it to engage their audiences and create a real community for their fans:

Coca-Cola (4 million  fans)

Starbucks (5 million fans)

Pizza Hut (1 million fans)

Sears (148,000 fans)

Best Buy (1 million fans)

Walmart (55,000 fans)

Nutella (3.3 million fans)

Pringles (2.8 million fans)

9 Things to Think About As You Create a Facebook Presence For Your Business:

  1. Start with a strategy: Just like any kind of marketing, having a solid strategy in hand from the beginning is key. What is your message? Who are you targeting? What’s in it for them? How will you reach them?
  2. Be creative: You need to have a strong creative execution. What is exciting or interesting to your customers/friends/fans? How does your page content add value? Creative execution includes sharing photos and videos, running contests and promotions, having lively conversations with members, and doing things that are just plain interesting that will keep your fans coming back.
  3. Engage with your fans: Many businesses create a fan page, invite people to join, and then seemingly forget that the page exists. Active fan engagement is the key to an effective Facebook presence. Have a content plan in hand that’s engaging and germane to your target audience. What will you post? When will you post it? How will you inspire your fans to participate? Don’t just create a page – create an engagement plan.
  4. Communicate consistently and frequently: The most successful and fruitful social media campaigns promote a strong message that is repeated often and is consistent in voice and tone. This increases brand awareness and sales potential by keeping your brand messaging top of mind with your target audience.
  5. Own your fan page: Some company fan pages are created and managed by an actual fan instead of the company. Fans expect company pages to be run by the company itself, and they want the company to play an active role. Issues around having a fan own a company’s page might not immediately present themselves, but not having control of a brand’s messaging might cause problems down the road – even if the owner is the company’s biggest fan.
  6. Monitor discussions: It looks pretty bad when a business is inactive and doesn’t respond to its fans. It’s important to monitor your fan page for activity and respond to relevant questions and comments. It’s a good idea to have someone who is dedicated to this effort and empowered to engage on behalf of the company.
  7. Pay attention to analytics: Facebook fan pages offer analytics and insights, so you can learn how engaging your page is. These great tools will help you understand what is and isn’t effective, aiding you in your efforts to constantly improve and refine your page.
  8. Don’t focus on the number of followers/friends/fans: Many businesses focus on the number of fans they have. This measure lacks relevance, since it’s not difficult to get followers or fans. These numbers shouldn’t be used as a key metric – what matters is how you engage your followers. A balanced approach measures what’s really important based on your strategy.
  9. Be transparent and honest: The importance of establishing integrity, honesty, and transparency up front cannot be overstated. Once credibility is lost, it’s very difficult to get it back.

The Takeaway

Facebook has quickly morphed from a fad into a highly effective business tool. If you have the time to devote to building and using social media for marketing, Facebook may have potential for your company. It can be a powerful avenue for establishing and enhancing a strong online brand identity.

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‘Tis the Season: Holiday Shoppers Flock to Social Media

Last year, during the height of the recession panic, retailers took to the Web to compete for the dollars of cash-strapped consumers. Online coupons and special offers of up to 90% off tempted shoppers to part with their money.

There doesn’t seem to be as much recession-related fear this year, but online is still the place to be for retailers — only now the battleground is social media. Retailers plan to leverage social networks to get their brands in front of consumers in hopes of wining a bigger piece of their limited shopping budgets.

And with good reason: According to an eMarketer analysis of a report from Deloitte, 27% of online shoppers will look to social networks for clues about what family and friends want. And almost one-half (45%) will use social media to research products and to search for and compare offers.

In total, 17% of consumers plan to tap social media this holiday shopping season, and just over one-half of them are in the coveted 18 to 29 age group. Here’s how that group will be utilizing social networking sites:

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Companies like Target, Starbucks, and J.C. Penney have acknowledged how much social media is helping them to engage directly with consumers and to get their feedback on everything from advertising campaigns to new product introductions. Now they’re investing more resources in social media and integrating it with their holiday marketing plans in a bid to convert friends, followers, and fans into shoppers.

As hordes of us rush to join Facebook and Twitter, the marketers are following.

Lest anyone think that social media campaigns lack the effectiveness of traditional marketing, consider the sheer volume of active accounts on Facebook and Twitter. The growth in new accounts every month is incredible (Facebook now has 300 million users, while Twitter has 19.2 million), and if only a small fraction of these users become active participants (use their social networking platforms more than two to three times a week), the potential to reach a wider audience is enormous. If just a small number of those convert into buyers, the numbers still make any investment in social media worthwhile. A Shop.org survey of online retailers found 47% plan to increase their use of social media this holiday season because it’s more cost effective than traditional media:

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“Retailers know that times are tough so they have created promotions and incentives to help Americans save money this holiday season,” said Scott Silverman, Executive Director of Shop.org. “From free shipping to Facebook, online retailers are combining new initiatives with tried-and-true tactics to make their companies stand out.”

Although Twitter and Facebook were around last year, and some companies were able to leverage them successfully, the mania about social media wasn’t nearly as great as it is today. Remember Starbucks’ Facebook fundraising effort for World AIDS Day? The company  said it would donate 5 cents for each drink sold on December 1st, 2008 to the Global Fund for World AIDS Day. To encourage consumers to go to Starbucks on that day, they hosted a Facebook event and asked fans to invite their friends to participate — almost 1 million people accepted the invitation. Starbucks is also interacting with customers on Twitter and YouTube.

Companies get a direct, personal connection to their audiences via social media, and they’re using that connection to determine what their customers want, like, and don’t like, and they’re also hearing their complaints. This summer, Target asked its Facebook fans how they felt about its men’s clothing selection — the company learned that they wanted more designer clothes and a wider range of sizes. Target is tweaking its product mix based on the feedback.

Twelpforce is being promoted by Best Buy — it’s the company Twitter account where its employees give advice and answer customer questions. This year, it will use Twelpforce to help customers decide which gifts to buy.

Many companies are still trying to figure out how to use social media to support sales beyond a one-time lift. At the same time, they don’t want to become too marketing-oriented. J.C. Penney promoted its back-to-school merchandise on Facebook and they noticed that their fans were engaging in ways they hadn’t anticipated — they were trading deals with each other, for example. The challenge for companies like J.C. Penney is to turn those conversations into revenue-generating traffic. If you take a look at their page now, you’ll see that it’s all about holiday advertising.

Consumers are turning to social media in droves for their holiday shopping. Retailers should try to capitalize on this and turn browsers into buyers. Giving users easy access to coupons, promotions, and decision-making tools is a good way to start.

Companies need to be where their customers are this holiday season — on social networks.

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Discounts Drive Users to Engage With Brands on Social Networks

As brands scramble to define themselves on social networks and connect with their customers, a new survey indicates that what consumers want from brands in this new engagement model is some old fashioned marketing: Good deals and customer service.

The results of Razorfish’s annual survey of 1,000 “connected consumers” was recently released, and it contains some interesting data. The sample group was about 50/50 male/female and the respondents all live in ten major U.S. cities and cover four major age groups:

Based on previous Razorfish consumer research, we have found that these “connected consumers” roughly mirror the U.S. population with broadband access. According to the Pew Internet & American Life Project, about 63% of all Americans today have a high-speed Internet connection, up from only 55% in 2008. This translates to roughly 200 million people, based on a July 2009 population estimate from the CIA World Factbook (total population 307,212,123, July 2009 estimate).

The survey found that the primary reason for “friending” a brand on Facebook or MySpace is for access to exclusive deals and discounts:

More than 25% said they followed a brand on Twitter:

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And 43% of those who follow brands on Twitter do so because of exclusive discounts or offers. That trumps being a current customer (24%), interesting/entertaining content (23%), and customer service/support (4%):

Following a brand on Twitter usually keeps it top of mind when making a future purchase decision:

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The report references Starbucks, the most popular brand on Facebook (by virtue of a promo that offered coupons for free ice cream and pastry). Whole Foods is the leading brand on Twitter, with more than 1.5 million followers. It gained its huge following by offering shopping tips and weekly specials.

Comcast has a great reputation for leveraging Twitter as a CRM tool thanks to the fabled efforts of Frank Eliason, Senior Director of Comcast National Customer Service. Virgin America and Zappos have also received high marks for using Twitter for customer realtions.

The takeaway:

Consumers are obviously very willing to engage with brands via social media. As social networks grow and attract more users, this will continue to be the case and undoubtedly gain more traction.

Brand marketers themselves need to become more engaged and give their friends and followers special offers — pushing out content and hoping consumers hop on the bandwagon isn’t nearly as effective. As social networks become more advanced and brands figure out how to leverage them, there will be many interesting new opportunities for marketing interaction.

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