AW Consulting Group

Effective Use of Conversations in a Social Media Context

2009-05-20T08:08:00.000-07:00

Facebook’s recent layout change prompted push-back from users and application developers alike. While the merits of the changes are debatable, it is apparent that Facebook has placed renewed emphasis on newsfeed as a primary channel for user interaction. Concurrently with this action, Facebook has also minimized the the role of apps within the ecosystem.

Retailers and advertisers can take advantage of Facebook's revamped user interface and its emphasis on newsfeeds. The newsfeed mechanism can be leveraged to serve both as an advertising medium as well as a conversation generator between the advertiser and user. Piggybacking on Facebook’s renewed emphasis on newsfeeds, advertisers can fine-tune their marketing message and/or applications to take advantage of the newsfeed mechanism in the following ways:

1) Provoke discussion

2) Reveal preferences

3) Spark action

1) Provoke discussion

Many advertisers and application developers succeed in the approach of "provoking discussion". After all, it is a feature that's inherent in the context of using a newsfeed to spread updates/news. Advertisers who are successful in this context offer unique content as well as regular updates to engage and inform their audience.

2) Reveal preferences

Fewer advertisers are able effectively utilize both approaches in terms of provoking discussion as well as engage users in revealing their preferences. In going this extra step, advertisers can get a sense of what their users want from the advertiser's offerings and begin to map out a strategy of fulfilling this gap.

3) Spark action

The ultimate goal of utilizing social media from a advertiser's standpoint is to convert the "buzz" in to action. This brings us to the third approach. Few advertisers effectively capitalize on the newsfeed mechanism to leverage all three approaches outlined above. The problem lies in designing an effective campaign that takes these three approaches into consideration from the start of the process. By failing to leverage these three critical approaches, the advertiser loses out on the opportunity to lead the user to commit to a desired outcome.

In the examples below, I'll attempt to analyze advertisers that fit the profiles outlined in each of the three approaches.

1) Provoke discussion

New York City Ballet

While a relative new comer to establishing a Facebook presence, the New York City Ballet has done a superb job in spreading the word about its offerings in terms of upcoming performances, video interviews with key personnel as well as related activities...etc. The Ballet offers a rich Facebook page that generates newsfeeds on a regular basis to keep its fans updated.

However, in terms of getting users to reveal their preferences as well as sparking action, the New York City Ballet falls short on both accounts. The newsfeeds and updates are essentially one-way broadcasts that do little to engage users in offering feedback or to prompt users to perform a desired action (such as reserving or purchasing tickets). The New York City Ballet can benefit from subtly introducing both of these missing elements to great effect while keeping the focus on the art itself rather than on the advertising.

2) Reveal preferences

Living Social

Living Social's "PickYourFive" app on Facebook is a great example of an application that not only uses the newsfeed mechanism effectively, but also does a superb job in getting its users involved in further propagating the application via intrinsic viral mechanisms.

The "PickYourFive" app's fundamental premise is simple yet effective. It is a framework on which users in addition to Living Social can pose 5 questions and ask other users to generate content as well as providing ranking. For example, users are asked questions such as "Top 5 fast food". From this simple question, users are engaged in not only revealing their preferences but also in a form of self expression through this revelation. The results are then posted to their profile or transmitted to other users via newsfeed. It becomes an effective catalyst to generating additional activity and participation from other users. Advertisers can user similar mechanisms to poll users and generate buzz.

3) Spark action

This is the "holy grail". There are few, if any, applications or advertising approaches on Facebook that effectively and consistently spark users to an action leading to conversion. By combining the best aspects of the rich content of the New York City Ballet’s approach with the interactive nature of Living Social's "PickYourFive" app, advertisers can design approaches that leverages Facebook and its newsfeed mechanism to effectively engage in meaningful conversations with their users as well as achieve their conversion goals.

Common Approaches to Advertising on Facebook - Part 2

2008-08-07T08:22:00.002-07:00

To elaborate on the common advertising approaches, I've attempted to list out Pros and Cons of each approach.

Ads

Banner ads

Pros: Ability to customize creatives to audience; familiar approach
Cons: May be blocked - mentally by audience or physically by various ad blocking utilities; tired approach and low ROI when measured in terms of actual conversions

Targeted ads

Pros: Ability to specify audience demographics as well as geography; marginally more effective than banner ads
Cons: Same as above

Sponsored ads

Pros: "In your face" advertisement; embedded with crucial content
Cons: Message can backfire if users find placement amongst their content to be overly intrusive; expensive

Applications

Co-branding arrangements with popular applications

Pros: Ads and message naturally fits targeted audience assuming posting on an application related to retail niche/subject matter
Cons: Success of campaigns coupled to success of underlying application

Embedded sales channels based on related applications

Pros: More effective than Co-branding as users can interact with retail products and socialize them with their network
Cons: See above

Games

Pros: Innovative promotional approach
Cons: See above; ROI difficult to measure

Tools

Facebook Pages

Pros: Allows for easy creation of content through default set of tools; allows embedding of custom content, widgets and creatives; FREE
Cons: Need to build proprietary fan base over time; excessively restrictive spamming rules (set by Facebook) that could restrict repetitive posts that contain advertising messages; must be brand or product owner to create page

Facebo0k Groups

Pros: Quick and easy creation; FREE
Cons: Limited to default subset of Facebook tools; difficult to implement custom content and cannot embed third-party widgets

Common Approaches to Advertising on Facebook

2008-08-05T10:56:00.000-07:00

Once retailers decide to advertise on social network platforms, they are faced with a variety of choices that range from familiar options to some approaches that are outside of the norm.

Some of these options are listed below:

Ads

Banner ads
Targeted ads
Sponsored ads

Applications

Co-branding arrangements with popular applications
Embedded sales channels based on related applications
Games

Tools

Facebook Pages
Facebook Groups

Social Media Mandate

2008-08-01T07:18:00.001-07:00

From pitching to and performing ad hoc surveys on over 700 retailers across various industries, it would appear that most retailers fall into the following categories:

Aware of the emergence of social media and the power of social networks
Interested in getting more information on how they leverage this niche
Not sure how to approach sales and marketing in social networks
Do not have a firm corporate mandate to invest and pursue opportunities

While a few forward-thinking retailers are actively pursuing partnerships and experimenting with different approaches, many retailers are still vacillating on a fine point between interest and commitment.

Given that major social networks represent a captive audience of ~ 1/2 billion users who spend an "inordinate" amount on time on these sites, it's surprising that so few retailers are actively investing in this space. Most seem to be captive to immediate/near-term goals and lack the strategic mandate to pursue opportunities in social networks.

Some relevant statistics on membership in top social networks are listed below (note that a few numbers may be on the low side as I chose verifiable statistics where available):

Slide 2

•Addressable market size

–Facebook Platform:

•Facebook: 80 million users1

–
Open Social Platform:

•MySpace: 110 million users2

•Bebo: 40 million users3

•Hi5: 80 million users4

•Orkut: 120 million users5

Total ~ 430 million users across 5 major social networks

Slide 2

1http://www.facebook.com/press/info.php?statistics

2http://techradar1.wordpress.com/2008/01/11/facebookmyspace-statistics/

3http://money.cnn.com/2008/03/13/technology/Hempel_aol_buys_bebo.fortune/

4http://www.hi5networks.com/press.html
5http://en.wikipedia.org/wiki/Orkut

Social Media Questions

2008-07-31T09:35:00.000-07:00

I'll be updating this blog with relevant articles, thoughts and questions regarding social media and social shopping in particular.

Some questions that I will endeavor to answer:

How does a merchant engage with users via social media?
Once an effective approach has been found, how does the merchant monetize it?
Assuming that a merchant is successfully monetizing a given approach, how can the merchant optimize the experience for maximizing conversions (sales)