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Myth-Busting Social Media
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Myth-Busting Social Media Presentation Transcript

  • 1. MYTH-BUSTING SOCIAL MEDIA AMEX Luxury Summit April 2011
  • 2. INTRODUCTIONDizzying HYPE surrounds social mediaOur discussion today intends to demystify social media for luxury brandsBy popping well-read mythsIncluding the relationship between T R A F F I C and social media
  • 3. YOUR JOB IS MORE DIFFICULT
  • 4. THERE IS MORE COMPETITION FOR YOUR CUSTOMERS• Attention is a commodity, the most valuable for luxury marketers.• While the supply is fixed, demand is escalating faster than ever before.• Attention is increasingly spent online.• As a result of this change, all media now self- organizes by affinity, sensibility, and sharing (left and right).• This is how consumption of luxury goods is changing.TAKEAWAY: In the Attention Economy whatworked before may not work now. Embrace change.
  • 5. ATTENTION COMES THROUGH GREAT CREATIVE
  • 6. WORD-OF-MOUTH IS #1 FACTOR IN LUXURY IN PURCHASING• My apologies to your creative director.• The number one factor in a luxury purchase is word-of-mouth.• Word-of-mouth in today’s media environment is a [link].• And traffic arrives through a [link].• So traffic is word-of-mouth, right!• Social media is now the plumbing for how [word-of- mouth] spreads.• All of your grand creative is reduced to a [link].TAKEAWAY: You cannot produce great creative ifyou do not understand link-based distribution.
  • 7. LUXURY CONSUMERS DO NOT USE SOCIAL MEDIA
  • 8. THEY EMPHATICALLY DO. DIFFERENTLY.• Luxury consumers are overwhelmingly more active: - 80% of high-net worth customers use the Internet daily and more regularly buy products online.1• Buyers are voyeurs, not publishers. - Affluents are more likely to use social media to look at brands rather than commit to a relationship with them (25% friends).2• Older customers are among the most active comparative shoppers through social. - 70 percent of affluent consumers over age 40 have at least one social media profile. 3 • By adding product recommendations and “shop the WetPaint and The Altimeter Group, 2009 5 look” features to JuicyCouture.com, the brand saw a 160%+ increase in conversion rates. 4- Social media strikes at the heart of what luxury brandsTAKEAWAY: The marketing mix for luxury brands offer: passion.must evolve to a minimum of 60-30-10, if you arepaying attention to marketing attribution. 1. Time, 2009 2. Luxury Marketers and Retailers: To Be a Friend, You Have to Listen, 2010 3. Morpace, Omnibus Report, June 2010 4. FashionablyMarketing.Me, February 2010 5. http://www.altimetergroup.com/2009/07/engagementdb.html 6. Forbes.com,, October 2009
  • 9. SOCIAL MEDIA DOES NOT DRIVE LUXURY SALES
  • 10. LUXURY NEEDS SOCIAL MORE THAN EVERSearch:• Google’s algorithm looks primarily for three attributes: • Naming convention • Inbound (social) links • Depth of recent conversation• 60% of brand links are from social media; 25% of search results for the world’s 20 largest brands are links to user-generated content.1Referral• Facebook accounts for 21% of referral traffic, and 38% of page referrals online. 2• Post < Link < Multimedia < Like < CommentSocial Commerce• 61% of people rely on user reviews for product information before making a purchase.3• 67% of shoppers spend more online after recommendations from online community of friends. 4TAKEAWAY: How many people work on your 1. Socialnomics, 2009 2. Marketing Sherpa 2010website versus your social channels? 3. Razorfish 2008 4. Internet Retailer, September 2009
  • 11. MY WEBSITE IS MY MOST IMPORTANT STORE 11
  • 12. YES BUT...• The average consumer mentions brands 90 times a week in social media.1• Luxury consumers increasingly do not visit websites directly.• Websites visit THEM through social networks, RSS, email.• Consumers increasingly access media through distributed (social) rather than centralized (web) channels.• Traffic is not a zero sum game anymore.TAKEAWAY: Luxury brands must now createbranded experiences across the customer journey inthe context of each channel, rather than adaptcreative across social networks. 1.Keller Fay, WOMMA, 2010
  • 13. SOCIAL MEDIA DOES NOT DRIVE IN-STORE SALES
  • 14. IT CAN. IT DOES. IT IS NOT YET PREDICTABLE• We know the future of retail.• Think of retail like a museum.• At a museum, you have an audio tour, placards, guides.• Now imagine you can do all that socially through QR, Geo-Mobile, and Links in-store.• You can enrich the entire shopping experience in- store.• And all the interactions get published virally through social media (mobile is social).TAKEAWAY: Do not think of in-store and on-lineas separate channels, but part of the same customerjourney.
  • 15. TRADITIONAL MEDIA IS MORE IMPORTANT THAN SOCIAL
  • 16. DEPENDS ON THE OBJECTIVE• When a reader participates in social media, the brand and reader share: • Affinity • Sensibility • Link• This relationship yields more traffic per reader, because it acts as peer-to-peer word-of-mouth rather than passive editorial or advertising.• This word-of-mouth stems: • Influencers across channels • Inclusion of social at onset of planning • Curation and sensibilityTAKEAWAY: Partner with influencers whointroduce you to new customers rather than solelyspeaking to your own.
  • 17. I CAN’T CONTROL MY BRAND IN SOCIAL MEDIA
  • 18. NOT TOTALLY...• Start with a good offense, distinct voice, and curation.• You can also make luxury work for your brand by understanding influence.• Some people are more equal, because they are simply more influential.• Influence is more than popularity; popularity is actually only a third of what constitutes influence.• Influence = Traffic + Virality + Links• Influence, not awareness, drives the right kind of traffic. “We believe that influence is the ability to drive people to action -- ‘action’ might be defined as a reply, a retweet, a comment, or a click.”1TAKEAWAY: Create campaigns to drive influence,not awareness, in luxury. 1.Klout, 2010
  • 19. SHOPPING IS NOT A SOCIAL EXPERIENCE
  • 20. SHOPPING IS SOCIAL. ONLINE AND OFFLINE• Shopping in the real world is social: why not online? • 53% of people on Twitter recommend companies and/or products in their Tweets, with 48% of them delivering on their intention to buy the product. 1 • Consumer reviews are significantly more trusted -- nearly 12 times more -- than descriptions that come from manufacturers. 2 • 90% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. 3 • Online user reviews have the biggest influence on consumer electronics purchases, with 43.7% of purchases affected by word-of- mouth. 4TAKEAWAY: Invest in social shopping and openauthentication as soon as possible. 1. ROI Research for Performance, June 2010) 2. eMarketer, February 2010) 3. Econsultancy, July 2009 4. BIGresearch, December 2009
  • 21. BRAND IS KING
  • 22. UH-OH• Sadly, yes.• 65% of consumers no longer have a favorite news source.1• Social media is ultimately dilutive of brand: • Links are word-of-mouth • Brand of sharer is more valuable than brand of publisher • Fractured distribution results in increasingly shared brand equity Terri Mugler versus Tom Ford in WWD • Search rinses off brand in the great archive, because of keyword • Demand for personality, authenticity, accessTAKEAWAY: Lean in or Lean away. 1.Pew Research, 2010
  • 23. INVEST ALL MY MONEY IN SOCIAL MEDIA!
  • 24. SOCIAL MEDIA IS A BUBBLE• Bubbles are characterized by: Inflation in the cost of talent High financial valuations Volume of new entrants Inversion of buzz to word-of-mouth• However, real value is being built, and consumer attention is quickening. “During the subprime bubble, banks and• Similar to the dot-com bubble in 1999, media will brokers sold one another bad debt — debt sort itself within 12-18 months; growth of social that couldnt be made good on. Today, ‘social’ media is plateauing domestically. media is trading in low-quality connections.”1• This sorting will mark the end of the beginning of the socialization of all media.TAKEAWAY: The clock is ticking to socialize yoursites, move beyond the web, and outside of the U.S. 1. Harvard Business Review, Umair Haque, 2010
  • 25. ACQUISITION
  • 26. THANK YOU Curtis Houglandcurtis@attentionusa.com @curtis_Hougland