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Social Marketing Delivers on the Promise of Direct Marketing
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Introduction: The Power of Social Connections
In their seminal 1993 book, The One-to-One Future, Don communities, yet still present individuals with an intimate
Peppers and Martha Rogers taught all marketers the holy sense of personal interactions. Today’s digital reality of
grail of personalized, individual marketing. Their concept social networks provides a means of tapping into this
and definition were simple: Use relevant data to market the complex web of relationships. Savvy brands can become
right product, price and promotion to the individual store part of this centralized social nervous system, transforming
and household level. Almost two decades later, with the it into a brand engagement engine.
rise of social, we may finally have the data to deliver on the
intimacy of their 1:1 marketing vision. Brands must be strategic about how they approach this
potential gold mine of consumer relationships and data,
Social media has evolved, and it holds far more power however. Far from being a one-hit wonder of marketing,
than even magazine covers and Hollywood movies have social is about building authentic, long-term relationships
proclaimed. For brands, social’s impact is its ability to through relevant, compelling experiences that burrow
not only precisely target prospects and customers based into the lives and lifestyles of consumers. The open
on their social graph, but also to engage with them in nature of today’s social landscape, which is fragmented
their own realm. Social allows brands to facilitate and and distributed across multiple networks, can make it
participate in conversations among enthusiasts, not merely fundamentally more challenging for brands to maintain
push information at them from afar, as traditional direct control of the conversation.
marketing has often done. The depth of the personal
information that people are willing to share will allow for Social marketing is the next step beyond direct marketing,
intimate messages and calls to action. where push is no longer the order of the day. In a reversal
of the power flow, pull experiences now shape brands and
Social is embraced by the masses for its ability to connect inspire consumers to influence one another.
multiple layers of people who share a history, an idea, a
passion, or a purpose. Acting like a central nervous system
for human relationships, social networks have always
enabled communications across myriad, intersecting
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But I was Promised 1:1 Marketing!
Despite the best of intentions, the promise of 1:1 shoppers to more (and often generic) marketing and
marketing remains a far cry from its current reality. In sales pitches. Old habits die hard, which is why marketing
part, that’s because the right tools weren’t available until is still mostly about push. Because an individual consumer
recently. The original promise of 1:1 marketing was that isn’t perceived as having an impact on sales beyond
brands would come to know us intimately enough to speak her own purchases, brands haven’t cared much about
“our” language, to extend offers and create experiences consumers’ shared passions or communities of
that were almost eerily relevant to our needs. like-minded friends and acquaintances.
The gold ring sought by brands attempting 1:1 marketing US Major Media Ad Spending, by Media, 2009-2015
wasn’t just consumer loyalty: It was consumer fealty, a (In Billions) 2009 2010 2011 2012 2013 2014 2015
powerful allegiance forged when consumers feel the brand
TV $53.8 $59.0 $60.5 $64.5 $65.0 $67.0 $68.0
has a true stake in their lives, as would a trusted ally or a
Internet $22.7 $25.8 $28.5 $32.6 $36.0 $40.5 $44.5
close friend. Think of the kind of passion fans have for their
favorite sports teams or bands, and you begin to see what Newspapers* $24.8 $22.8 $21.4 $20.7 $20.2 $20.0 $19.8
consumer fealty (versus loyalty) looks like. Radio** $14.3 $15.3 $15.7 $16.4 $16.7 $17.1 $17.2
Directories *
$10.3 $9.3 $8.2 $7.3 $6.5 $5.7 $5.0
We’re talking about passion, not mere consumerism. Magazines *
$15.5 $14.7 $13.9 $13.2 $12.6 $12.1 $11.6
And 1:1 marketing was considered the path to glory.
Outdoor $5.9 $6.1 $6.4 $6.8 $7.1 $7.4 $7.6
The Current Reality Total $147.2 $153.0 $154.6 $161.5 $164.2 $169.8 $173.6
Source: eMarketer, March 2011 *print only **excludes off-air radio & digital
Today’s brands are largely still using a spray-and-pray
method to market their wares. They continue to spend
heavily on broadcast 30-second TV spots, print coupon-
filled circulars or mail glossy promotions. Then, they wait
for consumers to arrive at their stores, where they subject
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But I was Promised 1:1 Marketing!
The Changing Reality
We’re poised to break free of this old-school marketing Sidebar: The Value of a Fan
model, moving instead into the sphere of the social
graph as consumer connector. What’s changed? We’re For all of the talk of fans and followers, one question continues
witnessing a perfect storm of consumer behavior, social to be asked is, “What is the monetary value of a fan?” In a
data collection and mobile (or “commerce is everywhere”) presentation at the Advertising Age Digital Conference in April
technology. The resulting fast-evolving social graph is a 2011, Coca-Cola presented that they found that a fan consumes
driving force in consumer profiling and shared experiences. two times more product than a non-fan, and that purchase
Testing and learning is already happening. Facebook, for intent of a fan is ten times higher than that of a non-fan.
example, is working on real-time advertising based on Also, after a specific activation (a campaign) on Facebook,
real-time comments, plus additional work on ads Coca-Cola saw a 7% increase in consumption and a 10%
targeting the status update. increase of purchase intent of their fan base.
Envisioned Future: Tax Time Additionally, one of our partners, Vitrue, is working to quantify
the answer. What they’ve found so far is that, on average, a
Just imagine the power brands could have if these fan base of 1 million translates into at least $3.6 million in
tests effectively bring together consumer data to equivalent media over a year. Vitrue arrived at its $3.6 million
deliver just what a consumer needs, just when she figure by working off a $5 CPM, meaning a brand’s 1 million
needs it. For instance, if a consumer updates her fans generate about $300,000 in media value each month.
Facebook status that she’s working on her taxes and Using Vitrue’s calculation, Starbucks’ 6.5 million fan base --
needs a hand, TurboTax® might immediately serve
acquired in part with several big ad buys -- is worth $23.4
up an ad, including which of her friends has used and
million in media annually. (http://goo.gl/7czxi)
likes its products. The social graph brings relevant
information to the consumer and helps brands identify
consumers who are in need of their products.
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Through the Looking Glass to the Social Graph
For all the talk of the social graph, many folks still How the Social Graph is Growing
don’t know what to make of it (or how to define it).
In its most literal sense, the social graph is a chart or While consumers are sharing their passions, interests
illustration that represents our relationships and shared and daily lives with each other on their social networks,
connections with others. It can be a Venn diagram, they’re also passively sharing their personal information,
a star burst map, a bubble chart, a family tree, preferences and click-stream with tracking systems such
or any other relationship visualization. as cookies and other analytics tools. They also actively
share profile and preferences information when they take
But as personal profile and behavioral data began surveys, sign up for new services or sites, or contribute
informing the social graph, the concept has expanded to forums and review sites. Likewise, as they roam about
into a potentially valuable marketing tool, serving as the or check into restaurants and shops while logged
key not only to understanding individual consumers, but, into geo-location services such as Facebook Places
more importantly, as the gateway to multitudes of other and Foursquare, their movements and preferences are
people with whom those consumers share similar tracked. And all the while, those old-school loyalty
passions, histories and habits. and affinity programs they joined years ago are still
tracking their purchasing behaviors.
The social graph is like the looking glass through
which Alice stepped: It opens up a whole new realm of Every day, this data is added to each consumer’s social
possibilities for brands seeking to access a consumer graph (and also connects them to others with similar
population they’ve never seen before–at least not in the profiles), creating an ever-more-precise portrait of
context of their shared passions and relationships. individual consumer and interrelated group interests,
tastes, purchases, behaviors and relationships.
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Through the Looking Glass to the Social Graph
Layering for Social Warmth
Dimensional consumer data is requisite to realizing the
possibilities of true 1:1 marketing. By layering classic social
graph information from social network behavior with geo-
location data and traditional demographic and purchasing
information, brands can gain a clearer, deeper picture of
consumers, their activities and their preferences. This also
helps brands provide gateways for word-of-mouth and
brand advocacy by enabling recommendations, reviews,
“Like” buttons and user-generated or curated content on
their sites, blogs, Facebook pages and other touch-points.
This evolution is starting to show promise. For example,
Levi’s launched an online Friends Store that configures the
digital shopping experience for its consumers based on
what their friends in their Open Graph like. Every Levi’s
web storefront is personalized based on the consumer’s
Open Graph and can be different each time they enter
based on what is happening within their friend-base.
Brands like Levi’s now have the power to serve up a more
customized offering when consumers enter their site (or
eventually, store), based on consumer interactions with,
and recommendations from, trusted friends.
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Through the Looking Glass to the Social Graph
“When asked what sources ‘influence your decision to use
or not use a particular company, brand or product, 71%
claim reviews from family members or friends exert a
‘great deal’ or ‘fair amount’ of influence.”
(Harris Interactive, June 2010)
Envisioned Future: Anything for the Pets
Now imagine what happens when the data from a
consumer’s entire social graph and CRM data combine.
For example, when a mom enters a PETCO location, she
uses Shopkick to passively check in to the store. Based
on the information from her PETCO Pals account and
her social graph, she’s recognized as a top-tier spender
with great influence and many friends. At that point, a
promotion is pushed to her phone, offering her a special
gift-with-purchase for her dogs if she spends at a certain
level. The offer drives her to spend more and as she
collects her free gifts and shares the rewards with her
dogs, the news of her great deal spreads to other friends
in her social network. This, in turn, puts more of her
friends—and their pets—on the path to shop that day.
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The Future of Social Marketing
Social marketing has so many different facets and experiences that cater to individual preferences, passions
trajectories that it’s difficult to pinpoint exactly where its and purchasing habits. The social graph, in general, is
next direct hit will take place. But one pathway is clear: going to influence most digital interactions (in a positive
The social graph is poised to expand in depth and way, if the user allows it).
importance. Social is about to break the bounds of
online experiences, cropping up wherever we go. » Brands can start engaging in more direct relationship
marketing as our web and digital experiences become
The Opportunity for Brands more tailored to the social graph. Those experiences
will be influenced by what we—and our networks—
We believe there is exponential power in the social graph, have viewed, liked and shared on the web. For example,
but no one is collecting and collating data at a broader imagine what happens when the site you’re viewing or
level. This is where the opportunity lies, especially for the ad you’re looking at on your iPad version of Wired
savvy direct marketers. By gaining consumer permission magazine is geo-aware and leverages your social graph
to tap into the Facebook Open Graph as well as other to instantly push more relevant, personal content to your
social information, brands can start to build a broader iPad. The result: the ad and content mix you see is tailored
picture of their consumers’ complete social profile. specifically to you and where you are at any given moment
The challenge lies both in access and in how to mine (both physically and socially). The experience for the
and apply this new data, finding predictive variables to consumer is completely personalized and highly
drive marketing communications toward increasingly relevant, while brands watch loyalty, along with their
discrete segments of consumers as brands draw ever customer lifetime value, increase.
closer to true 1:1 marketing.
» The social graph will be the common element that
» As the social graph becomes a richer, more dynamic and connects the consumer to everything—it tells marketers
more portable tool (following users with logged-in devices what consumers like, what they buy, who they interact with
wherever they go), brands will be able to instantly track and how to create meaningful personalized experiences.
consumers, mine their data on the fly, and present spot-on This, in turn, will lead to compressed decision cycles, which
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The Future of Social Marketing
move consumers from decision to purchase graph. More and more, the consumer IS her social network;
much more quickly. wherever she goes, her community is along for the ride.
Catch her attention, and you’ve got a lot of listeners.
Your Social Shadow
Social Commerce on the Verge
» As we go forward, we believe the social experience
as we know it today will also evolve. How important will Social commerce (aka s-commerce)
that regular social experience, like the Facebook Wall, be is “everywhere commerce.”
when your social network is embedded everywhere? Will The advent of social as the next
it have a single place, or will it be accessible and visible evolution of direct marketing
everywhere? Your social network may not need to have will unlock new streams of direct
a home base as much as it currently does, because it will revenue from consumers and
effectively be following consumers wherever they go. enable brands to innovate on
socially targeted products
» We believe there will also be continued atomization and (including virtual ones) and brand
distribution of a consumer’s social network. For example, experiences as never before.
Facebook is more of a state of mind than a real place
at this point, as it’s integrated with so many locales. We Social commerce success will
already see pockets of this happening, when you go onto spring from brands presenting
media sites like cnn.com and see what other articles your products and promotions as
friends have read and shared. in-context “shoppable moments”
—using a softer type of sales
» To capture data from, and effectively market to, these message—versus catalog-style
social shadows as they move through brand spaces, listings on destination sites, etc.
companies should use social plug-ins and customize Examples of this trend already in
experiences to take advantage of the expanding social play include French Connection’s
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The Future of Social Marketing
“YouTique” YouTube Channel, which showcases sexy, consumers should see offerings and offers that relate
soft-sell videos and chatty “what to wear” spots. to them personally bringing the best and most relevant
products and services to the forefront.
On Facebook, the Home Depot is successfully selling
products in the News Stream using Resource Interactive’s
unique DCP (Distributed Commerce Platform). This
sophisticated platform has additional functionality
which can leverage the user’s social graph and integrate
Facebook’s social plugins to create the type of shared
shopping experiences today’s connected consumers
demand. The DCP is also the first social commerce
platform to achieve superior security with PCI-level 1
compliance—the gold security standard. Other major
brands that have used the platform for social commerce
include The Limited, Pantene and Pampers.
Brands will achieve greater social commerce success by
aligning their offerings as closely as possible to the interest
pathways of their consumers—that will include verticalizing
large sets of SKUs for easier discovery and browsing by
shoppers online and off. One brand example to watch:
Target’s new Target Style Facebook page.
Now that commerce has been effectively embedded into
social, the next step is bringing social into commerce,
with a truly customized experience. In the future,
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What Can Brands Do Today?
As brands wait for the future to arrive and work continues
on how to capture, layer, implement and measure the 03 Incentivize sharing and participation: Reward loyal
brand fans and encourage the birth of new ones by
giving them perks, special offers, VIP events and prizes for
abundance of information that can be reaped by the
social behaviors such as “liking” your Facebook page, writing
social graph, a few key strategies can be implemented a product review, or re-tweeting a hot deal. Try experimenting
today to get prepared for tomorrow. with credits, the new “social currency” that is rapidly replacing
points as an acceptable tool for rewarding purchasing and
01 Integrate social tools on your site: Your site is no
longer just a final destination—it can also serve as a
hub to direct consumers to social touch-points where they can
loyalty behaviors. Facebook Credits were used by 16% of virtual
goods buyers in 2010. Likewise, virtual items on Facebook,
often in the form of virtual gifts, can represent a significant
support and promote your brand. Add Facebook “Like” buttons opportunity for brand marketers to connect with site visitors.
(or a Facebook Connect log-in), link to your Twitter feed, point
to your user forums, provide links for writing Yelp and Amazon The results: According to a Facebook presentation at a
reviews, and feature other social tools to allow fans of your brand BazaarVoice conference in April 2011, when American Eagle
to discuss and share your products and services with others. Outfitters added the “Like” button to their product pages,
Facebook users spent 57% more than non-Facebook users.
02 Plan ahead: As the social graph evolves, it is becoming In that same presentation, it was reported that Ticketmaster
more portable, persistent and embedded in everyday generates an additional $5.30 per-shared-link when they add
activities. As a result, consumers will reap the benefits of being sharing functionality at the end of a transaction. Similarly, clients
recognized and catered to wherever they go. To match this who implement Resource Interactive’s DCP: Facebook platform
momentum, capture connected consumers’ social graph data have seen between an 8% - 39% conversion rate depending on
(enabled through the use of social plug-ins) to begin shaping the campaign, and upwards of 80% fan growth once continuous
more flexible, scalable and personalized consumer experiences. campaigns have been implemented. While results in any of
The more you know about your consumers now, the better you’ll these situations vary, the important thing to note is that social
be able to customize their future experiences. commerce is still in its infancy and, as experiences improve
and consumers expect their social information to follow them,
we believe we will see a surge in social commerce.
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Final Thought
Disruptive social technology is on the fast track and the
integration of the social graph is following close behind.
The purchase of Radian6 by Salesforce in March 2011 is
just one example of the consolidation and new technology
that we believe we’ll see in the coming year as we
approach the promise of 1:1 marketing.
Thanks to social, data is richer, more plentiful and better
tied to the individual, and the combination of behavioral
data with social creates an incredible opportunity for
brands to elevate direct marketing, but the world of
social can be confusing and fraught with contradictory Connect with Andy
information about what to do and when to do it. And Let us help you prepare for today with tomorrow in mind.
there are those brands that say they’ll wait to see how
it all shakes out, but the risk isn’t in testing and learning
Andy Kennemer
and making it easy for consumers to integrate their Vice President,
social graph; the risk lies in not doing anything at all, Social Marketing and Media
because the changes that we’re talking about won’t be
happening ten years down the road—they’ll be Email:
happening in the next two years. akennemer@resource.com
Phone:
614-621-2888
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