ASMI Keynote

The Impact of Social Media on Marketing Brian Cavoli October 11, 2007

Welcome the World of Influence 2.0
Media influence is waning
Communications moving from one-way marketing to a consumer dialog
Social media enables broader consumer connections
Consumers are openly sharing their experiences, need and motivations
Influencing the opinions of millions – positively and negatively
Principles of the Social Media Impact on Business

Social Media is Mainstream It’s a Lot More Than Blogs Requires New Tools and Metrics

40% watch less TV now than two years ago (Piper Jaffrey)
Trust in ads plunge 41% in the last 3 years (Insight Express)
92% cite WOM as a best source for ideas on new products (GfK NOP)
More consumers trust discussion boards than ads in any media (Forrester)
The Internet Takes Over "The Internet is becoming consumers' primary entertainment source. The TV is increasingly taking a back seat to the cell phone and the personal computer” - IBM Media & Entertainment Strategy and Change

Consumers Trust Others – Even if They Don’t Know Them

Social Media Sites Lead Time Spent “ The popularity of social networking is not expected to wane in the near future. This is a phenomenon we’re seeing not only in the U.S., but also around the world.” - Peter Daboll, President and CEO comScore Sites based on social media

Social Components Drive Business Results 77% Online shoppers read consumer product reviews and ratings before making a purchase (Jupiter) $2 billion Online travel purchases a year are affected by social media (Compete) 24% Online car shoppers have changed their mind about a vehicle purchase based on social media (Compete) 51% Journalists read blogs for story ideas (Columbia Univ) More Influential BoingBoing has more inbound links than NPR and BusinessWeek (Technorati)

Social Media Also Influences B2B Purchases
IT buyers trust social media more than any other content source
More informed purchase decisions
Objective feedback on products
More in-depth research
80% of business and IT professionals read blogs
53% said blog content impacts their work-related purchasing decisions
Source: PJA IT Social Media Index, 2007 IT Buyers Place the Greatest Trust in Social Media Source: Universal McCann/KnowledgeStorm, 2007

Social Components Drive Business Results
Mentos sales jumped 15% after the Diet Coke Mentos Experiment videos on YouTube
Customers that sort the list of products by customer ratings spend 41% more
Emails that feature customer review content receive 50% higher clickthrough rates
Warner Bros attributes 25% of the March of the Penguins $100 million revenue to a “Mommy podcast”

“ for seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game”

“ marketing world leaders declared that it's time to give up control and accept that consumers now control their brands.”

4 Reasons why online will transform traditional modes of advertising
People don’t like ads
But they crave information
The consumer is in control. No, really
Diversion of ad budgets
Pay per view
Welcome to the Post Advertising Age “… display advertising's main role will be to quickly, straightforwardly, informatively draw you into a broader brand experience.” - Bob Garfield in Advertising Age

Marketers are Changing Their Tune
P&G’s CMO Jim Stengle calls for radical change at 2007 4A’s media conference
“ What we really need is a mind-set shift, a mind-set shift that will make us relevant to today's consumers, a mind-set shift from 'telling and selling' to building relationships”

Building Brands People Want to Talk About
Beam Brands refocuses $100M budget toward a singular goal – to drive word-of-mouth
"Advertising is not dead; it's really important, but it's more about fanning the flames of word-of-mouth than anything else." - Beam CMO Rory Finlay

Social Media is Mainstream It’s a Lot More Than Blogs Requires New Tools and Metrics

Blogs are Important… But They are Just the Beginning
Technorati reports that there are over 100 million blogs
1.6 million posts per day
“ Authoritative blogs” outnumber any other traditional medium
30,488 high/very high authority blogs
13,000 radio stations
9,000 TV stations
17,000 magazines
Cumulative Number of Blogs (Source: Technorati)

Social Networks Offer Blogging and a Whole Lot More
Easy to set up and connect with many people
Feature blogs, comments, discussion board
Easily enables people to create interest groups
Doesn’t require a big commitment to keep current
Users motivated to build their networks by sharing experiences and interests

… And Their Traffic is Exploding
2 of every 3 people online visit a social networking site (Compete)
70% of 15- to 34-year-olds utilize social-networking sites (Never Ending Friending)
More than half of MySpace visitors are over 35+ (Comscore)
“ The shift in demographics reflects the ’mainstream effect’. It's really a broadening of the user base, rather than one user base supplanting the other" - ComScore on the changing Myspace audience Social Network Users MySpace 200,000,000 Orkut 68,000,000 Friendster 50,000,000 Facebook 40,000,000 Classmates 40,000,000 Xanga 40,000,000

Creating New Marketing Opportunities … Beyond the Banner Ad

Wal-Mart’s MySpace Community

Brands Enhancing the Community Experience

Making it Easy to Spread the Brand Virally

Consumers Are Identifying Themselves With Brands

“ Never Ending Friending”
70% of the value from social networks is from the “momentum effect”
Consumers using brand elements on their profile

Television Decreases for Social Networking Users

Using Video Engage Consumers

Marketer are Connecting with Consumers on Twitter

Social Media is Mainstream Social Media is a Lot More Than Blogs Requires New Tools and Metrics

Traditional Marketing Tools Don’t Work Here
Influence 2.0 creates a complex marketing environment
Traditional metrics frail to capture the whole story
Measure the influences on the conditions that can result in sales
Reach/frequency
Click throughs, page views
Sales and ROI
Sentiment
Brand affinity
Power to influence others
“ Ditch the marketing tactics – this is about building trusting relationships. Marketers will fail of they approach social media as traditional marketing channel” - Forrester Research Traditional metrics measure: Engagement metrics measure:

Measuring Engagement Requires New Tools Source: Forrester Research Interaction eCommerce Social media Platforms Inquiries, online sales Qty/freq. of reviews, posts, comments Intimacy Market surveys Brand Monitoring Sentiment tracking Consumer opinions Influence Market surveys Brand Monitoring Satisfaction ratings Brand affinity Viral content High profile blog posts Involvement Web analytics Site visits, time spent, page views, etc. How to Track What to Track

Measure the Influences on Your Brand
Gain business insights from both online consumer discussions and traditional media coverage
Natural Language Processing
Traditional Media
Television
Radio
Newspapers
Magazines
Social Media
Blogs
Social networks
Discussion boards
Product review sites

Next-Gen Video Wars: Blu-ray vs. HD DVD
How do consumer feel about the battle between
these competing high-def video formats?
vs.

Equal Discussion Among Early Adopters
Volume of posts was balanced between the formats
Small percentage of sites discussed specific models of players
60% of conversations on 44 sites, representing early adopters
Videophiles: creating a total video experience
Gamers: benefits / disadvantages of the consoles, games and equipment
Format Discussion Volume Speaker Analysis Volume

HD DVD Discussion is More Positive
HD DVD has greater percentage of positive posts
Blu-ray has over 50% more negative posts
Positive HD DVD Discussions Outweigh Blu-ray 32.9% to 23.5%

HD DVD Earns More Positive Mentions
Launch of PS3 drove significant discussion
2.5 times more posts impressed with HD DVD
70% more posts discussed HD DVD advantages
Only 7.5% mentioned delaying purchase until standards emerge
Post Authors Impressed with HD DVD, Cite its Advantages # of posts

Top Blu-ray Negatives: “Dislike” and PS3
Key Blu-ray features not being discussed
Detractors doubt Sony’s innovation credibility
Many note other failed Sony innovations
Many felt Sony is an arrogant company
Integration with PS3 is a negative
Object to forced adoption
Microsoft praised for offering HD DVD option to Xbox 360
“ Cost” and “Format Wars” Aren’t Top Negatives

Over Time…Indifference Dominates

Thought Starters for Sony and Blu-ray
Let other companies be spokespeople for Blu-ray
Movie studios, reatilers and technology companies support the format
Engage the detractors
Launch a discussion board and invite detractors, give them answers to their questions, concerns, objections
Issue a disc that is a showcase for “next generation interactivity”
Discussion reveals this term isn’t understood
Talk benefits, not features
Little discussion of 30 MG capacity - doubts that the capacity is necessary

Measuring Engagement with Cymfony Brian Cavoli [email_address] 617-673-6023

ASMI Keynote

by Brian Cavoli on Dec 17, 2008

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