Social Media for Marketers


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The Social Media Market Opportunity

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Social Media for Marketers

  1. 1. Digital Marketing Innovation Series: Social Media for Marketers Presented by: Mark Silva, Founder and Managing Director May 13, 2008
  2. 2. AGENDA <ul><ul><li>Three takeaways about Social Media </li></ul></ul><ul><ul><li>It’s Messy </li></ul></ul><ul><ul><li>It’s Hot </li></ul></ul><ul><ul><li>It’s Game-Changing </li></ul></ul>
  3. 3. IT’S MESSY
  4. 4. IT’S MESSY <ul><li>FAILED SESSION TITLE: </li></ul><ul><li>THE TWO MOST IMPORTANT LETTERS FOR MARKETERS IN A CONSUMER-IN-CONTROL MARKET: </li></ul><ul><li>S & M </li></ul><ul><li>(AS IN SOCIAL MEDIA) </li></ul>
  5. 5. IT’S MESSY SOURCE: 2005 , Markus Angermeier  : Web 2.0 Mindmap
  6. 6. IT’S MESSY <ul><li>Web 2.0 as defined by Wikipedia… </li></ul><ul><ul><li>A social phenomenon embracing an approach to generating and distributing Web content itself, characterized by open communication, decentralization of authority, freedom to share and re-use, and &quot;the market as a conversation&quot; </li></ul></ul><ul><ul><li>Alluding to the version-numbers that commonly designate software upgrades, the phrase &quot;Web 2.0&quot; hints at an improved form of the World Wide Web; suggest that technologies such as weblogs, social bookmarking, wikis, podcasts, RSS feeds (and other forms of many-to-many publishing), social software, Web APIs, Web standards and online Web services imply a significant change in web usage </li></ul></ul>HUH? WTF? Unleashing “… a trend in which people use technologies to get the things they need from each other instead of from companies.” - Groundswell, Charlene Li & Josh Bernoff, Forrester Research 2008
  7. 7. IT’S MESSY
  8. 8. IT’S MESSY, BUT WE’RE TRYING TO CLEAN UP Bookmarking Video Photo Personalities = Social net/Individual <ul><li>Tribes = Social Net </li></ul><ul><li>Regional; Clubs </li></ul>Microblog Mobile Blog Search Authoritative Fan/passing Related ads Tiered media A Social Map identifies key consumers activities and how to engage. The accretive sum of activities influence the key channel activity: Search “ The Website as we know it today is dead You need an armada of activity to reach people where they are.” Steve Rubel, Edelman 4/22/08
  9. 9. IT’S HOT
  10. 10. IT’S HOT <ul><li>FAST GROWTH; LOW PENETRATION = HOT </li></ul>Visitor Growth by Category (1/07-1/08) Category Penetration (% of Online Users) Source: comScore “Digital World – State of the Internet’ 3/08
  11. 11. IT’S HOT <ul><li>GROWING FASTER THAN PORN : </li></ul>SOURCE: THE ECONOMIST, 4/19/2008
  12. 12. IT’S HOT <ul><li>CONSUMERS LEADING WAY: 58% CAGR in IP TRAFFIC, 2005E-20011E </li></ul>Source: Cisco Systems, Global IP Traffic Forecast and Methodology; Mobility segment (0.1% of traffic in 2007) not displayed
  13. 13. IT’S HOT <ul><li>Source: eBay Investor Presentation, RockYou </li></ul><ul><li>eBay starts Q2 98, PayPal starts Q1’00, Yahoo! starts Q1’95, AOL starts Q1’92, Facebook starts Q4’04, and RockYou Starts Q4’05 </li></ul><ul><li>Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to global Unique Visitors (per comScore Media Metrix) </li></ul>(2) Registered Users (MM) SOURCE: ROCKYOU! WEB2.0 CONFERENCE 4/2008
  14. 14. IT’S HOT <ul><ul><li>101MM visitors +305% Y/Y (67MM+ active users), 20B minutes (4# globally behind Yahoo!, Live , and YouTube), +365 Y/Y; 250K new registrations per day since 1/07; >50% of active users return daily (Facebook 3/08, comScore 1/08) </li></ul></ul><ul><ul><li>55K regional / work-related / collegiate / high school networks (>50% outside of college); Fastest growing demographic is those 25+ years old; 85% market share of 4-year US universities (Facebook 3/08) </li></ul></ul><ul><ul><li>14MM+ photos uploaded daily; 6MM+ active users groups on site (Facebook 3/08) </li></ul></ul><ul><ul><li>Top non-US active users: UK (8MM+), Canada (7MM+), Turkey, Australia, France, Sweden, Norway, Columbia, and South Africa (Facebook 3/08) </li></ul></ul>Source: comScore global 1/08, Facebook 3/08, Morgan Stanley Research
  15. 15. <ul><li>Internet + Personal Sources = Most Important Sources Of Information </li></ul>IT’S HOT Source: USC Annenberg School: Digital Future Report 2007
  17. 17. IT’S GAME-CHANGING Source: Google, Yahoo! iGOOGLE + YAHOO! MOBILE
  18. 18. IT’S GAME-CHANGING Alexa Global Traffic Rankings 12/31/05; 3/12/08, Morgan Stanley Research 1 2 3 4 5 6 7 8 9 10 2005 (U.K.) 2008 1 2 3 4 5 6 7 8 9 10
  19. 19. IT’S GAME-CHANGING <ul><li>Next-Generation Assets: YouTube + Facebook + Skype + PayPal </li></ul>Source: (1) comScore global 1/08; (2) eBay CQ4, Morgan Stanley Research; (3) YouTube; (4) Facebook Payment volume +35% Y/Y; On eBay / off eBay payment volume +17% / +66% Y/Y (to 44% of TPV); Average transaction size of $68.88 (+10% Y/Y) (2) +16% 57MM(2) $1.67 annualized revenue per registered user (+9% Y/Y) on peer-to-peer network; 1.6B Skype Out minutes (+10% Y/Y); 11.9B Skype-to-Skype minutes (+25% Y/Y) (2) +61% 276MM(2) #4 site in global minutes; 67MM+ active users; >50% of active users return daily; 20K application s + 95% of Facebook members have used at least one (1,4) +305% 101MM(1) #3 site in global minutes; 51% of users go to YouTube weekly or more; 50% watch all video to the end; ongoing copyright challenges; 52% of 18-34 year-olds share videos with friends / colleagues often (1,3) +94% 285MM(1) Comments Y/Y Growth Users
  20. 20. IT’S GAME-CHANGING <ul><ul><li>In 5/07, Facebook opened its platform to 3rd-party developers, allowing anyone to create widgets for use on Facebook pages </li></ul></ul><ul><ul><li>20K applications, 859MM instillations, 34MM usages per day since APIs opened – may be unprecedented ramp ( 3/08) </li></ul></ul><ul><ul><li>Early to understand that individuals had the ability to innovate faster than it could, while users would govern quality / value as they customized their profiles </li></ul></ul>Source: (1) Active user data unavailable; (2) E. Diep / J. Winterhalter; Source: 3/12/08 TOP FACEBOOK APPLICATIONS 12MM (1%) N/A (2) Quizzes 13MM (2%) RockYou! Hug Me 12MM (3%) iLike iLike 21MM (2%) Slide SuperPoke! 20MM (3%) Flixster Movies 16MM (2%) RockYou! Likeness 16MM (1) Facebook Video 25MM (9%) Slide FunWall 26MM (7%) Slide Top Friends 28MM (8%) RockYou! Super Wall Installs (% Active Users) Company Application
  21. 21. IT’S GAME-CHANGING Custom size pop-up w/ additional info appears upon mouse rollover on relevant quiz choice 646x90 banner clicks through to advertiser’s website Text link clicks through to advertiser’s website Application Integration: Custom Advertiser Quiz SOURCE: ROCKYOU! WEB2.0 CONFERENCE 4/2008 News Feed Mini-News Feed on Profile pages Profile box Notifications Email Message An advertiser’s custom Likeness quiz virally spreads through the a social network platform’s communication channels. 0.01% CTR for banner alone 65x better 0.65% CTR with integration
  22. 22. <ul><li>Applications can be skinned or branded with prominent placement for an advertiser with additional opportunities for sweepstakes, contests, streaming video units, and other custom programs. </li></ul>IT’S GAME-CHANGING Application Sponsorship SOURCE: ROCKYOU! WEB2.0 CONFERENCE 4/2008
  23. 23. IT’S GAME-CHANGING <ul><ul><li>WHY FACEBOOK OVER MYSPACE? </li></ul></ul><ul><ul><li>Facebook offers a social network that is both standardized + self-controlled / flexible – a highly personalized first-stop portal for online connectivity – users can program their pages with growing number of drag-and-drop applications (aka widgets) </li></ul></ul><ul><ul><li>Users like the ability to express themselves + connect with friends in a protected environment where they know / trust people in their network + don’t feel exploited / spammed y intrusive ads </li></ul></ul>Source: MySpace, Facebook
  24. 24. IT’S GAME-CHANGING Source: Facebook; C. Messina on flickr SOCIAL MEDIA – ‘PRESENCE’ VIA MOBILE 24x7
  26. 26. IT’S GAME-CHANGING <ul><li>FACEBOOK ADS </li></ul>
  28. 28. THE MOMENTUM EFFECT <ul><li>How to create brand value in the Web 2.0 social networking space? </li></ul><ul><ul><li>Over 70% brand value is the result of consumer-to-consumer communication* </li></ul></ul><ul><ul><li>The momentum effect contrasts direct exposure (B2C) to brand imagery, advertising, or indirect, second-hand exposure through another consumer (C2C) </li></ul></ul><ul><li>Why? </li></ul><ul><ul><li>Positive impact of seeing a brand within one’s social network </li></ul></ul><ul><ul><li>Consumers react when given the opportunity to share their own story using the brand as a symbol and reference point </li></ul></ul><ul><ul><li>Community members become highly engaged and focused on content they create, modify, or personalize </li></ul></ul>
  29. 29. WHAT BRANDS CAN SUCCEED? <ul><ul><li>Brands who are already experimenting with involving users’ voices </li></ul></ul><ul><ul><li>Companies who can move fast </li></ul></ul><ul><ul><li>Companies who are open </li></ul></ul>
  30. 30. HOW TO APPROACH THE SOCIAL MEDIA OPPORTUNITY? <ul><li>Visit, homestead, rent, host, contract, or DIY? </li></ul>Utilize Ning, Pluck, etc to host an environment Host Liveworld, Communispace Contract It Out DIY Build Yourself Google Blog Search, Buzz Metrics, Nielsen & Analyze Monitor Be part of pre-existing communities, e.g.. Community Connect Rent Don’t over-stay your welcome Homestead Drop in where your consumers are Visit
  31. 31. WHAT IS SOCIAL NETWORKING? <ul><li>Social networking as defined by eMarketer… </li></ul><ul><ul><li>A site whose main purpose is to enable people to connect with others by creating personal profiles, describing their interests and sharing content </li></ul></ul><ul><li>Social networking as defined by Wikipedia… </li></ul><ul><ul><li>Social media is an umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words and pictures. </li></ul></ul><ul><ul><li>Social media can take many different forms </li></ul></ul>Craft a unique identity, have a circle of friends, communicate, share <ul><li>Social networking as defined by eMarketer… </li></ul><ul><ul><li>A site whose main purpose is to enable people to connect with others by creating personal profiles, describing their interests and sharing content </li></ul></ul><ul><li>Social networking as defined by Wikipedia… </li></ul><ul><ul><li>Social media is an umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words and pictures. </li></ul></ul><ul><ul><li>Social media can take many different forms </li></ul></ul><ul><ul><ul><li>Internet forums </li></ul></ul></ul><ul><ul><ul><li>Message boards </li></ul></ul></ul><ul><ul><ul><li>Weblogs </li></ul></ul></ul><ul><ul><ul><li>Wikis </li></ul></ul></ul><ul><ul><ul><li>Podcasts </li></ul></ul></ul><ul><ul><ul><li>Pictures </li></ul></ul></ul><ul><ul><ul><li>Video </li></ul></ul></ul><ul><ul><ul><li>Blogs </li></ul></ul></ul><ul><ul><ul><li>Picture-sharing </li></ul></ul></ul><ul><ul><ul><li>Vlogs </li></ul></ul></ul><ul><ul><ul><li>Wall-postings </li></ul></ul></ul><ul><ul><ul><li>Instant Messaging </li></ul></ul></ul><ul><ul><ul><li>Music-sharing </li></ul></ul></ul><ul><ul><ul><li>Crowdsourcing </li></ul></ul></ul><ul><ul><ul><li>Voice Over IP </li></ul></ul></ul>
  32. 32. THE BBC! - @ + Facebook + YouTube Source: BBC
  33. 33. SOCIAL NETWORK FACTS <ul><ul><li>27.4m US internet users age 3 and older use social networking sites at least once a month </li></ul></ul><ul><ul><li>12% of all time spent online by US internet users is on MySpace (2006) </li></ul></ul><ul><ul><li>Since 2000 </li></ul></ul><ul><ul><ul><li>Internet Increased 50% </li></ul></ul></ul><ul><ul><ul><li>TV Increased only 6% </li></ul></ul></ul><ul><ul><li>Facebook: 64 million active users </li></ul></ul><ul><ul><ul><li>Since going to the public in September 2006, its rank went from 60 to rank 6 in web traffic </li></ul></ul></ul><ul><ul><li>Social media applications will attract over 1b broadband users within 5 years </li></ul></ul><ul><ul><li>Social network members tend to be younger and more engaged </li></ul></ul><ul><ul><li>Social network and widget usage </li></ul></ul><ul><ul><ul><li>18-24 43% social network 43% widgets </li></ul></ul></ul><ul><ul><ul><li>25-34 35% social network 25% widgets </li></ul></ul></ul>
  34. 34. WHO’S USING SOCIAL NETWORKING SITES? <ul><li>Who has a profile? </li></ul><ul><ul><li>Audience size: 120MM </li></ul></ul><ul><ul><li>2 out of 3 Americans </li></ul></ul><ul><li>Who’s doing what? </li></ul><ul><ul><li>12- to 17-year-olds 260 min/month </li></ul></ul><ul><ul><li>Viewed 808 pages </li></ul></ul><ul><ul><li>35- to 54-year-olds 179 min/month </li></ul></ul><ul><ul><li>Viewed 560 pages </li></ul></ul>Source: , Ad Age reported in October 2006
  35. 35. REFERENCES <ul><ul><li>Strategy Analytics, The people’s revolution: Implications of Web 2.0 and social media applications press release, December 12 2007 </li></ul></ul><ul><ul><li>eMarketer, Social Media Future Bright, Challenging, December 2007 </li></ul></ul><ul><ul><li>eMarketer, MySpace is America’s Favorite Internet Time Waster, February 2007 </li></ul></ul><ul><ul><li>Veronis Suhler Stevenson Study, September 2006 </li></ul></ul><ul><ul><li>Alexa Internet </li></ul></ul><ul><ul><li>Strategy Analytics, The people’s revolution: Implications of Web 2.0 and social media applications, November 2007 </li></ul></ul><ul><ul><li>Adnomics </li></ul></ul><ul><ul><li>comScore Widget Metrix press release, June 2007 </li></ul></ul><ul><ul><li>Dynamic Logic Survey </li></ul></ul><ul><ul><li>JupiterResearch, Travel Widgets, March 2008 </li></ul></ul><ul><ul><li>eMarketer, Widgets Come to Online Advertising, October 2007 </li></ul></ul><ul><ul><li>JupiterResearch </li></ul></ul><ul><ul><li>eMarketer, What Can Widgets Do?, February 2009 </li></ul></ul><ul><ul><li>JupiterResearch, Travel Widgets, March 2008 </li></ul></ul><ul><ul><li>eMarketer, Widgets Come to Online Advertising, October 2007 </li></ul></ul>
  36. 36. Building Viral Engagement User <ul><li>3. Indirect friends => focus on messaging </li></ul><ul><ul><li>Focus on messaging to invite/notification receivers to drive more friends invites </li></ul></ul><ul><ul><li>Deliver increasing AND simply understood value to app w/ every friend invited (Zombies) </li></ul></ul><ul><li>1. New users => build clean flows </li></ul><ul><ul><li>New users absolutely key to viral engagement (vs returning user) </li></ul></ul><ul><ul><li>Focus on linear, one-action flows to maximize activation for new users </li></ul></ul><ul><ul><li>Forget registration </li></ul></ul><ul><li>2. Direct friends => deliver clear value </li></ul><ul><li>prop </li></ul><ul><ul><li>Provide clear value proposition to new user for inviting friend network (Likeness) </li></ul></ul><ul><ul><li>Ensure invitation is first/second step of new user flow to maximize viral value of user (Superlatives vs Superlatives) </li></ul></ul><ul><li>4. Interested parties => allow universal use </li></ul><ul><ul><li>Enable simple tools (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My Questions) </li></ul></ul>Direct Friends Indirect Friends Interested Parties SOURCE: ROCKYOU! WEB2.0 CONFERENCE 4/2008
  37. 37. BEST PRACTICES-APPLICATION DEVELOPMENT <ul><li>F rictionless: simple, less is more </li></ul><ul><li>A udience: on Facebook for their friends </li></ul><ul><li>C ommunication: integrate into the viral channels </li></ul><ul><li>E ngagement: hook users to return regularly </li></ul><ul><li>B usiness model: design with monetization in mind </li></ul><ul><li>O bjective: establish goals and success metrics </li></ul><ul><li>O bvious: make each page’s purpose clear </li></ul><ul><li>K eep working: develop, test, repeat </li></ul>Some rules of thumb from Context Optional
  38. 38. <ul><li>Lead Generation and Direct Response </li></ul><ul><li>Leverage affiliate network providers at first (best offers w/ best payouts) </li></ul><ul><ul><li>Affinity Labs </li></ul></ul><ul><ul><li>MyOfferPal </li></ul></ul><ul><ul><li>Neverblue Ads </li></ul></ul><ul><ul><li>Commission Junction </li></ul></ul><ul><li>Vet opportunities based on demographic mix of the application/site </li></ul><ul><li>Successful lead gen/direct response campaigns on social media include: </li></ul><ul><ul><li>Mobile offers (SendMe) </li></ul></ul><ul><ul><li>Dating (True, Match, SinglesNet) </li></ul></ul><ul><ul><li>Education (UPheonix) </li></ul></ul><ul><li>Given unlimited funding for lead gen, effective way to fill remnant inventory at higher CPMs </li></ul><ul><li>Actively research performance via discussion boards and directories </li></ul><ul><li>Be prepared to process multiple lead gen offers to maximize performance </li></ul><ul><li>Lead generation campaigns may burn through quickly; active management and tracking is required </li></ul>BEST PRACTICES-APPLICATION DEVELOPMENT
  39. 39. CONTACT INFORMATION <ul><li>THANK YOU! </li></ul><ul><li>MARK SILVA </li></ul><ul><li>Founder & Managing Director </li></ul><ul><li>[email_address] </li></ul><ul><li>415.522.1045 ext 304- o </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>Thanks to all the Real Branding team for helping me in pulling this off. </li></ul>