Evolution of Social Commerce


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October, 11th 2006

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Evolution of Social Commerce

  1. 1. s-commerce: An opportunity for marketers to reach beyond MySpace and YouTube October 12, 2006
  2. 2. What we’ll cover today <ul><li>State of social networking </li></ul><ul><li>Marketing challenges </li></ul><ul><li>Social Commerce as a solution </li></ul><ul><li>Getting off to a smart start </li></ul>
  3. 3. The MySpace phenomenon <ul><li>Seventh largest site </li></ul><ul><li>56 million visitors </li></ul><ul><li>18 visits each month </li></ul><ul><li>1000+ page views per person </li></ul><ul><li>30 minutes per stay </li></ul><ul><li>Refers 35% of visits to Facebook and 13% to Google </li></ul><ul><li>myspace backgrounds, myspace layouts top searches on eBay </li></ul>snapshot:
  4. 4. The web is becoming more social <ul><li>Two out of three online consumers have visited a social networking site </li></ul><ul><li>Fastest growing online category: 109% growth in people, 414% growth in usage (pages viewed) since January 2004 </li></ul>
  5. 5. Social networking motivations Meet people Be entertained Learn something Influence others 78% join to communicate with existing colleagues or develop new acquaintances 47% join in order to find entertaining content such as photos, music or videos 38% join to get information from other people about topics that hold particular interest to them 23% join to express their opinions in a forum where their ideas could be discussed or acted upon
  6. 6. Characteristics of online socialites <ul><li>Attractive demographics </li></ul><ul><li>Younger: 37 years old </li></ul><ul><li>Higher household income: $78,000 </li></ul><ul><li>Greater discretionary income: $8,000 </li></ul><ul><li>Media & buying habits </li></ul><ul><li>35% spend less time with traditional media </li></ul><ul><li>75% seek input from peers before buying </li></ul><ul><li>25% of total purchases made online </li></ul><ul><li>Marketers’ equals </li></ul><ul><li>Early adopters: 40% are the first to buy </li></ul><ul><li>Influential: 37% influence others’ opinions </li></ul><ul><li>Credible: 63% trust reviews from other consumers as much as experts </li></ul>
  7. 7. Social saturation tempers growth <ul><li>Average online socialite already frequents three sites, only has enough bandwidth to join one additional site </li></ul><ul><li>Marketers’ demand for new advertising outlets exceeds supply of consumers’ time </li></ul>How many social networking sites would you consider being a part of? average Total number of social networks online socialites are willing to join
  8. 8. s-commerce offers marketers a new approach “ s-commerce” goes beyond advertising on social networking sites <ul><li>Links transactions and online communities </li></ul><ul><li>Broadens benefits of social networking </li></ul><ul><li>Thrives on consumer participation </li></ul><ul><li>Incorporates best practices from </li></ul><ul><ul><li>e-commerce : online sales & marketing performance </li></ul></ul><ul><ul><li>social networking : fast growth, deep engagement </li></ul></ul>
  9. 9. Emerging s-commerce models <ul><li>Corporate brands grow social </li></ul><ul><li>New brands create mash-ups </li></ul><ul><li>Branded micro-sites </li></ul><ul><li>Customer Forums </li></ul><ul><li>Ratings & Reviews </li></ul><ul><li>Peer-to-Peer selling </li></ul><ul><li>Community-created products </li></ul><ul><li>Product blogs/forums </li></ul>
  10. 10. “When it comes to beer, sharing is caring.” Miller Lite becomes the voice of men In concert with a new television campaign, Miller Lite launched ManLaws.com to develop a new code of conduct by men for men. Customers that go to the site can view each ad as well as contribute and vote on new entries to the Manlawpedia – the official book of laws that governs all men. <ul><li>Adoption: 50,000 visitors spend over 10 minutes interacting with the microsite each month </li></ul><ul><li>Engagement: Customers submit video auditions to appear alongside “men of the square table” </li></ul><ul><li>Influence: Over 50,000 new laws have been submitted to the Manlawpedia by customers </li></ul><ul><li>Positioning: 750+ daily blog posts containing ManLaws enhances Miller Lite’s brand among male beer drinkers </li></ul><ul><li>Other examples of microsites to study: </li></ul><ul><ul><li>Boldmoves; Seventeen & Aquafina MySpace profiles </li></ul></ul>Manlaws.com Unique Visitors Accumulated minutes viewed (000’s)
  11. 11. “What security software do I need?” Dell Online Forum Unique Visitors Dell forum helps customers help each other Dell’s active community forum consists of threaded discussions among Dell employees and community members. Participants create profiles to personalize their posts and add credibility. Dell rewards participants with exclusive promotions & offers for community members. <ul><li>Community: 52% of visitors surveyed said they feel like a part of a Dell community </li></ul><ul><li>Service: 75% trust the content within the community and do not require support from Dell </li></ul><ul><li>Loyalty: 68% of members are likely to purchase their next computer through Dell </li></ul><ul><li>Advocacy: 90% of members will recommend the online forum to friends and/or family </li></ul><ul><li>Other examples of online customer forums to study: </li></ul><ul><ul><li>Cingular, Samsung, Microsoft </li></ul></ul>
  12. 12. “ Getting out of two mortgage payments after condo fire.” Borrowers bond with lenders at Prosper <ul><li>Other examples of peer-to-peer sites to study: </li></ul><ul><ul><li>Zopa, Lala, Peerflix </li></ul></ul>Inspired by eBay, Prosper is building a new social-financial marketplace. Borrowers use Prosper’s online platform to create loan listings; lenders then bid down the interest rate to compete for the loan. Borrower profiles, bid histories and “groups” make the process straightforward, transparent and safe. <ul><li>Adoption: 145,000 visitors each month, 50% are registered Prosper users </li></ul><ul><li>Engagement: Users visit the site 3.6 times each month and view nearly over 65 pages per visit </li></ul><ul><li>Community: Approximately 3,800 active loans totaling $18.1 million (loans in default: 4) </li></ul><ul><li>Affinity: 3,250 borrower groups have formed to pool like people, mitigate risk and lower the interest rates offered by lenders </li></ul>Prosper Unique Visitors
  13. 13. “California-style burger joints in Boston?” Yelp Unique Visitors Local businesses & opinionated reviews at Yelp <ul><li>Other examples of product-focused forums to study: </li></ul><ul><ul><li>Woot, Insiderpages, Judy’sBook </li></ul></ul>Yelp is quickly becoming the definitive city guide by offering community-generated reviews on local businesses from restaurants to dentists. Consumers post reviews to Yelp, and can collect and organize recommendations from peers. Advertisers participate via email ads, enhanced business listings and sponsored search results. <ul><li>Adoption: 500,000 monthly users: 15% submit at least one review each month </li></ul><ul><li>Community: Yelp members are very active contributors; in San Francisco, the average Mexican restaurant has 50 reviews, and the average member has contributed over 100 posts </li></ul><ul><li>Influential: 80% of Yelp members consider community reviews as trustworthy as advice from family member or friend </li></ul>
  14. 14. Roadmap for launching s-commerce initiatives <ul><li>Research consumers, while they research you and your rivals. </li></ul><ul><li>Develop new online research program </li></ul><ul><li>Benchmark usage and adoption of social sites </li></ul><ul><li>Survey consumers to understand motivations </li></ul><ul><li>Create a channel to connect consumers and your brand. </li></ul><ul><li>Design, launch and iterate s-commerce site </li></ul><ul><li>Focus on sales, service, or positioning brand </li></ul><ul><li>Seek customer input into site features </li></ul><ul><li>Engage consumers in conversation: listen, learn & leverage. </li></ul><ul><li>Contribute to the dialog and reinforce your value </li></ul><ul><li>Participate via questions, discussions, offers </li></ul><ul><li>Apply learning throughout sales and marketing </li></ul>Research Channel Engage
  15. 15. Taking our own medicine – compete.com <ul><li>Launching compete.com as a consumer service on November 1 </li></ul><ul><li>Consumers benefit directly from sharing their clicks with each other, Compete and marketers </li></ul>compete.com – clickstreams as consumer-generated content Trust : Detects dangerous phishing sites and spyware offenders Deals : Promotions and discount codes across more than 2,000 online retailers Site profiles : Timely, accurate website analytics including visitors, rank, pageviews, time spent, etc.
  16. 16. Questions from registrants <ul><li>How does s-commerce relate to my market (travel, auto, financial services)? </li></ul><ul><li>What are the issues around privacy and hosting consumer-generated content? </li></ul><ul><li>What are cost effective ways to incorporate s-commerce into a consumer website? </li></ul><ul><li>How viable an advertising channel are social sites for high-consideration products? </li></ul><ul><li>How effective are profile and sponsored pages on social networking sites? </li></ul><ul><li>What impact are communities having on sales, marketing and/or customer service? </li></ul><ul><li>What specific tools or features impact conversion rates? </li></ul><ul><li>What are online communities three most pressing issues? </li></ul><ul><li>How should marketers partner with social networking sites? </li></ul><ul><li>Do consumers really pay attention to ads on these social networking sites? </li></ul>For copies of both presentations, please email Max Freiert at mfreiert@compete.com