This document discusses how Web 2.0 and social media have changed marketing and community engagement. It notes that consumers now trust recommendations from people they know and opinions posted online more than branded advertising. This represents a shift from brands controlling the message to audiences now having more control over what news and information spreads due to social sharing. The document also cautions that new technologies take time to be fully adapted and applied.

1. Web 2.0 and Community
Marketing
Francisco Hernández Marcos
@franciscohm
Madrid, 4th December 2012
This document has been produced by 11 Goals & Associates. It is not complete unless supported by
the underlying detailed analyses and oral presentation.

2. About me SHAMELESS
SELF-PROMOTION
Education: Universidad Politécnica de Madrid, UNED,
London Business School, University of Chicago – Fundaciò
“laCaixa” & Fundación Rafael del Pino scholarships.
Firms worked for full-time: Abengoa, McKinsey&Co, ABN
AMRO, Real Madrid C.F.
Entrepreneurship: Crisalia
Social Media & Internet consulting: 11goals.com
Lectures & Speaker in 3 continents: The Wall Street Journal, Universidad Politécnica
de Madrid, London Business School, Cornell University, Politecnico di Milano, CEIBS
(Shanghai), Kungliga Tekniska högskolan, The Business Factory, Asociación J.W.
Fulbright Spain, ESCP Europe, UIMP, and several private companies.
Full profile: linkedin.com/in/franciscohm
1

3. “A child of five would understand this.
Send someone to fetch a child of five.”
Groucho Marx (Duck soup, 1933)
2

4. What happened to Real Madrid’s social networks
#1 sports team in social
media worldwide
(sep 2011)
Source: Famecount (now Starcount), Football Marketing
3

5. What happened to Real Madrid’s social networks
Only Spanish brand
ever to be the most
active Facebook page
Source: AllFacebook.com
4

6. Agenda
 Things are changing
 Web 2.0 & Community MKT
 Some useful tools and concepts

7. Sending a postcard…
6

8. Showing off who we have met or known…
7

9. Displaying where we have been…
Our parents
Our children
(& ourselves)
8

10. Who decides what news are more important?
Gumersindo Lafuente: “Por primera vez en la
historia, las audiencias controlan a los periodistas”
9

11. Who was the leader of the Arab Spring revolution?
• 9 out of 10 Egyptians and Tunisians asked
in a poll said they used Facebook to
organize protests and spread awareness
10

12. How do we play?
Offline, Social
5.7 mill.
daily users
“Transactionalization”
Online, Social
Online, Non-Social
“Re-Socialization”
Source: App Data
11

13. ILLUSTRATIVE EXAMPLES
The path to social+online
Non Social Social
¿?
SOCIAL
TECHNOLOGIES
Online (Social relevance
/ real identities)
&
¿? INNOVATION
Each segment
has its own
INFORMATION TECHNOLOGIES way and pace
to be online
TV and social
Gaming
Offline Travelling
Electronics
Supermarket
Shopping
Shopping
Source: 11 Goals & Associates
12

14. Inertia in the application of new technologies
Radio as newspaper… TV as radio…
It always takes time
to adapt to new
technologies
Web 1.0 as newspaper… Web 2.0 as Web 1.0…
We expect years
developing
applications of
current and future
social technologies
Source: 11 Goals & Associates
13

15. Agenda
 Things are changing
 Web 2.0 & Community MKT
 Some useful tools and concepts

16. World’s best brands according to Interbrand
Source: “Best Global Brands 2012”, Interbrand
15

17. World’s best brands according to me
Source: Me
16

18. Which of these ‘ads’ do you trust the most?
17

19. Customers trust each other, not the brand!
76% of American consumers believe companies don’t tell the truth in
advertising -Yankelovich (2005)
60% have a much more negative opinion of marketing & advertising than a few
years ago - Yankelovich (2004)
78% say consumer recommendations are the most credible form of advertising
- Nielsen (2007)
83% say online evaluations and reviews influence their purchasing decisions -
Opinion Research Corporation (2008)
84% trust user reviews more than critics’ reviews - MarketingSherpa (2007)
Trust in “person like me” tripled to 68% from 2004-2006 – biggest influencer to
consumers - Edelman Trust Barometer (2006, 2007)
Source: Your Users Trust Each Other, Not You: Why and How to Implement Ratings and Reviews, by Molecular Inc.

20. What form of advertising do consumers trust?
Recommendations from people I know 92%
Consumer opinions posted online 70%
Editorial content such as newspaper articles 58%
Branded Websites 58%
Emails I signed up for 50% 28.000 Internet users in
Ads on TV 47% 56 countries
Brand sponsorships 47%
Ads in magazines 47%
Billboards and other outdoor advertising 47%
Ads in newspapers 46%
“Recommendations from
Ads on radio 42%
people I know” is, by far,
Ads before movies 41% the most trusted form of
TV program product placements 40% marketing
Ads served in search engine results 40%
Online video ads 36%
However, “Ads on social
Ads on social networks 36%
networks” not really
Online banner ads 33% trusted
Display ads on mobile devices 33%
Text ads on mobile phones 29%
Source: Nielsen, Global Trust in advertising and Brand Messages, Abril 2012

21. Our growing circle of trust
From “Me” to “Social”
…
Me Mom Dad Enrique
…
Miguel Carmen Esther
…
…
Arturo Gonza Carlos
Source: 11 Goals & Associates 20

22. How do we use our circle of trust?
Extract value
We rely on people we know to: from the circle
• Get informed.
• Make decisions.
Yo Mamá Papá Enrique
We use our experiences to: Miguel Tomás Esther
• Increase our Goodwill
•
Arturo Rafael
Identify ourselves. xxx xxx …
• Self-express ourselves.
• Self-realise
• Socialize around an excuse
Nourish and
for conversation
extend the circle
21

23. What’s a social networking service?
SNS: “online service, platform, or site that focuses on building and
reflecting of social networks or social relations among people, who,
for example, share interests and/or activities” (Wikipedia)
~85% of
online
population
use SNS
There are discrepancies about
which services are really a
SNS and which ones are not
Source: http://en.wikipedia.org/wiki/Social_networking_service
22

24. World map of Social Networks
June 2009
Source: vincos.it 23

25. World map of Social Networks
June 2012
The World Facebookised (1000 mill. Active users)
Source: vincos.it 24

26. Real activity in SNS. Facebook rules.
Facebook world’s
time share:
•75% (SNS)
•14% (Internet)
Source: comScore 25

27. What is a social graph?
Social graph: “the
global mapping of
everybody and how
they're related”
(Wikipedia)
Sociograms: “graphic
representation
of social links that a
person has” (Wikipedia)
Source: http://en.wikipedia.org/wiki/Social_graph , http://en.wikipedia.org/wiki/Sociogram

28. A Facebook’s sociogram example
Source: Facebook Inc. Paul Butler
27

29. Sociogram by Networks (Top 250 friends)
Another Facebook example
Source: Touch Graph 28

30. Facebook API, Open graph
• Facebook offers the ability
to access to the user’s
social graph if she gave
access to us.
• Brands should understand
the graph’s possibilities
and should work out ways
to build social way of
promoting their brands.
• Examples:
• Spotify
• Netflix
• NYT
Source: https://developers.facebook.com/docs/opengraph/ 29

31. Web 2.0 is not only SNS: Social Media Ecosystem
Nobody owns the
Source: Luma Partners
ecosystem
30

32. 5 attitudes regarding the social media ecosystem
Ignore Complement
[Hi-Tech]
[Content]
Combat Copy
Minimum presence
(most brands)
Pasive  Reactive  Proactive
Source: 11 Goals & Associates
31

33. In Social Media, the medium is the people
Audience
• Message
• Image Real
• Video impact
• Emotion
• Poll
• …
Social Ecosystem
Community Marketing/Management:
Audience knowledge:
•Experience
•Analytics (Tests)
Social Ecosystem knowledge
32

34. A powerful community on SNS helps Obama to…
Movilize Strike
Know
Inform Defend
…without intermediaries, faster, and to a broader audience
33

35. “Marketing is dead”
Harvard Business Review – 9 Aug 2012
Traditional marketing — including advertising, public relations, branding and
corporate communications — is dead. Many people in traditional marketing roles
and organizations may not realize they're operating within a dead paradigm. But
they are. The evidence is clear.
Buyers are checking out product and service information in their own way, often
through the Internet, and often from sources outside the firm such as word-of-
mouth or customer reviews.
Actually, we already know in great detail what the new model of marketing will look
like. It's already in place in a number of organizations. Here are its critical pieces:
 Restore community marketing
 Find your customer influencers
 Help them build social capital
 Get your customer advocates involved in the solution you provide.
Most read article in Aug 2012
Source: http://blogs.hbr.org/cs/2012/08/marketing_is_dead.html
34

36. 3-SLIDE SUMMARY
Community Marketing used to be this…
Picture: http://es.wikipedia.org/wiki/Archivo:Ultramarinos-.jpg
35

37. 3-SLIDE SUMMARY
…that in order to get scale was denaturalized by this…
36

38. 3-SLIDE SUMMARY
…until this came along and allowed scale and direct
contact simultaneously
37

39. Who deals with the fanbase?
0FFLINE WEB 1.0 WEB 2.0
(CIRCULATION) (DAILY REACH %) (FANS/FOLLOWERS)
Marca: 244.456 /day Facebook/Twitter (mill.)
Diario As: 198.758/day Marca: 0,65/0,91
Real Madrid: ~0 Diario As: 0,28/0,41
Real Madrid: 31,8/6,8
MD: 95.907 /day Facebook/Twitter (mill.)
Sport: 91.753/day MD: 0,18/0,64
FC Barcelona: ~0 Sport: 0,23/0,22
FC Barcelona: 35,3/12,4
Web 2.0 allow football clubs –better than ever before- to be in touch directly with their fanbase
Source: OJD (2011), Alexa.com, Facebook Inc. Twitter Inc.
38

40. The value of Community Marketing
Real Madrid: estimated equivalent
advertising value of its Facebook
page: EUR 30 mill./month (Apr 2011)
Source: IAB Spain, Ontwice, http://www.slideshare.net/IAB_Spain/liga-de-ftbol-profesional-en-redes-sociales

41. Agenda
 Things are changing
 Web 2.0 & Community MKT
 Some useful tools and concepts

42. Do we need a [great] brand to create a [great] online
community?
Online community
Failure Success
Strong
Brand
Weak or
non-existent
No
Common interest
Source: 11 Goals & Associates
41

43. From a person to the online community
People Community Online community
Common
interest Online
“Robust communities are built not on brand reputation
but on a deep understanding of members’ lives.”
42

44. ILLUSTRATIVE EXAMPLES
Community segmentation
Soccer Club Country’s tourism board
@1
Former Potential
visitors visitors
Team Supporters
Other gov
entities
Country Tourist
Employees industry
@2 citizens
Football fans
General public
Interests?
Motivations?
Roles?
Source: 11 Goals & Associates
43

45. Interests and role of each subgrup within the community
Subgroup Interests Rol
1  …  …
 …
2  …  …
 …
3  …  …
 …
…  …  …
 …
Key question: Does it
make sense as a system?
How can the brand close
any gap in the system?
Source: 11 Goals & Associates
44

46. Three forms of Community Affiliation
“Pools” “Web” “Hub”
• People have strong • People have strong one- • People have strong
associations with a to-one relationships connections to a
shared activity or goal, with others who have central figure and
Description or shared values, and similar or weaker associations
loose associations with complementary needs. with one another.
one another.
• Apple enthusiasts. • Cancer patients and • Oprah Winfrey.
Examples • Political party relatives. • Hannah Montana.
members. • Apple enthusiasts (too) • Apple enthusiasts (too)
RRSS
Most frequent type Preferred by brands
Source: “Getting Brand Communities Right”, Harvard Business Review, Abril 2009, 11 Goals & Associates

47. Building up an coherent social media community
ANALYTICS (SOCIAL BALANCED SCORECARD)
STRATEGY ORGANIZATION SERVICES MARKETING
ONLINE & SOCIAL MEDIA INTERNAL & EXTERNAL FOR COMMUNITY MANAGEMENT SOCIAL & GENERAL
COMMUNITY ENGINEERING SOCIAL MKT
• The “community engineering” stages are key to build a truly brand community on social
networks and to achieve a high level of social capital.
• Without a good community engineering (and social capital) campaigns simply do not work.
• Currently most brands think of social media as another ad place, and get easily disappointed
because they did not work enough the community before beginning to extract value from it.
Source: 11 Goals & Associates
46

48. How is Social Media organized in your company?
Source: Altimeter Group
47

49. Priorities when developing the community
LONG TERM
• ….
• ….
MEDIUM TERM
• ….
• ….
• ….
SHORT TERM
• ….
• ….
• …..
• ….
Revenues + keep
More
More Fans fans and
Engagement
engagement
Source: 11 Goals & Associates
48

50. Miths and realities about managing communities SUMMARY
Myth Reality
1. A brand community is a marketing 1. A brand community is a business
Strategy. strategy.
2. A brand community exists to serve 2. A brand community exists to serve
the business. the people in it.
3. Build the brand, and the 3. Engineer the community, and the
community will follow brand will be strong.
4. Brand communities should be 4. Smart companies embrace the
lovefests for faithful brand conflicts that make communities
advocates. thrive.
5. Opinion leaders build strong 5. Communities are strongest when
communities. everyone plays a role.
6. Online social networks are the key 6. Online networks are just one tool,
to a community strategy. not a community strategy.
7. Successful brand communities are 7. Of and by the people, communities
tightly managed and controlled. defy managerial control.
Source: “Getting Brand Communities Right”, Harvard Business Review, April 2009.
49

51. SUMMARY OF CONCLUSIONS
1 of 2
¶ Many things are changing due to the existence of Social Networks and Social
Media. The same underlying motives but a different way expressed them.
¶ We tried to understand the reasons of this phenomenon. Is there any theory
behind it? What’s the big picture?
¶ To a great extend Internet transformed intrinsically social activities into merely
transactional ones. Now thanks to SNS those activities are re-socialising, but this
time online.
¶ However, Social Technologies adoption is a continuous process that will take many
years to be completed. Brands need to experiment and learn.
¶ The success of social networking services like Facebook relies in the fact that they
are able to translate a person’s social live (“circle of trust”) into the online world.
It’s not a new social life, it is the same life but faster and more efficient.
¶ Facebook worldwide’s dominating SNS excepting in former URRS countries and
other countries where it has been banned (China, Iran, etc.).
¶ At par with SNS is the concept of Social Graph, key to understand how our brand
or company can take advantage of social media through SNS or Apps.
50

52. SUMMARY OF CONCLUSIONS
2 of 2
¶ Social Media works as a very complex ecosystem in constant change. The best
attitude towards that reality is to try to understand the ecosystem and to figure
out how to complement it and add value for the user. However brands tend to
copy parts of the ecosystem, leading to digital strategies which use to be
expensive, short-lived, and not very successful.
¶ In Social Media, the medium is the people.
¶ Community Marketing uses social technologies to build large, active and
sustainable online communities of great value for the brand.
¶ In order to build up a great online community:
 Do not need a great brand.
 Need to deeply understand the member’s interests and lives.
 Segment the community and determine the interest and role of each
segment.
 See how members are affiliated among them and with the brand.
 Think carefully about the organization you need.
 Focus on i) grow fans ii) engage fans iii) generate direct and indirect
revenues
51

53. Thanks!
Francisco Hernández
francisco_hernandez@11goals.com
www.11goals.com
52

54. Motivations for sharing
To bring valuable
and entertaining
content to others
To get the word
To define ourselves
out about causes
or brands 5 key motives to others
for sharing
To grow and nourish
Self-fulfillment
our relationships
Source: “The Psycology of Sharing: Why do people share online?”, The New York Times’s Customer Insight Group