Brand Promotion on Social Media Channels
Brand promotion is no more an activity that can be singly controlled by companies. It is rather hugely affected by blogs, other social networking sites, and user reviews. In fact the success of a brand is determined more by what consumers say than what organizations intend to communicate. Isn’t the fate of the movies being decided on twitter itself nowadays?
In the present context, it is increasingly becoming pertinent for companies to (1) build a favorable base of consumers, and (2) involve them in decision making (hint:mystarbucksidea.com). According to Softpedia, during the last quarter of 2009, 86 percent of online retailers in US had a Facebook page. It was expected that this figure would reach 99 percent very soon. During this same period, e-marketer pointed that 65 percent of its surveyed online retailers were active on Twitter. Another 26 percent were planning to incorporate Twitter in their plans. e-marketer projects that by 2011, 91 percent of online retailers will be Twitter ready and all of them will have a Facebook page. Presently, greater than 700 thousands businesses have an active Facebook page. And around 80 thousand web portals are Facebook Connected presently.
Average Social Media Channels by Industry
But beyond Facebook, retailers are interacting with consumers on various other social platforms too. These retailers span across technology, media, leisure, consumer electronics, and auto industry. [Fig. 7] Retailers are getting enamored with this medium because it has made consumer engagement a two way street. Social media is a potent tool to unswervingly connect with those who matter the most – the customers! The dynamic and real time nature of the interactions further upholds this view. Consequently, social media leverages not only brand promotion but also aids in improving the brand itself. It makes it easy for the marketer to dynamically alter “the offer”; thereby making it more palatable to the prospective consumer. Besides, the advantages of direct interactions with consumers becomes a non-tangible benefit. This thought is best captured by Indira Nooyi, Chairman and CEO, PepsiCo
Good Messages, good things that we do are transmitted around the world very rapidly, and for global organizations like Pepsi that have global brands, global reputations to protect, thats very important. It’s making us pause and use social media as a force for good and also watch social media as for messages that they are sending us, so we can quickly jump in to action.
[Indira Nooyi, Chairman and CEO, PepsiCo at the World Economic Forum, Davos]
Until recent past, social media effectively served as another customer outreach activity of organizations – essentially building brand awareness and generating leads. However, trends are now changing towards utilizing social media for positively impacting sales. A mindset shift towards making social media a committed engagement channel is already underway. An analysis by Wetpaint and Altimeter – engagementdb.com, concurs that the most successful companies on social platforms were maintaining profiles on 7 or more channels. Consequently, reflecting the organization’s commitment to connect with consumers on different social media channels. However, there is a caveat. It does not mean that organization’s planning to execute social media interaction with its customers need to maintain numerous social profiles.
Engagementdb research also highlights that organizations that were highly selective of the channels also faired reasonably well in terms of higher gross and net margins – their simple philosophy being deep engagement within a few channels. [Fig 8 and 9] Nevertheless, number of channels aside, it all boils down to only one thing – Consumer Engagement. But very few companies have this mindset. Multiple social profile are of little significance if companies do not monitor conversations and engage consumers. There is a slew of companies that are present across platforms but devote little time to interacting with consumers. In fact the Weber Shandwick study shows that 73 Fortune 100 companies had registered as many as 540 twitter accounts; but of these accounts – as many as 410 or about 76 percent accounts were virtually inactive – as they did not post often. Of those that were active, were essentially following the old school top-down approach for communication. Nearly 26 percent of twitter accounts were for serving news to the followers. What they lacked, however, was the feedback mechanism due to little engagement with followers. Another 24 percent used twitter for brand awareness, but in actuality it could be brand squatting than engaging as these accounts were just ensuring an online presence, and blocking others – those not affiliated to the brand – to claim ownership. [Fig 10] All this may be one of the prime reasons why nearly 50 percent of the Twitter accounts of Fortune 500 companies had fewer than 500 followers.
Impact of Social Media on Revenue and Gross Margins of Companies and Organisations
Reasons for Using Twitter at Fortune 100 companies
Irrespective of the size of a company, incorporating social media in marketing plans is stalled due to a variety of reasons. According to the MS&L Social Media survey, [Fig 11] more than half companies lack resources to implement it. Almost an equal number (43 percent) have no expertise, and another 10 percent claim lack of an appropriate agency to implement. It is pertinent to mention here, that many early adopters among companies hire interns to manage social media communications. In fact, this could be risky, as any goof-up by an inexperienced intern can seriously ruin the brand image.
Barriers to Implementation of Social Media at companies
On the other hand, social media use scenario is more encouraging at small businesses. According to the State of Small Business Report, social media usage by small businesses increased from 12 percent to 24 percent in the last year. Further, almost 20 percent of small businesses actively employ social media as an integral part of the marketing strategy. In fact small businesses are currently allocating 6% of their marketing budgets to social media. It is expected that this is expected to reach 10 percent by 2011 and further to around 18 percent over the next 5 years. Some of the findings from the survey are particularly encouraging from business via social media point of view, these include:
- 75 percent of small businesses have presence on a social networking site
- 54 percent are monitoring feedbacks
- 69 percent post updates or interesting articles on social media sites
Those are some mind boggling numbers, especially after the viewing the depth of social media penetration across big companies. But what is most striking from the two surveys is the fact that while nearly 70 percent of Fortune 100 companies are virtually inactive. However, a similar percentage of small businesses are buzzing with activity on social media. Nonetheless statistics aside, it is high time, that businesses, irrespective of their size have a social media plan that has 3 C’s in it, viz (1) a Companywide engagement strategy that (2) ensures Conversations with cosumers, and (3) Causes user loyality across social networks. The following post on Consumer Perspectives on Brand Engagement further strengthens this point of view.
Top Image Source – Jump on the social media bandwagon by Matt Hamm
NEXT – BRAND ENGAGEMENT ON SOCIAL MEDIA – CONSUMER PERSPECTIVE
~by Nitin Srivastava
Nitin espouses to be a libertarian, he loves to read & learn about anything (make that everything). He has a keen sense of observation, and can tell about the guns in ladies' purses by just looking at their heels. Do you get the drift? Follow Nitin on Twitter
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