Chapter 1 hausman book

Hausman and Associates Hausman Marketing Letter

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I. What is Social Media Marketing

and Why YOU Need It?

What is Social Media Marketing?

Simply put, social media marketing is an effort to support your brand

using one or more social networking platforms.

“Social media marketing consists of the firm’s efforts to

create content on various social networking platforms.

The goal is to encourage users to engage the firm on

these platforms and share its messages throughout the

users’ own social network.”

Social media experts often include paid advertising on social networks

(such as Facebook sponsored stories), banner advertising on other

websites (including AdWords), and sites, and Affiliate Marketing as part

of social media marketing. However, these tools fit equally well with

notions of traditional marketing and media. In this book, for the most

part, we’ll discuss UNPAID social media marketing – something

Wharton (School of Business) calls “earned advertising”. In Chapter 11,

we’ll discuss paid advertising on social networks briefly. Much of what

we present in terms of concepts and strategies that optimize your


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“earned advertising” also work effectively with these paid advertising

tactics.

Social networks provide marketing tools to build one-‐on-‐one

relationships with customers and create a community of loyal

customers who continue buying your brand and draw in future

customers. Social networks also motivate people to share their great

experiences with your products and people and become advocates for

your brand.

Social media marketing gives giant multi-‐nationals all the advantages of

the little pushcart guy who truly knows his customers and shoots the

breeze with passers by. It turns any business into “Cheers” where

“everyone knows your name”.

Social media marketing is much more than just Facebook, although, with

nearly 1 billion users, Facebook is the largest social platform. Facebook,

Twitter, and LinkedIn are considered the top 3 social platforms (at least

at the time this book was written). But, new social networks arrive on

the digital landscape every week – including Google+ and Pinterest,

which gained followers more quickly than comparable platforms. Other

common platforms include: YouTube (for video-‐sharing), Instagram

(photo-‐sharing), Foursquare (a location-‐based social platform), Reddit

(a social bookmarking platform), and many more. In fact, there are

probably hundreds, maybe even thousands, of social platforms. Some

are specialized for specific types of content, like YouTube is for video,


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others are specialized to a specific demographic, such as Mixi for

Japanese.

More than 300 million people spend at least one hour a day on

Facebook, approximately 200 million people are active on Twitter, and

100 million use LinkedIn1. The most active social media users are 18-‐ to

34-‐year-‐olds (82%) and women (78%, vs. 66% of men), according to a

survey by Netpop Research2. However, according to CBS, 80% of baby

boomers are online; mostly on Facebook3. Socially savvy consumers

likely employ multiple social networks, so these numbers do not reflect

unique users, but the numbers are still staggering2. By 2014, 65.8

percent of Internet users are likely to become regular social network

users4.

But, don’t forget blogging (a blog is short for weblog). Blogs are one of

the earliest forms of social networks, dating from 19945. Originally

consisting of online diaries with limited appeal, except for those run by

journalists, today’s blogs are powerful tools for branding, creating

engagement, and generating revenue through online advertising. We’ll

see later why nearly 90% of firms plan to increase their usage of blogs

in the future6.

Blogging software makes it incredibly easy for folks with limited

technical ability and NO programming knowledge to create

attractive and effective websites. Content management systems

such as WordPress (my personal favorite), Drupal, and Joomla


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allow users, with a little effort and practice, to create professional-

looking websites.

But, more than these tools and tactics, social media marketing is a

paradigm shift from traditional marketing. Engagement is the

mantra of this new paradigm and gifting is its currency. Let’s take a

look at how new media differs from traditional media:

New Media Traditional Media

Two-‐way conversation

Open system

Transparent

One-‐on-‐one marketing

About you

Brand and User-‐generated Content

Authentic content

FREE platform

Metric: Engagement

Actors: Users/ Influencers

Community decision-‐making

Unstructured communication

Real time creation

Bottom-‐up strategy

Informal language

Active involvement

One-‐way conversation

Closed system

Opaque

Mass marketing

About ME

Professional content

Polished content

Paid platform

Metric: Reach/ frequency

Actors/ Celebrities

Economic decision-‐making

Controlled communication

Pre-‐produced/ scheduled

Top-‐down strategy

Formal language

Passive involvement

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Why Social Media Marketing?

Not every firm chooses social media as a means to market their brands.

For instance, Apple Computers doesn’t own any social media territory.

OK, so there’s a little Facebook FanPage, but Apple, Inc almost NEVER

posts anything or responds to posts there – it’s not even clear if this is

really owned by Apple. You certainly don’t see any social media icons

listed on Apple’s website. No obligatory: “follow us” on Twitter or

Facebook in their advertising or packaging. Some may find this

shocking considering Apple’s reputation as a technology innovator and

the darling of the social media generation. I mean, Apple created an

early version of social sharing with iTunes.

But, knowing Steve Jobs, Apple’s co-‐founder, it’s not surprising he liked

to control the conversation about his brand7. Apple encourages

consumers to interact – with the forums on their website, not in the

free-‐for-‐all of social networks. Through its forums, Apple CONTROLS

the conversation and conscientious moderators remove posts that

conflict with Apple’s view of their brand.

Other firms, big and small, find it harder to avoid social media –

including iconic brands like Coke and Starbucks. Ford recently

reintroduced its Mustang using a social app allowing users to customize

their own version of a Mustang. And this tactic was a resounding


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success. Facebook “Likes” nearly doubled on the Mustang FanPage in

just a few months8.

As you can see from the Ford example, firms see social media marketing

as a valuable tool for marketing their brands. For instance, Social Media

Examiner found 83% of the nearly 4000 marketers surveyed believe

social media marketing is important for their business9. Many

marketers plan to increase their use of and budget for social media

marketing. In a recent report from Awareness, marketing managers

report use of several social media platforms including 87% using

Facebook, 86% using Twitter, and 76% using LinkedIn6. Moreover,

experienced social media managers plan to increase their use of various

forms of social media beyond these 3 major platforms – 91% plan to

increase use of blogs6.

In addition to vast numbers, social networks appeal to firms because

they embed commercial actions within a community10. Thus, social

media reaches organizational goals by employing “creative and

communications marketing aspects to enliven ideas, unite communities,

and amplify stories”11. Blending commercial and non-‐commercial

expression reflects the reality that purchase behavior “is part of a social

process.... it involves not only a one-‐to-‐one interaction between the

company and the customer, but also many exchanges of information and

influence among the people who surround the customer."12. Large

numbers of consumers use social networks as a major source of this

information and influence.


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Additional factors argue for corporate use of social media. One study

finds, for instance, consumers are more satisfied with retailers’

Facebook pages than they are with the retailer’s websites13. Declines in

the effectiveness of alternative communicative channels, such as

television, also make social media an attractive option14. Disruptive,

self-‐centered conversations marketers commonly employ in traditional

media are not effective in social media and marketers must find new

ways to embed messages into naturally-‐occurring conversations15.

Rather than broadcasting marketing messages to an increasingly

indifferent, even resentful, audience jaded by the 2,000-‐plus messages

the average American reportedly see every day, marketers should

participate in, organize, and encourage social networks to which people

want to belong. Rather than talking at customers, marketers should talk

with them16.

The top 3 benefits marketers find from using social media marketing

are: 1) building brand awareness; 2) driving traffic to their websites and

physical stores, and 3) improved customer insights6. Although we’ll talk

about each of these elements in more depth later in the book, let’s take a

look at each benefit briefly now.

Building Brand Awareness You know the old saying: “Build a better mousetrap and the world will

beat a path to your door” – well that only works if people 1) know about


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your mousetrap and 2) believe it’s better. Otherwise, the path to your

door will be pretty overgrown.

Traditional media actually does a pretty good job of building brand

awareness because it reaches millions of people with memorable

messages and catchy jingles. But, social media marketing builds a

DEEPER awareness of your brand. Now, instead of just remembering

your brand name and, maybe, a few factoids about your brand, social

media marketing encourages consumers to develop a more connected

set of attitudes related to your brand. Instead of just hoping they’ll get

warm fuzziest about your brand because they like the celebrity

endorsing your brand, social media uses your friends to endorse the

brand. Now, you not only know about the brand, but you know what

your social network thinks about it, which increases the likelihood you’ll

buy the brand. You begin to see the brand as another friend and, when

you like the brand, it even shows up in your newsfeed just like other

friends. With social media marketing you not only develop an attitude

toward the brand, you develop “feelings” for the brand.

Driving Traffic


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Alright, I don’t want to get into too much of this now (you’ll get a lot

more of this in Chapter 9), but social media marketing drives a lot of

traffic to your website and to your brick and mortar store. Increased

traffic comes through 2 related channels – SEO and Customer Insights.

SEO

OK, pretend you’re an average user looking for information online.

First, you type your search term (keyword) into the Google Search

Engine (or Bing or Yahoo, etc). Google returns links to websites that

match your search – or SERPs, which is an acronym for Search Engine

Results Page. If you’re the average user, you’ll start exploring links near

the top of the SERPs and you’re unlikely to go beyond the first page or

so in the results.

If you’re a firm, you want to be near the top of the search results

because you know you’ll get more traffic that way. According to Optify,

you’ll get over 35% of the search traffic when you’re in the first position

in the SERPs, but only about 12% of the traffic for a 2nd place finish. By

position 10, you’ll only get about 2% of the traffic visiting your site17.

Google (and Bing and Yahoo) use a complex algorithm (that changes

frequently) to determine where your site shows up in the SERPs. And,

social media marketing helps your site rank higher in 2 ways. First, the

more social media interest you generate the higher you’ll rank. Second,

the more you and your friends engage with the brand, the more higher

Google will rank the site in YOUR results – see an interesting thing is


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that not everyone will see the same SERPs. SERPs are individualized to

ensure YOU get the most relevant links possible, so they’re customized

to what Google knows about your online activity.

Improving Customer Insights Academic readers and those already engaged in market research

probably already recognize the value of all the data consumers share

about themselves on social platforms. But, the average social media

marketer probably hasn’t explored this data deeply.

Using sophisticated ethnographic tools and software such as nVivo,

SPSS Text Analysis Software, and HyperRESEARCH, firms can

understand not only consumer sentiment about the brand, but elements

of lifestyle, unmet needs, and other critical information that allows the

firm to develop new offerings, maximize the consumer benefit of

existing offerings, position brands, and drive consumer demand for

their brands.

Although developing consumer insights is a major benefit of social

media marketing, details go well beyond the scope of this book. I’ll list

some resources to learn more about developing customer insights after

the references to this chapter.

Other Major Benefits of Social Media Marketing


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Here are a few more reasons why your firm should consider social

media marketing:

1. COST

Social media marketing is much more cost effective than

traditional advertising. In fact, many so-called social media gurus

contend social media levels the playing field for small businesses

because it’s free. Well, that’s not exactly true, but it’s sure cheaper

than a Super Bowl ad – at over $3 million for a 30 second spot.

To see the cost effectiveness of social media advertising, let’s look at a

little example of how social media spreads a message compared with

traditional media.


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This diagram demonstrates the potential reach of social media

marketing, which is vast. This example assumes 2 million people see

your message across your various social media touchpoints – YouTube,

Facebook, etc. Now, 2 million eyeballs may seem like a lot, but when

you think about firms like Starbucks that have 16 MILLION fans on

Facebook alone, you can see it’s really not that difficult to reach 2

million users when using multiple social networks.

Each of those 2 million users has, on average, 245 friends according to

the Washington Post. If only 10% of the people who saw your message

share it with their network – you’d reach 49 million people. And, if that

49 million shared the same way, you’d reach 1.2 billion people. And, the

transmission cost – the amount of money you pay to get this reach – is

$0.

Now, compare that with traditional media. Even the Super Bowl, the

most watched program 2 years running, only reached 111 million

viewers in 2011, according to the Huffington Post. And the cost of a

single ad airing on the Super Bowl was over $3 million for 30 seconds,

which doesn’t include the production costs for the commercial, which

can be another million or more.

While spreading your message across social platforms may be free and

creating a presence on these social platforms is very inexpensive, doing

“good” social media requires other resources. You have to create

content, share that content effectively, and encourage linked consumers


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to share your content. And, whatever you do in social media has to be

done consistently and regularly, or you risk turning the medium against

you. So, you’ll have to either dedicate some time for an employee to

handle your social media or add it to the already-‐long list of things you

have to do.

How much time will it take to do “good” social media. Well large

companies may have several full-‐time employees who do nothing but

manage their social media platforms. Richard Branson of Virgin Atlantic

employs a social relations team combining expertise in marketing,

advertising, public relations, and customer service to manage his social

media marketing efforts1.

The amount firms invest in social media marketing varies widely. Most

small businesses spend more than 6 hours a week managing their social

media and this number increases as the firms GAIN experience9.

2. TRACKABLE

Social media is trackable. While it’s still difficult to directly link social

media output to revenue, social media marketing efforts generate a

number of useful metrics. Set things up right and you can tell exactly

which types of content work best with your target audience and

calculate ROI pretty accurately.

You can also track:

How people reach your website and what they do on your site


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Where people go after they leave your site

What time of day generates the most click-‐through and/or sharing

Which social platform performs better

How social media engagement indirectly translates into ROI for

your firm.

Armed with this knowledge, a marketing strategist can more easily

optimize their strategy to get the greatest return. You can also do A/B

testing to determine which offers work best, which copy appeals to your

linked users, and even test different graphics or layout performs best.

We’ll discuss and demonstrate analytics in more depth in Chapter 6.

3. LOYALTY

Folks confuse loyalty with repeat purchases. Consumers might buy

your stuff over again, but not be truly loyal. Loyal consumers not only

buy your stuff, but resist efforts by competitors to lure them away. So,

when your competitor offers a coupon for purchase, other consumers

might switch, but loyal consumers stay true to THEIR brand.

Loyal consumers also like to bask in the light of their brand — sharing

their love of your brand with their friends. Sharing by friends is a major

motivator driving purchases.


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Organization of the Remainder of the Book Armed with your expanded knowledge of social media marketing, the

next chapter will refresh and deepen your knowledge of traditional

marketing concepts, demonstrating how these concepts impact the

success of your social media marketing efforts. Chapter 3 delves more

into consumer behavior that underpins online behavior and helps you

understand how users make buying decisions on social networks.

The next 7 chapters expand on the most popular post from Hausman

Marketing Letter – the top 7 skills you’ll need to make your social media

marketing successful. Chapter 4 discusses how to organize for social

media marketing success listing tools and strategies necessary. Chapter

5 shows why social media marketing takes time. The chapter includes

pert charts demonstrating the pathways to success, a checklist of daily

and weekly activities necessary, and sources of help in getting these

tasks done. Chapter 6 discusses metrics and how to use them to guide

decision-‐making. Online sentiment is the topic of Chapter 7, including

the topics of listening and coding sentiment, maintaining your online

reputation, and crisis management. Chapter 8 covers the important

aspects of creating valuable content. Finally, Chapter 9 discusses how



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sharing works across some of the major social networks and how to

make sure your message shows up.

Chapter 10 tries to bring everything together – showing how to

integrate your social media marketing across platforms and how to

integrate online marketing with mobile and offline marketing. Finally,

Chapter 11 discusses some paid advertising options and how to use

them to support your earned advertising strategy. Chapters 10 and 11

also include case studies of successful social media strategies and how

your business can duplicate these strategies. Sometimes, I’m challenged

at a speaking event or client pitch by notions that social media

marketing only works for certain types of firms or in certain areas.

That’s not true and I hope to show you this in my case studies.

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