Monday, April 20, 2009

Why Web 2.0 & Social Media Matter For Brands

Many consumer brands have Facebook pages, they are on Twitter, they lurk on MySpace…but why? Do these channels actually “work?“ Except for very few exceptions the answer is probably anything from “No” to “maybe a little,“ but that’s not a reason to leave. The problem lies in the strategies behind these digital forays. Put simply, digital technologies should be used to engage with a customer’s analog life. It’s not the medium that matters, it is the message. The way for brands to make these technologies work is to do digital, but think analog.

The growing number of consumers that have fully embraced the digital lifestyle has been a boon for digital agencies, but not necessarily for brands that were coaxed into social networking without any real strategy. (Some even paid big money to be in forgotten cul-de-sacs like SecondLife.) Regular folks use social networks because they’re free, and they can keep using them amidst the disintegrating economy, skyrocketing job losses and stock market free-falls.

Meanwhile, in the department store, supermarket and elsewhere, consumers have stopped spending. This lower consumer spending has resulted in brands pulling promotion and advertising dollars. Print and broadcast media have been suffering mightily from falling ad revenues. Consumers don’t need Time magazine anymore, they can get that content (or similar) online for free without committing to the Time brand. Brands previously relied on the perceived strength of the commitment made between a subscriber and an outlet (like a magazine or newspaper) to balance their advertising spending. The digital realm has all but removed that commitment; a mere banner ad is no replacement.

What’s a brand to do? How does a brand continue to be present in the lives of consumers? And, most importantly, what kind of effort and money are we talking about?

Brands should endeavor to replace the commitment that a subscriber used to make to an outlet with a commitment from the brand to its audience. The concept of commitment is a very analog concept; it’s not on or off, it is a fluctuating continuum that requires and rewards constant attention. A brand should target its message and go for fewer but higher quality relationships instead of broad-stroke blanketing. Use the technology to give back to your desired audience, to be a partner with your customers. Recast your customer relationships to be a peer and a resource instead of just a provider of some gizmo. This approach was almost not possible before, but digital technologies make it not only possible but very cost-effective, stretching your budget far beyond what you might have ever imagined.

Want specifics? Here are 4 ideas, just for starters:
1. Brands develop products. One collateral benefit of product development is knowledge development on a given topic. Give some of this knowledge away through all these digital channels, it will help reinforce your position with your customers and it gives you something to talk about without being to “me-me-me” all the time.

2. Start offering select specific financial incentives exclusively through your web site. Tweet the program, and reward those who tell all their Facebook friends. Customers are hurting and products are moving more slowly, so couponing makes sense. Your CFO will scream about profit margin, but a quick trip to the warehouse or through the inventory report will provide a strong enough argument for moving product at lower margin. Plus, why pay to be part of somebody else’s circular? These are exceptional times that call for exceptional measures…

3. Network on behalf of your customers by creating a network they can use. Employ the bully pulpit of your web site or Twitter account to help out of work customers spread the word about their skills and availability. Allow your customers to find each other (they have at least one thing in common…you!) and help each other. The PR bump from this generous act will lift your brand…and it is the right thing to do.

4. Be funny, be useful. Release an iPhone or Blackberry app that brings a smile or a sense of utility. Give it away. Stay on your brand’s central message, but make the app a secondary reason for the world to see your brand. Done properly it’s something that long outlives the normal duration of contact with your audience. If a brand’s lifelong ambition is to become a meme, this is the first step toward getting there in the digital world.

But what about the money? To put it one way, your $2MM brand building ambitions can now be meaningfully executed for around $200,000. Put another way, a properly applied $2MM budget is now worth $20MM in benefit. The rules HAVE changed, and these rules are better for brands if they do digital but think analog.

ADDENDUM: Check out this article on the Chief Marketer magazine blog about a recent Dominos promotion and keep in mind this metric: 11,000 medium pizzas x about $3 = about $33,000 for 50 million impressions - who says you need a big budget?