Capitalizing on the Incredibly Shrinking Marcom Expense Line

Capitalizing on the Incredibly
Shrinking Marcom Expense Line

Denis Hancock
July 26-28, 2010
Park Hyatt Aviara Resort
Carlsbad, CA

Social media marketing strategies are often
narrowly focused

Where most of
the money is

Customers

Where most
Co-creators social media
marketing
Influencers
strategies
are focused

© 2011 Moxie Insight. All Rights Reserved. 2

Some guidelines for reaching everyone else
more effectively

Spend less.
Talk less.


Social media marketing critics and advocates both
love these stats

Online spend lags activity

Source: Ogilvy

The social component is
small, and growing
slowly

Source: MediaPost.com


The problem is the metric, not the activity

SocialMedia
Cost of sending a tweet: $0
Cost of creating a Facebook event: $0
Cost of putting a video on YouTube: $0

Ability to reach customers for free*: Priceless


Marketing is going through a structural change

Current marketing budget New marketing budget

Savings!

Traditional
channels Traditional
channels

Digital
Digital


A select few agencies have been thinking this way

“I want to be the
agency that ruined
“Their view was
it for every other
always, if the idea is
agency in the
great enough, in a
world”
world that is
– Alex Bogusky, intensely
formerly of Crispin connected… the idea
Porter + Bogusky will run wild through
the population
without us having to
pay for media.”
– Andy Macaulay,
chairman of Zig

Source: Susan Krashinsky,
“Advertising whiz Bogusky takes © 2011 Moxie Insight. All Rights Reserved. 7
his leave”, Globe & Mail, 7/2/10

Sites like Facebook lower the need for “creative
genius”

“It does raise huge
questions about, you
know, could you in
the future have half
the marketing
budget and do it
differently.”
—Richard Musson,
VP of Marketing for Labatt
Breweries


New platforms are creating new opportunities

“The real
opportunity isn’t for
mayors – that’s
limited and short
sighted. Knowing
that the top 5% of
customers generate
the majority of
revenue, it’s a whole
new loyalty
platform. And it’s a
lot cheaper than
Aeroplan.”
– Phil Barrett, VP of
digital and mobile at
BStreet


The key driver: “ambient intimacy”

150 used to be
a lot of
connections.
Now it’s not.


But there are other key differences to consider as
well

Traditional Media Social Media

Cost Expensive Free (or very cheap)

Choice for customer Forced Opt-in

Connection with customer Indirect Direct

Impact on intended customer
Generally negative Generally positive
experience

Ability to “go viral” Difficult Easier

Knowledge about who’s
receiving—and sharing—the Poor Good (and improving)
message


Starbucks tapped into this opportunity early

 200,000 + accepted
event invite on
Facebook
 400,000 + viewed
YouTube video
 379 blog posts
tied back to it
 Viral buzz increased
26% overall


The potential payoffs for Starbucks are
getting bigger and bigger


@garyvee drives Wine Library’s ROI in Twitter

 Direct mail campaign: $7,500 200 new customers
 Billboard ad: $7,500 300 new customers
 Tweet offering free shipping 1,800 new customers

Source: Tanya Battalas, “Companies take on Twitter”, New Jersey Times, June 2009


Yelp: Great news for great service providers


How to think about reaching everyone else
more effectively

Spend less.
Talk less.

New perceptions around media are evolving

Broadcasting = bad
Conversations = good


The “problem” is often represented something
like this

Source: “Changing context,” Nokia


But there’s a problem with the notion of the
“problem”
Social media enthusiast Your customer

vs.


Too many people are feeling a lot like this
LEARNING & PROBLEM
FAMILIARIZATIONRESOLUTION EVALUATION
INITIAL USE
EXPERIENCES INITIATING

FULFILLMENT CONSIDERING
NEEDS

ORDER
ACTIVITIES IDENTIFYING
ALTERNATIVES

DECISION
PROCESS
EVALUATING
ALTERNATIVES
ADDITIONAL SALES
INFORMATION INITIAL CONTACT
ASSESSMENT

Asking them to “join in your conversation”
can make it that much worse

Hey consumer –
talk to us! We’re
Brand n
Brand 1 listening!

Brand 5
Brand 2

Brand 3 Brand 4


But there is something else you can do

In the social media world, simple broadcasting
strategies are prevalent – and effective.

Twitter points us in this direction


A unique growth strategy, led by weak tie
connections

Strong Ties

Weak Ties

24 | © 2010 Moxie Insight. All Rights Reserved.

Twitter is “few to many” rather than “many to
many”

Harvard Study: 10% of Twitter users
generate 90% of the content. “This implies
that Twitter's resembles more of a one-
way, one-to-many publishing service than
a two-way, peer-to-peer communication
network.”

Source: Twitter hype punctured by study”, BBC News, June 9 th 2009. www.bbc.co.uk.


Twitter users are more likely to engage in
commerce


This made Twitter much more different from
Facebook than many realize

Facebook is a social network.
Twitter is a media/marketing
vehicle disguised as a social
network. Big difference. And if you
don't think it's changing the way
information is dispersed, for good
and bad, you're insane.
– Bill Simmons
ESPN’s “The Sports Guy”

@woot: Buy our stuff


@zappos: If you have a question, talk to someone
else


@mashable: broadcasting the social media guide


Facebook is subtly allowing ambient networks to
grow

Top versus Recent news
Fan versus Like


Companies are often getting advice like this

Don’t split the conversation stream between the
organization and “just fans.” You want fans to see each
other communicating online. It’s about fostering a
community.

To split your updates from fans signals that:
 You are controlling the message
 Organizational message delivery is the primary
reason for the page; and
 The organization doesn’t value fan content or
participation as highly as its own
Source: “Facebook fan page best practices”, Livingston Buzz, November 2 nd 2009


Follow it and you often get results like this


Aren’t these a little better?


What Facebook fans say they want

Note: consumers were allowed to answer “yes” to more than one response.

Source: Morpace Inc. study, as published on RetailCustomerExperience.com (April 13 th 2010)


The difference between “fan” and “like” is
important


It connects to a new opportunity, enabled
by social media

Suspect

Prospect … but can you
use social media
to create
Customer
“passive” or
“occasional”
advocates”?

Regular

Advocate

You know about the
importance of these
folks…

Using “passive advocates” to win the tug of war

Good Bad

Brand

They She She She
like you loves hates dislikes
you you you


Shifting objectives: From conversations to impact

Instead of always trying to engage customers
in conversations, use new tools and
platforms to:
Give people something they want
Give people something they want to share


Stickybits.com: A new case of conversations
being sub-optimal


Groupon: Cool, cheap, local
experiences (if enough people buy in)


Foursquare: Connection without
conversation (and cheap, cheap rewards)


One more thing…

Think Quirky.


Quirky: Cost effective innovation and marketing
processes collide


Key takeaways

Spend less.
Talk less.
Think Quirky.

Denis Hancock
Director of Marketing Insight
dhancock@nGenera.com
www.denisbhancock.com
Twitter ID: @denisbhancock
416-863-8848

Capitalizing on the Incredibly Shrinking Marcom Expense Line

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