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Talk for JP Media, I.M.Press and DM Gakkai, in Akihabara, Tokyo, Oct. 5, 2012, covering:
• Social media usage patterns in the U.S. (consumer and b2b)
• Social media best practices for marketers
o Defining direct marketing
• The intersection of direct marketing and social media marketing
o How social media marketing is enhanced by direct marketing methods
o How direct marketers can use social media to meet their marketing objectives
• Chick-fil-A case example of effective integrated marketing communications
• Where social media is headed: Future trends
• How direct marketing is evolving: Future trends
Today (October 5, 2012, in Akihabara, Tokyo), we are here to talk about social media. Social media is a huge topic. But today I will speak on a fairly narrow angle, namely, how social media and direct marketing intersect.
Here is the agenda I will follow for my talk today. I will cover 5 topics. First, some data on how Americans are using social media today. There are a lot of numbers here, so please don’t fall asleep. Second, ideas on how U.S. marketers are getting value from social media today. I will share some of the latest thinking about social media strategy and tactics. Third, how social media and direct marketing are connected. I will make the case that direct marketing principles apply everywhere in social media, and that direct marketers are getting a lot of value from these new channels. Fourth, we look at a case from a fast-food chain that launched a new store using both direct mail and social media, with great success. Finally, I will look at where social media and direct marketing may be headed in the future.
I’ll start here by putting the U.S. in its global context. Social media is still growing at a rapid pace. 19% this year. But notice two things: First, the growth in more developed countries, like Japan and the US, is in decline. Second, the worldwide growth is also in a slow decline going out toward 2014. This is to be expected, given the explosive growth of social networks in the last 20 or so years.
Now, about the U.S. In demographic terms, we have about an equal split between men and women using social media. Active use by all ages, the most active being under 50. Active use across racial and ethnic groups, and across incomes and educational levels. In short, these media are being widely embraced. In total, we have about 158 million users today, in the U.S. population of 314 million. Exactly half.
Now I’d like to show you some more details about the demographics of specific social networks. There’s quite a variety. Facebook average age is 40, while Reddit is 34. By the way, Reddit famously ran a 30-minute “ask me anything” interview program with President Obama in early September, which did a lot to polish his image as a cool guy.
Here’s a bit more data about how the ages are distributed across each network, in case you want some more detail. Notice how Facebook’s biggest age category is 45-54. Surprising, isn’t it? Since we associate Facebook with young people like founder Mark Zuckerberg.
Teens and “millennials” (Gen Y, born 1980-2000) are the most frequent daily users of social networks. The kids are living on their networks.
We are also seeing a lot of evidence that young people are more attracted to media that include lots of visual interest, like photos and videos, and not just text. Pinterest, Instagram (a mobile app just purchased by Facebook), Tumblr (a photo blog platform) and YouTube. I’ll refer to this again when discussing future trends.
We see wide variations in gender mix between networks. Pinterest, which is heavily used by women for sharing images about fashion, food and pets, compared to Slashdot, a discussion board for nerdy geeks, most of whom are male.
Moving into the B2B arena, it’s perhaps surprising how broadly social media are being adopted. By industry, which you can see here on the right, Twitter is being used everywhere, industrial and financial sectors, as well as food and retail. I am just surprised about automotive, which is the lowest user shown here, at 44%. Not sure why. Large enterprises, who are known for caution and lots of bureaucracy, have been relatively enthusiastic about harnessing these media channels, as we see here in the left-hand corner. But perhaps we should not be surprised, since social media are such a great way to communicate with customers, and attract prospects—which is what businesses do.
No surprise, LinkedIn is the most popular network with businesses.
So, that wraps up the statistics. Are you still awake?Now it’s time to look at some best practices in social media marketing.
First, I’d like to share some context about how U.S. marketers are using social media. Here’s a breakdown by medium. After fast growth, these media are starting to slow. And 3 categories declined significantly between 2011 and 2012: social bookmarking sites, forums, and geo-location services like Foursquare. Google+ was only introduced in late 2011, so its 40% adoption rate is impressive.
Business marketers are using LinkedIn and Google+ more heavily than consumer marketers, who favor Facebook and YouTube.
OK, that’s enough data. Let’s look at marketing strategy now. If I can boil down all the strategies that work in social media into one word, that word is collaboration. What marketers have learned, through some painful processes, is that they need to change their mindset when working with social media. This new marketing channel demands a different approach. We need to think of users as partners, instead of customers and prospects. We need to help them, deliver value to them, listen to them, be honest and transparent with them. This is pretty much the exact opposite of our usual approach, which is selling. This non-selling mindset is the secret to success in social media. It is not in our natures, as marketing people (with the exception of PR people—who behave this way all the time). We marketers have to learn it. And several of us have stumbled, badly. I’ll show you an example when we talk about the fast-food restaurant chain, later.
Now, with that collaboration mindset in mind, let’s look at some strategy and tactics. Let’s begin with a 5-step strategic approach to social media marketing success, which was developed by Heidi Cohen, a thoughtful observer of the social media marketing scene. This is pretty high-level, but essential to focusing your efforts and getting real business results, without flailing around in this crazy social media ocean. 1.Assess your business objectives. What corporate goals are you trying to achieve? Are you looking to increase awareness, build your brand, attract new prospects and leads, increase sales, or provide post-purchase support? 2.Determine your target audience. As part of defining your marketing personas, which social media platforms do your audience use and why? 3.Integrate your branding. Which brand elements will you highlight on social media platforms? How do you give your brand a 360-degree perspective? How does it appear in photographs, video, audio, and real-life events? 4.Create content. What questions do your prospects and customers need answered before they buy? Is there related information you can offer that will aid their decision without being promotional? 5.Measure results. Based on your goals, what will you track to determine your social media success? Are these metrics incorporated into your digital analytics so that you can measure them later?
Moving on from strategy, let’s look at some tactics. Here’s some data on what’s working best for marketers when they do wall posts on Facebook. For example, posts should be less than 80 characters. They should be posted outside of business hours. Thursday and Friday are the best days of the week for posts. Saturday is the worst day. Posts are best when they end with a question. Very interesting and useful tactics for marketers.
Let’s look at a case example from a chain of bagel shops called Einstein Brothers, which was presented by Debra Williamson of eMarketer in a webinar. They also own a bagel chain called Noah’s. They posted a question about whether pets like bagels. Within 3 days, over 80 people had uploaded pictures of their dogs and cats with a bagel. Excellent brand engagement.
As it opened new stores, and wanted to drive fresh traffic, Einstein Brothers ran 4 ads using a Facebook “reach block” media buy that guaranteed it would reach 100% of its target audience over a 24-hour period. They used a “free bagel and cream cheese” printable coupon offer, in exchange for a “like” on the Facebook page. The following week, the company reached its highest sales level in history. Thereafter, they used smaller discounts offered to existing “likes”, such as a free iced coffee. Thus, they successfully matched the offer to the target.
Einstein recognizes the importance of speedy reaction to customer service problems. In this example, a rep responded to a complaint within 14 minutes. You notice here that the customer was pretty unhappy when the rep asked him to call in to discuss. He said “Don’t you have an email address?” People want speed, and they want convenience. (I am pretty sure that the complainer here is not Joseph E.Stiglitz, the Nobel-prize winning economist.)
Another important tactic is making you current customers feel special. Einstein Brothers offers a club that gives early-bird coupons to members only.
So, in summary, social media marketing needs to be a consistent part of your entire marketing strategy. You have to devote enough resources to manage and sustain it. And you need to design your communications within the style of the medium, to interact and engage with your customers in a way that deepens the relationship. That’s what marketing is all about.
Now, let’s get to the subject of where social media and direct marketing intersect. My message here is a simple one, as you will see. But to begin, I’d like to offer a definition of direct marketing.
This definition may surprise you. I am saying that direct marketing is a type of communications that is structured to motivate a response. This is a special kind of marketing communication. It is characterized by being delivered to a carefully targeted audience; it contains a motivation offer and a call to action; and it collects the response in a database. Direct marketing communications (also called direct-response communications) are usually applied to selling something (as in mail order), to generate a lead, or to drive a visit to a store or an event. But, do you notice, by this definition, the communication can be delivered anywhere? It is truly “media neutral.” It can work in direct mail and email, but also in print, on billboards, on television and radio. And in social media! So, if you accept this definition, let’s move to the next point.
We can think about the intersection of social media and direct marketing from 2 perspectives. From the social media perspective, I argue that social media can be direct marketing media, as long as you add the defining characteristics, namely, an offer, a call to action, and a response vehicle (a landing page). Then, from the direct marketing perspective, I would point out that direct marketers everywhere are enthusiastically embracing social media today, recognizing its power to deepen customer relationships, to bring in new prospects through sharing, and to identify and resolve customer service problems. .
Now, let’s look at how social media is becoming a direct marketing medium. Here’s some interesting data. When social media first arrived on the scene, it was widely viewed by marketers as a way to “get the word out” (which means awareness) and bring traffic to a website. But increasingly, marketers are getting much more “DM-y” about social media. In this year’s Social Media Examiner study, 58% of marketers said they were using it to generate leads. Last year, in 2011, only 7% said that. Wow. A big change. And small businesses were even more likely to focus on lead generation than average, at 65%.
As marketers increasingly view social media as direct marketing media, the media themselves are responding, fast. Just in August this year (2012), Facebook announced that it would improve the targeting options advertisers can use, including for the first time targeting variables like email address and phone number, which direct marketers have used for years. Before this, advertisers were limited to demographic selects like age, income and gender. Facebook is at last getting the hang of database marketing.
Also in August 2012, Twitter announced that it will offer ad targeting by consumer interests, like gardening or movies. Interest-based targeting has been a staple of direct marketing media for decades. These social media are moving in a direct marketing direction.
Now let’s look at how traditional direct marketers have embraced social media. JC Penney, the multi-channel department store, has traditionally combined retail stores with a large mail order catalog, and more recently e-commerce. In 2010, J.C. Penney became the first major retailer to make its entire catalog—250,000 items—available to shoppers within Facebook—not just to look, but to buy.
Lands End, another mail order apparel catalog, is tweeting up a storm, most recently with video tweets timed to certain shopping events, like back to school.
A recent study about consumer behavior from a leading email service provider, Constant Contact, interested me.This study asked consumers what motivated them to take various actions online, either about email or about Facebook.Don’t get confused here: the red bar is Facebook, and the blue bar is email. Should have been the other way around, since Facebook’s brand color is blue!Now, no surprise, the strongest motivator was receiving a discount or other offer. People want offers. But there are other good motivators, like supporting a cause, or getting information. To me, the big message is: Consumers behave similarly across these media channels. People are people.
Their negative behavior is similar, too. The reasons given for “unliking” on Facebook and “opting out” of email are almost identical: no longer interested, and being overwhelmed by too many messages. So it’s no surprise that social media and direct marketing are intersecting. Consumer behavior is consumer behavior, irrespective of channel.
One more point: we also know that social media are used in combination with other media. So, it stands to reason that if your marketing goal is to generate a response, then you’ll apply social media to that objective, just as you do with other media.Interesting that the top media combinations with social are email, search and events. But direct mail is in there, with 41% of marketers using it in combination with social.
Which brings me to an ironically funny point to share with you. I was doing a seminar out at Facebook a few months ago, training their ad sales marketing team on B-to-B direct marketing. While there, I learned that Facebook is a huge user of direct mail. They use it to sell advertising to small and medium businesses. Here’s their letter, front and back, and their outer envelope. They have a strong offer: $50 free advertising. Isn’t this a nice intersection of social media and direct marketing? Ha ha.
Now let’s look at a really great example of the intersection of social media and direct marketing.
This case comes from Foundry, the social media agency supporting Chick-fil-A, a chicken fast food chain based in the Southern area of the U.S. Chick-fil-A’s competitors are KFC (Kentucky) and Popeye’s.It’s a family business, with revenue growth in each of their 44 years. Annual sales of $4 billion. Over 1600 stores, which are closed on Sundays, due to the Christian values of the owners.
In the last couple of years, Chick-fil-A has been an advertising success story, having launched a clever campaign in 1996 where cows with paintbrushes in their mouths draw graffiti encouraging people to eat more chicken. Get it? Less hamburger, more chicken. These cows became well known and well loved. Notice how the cows can’t spell, which makes them even more cute and lovable.
The company embraced social media early. The corporate Facebook page has 5 million fans.
The cows themselves have their own Facebook page, with 690 thousand likes.
The campaign I want to tell you about was done by 2 franchisees in Louisiana who were launching a 3rd store and wanted to drive traffic and build a marketing database. Their first attempt was to put a sign-up sheet in their existing stores and ask customers to give their names and addresses. A total failure. Only 150 people signed up.
So they launched a direct mail campaign. Plastic postcards went out to 5000 households in the trading area around the new store. Recipients could punch out 2 perforated coupons for free sandwiches and bring them into the store.But here’s the extra clever part. To “activate” the coupon, recipients had to go to a personalized website and enter their contact info. As an extra incentive, there was a contest to win free Chick-fil-A for a year.
At the personalized website, visitors could share the offer with their social networks. 265 networks were available, plus email and SMS. So the store owners not only built their database, they also gained new prospects through viral pass-along.
The results were amazing. 279% campaign response. Have you ever heard of such a thing? The mail itself generated 22% response, due to the strength of the offer. But these responders then shared with their friends, mostly on Facebook and Twitter, which generated thousands more responses. The owners got 14,000 names for the database, each with some extra information about their preferences and purchase behavior. And 1300 coupon redemptions at the store.
Here are more details about where the response came from, if you are interested.
I love this case because it shows clearly how direct mail and social media can work together, each applied to its best use, for great results.In the U.S., the mailing list industry is very mature, and excellent lists are available for new-customer prospecting. So postal mail is a strong medium for cold prospecting. Social media is excellent at stimulating pass-along and gaining additional prospects.
But there’s one follow-up story I’d like to share. Social media has also backfired for Chick-fil-A recently. Remember I said the owners are Christian? In July of this year, the current CEO, Dan Cathy, said in a Christian radio interview that he opposed same-sex marriage. He thought he was just talking to fellow Christian conservatives on the radio. But his comments were spread like wildfire over social media. Same-sex marriage is a hot topic in the U.S., and the uproar resulted in real business problems for Chick-fil-A. Cities threatened to bar new stores. Jim Henson’s Muppets cancelled a scheduled promotion with the company. Here you can see protesters outside a store. It’s been a mess, and the mess is still going on today, months later.
So let me wrap up this case with some conclusions about getting the most value from social media.First, think of social media as part of your entire marketing program. Not as a separate activity. Apply social media to the same goals.Second, use social media where it works best, whether it’s deepening relationships, or finding new customers through pass-along, or solving customer service problems.Third, measure your results using the same metrics as the rest of your marketing program.
Now, let’s look at where direct marketing and social media may be headed.
One interesting new direction is the increasing importance of networks that include visual elements like photos, graphics, and video. As we saw earlier, younger users prefer these networks to all-text environments.Here’s an example from the Italian notebook company Moleskine. Their website encourages notebook owners to share their artwork, their videos, their writings, and it has become a vibrant community of creativity—and very visual. It’s a social network devoted to a single brand.
Another trend is the slowing down of Facebook. They’ve had some very bad press lately, with the stock losing 50% of its value after their IPO this May. But their problems are not just financial. User interest is plateauing. In the U.S., it has already peaked and is on the decline.
On the other hand, advertisers are still flocking to Facebook. This chart shows that Facebook ad budgets are growing faster Another trend is the slowing down of Facebook. They’ve had some very bad press lately, with the stock losing 50% of its value after their IPO this May. But their problems are not just financial. User interest is plateauing. In the U.S., it has already peaked and is on the decline.
Social media is still viewed as risky. 35% of brand executives think Facebook poses significant risk. Marketers need to learn how to use social media properly, to ensure its continued growth as a marketing channel.
Luxury brands, which were generally slow to adopt social media channels, are getting more comfortable with these channels. So this is a positive trend.
One final trend note: our dear US Postal Service, which has been under threat since the arrival of the Internet. Mail volumes are in steady decline. I would point out, however, that the worst decline is in 1st class mail. Standard (advertising) mail remains flat. I believe direct mail will continue as a useful channel for U.S. marketers due to its power to persuade and the wide availability of mailing lists.
In conclusion, I’d like to point out that, increasingly, digital marketing is converging with direct marketing. One of the surest indicators of this trend is the metrics digital marketers are using. These are all direct marketing metrics! Cost per lead, response rate, conversion rate, cost per sale. It’s a great time to be a direct marketer.
So, in summary, I view digital media—including social media—as direct marketing media. And, in fact, digital marketing is marketing. Direct marketing is marketing. It’s all about finding new customers and deepening the value of the customer relationship. It’s a great time to be a marketer.Thank you.
Social Media Meets Direct Marketing
Social MediaMeets Direct Marketing Getting Value from Social Media Beyond “Likes” and “Followers” Ruth P. Stevens email@example.com. @RuthPStevens