Shopatron PATH - Marketing Insight and News for Shopatron Clients and Partners
ISSUE 4, JUNE 2008
Social Shopping 101 (Part 2 of 2)
By Ed Stevens and Greg Squires
How can a manufacturer brand leverage social networks to build its brand and drive online sales?
Provide value to connected consumers in these rapidly growing Internet communities, and you could spark a powerful, self-sustaining marketing force. Jump into social networks halfheartedly in a cynical attempt to take advantage of a trend, and you could find yourself picking up the pieces of a major brand management headache.
Social media marketing has been heralded as “the next big thing” on the Web. Big brands such as Nike, Coca Cola, Adidas, and many others are spending marketing resources on exploring the social networking opportunity. Many corporate Web sites are incorporating social engagement tools, such as blogs, forums, and video/photo uploads. There are literally hundreds of “social networking” sites on the Internet.
In PATH Issue 3, we examined social shopping specifically and outlined some rules of thumb in experimenting with this trend. Social shopping sites, like Kaboodle or Pronto, can benefit branded manufacturers by providing free traffic, facilitating listening to customers, and optimizing for search engine results.
We did not look at MySpace or Facebook, because these two sites are in a class of their own. No social networking sites that specialize in shopping or anything else have the traffic that MySpace or Facebook have.
In this PATH Issue 4, we break down Facebook and MySpace and explain the various marketing opportunities that exist on these sites for consumer goods manufacturers. We conclude with some recommendations as to how a brand might begin using these sites.
Undeniable Traffic Volumes
The traffic volumes to Facebook and MySpace are huge. These major social engagement sites are in the top 10 visited sites across the entire Web, near Google, Yahoo!, YouTube, and Wikipedia. It's a reality that these sites are grabbing the attention of online consumers, so the obvious question that brands must ask is, “How do we tap in?” or maybe, “Is there a way to tap in?”
The first iteration of MySpace was created by employees of eUniverse in August of 2003. The entrepreneurs saw potential in the 2002 launch of Friendster, a social network that is still active today. eUniverse used its 20 million users and email subscribers to quickly move MySpace to the head of the pack of social networking sites.1 In July 2005, eUniverse was bought for $580 million by News Corporation, the parent company of Fox Broadcasting Company. MySpace currently has 68 million unique monthly visitors, according to the latest numbers from compete.com.
Facebook got its start on the Web in early 2004. Mark Zuckerberg, a Harvard student at the time, initially created Facebook as a way for his Harvard friends to interact with each other. It quickly gained traction at Harvard in early 2005 and expanded to other Ivy League schools. By the end of 2005, more than 2,000 colleges and over 25,000 high schools throughout seven countries had networks on Facebook.2 By beginning with a limited release only to high school and college networks, it gained an initial buy-in from teens and twenty-somethings. After opening up to all users in September 2006, the site's growth has been phenomenal. Facebook reports that its "fastest growing demographic is those 25 years old and older."3 Facebook currently has 31 million unique monthly visitors, according to the latest numbers from compete.com.
Alexa shows steep increases in traffic on both Facebook and MySpace over the past 24 months, as displayed in Figure 1 below. Traffic levels to sites like shopping.com, BizRate.com, and PriceGrabber.com – three of the “solo-hunter” sites we reviewed in the last issue of the PATH – are nowhere near that of Facebook and MySpace.
Facebook / MySpace website traffic
Marketing Opportunities on Facebook & MySpace
Facebook and MySpace provide multiple options for brands to engage with their users. Facebook has five marketing programs: Pages, Social Ads, Display Ads, Platform, and Beacon. MySpace provides two consumer-facing initiatives: Profile Pages and Display Ads. These initiatives vary in their setup costs and their efforts to manage, and each of them has a unique purpose for marketers.
Sorting out “Pages” and “Profiles”: the Free Stuff (free?)
Any individual who signs up for Facebook gets a user profile. You can post pictures, connect to friends, and see what your friends are doing.
A Facebook Page is similar to a user profile and is what companies set up in Facebook. A Facebook Page can be created for any kind of organization or business: a local restaurant, a TV show, a sports team, or a consumer brand.
* Facebook Pages can have discussion boards, lists of “fans,” image and video channels, events listings, RSS feeds, product reviews, and more. The Page creator controls whether each section of the Page is displayed.
* Individuals with Facebook accounts become “fans” of their favorite brands and products and use this as a way to display their interests to friends and family.
* Facebook Pages are free and allow organizations and brands to connect with consumers.
* A brand's Facebook Page can be promoted on your Web site, by following the instructions on the Facebook Web site.
MySpace does not differentiate between individuals and organizations. Both set up Profiles. A Profile in MySpace behaves like a Profile or a Page in Facebook.
* A brand creates a Profile. Individuals can “add” the brand as a friend.
* Images, videos, contests, featured products, company news, articles, and blogs can be posted.
* Consumers can post comments to the Profile (if enabled), and a conversation between brand and consumer can be established.
* MySpace Profiles are free to set up; the Profile's look and feel can be customized to match brand image using HTML coding.
MySpace Branded Profiles
For marketers with large budgets, MySpace has a relatively new program call Branded Profiles. Like normal MySpace Profiles, the Branded Profiles allow for sharing images, adding friends, adding text, blogging, etc. The primary differences are that visitor demographic information is available for Branded Profiles, and they do not have any display ads from other companies.
* Minimum cost is $10K per month.
* MySpace account manager is available to help target, based on consumer profiles.
* Reports are available on traffic to the profile, including visitor demographics.
Facebook Display Ads
Facebook allows advertisers to purchase digital display advertisements through its site.
* Ad inventory is available exclusively through Microsoft Digital Advertising solutions.
* Display ads can be targeted by geography, schools attended, and age.
* Display ads generate relatively low traffic. Some speculate that social networkers are not usually in buying mode when they connect with friends.
MySpace Display Ads
Advertisers can also purchase display ads through the MySpace site.
* Ad inventory is available through Advertising.com and other ad networks.
* Display ads can be targeted as in Facebook.
* MySpace tends to display more ads per page, creating a more chaotic feel with less brand control than Facebook.
Facebook Social Ads
Facebook Social Ads are one of the newer “social” ways to advertise.
* Display ads are in and around the “News Feed,” a constantly updating list of actions made by friends on Facebook. Social Ads can target specific segments of consumers to promote individual products. For example, a shoe manufacturer can advertise men's skate shoes to men over the age of 18 who have an interest in skateboarding.
* Tracking performance is handled with Facebook Insights, a free metrics solution.
* Can promote a Facebook page, a website page, or a product page.
* Targets consumers by age, gender, interest, location, education level, and more. Estimates the size of the target audience.
* Creates an ad with a picture and text.
* Can pay on a cost-per-click or cost-per-1000-impression basis.
Facebook has a built-in application that enables consumers to share purchasing activities with friends on Facebook.
* A movie rental activity can be shared: Meagan Marks added Top Gun to her favorites on Blockbuster.
* A purchase activity can be shared: Jim Bossler bought an iPod Shuffle at apple.com.
* Very little integration is required for setup. To enable the Facebook Beacon feature, you define the actions to be displayed on Facebook and add a few lines of code to the site.
* A lot of controversy has been raised over Facebook's Beacon for alleged misuse of private information. With the Beacon program, Facebook only allows for opt-out of information sharing, rather than requiring a user opt-in.
* Companies have been slow to adopt Beacon due to privacy concerns and consumer pushback.
Facebook Platform (Applications)
Custom Facebook applications are a flexible marketing tool but also the most difficult to create. Over 20,000 applications have been developed since last May.
* Develops custom applications that allow users to interact/engage with a brand.
* Open platform to integrate data/products into the application.
* Provides product recommendations based on the user's interests and other profile data.
* Can also provide opportunities to sell ad space as a revenue generator.
Figure 2 below outlines each program, comparing its costs and effort to manage.
Facebook / MySpace program comparison
Where to Begin
MySpace and Facebook provide several reasonable marketing opportunities. A good way to test marketing is through the inexpensive or free options available.
* Find out if a page for your brand has already been created; if so, you should definitely create the official branded site.
o One social media marketer, in reference to one of the brands he works with wrote that the “brand was so popular among the demographic that uses MySpace that well-meaning customers were creating profiles that appeared to be the official MySpace of the company. Customers were taking company logos and images off the company Web site, and pasting them on their MySpace profiles. Obviously, this was a problem. Several of the MySpace profiles contained content that the company did not approve of, and did not want associated with the brand. In their case, they needed an official MySpace presence in order to prevent this confusion.” 4
* Create a free Facebook or MySpace page and promote it from your Web site. Spend some extra time at the outset to invite friends, write content, post pictures, and get the ball rolling, until it gains some momentum. Take part in the conversations, and be prepared to honestly represent your brand.
* MySpace tends to be a more open community (chaotic and free form). Facebook is more understated and controlled. Consider which venue is better suited to the brand image you want to portray. Some brands may not have many consumers using either Facebook or MySpace. You can get a good feel for community activity levels by searching for keywords you know.
* Be a legitimate member of the community. Don't be a corporate spammer. If you are a true representative of your brand, hear what consumers have to say.
* Offer something valuable so that the new program launch can be immediately successful. Run a giveaway contest or a promotion through the Facebook Page or MySpace Profile. An attractive deal will create buzz on the Web and draw consumers to the page.
* Build some links pointing to these pages so that they can get ranked on search engines for your brand terms. Link to your new page from your Web site for the SEO benefit.
MySpace and Facebook are so popular today, it is important for brand marketers to stay up with their growing influence. Be sure you know what is happening with your brand, then try something free or low-cost to see if it drives traffic or sales.
1. “MySpace”, Wikipedia
2. “Facebook”, Wikipedia
3. “Press Room”, Facebook
4. “Why Every Business Needs a MySpace and Facebook Profile”, Palmer Web Marketing