The Power of Influence

Me being interviewed on ADOI TV

A little while ago I spoke at the MMC09 - here is an interview done by the team just after the conference.

In the interview I cover the relationship between WoM and Social Media and how my company (Vocanic) approaches the planning of a campaign with its Groundswell(tm) methodology.

Here is a post by Andy Sernovitz, the ex head of WOMMA, who is now off doing his own thing called Gaspedal  and authoring books  and writing his Dam, I Wish blog

What I loved ( and got his permission to repost, thanks Andy) was the simple way he got rid of lots of the confustation (new word ...like it?) that is being weaved around WoM and Social Media.

To put Andy's sentiment into our own (Vocanic's) parlance .... its all about earning the recommendation.

Big Hairy Idea #1:  It's Not ALL About Social Media

Social media is an incredible tool.  It enables fast conversations, it enables widespread conversations, and it connects people who would rarely see each other.  It gives speed and scale to word of mouth.

But social media is not word of mouth marketing.  It's a tool we can use for the online portion of word of mouth.  But it's not even the main tool there. I would argue that more recommendations go by plain old-fashioned email than all the social networks combined.

On top of that, offline word of mouth is so much bigger than online word of mouth.  A tweet still doesn't beat a personal recommendation from a close friend.

So why are we talking about social media so much?  

1.  Because real word of mouth is hard.  It requires big ideas, long-term commitment, and an honest dedication by a company to earn the respect and recommendation of its customers.  You can't just call your agency and order up some WOM.

2.  Because social media gives us an action step.  It's fairly straightforward to do a campaign on Facebook or Twitter.  You can call your agency and order up a social media campaign.  And your agency, who is totally freaked out by this WOM stuff, can deliver a pretty good campaign.
Then you can show the results to your happy boss.  Everyone feels good and gets paid.

Except...  we completely miss the point.

The point of word of mouth isn't ecommerce; it isn't to count clicks and CPAs.

The point of word of mouth is to be a brand worth talking about.  To be a company that people are proud to tell their friends about.  It's to replace paid marketing with personal connections.  To replace cash with love.  To be fantastic.

Internet overtakes TV in the UK to be the biggest advertising medium

UK INTERNET AD SPEND GREW 4.6% TO £1.75 BILLION IN H1 2009 Online advertising expenditure overtakes TV for the first time IAB figures show ad expenditure online up £82m to record market share of 23.5% www.iabuk.net

In the first half of 2009 internet advertising weathered the recession and grew by 4.6% to £1,752.1m, despite the entire advertising sector contracting by 16.6% during the same period.

According to the bi-annual online advertising expenditure study from the Internet Advertising Bureau (IAB) - the trade body for digital marketing - in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) - , the internet has now overtaken TV advertising to become the UK's biggest advertising medium.

The UK remains the world leader in terms of market share for online, with the medium accounting for 23.5% in the first half of 2009. The results signal a significant restructure of marketing budgets as advertisers follow their audiences online and look to the internet for even more measureable and accountable methods.

Technology, telecoms and finance leading the way

 The study breaks down the online display market by industry category, to identify the top spenders and how investment is increasing or decreasing across sectors.  The results show that Technology is the biggest spender, accounting for 19.1% of the market, followed by Telecoms (13.3% rising from 9.7% the previous year) and Finance (13.2% up from 11.9).  Entertainment and Media was fourth with 11.8%, while Consumer Goods saw significant growth up from 6.2% in H1 2008 to 8.1% in 2009 as FMCG marketers steadily increased digital budgets.

StarHub FaceBook Campaign

Lipstick on a Pig (aka Social Media Makeover)

Tom Fishburne absolutly nails it again - sign up for your weekly smile at http://www.tomfishburne.com/

Disclaimer: I have no relationship with BrandCamp at all - other than admiration!

Malcolm Gladwell Speaks in HK: Online reach does not equal influence...

Influential author Malcolm Gladwell has questioned whether popularity on social media platforms translates into real influence that brands can use.

Gladwell, author of The Tipping Point, Blink and Outliers, was speaking in Hong Kong in his first seminar in the SAR. In his talk, based around some of his findings in The Tipping Point, he described people called ‘connectors’, who have far bigger social circles than other people. These people wield huge influence in social circles and are key to word-of-mouth campaigns.

However, when asked about how this theory translated into the world of social media, he argued that popularity online did not necessarily mean social power.

“I have some doubts about the power and influence of some of the internet-based social platforms,” he said. “I’m not sure online is the best space for developing relationships. It’s good for initiating them, but not developing them.”

He added that the key to social power was the intimacy of relationships, but that adding friends to Facebook or similar platforms isn’t a reflection of intimacy. “A true connector is more impressive than a Facebook glutton.”

Marketers, wean yourself off the addiction to Celeb endorsements .. it is damaging your brand

Those of you who have heard me present will remember my position on the effectiveness of celebrity endorsements.  A waste of time and worse, money.  Lazy markeing.

“Make your brand the hero, don’t buy someone’s reputation and put your product next to it hoping some of it will rub off” is my sometimes seen as controversial line. Which often gets a reaction as Celeb endorsements are such stock in trade for so many brands and agencies.

“Take the money you would be wasting on the Celeb and invest it in doing something remarkable for your customers” I propose instead.

Well here is some research to back up my position When asked “When you see a Celebrity in a product advertisement does it make you? ”  78% say no effect and 12% say less likely ie 90% of people say it either has NO effect or actually makes the LESS likely to buy the product.

Lest for one moment ignore the total waste of budget and effort on a campaign that has no effect and just look at the people that it does effect.

If 12% say LESS likely and 8% say MORE likely – the net effect of the campaign is a market 4% LESS likely to buy the product. 

You would be better off going to beach / golfing and giving the money to charity than running the campaign.

So – STOP IT already. 
 
Though the media feeds consumers a constant stream of minutiae about celebrities’ private lives, and celebs who Tweet seem to have legions of avid followers, a new study of LinkedIn users by AdWeekMedia finds that most US consumers say they are not at all swayed by celebrity endorsements of products.

When respondents in the survey were asked whether the presence of a celebrity in an ad makes them more likely, less likely or neither more or less likely to buy the product, nearly 8 in 10 (78%) said it doesn’t sway them one way or the other. In fact, only 8% said the presence of a celebrity spokesperson makes them more likely to buy a product. This compares with a  significant 12% who actually say it makes them less likely to buy a product.

Additional findings by demographic group:

• Older respondents are especially likely to reject celebrities as spokespeople. Nearly one-quarter (24%) of those ages 55+ say seeing a celeb in an ad makes them less likely to buy a product, vs. just 4% saying it makes them more likely to buy.

• Men (15%) are slightly more likely than women (11) to say a celeb deters them from buying a product.

• 20% of business owners vs. 11% of people with jobs in the “management” category say the presence celebrities in ads make them less likely to buy.

• While 19% of survey participants in “creative” roles said a celeb in an ad makes them less likely to buy. This compares with 8% saying it makes them more likely.

A recent survey by Harris Interactive found that Americans do not consider the occupations of actor, entertainer and athlete to have a great deal of prestige.

About the survey: The survey was conducted online in July among a sample of 4,778 LinkedIn users.

 

Airlines start to take to Social Media ...

Great piece by the NYT (they do seem to get this stuff) on Airlines and Social Media.

Here are some of the key points - and this is the link to the full article.

As the global recession and the consequent drop in air traffic force carriers to cut back on services and consider charging extra for everything from checked bags to onboard meals; the Internet, and social media Web sites in particular, is giving once-faceless travelers a global — and instantaneous — platform from which to air their grievances.

Confronted with these middle-seat Davids-turned-Goliaths, airlines, like other consumer-oriented businesses, are racing to find their own ways to use social media channels like Twitter, Facebook and YouTube to forge deeper relationships with passengers — before things go wrong.

“Thanks to social computing, travelers’ tales are no longer confined to what they tell to their coworkers and neighbors,” said Henry H. Harteveldt, a vice president and airline and travel industry analyst at Forrester Research in San Francisco, adding that roughly 60 percent of travelers in Europe and North America engage in some form of social networking online. “They are out there in public for the whole world to see.”

Airlines in the United States have been the quickest to embrace social media as a low-cost public relations and marketing tool, in particular to spread the word about fare sales or to make announcements about new routes or services.

Carriers like Southwest Airlines, JetBlue and Alaska Airlines are among the most active users, each with online “followings” in the tens, if not hundreds of thousands of people.

“For most airlines that have a large following on Twitter or Facebook, it’s pretty clear that they have a few people dedicated full-time to it,” said David Beckerman, a vice president at OAG , an aviation market research firm. JetBlue, for example, which has more than 960,000 Twitter followers, has 35 staff members dedicated to updating its feed.

Still, he said, “it’s weird that airlines aren’t using social media more,” particularly in Asia, where large numbers of travelers are equipped with Web-enabled cellphones. Only a handful of Asian carriers, among them Malaysia Airlines and the low-cost Air Asia, use social media actively, he said.

Research Proof that Friends Influence Eachother's Puchase Behaviour on Social Networks

Just found some great research around the actual impact of social networks in buying behaviour.  It was done this year (09) using data from the Korean Socual Net Cywords (22m members out of a total population of 55m)

The study is being done by Sunil Gupta who is the Edward W. Carter Professor of Business Administration at Harvard Business School.

The basic conclusion is that yes - there is a significant causal relationship - but you (if you are a brand) need to know how to select the right group of people to target.  Get it wrong (as so many have by going cool hunting) and you will end up with a -12% result.

This research and findings corelated directly with our (vocanic) projects in the real world where we use our Groundswell(tm) methodology and technology to screen to find the right group to engage.

Below is an abstract of the paper, this is a link to the HBR Site to find it

"In spite of the cultural and social revolution in the rise of social networking sites such as Facebook and MySpace (and in South Korea, Cyworld), the business viability of these sites remains in question.

While many sites are attempting to follow Google and generate revenues from advertising, will advertising be effective? If friends influence the purchases of a user in a social network, it could potentially be a significant source of revenue for the sites and their corporate sponsors.

Using a unique data set from Cyworld, this study empirically assesses if friends indeed influence purchases.

The answer: It depends. Findings are relevant for social networking sites and large advertisers.

The core conclusion is that there is a significant and positive impact of friends' purchases on the purchase probability of a user.

In detail:

• However, there are significant differences across users.
• Specifically, this social effect is zero for 48 percent of the users, negative for 12 percent of the users, and positive for 40 percent of the users.
• "Moderately connected" - the 40%)users exhibit "keeping up with the Joneses" behavior. On average, this social influence translates into a 5 percent increase in revenues.
• Highly connected users tend to reduce their purchases of items when they see their friends buying them. 

This negative ocial effect reduces the revenue for this group by more than 14 percent.

This finding is consistent with the typical fashion cycle wherein Innovators or the super elite in the fashion industry tend to abandon one type of fashion and adopt the next when it becomes more commonplace in order to differentiate themselves from the masses.

Negative Word of Mouth in action - 3 million views at time of posting (4.2 Million 10 days later)

This brand (United Airlines) has a poor Net Promoter Score and is in decline - the net effect is that their cost of acquisition for new customers is increasing and financially they are suffering (Chapter 11)

This is the latest in the line of case studies where a brand's arrogance and unwillingness to listen to their customer (listen to the lyrics that tell the story of how he was ignored) is costing them dearly!

UPDATE 27 July 09

David Carrol posted this video http://www.youtube.com/watch?v=T_X-Qoh__mw saying that United has now (with viewership of his original video at 4.3 million) contacted him with an offer of compensation - after 12 months of him trying through direct contact with United.