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Posts tagged Advertising
A Guide to Social Media Marketing Techniques
Mar 9th
In my previous article, I was somehow critical about the state of advertising in social media. I do believe that marketing is a necessity in a free market and that it can give great results when done with integrity. And by that, I mean not disguising Ads into user generated content. And I have to admit, there are a number of companies that just do that and they have gained a lot as their customers have gained also. In this post, I will talk about a few techniques that can be used on social media for marketing purposes. As you know my philosophy, I’m against black-hat techniques when it comes to selling products, so everything here might sound very boring to some…
Social media for promotion
Let’s say a friend of yours just had a great deal at Best Buy. The deal is so good that he had to tell you, which led to you buying that same product. That’s great because Best Buy benefits from word-of-mouth marketing here. First, they promote their products and then word-of-mouth happens with sales flowing. Social media offers very much the same possibility. When people retweet or tag a page on Facebook, their friends get notified which is the same as if they had talked about it. Now what’s great with social media is that marketers can easily measure the impact of their campaign by using a brand management and monitoring solution. Some companies have used this technique with great results and their increased effort in this direction is just a proof of it.
Broadcasting techniques
When markets are global, broadcasting become effective way 0f marketing. There are marketers that use Twitter to reach as much people as possible. Of course, having a lot of followers helps in this technique. However, social media is very good at minimizing the cost per person reached. A follower will not cost more than a few cents to acquire so people can be reached for a very cheap price.
Customer retention techniques
It is common knowledge to say that customer retention is an important issue for marketing. It is also known that personalization of customer communication is a big factor in customers loyalty. The good thing with social media is that it can create a community around a certain brand which is going to be active about how to deal with a lot of things. The marketing management’s role here is to coordinate and participate in the conversation and get to know the customers. since distance between the customer and the company is diminished, effort can be spent on stuff like keeping in touch with customers and receiving frequent feedback. Again, brand monitoring is great when it comes to sensing important issues that need to be addressed. Here, the idea is to turn the fire off when things get nasty on social media.
Local business marketing techniques and Social media
With location-based social media gaining popularity, businesses that offer services need to be present on those platforms. Don’t forget that there are intangibles involved with services, so it’s always good to adopt cutting edge techniques and have a presence where your competition isn’t really present. Also, people are increasing using things like Google Map to look for services in their area. So marketing needs to be there and be active so it can get the right king of attention for the business.
Marketing techniques and integrity
Of course, all of these should be done by user accounts that clearly indicate a link with the brand. Without this indication, companies are misleading consumers about the nature of the messages that they are sending out there. While this technique can be fruitful in the short run, people will end up uncovering the deceitful methods and things can get worse than if no effort was spent on social media at all.
A Critical View About Advertising on Social Media and the Need for User Code of Ethics
Feb 27th
Generally speaking, I’m very against a lot of promotions and advertisements that happen on social media. That’s not because I despise advertising, but more because a lot of ads on social media are actually disguised as user generate content. Things got so ugly that the FTC had to step in and impose regulations on how to advertise on social media. Recently, there was a class action filed against Yelp for extortion, where the company is accused of asking for money in exchange of good reviews. How did things get there and should we get rid of marketers?
Advertising is unavoidable in a free market
The great thing about capitalism is that all have the freedom to choose a trade out of their own decision. There is no government that will impose it’s view on how the economy should be run. Rather, it is an ‘invisible hand’ that dictates or at least suggests picking one trade over another. Basically, when one has to take its own competences as well as that of its surrounding when deciding upon the trade to choose. For example, someone who is good at repairing cars must also see if there are other mechanics in the area where he wants to open his business.
Here, free market must have a mechanism in which suppliers can promote their products or services in a way with which consumers will be able to decide between a few competing suppliers. In other words, every business has to be allowed to communicate whatever it is offering to the market, but also, every consumer accepts to invest some of its time to take knowledge of the different offers available on the market. Without this implicit agreement, free market wouldn’t exist meaning that there won’t be any competition and that things will end up in monopolies.
Advertising needs space to communicate its messages
We live in a physical world. Therefore, even things that seem abstract like communication needs a medium to travel. One very simple way of communicating is through sound. If I shout loud enough, then every body on the planet will hear me! I wish I could do that…
But there are other ways of communicating. For instance, posters are used a lot everywhere to communicate messages to people. In a similar way, the Internet is also a medium to communicate. Of course, it seems abstract because everything is bits of information, but if you think of a wall of information where your favorite news or email is displayed, then it is easy to see that that little space that is used for advertising is taking a piece of physical space. My point is that this is the second pillar of marketing, meaning that it needs to have access to all the space that it can use to communicate its messages.
Social media is a damn good space to advertise
Since social media has attracted a great amount of attention lately, it is only natural that marketers throw themselves at the platform. The same why big displays on the highway are used by marketers to advertise their products, a few pixels on a web page can also be used to advertise. But there is something about social media that is different from traditional platforms for promotion: it is new. Since it is new, people don’t deal with it the same they do with other platform. When we see a ad on a poster, we know it’s an ad because we have been trained for it.
The new thing with social media is in the agreement that all users have to exchange with complete strangers. We have tons of Twitter friends and followers and we are friends with Facebook people that we have met on Mafia Wars. So somewhere, we have all agreed to have a place where we could exchange with people we do not know of, something that we don’t do in real life. Now the problem is that having people to cooperate on an open platform doesn’t guarantee that malicious agents will not infect it.
Imperfect information and market failures in social media
The problem with marketing on social media is that consumers and suppliers are in a game of imperfect information. When a suppliers pays someone to write positive feedback about a product, there is practically no way for the consumer to find out who is behind the good review. Of course, consumers could check the reviewer’s history and try to estimate to what degree it can be trusted. But then, people have to spend a lot of time figuring out who is trustable or not. Even worse, there is no guarantee that someone who has been a reputable source of reviews has integrity in the future.
It is precisely this reality of social media that malicious agents exploit in there advantage. This is where the market fails to deliver value or that value is not delivered in an optimal way when dealing with advertising through social media. The problem is that people will take bad decisions because they will be deceived by user generate content that is not really content but only advertising. Trying to avoid deception at all costs could lead to pathological situations where consumers will have to spend an undefined amount of time screening reviews to make sure of their legitimacy before taking a decision. Since there is no guarantee that the consumer will get anywhere by screening he might become victim of paralysis by analysis and not be able to take a decision.
Advertising on social media must be regulated
Knowing that markets can fail, there could be an attempt to regulate supplier behavior on social media. FTC’s attempt to fine bloggers who don’t disclose payments is one of them and it could be a safe bet to say that more regulations are to be expected in the future. These regulations will impose that advertisement must be clearly marked and differentiated from real content. What it means in terms of the agreement between consumers and suppliers that I describes earlier, is that consumers are willing to have a piece of that physical space reserved for advertising. For example, people are willing to have the right sidebar on Facebook be reserved for advertising. Of course, this is going to take space that will not be used by Facebook to display otherwise useful content. That not-displayed-and-useful content will have to be places somewhere else on another page and accessing that page will mean that the consumer will have to perform a click.
Consumer lassitude and the failure of regulations
It might seems to be little effort in exchange of living in a free market, but it is still effort that means a bigger server for Facebook, and a whole lot of clicks if we add up all those clicks by the 300 million members. As a result, there is a general lassitude among consumers in regards of advertising. It is as if all consumers know that they have to deal with advertising for free market to function, but that at the same time they are fed up with being exposed to it.
It is because of this feeling that people disregard publicity and it is the same reason that pushes marketers to use tricks to avoid the defense mechanism that all consumers have developed against advertising. In other words, regulations will not regulate supplier behavior but only force them to combine secretly with malicious agents. Now the challenge for legislators and law enforcement is to prove the existence of secret combination between a product supplier and a social media reviewer. History shows that this is a very difficult task that succeeds only under a few strict conditions.
Consumers must be aware of the different forms of advertising
Since regulations will not stop businesses to use fake reviews to promote their things, consumers must learn to use social media in a way that would detect fake reviews. To take an example from day to day life, fake reviews would be like walking in the street and having someone come up and say: “Pepsi’s so good for the stomach, I tried it and its great. You should do the same”. How do we know that this person is working for Pepsi? Simply because it doesn’t make any sense for a sane person to go out there and say such a thing to someone he doesn’t know. Therefore, our reflex is to thing that the person is crazy and that the message that he is communicating should be disregarded. Marketers are very aware of this fact and that’s why they don’t invest in such techniques!
Now my point is that the should be common understandings among social media users about what is the ethical way of interacting to each other. The same way that there are norm in society about not going to a stranger and talk about Pepsi, there should be norms of ethics for proper behavior on social media. My point is that consumers must adapt their attitude and behavior to a new media for communication if they want to take full advantage of the benefits the it offers.
FTC Sends Strong Message to Social Media Marketers
Dec 16th
Among all those who spend huge amount of time on Facebook and Twitter and couple of new guys are joining the crowd: it’s the FTC staff. In order to execute the new law about bloggers disclosing payments, the FTC is having a firm eye on what is going on different social media platform.
Blogging just keeps getting harder.
So now, someone having information about someone not disclosing payments on social media is worth $11k minus procedure fees! Oh yes. In a world were employer/employee loyalty has been flushed down the toilet long time ago, employees who have information about their employers paying bloggers who happen not to disclose payments are going to be tempted to stool.
As a result, the cost of doing advertising on social media is going to go up because extra precautions will have to be taken both by employers and social media advertisers in order to stay compliant with law. This means that a lot of advertising campaigns will not happen because they will not be able to show good profitability forecasts. Of course, a lot will fail because profitability forecasts have been hyped.
Will the FTC Fine Bloggers Who Don't Disclose Payments?
Oct 7th
Effective December 1st 2009, bloggers cannot advertise a product or service without disclosing payments. I could see this one coming because some bloggers where like this guy below:
Of course not all bloggers can afford FTC's $11k fine…
The thing is that most people will probably not notice that a product is actually being advertised and think that praise for a product or service is genuinely made by someone like them who happens to have a popular blog.It is only a trained eye, i.e. someone that has knowledge of sales and marketing, that could see if something is being sold or if something is being reviewed.
Well, according to the FTC, this is not acceptable business practice anymore. As a social media and Web 2.0 enthusiast, I welcome this decision, because it will remove a lot of noise from the blogosphere to a certain degree. Of course, the FTC will not be able to monitor everybody, but ads disguised in reviews will be diminished. Or, will it reinforce the influencing power of the ones that will go unnoticed?
Without being a legal expert, I believe there will be some semantic as well as logistics issues in identifying and correctly labeling sponsored reviews. After all, I can hardly imagine that Starbucks would admit they hired the blogger above…or did they?
Update (Jan 17 2010): The FTC finally admits that it’s not so easy to enforce its rules.
The Thin Line Between Real Marketing vs. Spam: The Case of 'Black Hat' vs 'White Hat' Social Media
Aug 13th
The number of spammers has grown so much, their tricks have become so sophisticated and their presence is so overwhelming that it becomes hard for marketing to distinguish itself from spam. After all, both marketers and spammers are promoting something. Since marketers are known to advertise all kind of useless things, it is not so easy to legitimize one form of promotion over the other. This issue was rises at SES SJ (2009) as ambiguity between spam and legitimate marketing is felt in the industry. Some could argue that lotto sells dream, but none would label lottery ads as spam. I know, I know… lottery is not scam because you always have a chance of winning when you buy a ticket. But as Adam Smith has put it:
The worst way to lose in lottery is to win for sure.
Why? Because there is one way to win for sure, and that is by buying all the tickets. The only problem, is that the cost of all the thickets will always be more than winning the prize! After all, those than run the lottery are not working for free…
To get back to our subject, I think that there is currently real ambiguity over the definition of marketing but that this situation will lead to new way of doing in this field. Before everything, I would like to say that in a free market, advertising is a legitimate and necessary activity for every firm. When there is competition, firms should be able to promote their products. So marketing will always exist and should always exist. What will change is the customer manipulation techniques. What I mean is that with increased understanding of social psychology, marketers have used sophisticated techniques to add a certain intangible value to their brand or product. That is, they create need through the manipulation of emotions when there is no rational need.
I will not question the legitimacy nor the morality of this model. I just think that this trend will die because consumers are becoming increasingly rational and aware. This new reality is caused by the information revolution as well as social awareness of issues related to consumption culture. In this new market, the role of the marketer will change. They will be more involved with customers that take decisions in a rational way. We already see that there is increasing dialogue between consumers and producers where both have to define value.
Interestingly, this is an opportunity for smart marketers to distinguish themselves from spammers. Spammers cannot have dialogue or rational discussions with their clientele. Spammers job is one of broadcasting and fishing, while marketers job is one of aggregating and relationship building. Those who will be able to build dynamic relationships with their customers will be the ones that will differentiate from spammers. They are the ones that will attract attention and have prospects. Those who will use old static rules of one way ‘brainwashing’ will look like spammers and will pass unnoticed.
Social Media a Platform for Advertising?
May 10th
Not really having a business model, social media is turning into a tool for promotion rather than a tool for collaboration. With the great use of social media such as Facebook, MySpace, Digg, WordPress, Reddit, etc. a new form of advertising has arrived an is called social media optimization. This method consist of increasing visibility through the use of social networking websites which on its turn introduces the concepts of online reputation management where organizations or individual pay close attention to their online presence. Our inquiry here is to find out the benefits offered to an “active social networker” besides the “fun factor” associated with social networking.
Social media can be used as a tool for “word of mouth” marketing. In fact, social networking is the virtual equivalent of talking, only people don’t use air but the Internet as a media for transmitting their words! Matter of fact, social networking is a very green way of gathering. As a result, online marketers can take advantage of the huge traffic around social networking websites to post messages and have them heart by a great number of visitors and this with little effort. This can at least be used as a way of directing a great number of visitors to one’s website. In other words, it is like being indexed on a search engine, only the effect is much more immediate. The other benefit of this method is in creating links to the website, which will most likely increase page ranking on search engines. Isn’t this marvelous?
From now on, two facts will have to be understood: 1) there will be two types of users in social media: one that produces marketing-oriented-messages and another that will consume these messages (along with the consumption of the initial “fun factor”); 2) marketers will be in war with each other for having a better “social media presence”.
And like all wars, this one has something to do with resources. Here, resources are the size of a network. The bigger a network of interconnected users, the more likelly a merketing-oriented-message will be viewed by consumers. We now can answer our initial question about the “real” benefits in being an “active social networker”.
Since popular social networkers have “louder voices” in the virtual airspace, they are “more valuable resources” to the online-marketers. Having them exclusively sponsor a website means having more people visit their website an not competing websites. Naturally, Online-marketers will want to put their hands on the exclusive allegiance of these social networkers.
The open nature of social networks gives great bargaining power to the social networker when it comes to valuating his services: he is very aware of his relative weight compared to other social networkers. Associations can be created to increase this bargaining power in front of online-marketers and investors.
Whether this scenario is initially planned by active members of social media or not, once again, social competence seems to be an important asset.