BCA

From: World Advertising Research Center (WARC)

 Brand owners must now become “marketing organisations” which spread responsibility for customer engagement across their entire corporate structure, McKinsey has argued.

“Customers no longer separate marketing from the product – it is the product,” the consultancy said in a new study.

“They don’t separate marketing from their in-store or online experience – it is the experience. In the era of engagement, marketing is the company.”

Factors stimulating this trend include the rise of DVRs, websites such as YouTube, smartphones and tablets, which are revolutionising consumer media habits.

Similarly, shoppers are increasingly looking to social networks, blogs, forums and user reviews to research, and connect with, brands.

As the amount of touchpoints proliferates, traditional “push” marketing techniques have been undermined and the importance of functions beyond the control of communications teams, like sales, IT and call centres, has grown.

“In essence, companies need to become marketing vehicles, and the marketing organisation itself needs to become the customer-engagement engine,” the study said.

Zappos gaining advantage from rigorous customer service

Online retailer Zappos was named by McKinsey as one firm deriving a significant competitive advantage from its rigorous approach to serving consumers.

“Great companies all have strong cultures. That’s our number one priority at Zappos,” said Tony Hsieh, Zappos’ CEO.

“The second ingredient is that all great companies have a vision that has a higher purpose, beyond profits or being number one in the market.”

Key is people and developing chemistry

Air carrier Virgin America has also attempted to ensure passengers receive a differentiated service.”The real key is people and developing the chemistry and the attitudes, in our staff, that create the right experience for customers,” Steve Ridgway, Virgin Atlantic’s CEO, said. “And at the end of the day, that really matters. After all, we fly exactly the same planes as everybody else. We fly them under the same very strict safety rules.”

In replicating such success, corporations must abandon models where specific divisions effectively “own” responsibilities like CRM and merchandising. “Companies will be better off if they stop viewing customer engagement as a series of discrete interactions and instead think about it as customers do: a set of related interactions,” said McKinsey. “CMOs will increasingly be held accountable for the performance of groups that don’t report solely to them.”

Marketing could be divided between “core” activities and dispursed duties throughout the company

At the organisational level, marketing could ultimately be divided between “core” activities, like branding and agency management, remaining largely unchanged, and duties that are “disbursed” throughout the company.

“Marketing is touching so many more parts of the company now,” said John Hayes, CMO of American Express.
“It touches on service; it touches on product development. We need to organise in a way that starts to break down the traditional silos in the business.”

Procter & Gamble, for example, has a specialist team buying digital advertising across different geographies, and which is located within its purchasing arm but staffed by marketing experts.
  
McKinsey recommended setting up cross-functional marketing “councils” to encourage coordination, alongside possibly building online forums to solicit consumer feedback and assistance in the creation of new products.

Building third party alliances is vital

Cementing third-party alliances is also vital, proven by Nestlé’s team dedicated only to Wal-Mart, and covering everything from promotions and logistics to innovation and design.

Wal-Mart thus has a single point of contact with one of its biggest suppliers, Nestlé benefits from enhancing its ties to the retailer, and both firms accrue detailed shopper insights, which are growing ever more valuable.

“Marketing is going to become a much more science-driven activity,” Duncan Watts, a research scientist at Yahoo, said. “The kinds of questions that we can ask are much more sophisticated and require a whole new science.”

Data sourced from McKinsey/Huffington Post; additional contet by Warc staff, 14 July 2011

From World Advertising Research Center

Boutique social media agencies are “threatening the budgets” of more established rivals, a report has argued.

The Altimeter Group, the consultancy, surveyed 140 corporate social strategists representing firms with at least 1,000 staff, finding that organisations at the early stages of using services like Facebook and YouTube normally relied on traditional digital agencies, and posted an average annual spend of $51,000.

By contrast, marketers tapping dedicated social media shops during this experimental period typically allocated just $31,000 to leveraging such properties.

Mainstream new media agencies are also generally afforded $162,000 in billings as activity becomes more “formalised”, measured against $96,000 for their smaller counterparts.

A substantial shift
As brand owners reach a “mature” or “advanced” level, the situation undergoes a substantial shift.

At this point, the resources made available to boutiques hits $238,000, compared with $87,000 for more established agencies.

According to the Altimeter Group, the rise of social specialists marks the next phase in the sector’s evolution after a “fast consolidation” in the downturn.

The consultancy further suggested these new entrants are “threatening the budgets” of bigger competitors, if clients’ behaviour to date continues.

Entrants rely on traditional agencies for education
“They often rely on traditional agencies for education (often a loss leader) research and strategy and implementation,” Jeremiah Owyang, a partner at the Altimeter Group, said.

“Once corporations realise that social business is not about short term campaigns, they give dollars to boutique agencies.”

The primary contributors to this trend include a lack of flexibility and in-depth knowledge about genuinely engaging consumers among some prominent networks, which “layer” social media on top of existing approaches.

“This is a great opportunity for the boutique agencies, who let the traditional agency do education, set plans in place, experience a few failures letting boutiques swoop in,” Owyang added.

However, the fact these agencies are small means running multi-market or truly integrated marketing initiatives is largely not viable.

Moreover, major players like Edelman and Ogilvy are rapidly, and effectively, enhancing their capabilities in this area.

Start-Ups ripe for acquisition
It can thus be expected many start-ups will attract the attention of holding companies keen to make acquisitions.

Greater collaboration between shops covering all disciplines, irrespective of whether they belong to the same company or act independently, should also increase.

Previous research from the Altimeter Group revealed social media “beginners” provide an average budget of $68,000 to the channel, rising to $1m among the “formalised” group and $1.4m concerning their “mature” peers.

Around 76% of companies now use social media for tracking brand metrics and 67% use it within the R&D process.

Meanwhile, 65% direct advertising and marketing expenditure to social media.

Data sourced from The Altimeter Group; additional content by Warc staff, 23 December 2010

From World Advertising Research Center

Brand owners must face up to the “daunting task” of creating marketing systems reflecting the demands of the digital age, according to a new study.

As consumers gravitate towards social networks, search engines, blogs and the mobile web, advertisers are “abandoning traditional media at a shocking rate,” the Booz & Co report suggested. Such a trend has been demonstrated by the comparative resilience of online – and to a lesser extent mobile – adspend during the recession.

This is partly because both channels allow for precise targeting at low cost.

“The many virtues of digital marketing – its speed, flexibility, interactivity, and accountability – require a whole new set of marketing strategies and skills to make it work,” Booz said.

“In a Web 2.0 world, however, taking part in that market isn’t simply a matter of throwing some banner ads against a few likely websites and seeing what sticks.”

Exploit the vast amount of data available

Any adequate response to the evolving preferences of shoppers should be premised on exploiting the vast amount of data now available, the Booz report added.
“It demands a close collaboration between CMOs and CIOs to build technology to automate new marketing processes and provide real-time decision support.”

Firstly, this encompasses establishing methods to track the behaviour of consumers, including their communications and media usage habits.

Delivering programmes enabling executives to “target customers 24/7 via the right channel, at the right time, and with the right message” is also assuming centre stage. More broadly, corporate leadership, skill sets and incentives ought to be “geared towards the digital world” rather than reinforcing outdated models.

Develop a single view of shoppers

Achieving this goal ultimately means brand managers need to gain a “single view” of shoppers drawing on the mass of facts and figures hosted online and offline.
“They must use that information to make specific offers to individual customers based on their value to the company – both in the past and in the future,” Booz said.

“They must build a marketing platform that can help automate the process of publishing a consistent set of marketing messages and content … from classic TV spot to Facebook app to YouTube video to Google AdWords to blog entry.”

A novel solution may be necessary

Given the complexity of handling these tasks, and the challenges of coordinating technology vendors, advertising agencies, media owners and publishers, a novel solution may be necessary.As such, advertisers should establish a dedicated digital unit to act as an intermediary between management, IT and marketing departments, as well as running campaigns and dealing with corporate partners.

Google has recently released details about its real-time search engine, which trawls the web to provide all the latest results, and can be refined by location.
“We’ve added a conversations view, making it easy to follow a discussion on the real-time web,” said Dylan Casey, a product manager at Google.

A full conversation view is the objective

“Often a single tweet sparks a larger conversation of re-tweets and other replies … With the new ‘full conversation’ feature, you can browse the entire conversation in a single glance.”

Procter & Gamble, the FMCG giant, is one firm planning a major investment in this kind of approach at a corporate level, according to its ceo, Bob McDonald. “With digitisation, our goal is to standardise, automate and integrate systems and data so we can create a real-time operating and decision-making environment,” he said.

“By getting the right data to the right decision makers at the right time, we can become increasingly efficient and productive.”

Coca-Cola Enterprises, which distributes goods from Coca-Cola’s portfolio, has also leveraged software called SugarCRM to integrate various elements of its operations.

The main goal is a global solution

“The main goal was to get a global solution that combined e-commerce, CRM, and logistics into one package that everybody could standardize on,” said Pierre Fredet, group director for dry outlets, Coca-Cola Enterprises.

Data sourced from Booz & Co/Procter & Gamble/Google; additional content by Warc staff, 02 September 2010

By John Riley

 Last night I was treated to a professional marketing and promotional experience worthy of special note. As it unfolded, you could not escape the fact it had been well planned and executed faultlessly. The venue was the U.S. Airways Center in Phoenix where the Phoenix Suns professional basketball team plays their home games. The occasion was a special evening event to sell their unsold season tickets.

 Billed as “Taste of the NBA”, I estimate 250 people were invited to sample food offerings of leading chefs from cities in the National Basketball Association, meet and talk with the Suns management and coach and inspect the unsold seats for the upcoming season. No one seemed to mind coming out in the 110 degree temperature and many arrived early.

 Free parking was arranged in the adjoining building making entrance into the U. S. Airways Center lobby easy and comfortable. Entering the lobby, you quickly noticed the large screen mounted on high on the interior wall featuring highlights of the previous season’s games. Tables were arranged for guests to pick up their name tag and register for an undetermined prize while under the helpful guidance of several Sun’s sales coordinators.

 As we were escorted into the bowels of the building, we encountered a staging area where a photographer was taking pictures of each party with two team hostesses and the team’s gorilla mascot. Following our photograph, we moved to the playing floor where food and beverage stands were positioned and chefs were serving guests. Each stand presented three or four entrees plus a dessert.

 Surveying the scene above the floor, you could see 18,000 empty seats with an untold number  of available choices posted with a location ID and season price. Guests mingled among the seats considering their possible selections while the white shirted sales coordinators stood by to answer questions.

 One team owner helped serve food at one stand while another owner helped guests find unsold seats to suit their needs. Meanwhile, large screens throughout the room replayed engaging snippets of past Sun’s games. 

 Stationed strategically at one end of the floor, four team principals gathered to present an informal program. First came the coach with a few remarks on his players and the outlook for the coming year. Next came the introduction of the new general manager. He was followed by the principal owner who outlined a number of incentives for guests who made seat purchases before leaving ( for example: the first four couples to buy would receive a free trip with the team to one of their scheduled games while another couple could qualify to use one of the owner’s boxes for one of the scheduled games)

 One of the new additions to the team was the final speaker. Door prizes were then awarded and if the recipient made a free throw in one try, an additional prize was given.

 From that point on, guests continued to enjoy the food, talk with team management or survey the seat locations. No one seemed anxious to leave.

 My experience with similar types of events over the years always alerts me to expect an aggressive sales effort. That didn’t happen here. Neither my guest nor I felt any pressure from the sales coordinators or anyone else. The Sun’s let their product sell itself and if you liked the product, the staff was there to make it easy for you to buy.

 Bottom line: it was a first class marketing effort and it was successful

From e-marketer.com

Word-of-mouth may not translate to loyalty.

Social media is a hot topic in marketing circles, but many consumers are also discussing the trend, which accounts for nearly 23% of time spent online in the US, according to Nielsen.

An April 2010 survey conducted by Harris Interactive for the Online Publishers Association (OPA) found that social media sites were the most talked-about on the web, ahead of portals and top media sites that are members of the OPA in discussions on a wide variety of channels.

All those conversations, whether in person, via email, on the phone or elsewhere on the web, however, don’t make social site visitors loyal—internet users expressed the least loyalty for such properties, compared with portals or OPA member sites. They were also most likely to say social sites were not a very good fit for their information and entertainment needs.

The OPA’s findings are in line with the annual customer satisfaction report from ForeSee Results that found Facebook among the most disliked sites on the web after its many disagreements with its own user community and several privacy debacles.

According to the OPA, negative feelings about social sites may also apply to the brands that advertise there. Only 8% of internet users felt social media site advertisers were reputable, compared with a 21% average for content sites. They also felt advertising on social sites was less relevant and the companies that did so were less respected.

The answer for brands is to continue a greater focus on non-advertising marketing activities, engaging on the social media user’s terms. And marketers should remember that while loyalty to individual social properties may be low and site users dissatisfied, the activities that have come to define social media— connecting with friends and family and sharing information and content with a trusted group—will remain important in the lives of millions of internet users and continue to provide avenues for brand engagement.

For compete data charts and story, go to e-marketer.com

There has been a major “paradigm shift” in consumer behaviour in the US, with the recession changing people’s views on value.

Deloitte, the consultancy, conducted a survey of 2,077 main household grocery buyers in America, finding that 84% were examining their spending in every category to try and save money.

A further 79% believed they were “smarter” shoppers than two years ago, and 65% said a decrease in overall expenditure had not exerted a negative impact on their quality of life.

Some 81% of the sample agreed it was “fun” to see how much they would be able to reduce bills using vouchers and loyalty cards.

Two-thirds of participants were more regularly reclaiming coupons, a total that includes the 39% using the web to track down special offers.

Around 60% of contributors also described themselves as having become more “price conscious” in the last 24 months.

In contrast, only 15% were “buying to please myself” with a greater degree of frequency, 11% placed a particular emphasis on new products and 7% exhibited stronger levels of attachment to brands.

In all, 75% of the panel suggested the financial crisis had caused them to realise “which brands I really care about are which ones are less important to me.”

Elsewhere, 80% thought own-label goods were simply repackaged variants of better-known alternatives and 74% were “more open” to experimenting with lines manufactured directly by retailers.

Only two or three brands they could not do without

A majority of consumers said there were only two or three brands which they “could not live without”, and that private label items were of the same or superior standard to more established rivals.

Deloitte argued there are now four distinct audiences which have emerged in the US, adding that each of these groups has unique requirements.

The biggest of these was the “spectators”, comprised of young, high-earning and well-educated adults that had no need to reform prior spending habits.

According to the study, this cohort has a “well-balanced, opportunistic take on resourcefulness” which means its members often make savings out of choice rather than necessity.

“Planners” made up 21% of the potential customer base.

The group’s shared preferences include cooking from scratch rather than eating prepared meals, suggesting they are interested in a wide “product mix.”

At the other end of the spectrum are “sacrificers” – making up 22% of the total base – who are typically on a low income and who have seen their wealth decline in the last two years.

While this group displayed a “certain pride” in carefully managing money, this came at a “steep emotional price” in the form of disappointment at being forced to trade down.

One key way people fitting this profile are trimming costs is through opting for larger pack sizes, even though they were the least likely to have children.

“Super-savers”, 21% of grocery buyers as assessed by Deloitte, were characterised by a “deliberate and concerned effort to increase use of coupons and multiple store shopping”.

Women are the most sizeable portion of this demographic, which generally experienced feelings of “empowerment” and “great pleasure” by containing household budgets.

The battle over surplus margins

“We see a fundamentally changed consumer marketplace paradigm, one in which consumers and marketers do battle over surplus margins, where surplus margin is the difference between the regular price and the discounted effective price,” Deloitte added.

From World Advertising Research Center

By Ernie J. Geeting

Every day thousands of people decide to enter the world of internet marketing. They have heard the stories of others earning fortunes online and hope they might be able to get a piece of that pie themselves. Most have no previous background in sales or marketing. Some will succeed but many will fail. In this article I will expose the main reason people fail and then I’ll reveal to you the single most important thing you must do before promoting any product or service online.

Here’s the most important thing you must know about internet marketing…it is all about the MARKETING. Forgive me for stating the obvious but most people really don’t know what marketing really is or what it involves. So what is it exactly? Marketing is the process of promoting a product from a producer or supplier to a prospective customer in a manner that persuades the prospect to buy. It’s about matching products and services with people who want, and will pay for them. The marketing process requires study of the product itself, researching the potential market, testing, presentation, and promotion. Most people who want to make money on the internet know nothing of the process of marketing, fail to do proper research and are unwilling (or too broke) to do testing. It has been said over 95% of people who try doing internet marketing fail. Now you can understand why. You wouldn’t try flying an airplane without proper knowledge and hands-on training but yet hundreds try to start a home business in marketing without having a clue as to what to do. They are destined to crash and burn.

Making money on the internet comes from making sales, nothing more. This is done by advertising. The NUMBER ONE REASON why people fail as internet affiliate marketers is that they have insufficient knowledge and experience in selling and advertising. The cause for their lack of success isn’t the product they represent or the companies they choose to affiliate with, the problem is with the prospective marketers themselves. If you want to succeed online you need to understand the sales process and need to be willing to always be learning sales and copy writing techniques. While there may or may not be such a thing as a ‘born salesman’ (or copywriter) there most certainly are personality differences that allow the concepts of selling to come easier to some than others. However these concepts can be learned and applied by anyone desiring to do so. I urge you to seek out good books and courses about selling and copy writing. This knowledge will be extremely helpful to you when writing the content for your advertisements, capture pages and sales pages. Fortunately, most publishers or network marketing companies will provide you with a professionally written affiliate sales page and advertisements. However….

A frequent temptation newbies fall into is taking the shortcut of using a publisher provided affiliate sales page as the landing point for their visitors. A sales page is the main website page for a product that contains the advertising copy (aka: sales pitch). This is a grave error that will cost them untold wasted hours and advertising dollars. Never link directly to a ‘stock’ sales page. Did you get that? This is an important key to success: DO NOT link directly to an affiliate sales page. Why not? Because that sales page is the exact same sales page that everyone else is using. You offer no more than anyone else advertising the same page so customers have no reason to buy from you over someone else. This is the most important thing you must do before you try to market anything online. Fail to do this and you will sabotage your chance to succeed. The same goes for ads and for the same reason. Never use company provided ads exactly as written, but rather reword or rebuild them while keeping the main points emphasized

So what should you do? Here are some options…

1. Make a Capture Page. On you capture page offer a free report series or e-book about a topic closely related to the product you wish to sell. The idea here is to give away some useful information, not a sales pitch. Deliver it via autoresponder in a series with each installment having a recommendation at the end (with a clickable link) for the customer to purchase the item you wish to sell. That link can be to your company provided sales page (embedded with your affiliate id). This approach works the same way for network marketing. Give first, sell second.

NOTE: Sometimes a product you might sell might be from an online store with multiple products. Always link to the sales or catalog page specifically for that product. If you are promoting a business opportunity such as MLM, link directly to the recruiting presentation page.

2. Build Your Own Sales Page. If you are savvy at website creation you can create your own sales page. Sometimes companies will allow you to copy and paste, or even provide you with images of their product or components of their sales page for the purposes of building your own sales page. Sometimes publishers of digital products will offer a Resale Rights package you can buy that contains all the essential graphics and ad copy for creating your own pages. If you do create your own sales pages reword the advertising copy and somehow personalize your pages so they are ‘branded’ to you. Finally, make sure the finalized page is in compliance with the publisher’s rules for such pages.

3. Create a Review Page. This has become a popular way to promote products. You simply write a review (or do an audio or video review) of the product you are selling from your own perspective and then link that page to your sales page. This can be done as a stand alone website or even a a blog. Just a caution here the FTC is really cracking down on sites like these because of their covert approach. You need to make it clear to the reader that you are an affiliate and will profit from the sale of the products reviewed at your site. Be sure to visit the FTC website for the details and play by the rules. Don’t turn your ‘review’ into a sales pitch. The only reason people will read your review is to get an honest opinion and some further detail about the product. While you want to be careful not to give a detailed description of every facet of the product, you do want to give the reader enough information so they will know whether this is the type of product they are looking for and would like to see the sales page on. By the way, it never hurts to also put a link for your autoresponder capture page on your review site, perhaps you could send them review alerts when you’ve done a new review or listings of other products you’ve reviewed, etc.

4. Use Lead Capture Drop-ins. Drop-ins are nifty little tools that allow you to turn any web page into a capture page. You simply use this tool to create an opt-in form that ‘drops in’ on top of the web page you are promoting. You then link the request form an autoresponder for follow up emails. You can use these much as you would a capture page, offering a free report, ebook or just ‘further information’. These are much faster to create than capture pages and work great with company provided sales pages as they allow you to offer something personally that others aren’t while also helping you build your contact list, just like the gurus do. They are the closest thing to a short-cut.

Having read this article you now know why so many fail online and exactly what you must do to set yourself apart from everyone else. Start putting this information into practice today and you will be positioning yourself for internet marketing success.

Ernie J. Geeting is an internet marketer and writer. He loves helping people to experience more success in their lives. You can see his blog and get a free course with insider secrets to internet marketing success at http://earnonlineincomenow.info

Article Source: http://EzineArticles.com/?expert=Ernie_J._Geeting

From World Advertising Research Center

Consumer groups that are typically regarded as “minorities” by marketers will grow to become the majority of the US population over the next three decades.

At the ARF’s Audience Measurement Conference – covered in more detail here – Dr Robert Groves, director of the US Census Bureau, argued several seismic shifts are now underway in the country.

Census forecasting growth from 310 million to 439 million

“Between 2010 and 2050, the US population is projected to grow from 310 million to 439 million – an increase of 42%,” he said. “And one in five US residents will be aged 65 or older in 2030.”

Moreover, Groves suggested that by 2042, groups that are generally categorised as “minorities” – like Hispanics, Asians and African Americans – will make up the largest number of people living in the US.

As a forerunner of this trend, the 2010 Census is aiming to reach 309 million individuals in six different languages, in the form of English, simplified Chinese, Korean, Russian, Spanish and Vietnamese.

Language assistance guides to be provided

While this is expected to cover 97.8% of potential contributors, a further 59 “language assistance guides” will help respondents speaking Punjabi Romanian, Tigrinya and a range of other languages.

Even then, its overall penetration will come in at 99.7%, and in a bid to engage the remaining possible participants the Bureau will look everywhere from grassroots organisations to multinational corporations.

In just one example of the future challenges that will face researchers, an attempt by the Bureau to provide bi-lingual surveys has resulted in highly specific difficulties.

“Some people start filling out the Spanish column, move to the English, and switch back to the Spanish,” said Groves.

The marketing campaign for the Census started in January, the first stage of a $350m effort that is unique in its goal of impacting “absolutely everyone.”

Despite the contrasting backgrounds of the consumers featured in the Census, other factors may play a more decisive role in segmenting the population, according to Groves.

“Socio-economic conditions are our greatest differentiators,” he said.

From World Advertising Research Center

 Behavioral economics can help marketers overcome a variety of obstacles related to both price and broader market competition, McKinsey, the consultancy, has argued.

 McKinsey argued that marketers have actually displayed an “inadvertent leadership” in this area in the past, in the form of offers like “three for the price of two” and “extended layaway plans.”  What has been lacking, it suggested, is a systematic approach, largely as most firms simply used these tactics because they worked, rather than basing them on an in-depth understanding of shoppers.

 Among its recommendations for companies looking to exploit the insights from this emerging discipline is to “make a product’s cost less painful.” Consumers , it argued, can both pick between brands and decide against all the goods available, and often “value a dollar” differently depending on the specific item they are considering.

 Retailers have long-since realized that allowing customers to put off paying for acquisitions can increase their propensity to buy as this tactic offers both financial and emotional benefits.  “Even small delays in payment can soften the immediate sting of parting with your money and remove an important barrier to purchase,” McKinsey’s report said.

 Secondly, positioning a product or service as a “default” typically heightens the probability that it will ultimately be selected, particularly when individuals are presented with a wide variety of alternatives. What is important is to ensure that a default constitutes a “good choice for most people,” and eliminates the need to make difficult decisions.

 This is crucial because the pleasure from being “given” something, which is how defaults are generally perceived, typically results in a stronger attachment than if someone has actively identified a brand. In the absence of defaults, marketers must avoid creating a “choice overload”, which make it harder for consumers to find a preferred option, and thus discourages them for reaching the end of the purchase funnel.

 A “choice overload” can also generate a “negative halo” effect, as picking one brands inevitably incurs a penalty, in the form of foregoing favorable characteristics offered by  other similar rivals. “Reducing the number of options makes people likelier not only to reach a decision, but also to feel more satisfied with their choice,” McKinsey said.

 Finally, it is crucial to understand that while everyone has a different budget, each person has a maximum price they would be willing to pay for certain goods. Marketers can, however, exert an influence in this area by repositioning their brands, often in ways that can initially seem counter-intuitive.

 For example, increasing the price of a product can change perspectives about its quality, while making a more expensive alternative available can lead to an alteration in perceptions of value. Sony, for example, found that , with its headphones, “consumers buy them at a given price, if there is a more expensive option—but not if they are the most expensive option on offer.”

 McKinsey’s own research has also revealed that when deciding on an ice cream, brand consideration typically take primacy, followed by flavor, and then price. “Organizing supermarket aisles according to the way consumers prefer to buy specific products makes customers both happier and less likely to base their purchase decisions on price,” its study concluded.

 Data sourced from McKinsey, additional content by WARC staff.

By John Riley

 It was an affair like most affairs. It started quietly and discreetly. As the participants exhibited a growing passion for the union, they could no longer contain themselves and word spread. Such has been the evolution, some would say revolution, of social media and it’s impact on marketers. And today Nielsen tells us two-thirds of the world’s Internet population visit a social network or blogging site which now accounts for almost 10% of all Internet time.

Thanks to the following Nielsen’s statistics, we have a better picture of social networks and their growth. Remarkably, the time spent on social networks and blogging sites is growing more than 3 times the rate of overall Internet growth.

 Online Marketing Growth for Facebook is Stratospheric

 Facebook alone has increased by 566% from December 2007 to December 2008 and replaced My Space as the world’s most popular social network. Historically, much of the growth started out in younger audiences, but over time that has changed. Facebook is attracting almost twice as many 50 to 64 year olds than the under 18 year old youngsters. This has resulted in social networks being able to offer advertisers a way to reach all demographic groups.

 We also know from McCann Global Research that blogs play a major role in the spread of social media. Their 2008 study revealed that 77% of all Internet users read blogs, an increase of 11% from the previous year.

 All of this growth has not escaped marketers. Since consumers have been flocking to social networks and spending increasing time there, advertisers naturally followed. But it’s not the same. Social networks are both suppliers and consumers of content while traditional media is only a supplier. Because of the highly personal data their sites contain, many of the social networks are reluctant to accept advertising and that complicates matters.

 Marketing Plans Start with Target Audience Analysis

 When a marketer starts to plan an advertising or sales campaign, it starts with an objective that defines the target audience. Trying to identify which social network tool can best supply the audience the marketer wants to reach can sometimes be quite easy because of the digital underpinning of social networks, particularly if it’s a consumer audience that’s targeted. If the target audience is in the business-to-business sector, it may not be so easy because of the type of data needed for the analysis.

 Once that analysis is complete, the next step is to follow the same process with traditional media and then see how they compare in terms of reach, frequency and cost/thousand to the social media data. Then there are the intangibles that need to be taken into account such as the editorial environment or the vehicle’s influence in the market(s) it serves.

 This process has led more and more marketers such as J. C. Penny, Dell Computers and Kodak to shift a bigger share of their market development budgets from traditional media to the social media. Almost daily, announcements appear in the trade press about one company or another moving more of their marketing budget to social media. The trend has almost become a stampede in terms of the number of companies incorporating more social media into their market plans, but it terms of dollars spent, traditional media still clings to a fair share of marketer budgets.

 So what does the marketer get for his or her money? The payoff comes in sales lead generation and brand building and its working.