With the bi-polar behavior of the market these past few weeks, it’s easy for brands to panic and cut their total marketing/advertising/PR budgets until we see some economic stability. Naturally, I think this is a mistake. Now is the time for brands to differentiate themselves and truly engage their customers in a personal (and cost-effective) way. As to how to do this, the answer is social media relations, but don’t take my word for it.
Some very smart analysts at Forrester (Josh Bernoff as lead, with Charlene Li, Christine Spivey Overby, Jeremiah K. Owyang, Shar VanBoskirk) have released a new report that clearly IDs social media as the most cost-effective and measurable tactic brands should employ during this economic crisis…and beyond.
Here are a few of their facts (credit: content pulled directly from Forrester’s report):
Online ads & video won’t be hit too hard. In the last recession, much of the online money came from dot-coms and venture funding, a source that rapidly dried up in bad economic times. But the mainstream consumer companies now advertising won’t evaporate so quickly. Instead, brand advertisers seeking cheaper media could turn from TV and print to online video and flash ads. And they’ll shift some dollars into performance-based display ads. Result: Ad pricing will shift toward performance-based ads and away from CPM, but total spending on display ads won’t suffer.
Money will flow toward search. Search marketing is close to where value is delivered. Search pays on clicks, which correspond to prospects doing active research or buying. We think that Google and other search-based firms could actually see prices increase as marketing dollars cut from mass brand advertising begin to flow into performance-based search.
Email marketing will increase. Email targets your existing customers, a group far more likely to listen to your messages in a recession than new prospects. A recession is likely to increase email marketing volume. Smart marketers will even invest in analytics to determine which of their existing customers are most likely to buy again and then send appropriate messages to those consumers.
Social Media Marketing Will Thrive.
Conventional wisdom says that experimental media gets cut in tough economic times. But social applications like communities, social networking sites, and word-of-mouth marketing are proving themselves, and they depend on an abundant resource – your customers – rather than a scarce one – advertising dollars. In a recession, social applications with measurable results will pay off. Why?
— Well-designed social applications are effective. Social programs leverage the voice of the customer to get messages carried further than ad impressions. If your message resonates with consumers, their word-of-mouth is a more effective medium than any of the traditional media.
— They’re cost-effective. Advertising campaigns often run into millions of dollars. But, Facebook pages and blogs are two examples of social programs that you can start for next to nothing. Even more sophisticated programs like a full-blown customer community typically don’t cost more than $50,000 to $300,000 to get going.
— They motivate consumers in the middle of the funnel. Social applications like discussion forums are better than advertising at helping people in the consideration phase when they’re on the fence about purchasing. In a recession, improving consideration will be more cost-effective than blasting awareness messages at resistant consumers.
The fact is awareness alone will lose its effectiveness. Advertising (or as the guys at Forrester call it, “shouting”) is mostly about generating awareness and reinforcing brands. In a recession, ordinary consumers like you and me aren’t as willing to spend our hard-earned dollars. And, as you know, we look to our peers to guide that spending. Social media, by its very nature, drives the dollar. If your friend or a colleague whom you know to be up on the latest and greatest category-specific product says you gotta try that restaurant, cell phone, energy bar, new gym, etc., you’re more likely to act.
I’d add one more point to the Forrester report: social media relations is measurable. You all have heard me say it many times – it’s the instant ROI that social media delivers that gives it such value. If it generates leads, or conversions, or sales, or something useful — then you can prove it’s working. As Procter & Gamble said, the online community beinggirl.com is four times as effective as TV ads. Something like that simply won’t get cut in a recession.
Forrester does have some specific recommendations:
Make sure results-based interactive gets its share of the mix. Your CEO is warning your VP of advertising to prepare to cut spending. You should be whispering in her other ear with stats about how your email marketing, search marketing, or online advertising programs are paying off. If the dollars get cut, this will keep interactive in the mix or even increase your share of the remaining marketing dollars.
Stop dabbling and insist on social applications with metrics. Many interactive marketers tell us they’re just “toe-dipping” with social applications. Toe-dipping won’t survive recessionary cost cuts. Instead, concentrate on programs with clear objectives tied to metrics like increased sales conversions, measurable word-of-mouth, or improvements in online buzz.
Stick with partners that have staying power. Well-funded, well-trafficked social networking sites like Facebook and MySpace.com in the US, Bebo in Europe, and Cyworld in Korea will continue to collect members and activity. They’ll succeed in down economic times, especially if they can create improved programs for advertisers, while the new social networks now springing up may not. Similarly, Google/DoubleClick and Microsoft/aQuantive figure to be solid partners. If you’re working with smaller, needier vendors, you need a backup plan for what to do if they fall victim to poor economic conditions.
Focus on quick, inexpensive successes. If your experience with social applications is limited, concentrate on creating a small success with a single brand or product. Cheap programs will find it easier to escape the axe, and you’ll be able to make the case that you can duplicate that success with bigger brands (or, if things go badly, that you didn’t waste much). Bigger projects that take a year to pay off are more likely to get cut before the ROI kicks in.
So, the bottom line is – now is the time to demonstrate the true value of social media. As much as this recession is hurting everyone, the silver lining is that it is proving to be just the push CEOs and CMOs need to get off the fence and really dive deep into a strategic social media plan. So, no excuses, y’all! Let’s get out there and make it happen!