Social Network Marketing Expands Sphere: eMarketer

A tool for every purpose

AUGUST 31, 2009 – Though social network advertising gets a lot of attention, it is only one of many ways marketers can reach customers on social networks. Social networks can be used for branding, improving customer loyalty, lead generation, direct marketing and e-commerce.

“The beauty of social networks is that they are a place where nearly any marketing goal can be achieved, with nearly any marketing tactic,” said Debra Aho Williamson, eMarketer senior analyst and author of the new report, “Marketing on Social Networks: Branding, Buying and Beyond.”

Common wisdom over the past few years has been that people are interested in interacting with social network friends, not marketers. Not so, according to Anderson Analytics’ May 2009 survey�52% of social network users had become a fan or follower of a company or brand, while 46% had said something good about a brand or company on a social networking Website�double the percentage who had said something negative (23%).

In a December 2008 MarketingSherpa survey of social media marketing professionals, 92% of respondents said social media marketing was effective at influencing brand reputation and 91% said it worked for increasing brand awareness. These executives found it far less effective for generating sales leads or increasing online sales.

However, savvy marketers are demonstrating the effectiveness of using social networks for direct marketing and lead generation as well. Brand pages and applications can be vehicles to deliver coupons and offers to consumers to drive trials, store traffic and response. A July 2009 Starbucks promotion, for example, distributed coupons for a free pastry via Facebook and other social outlets. The chain was soon one of the top trending topics on Twitter and the top brand on Facebook, with more than 3.7 million fans.

In terms of e-commerce, few retailers are currently selling products directly through social networks. But the pending launch of Facebook’s virtual currency will make it far more appealing for this purpose. Meanwhile, e-tailers can take advantage of services such as Facebook Connect to allow users to share information about their browsing and purchasing activity on an e-commerce site with their social network friends.

Measuring social media success remains difficult for marketers. Many of the metrics that marketers can track on social networks today involve what is called “soft ROI”�which does not show up in the bottom line. But a study from the Altimeter Group and Wetpaint, along with a separate study from Razorfish, indicates that the stronger a brand’s social media presence, the better the brand performed�whether measured in conversations or in financial performance.

“Social networks are a constantly changing database of consumer sentiment, attitudes and information, and marketers today have only the earliest glimpse of the potential,” said Ms. Williamson. “Companies that want to maximize their presence on the social Web must take advantage of social networks in all stages of the purchase funnel, from awareness to learning to buying to loyalty.”

Maximize your social network marketing. Download the new eMarketer report, “Marketing on Social Networks: Branding, Buying and Beyond,” now.

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