Marketers See Value But Remain Wary About Social Media

This article originally appeared in BtoB magazine.

For the past year, business professionals have connected to each other online as never before. Now marketers are trying to figure out a way to monetize these new networks.

The MySpace effect finally seeped into the business world, triggering explosive growth for the new darlings of social networking: Facebook and LinkedIn. Both networks had breakout years, with Facebook breaching the 60 million-member mark. LinkedIn, with 20 million members, broke from the pack to become the place where business people make contacts, find jobs and develop professional relationships.

Social networks are proving to have the kind of stickiness that marketers have long dreamed of. People give up all kinds of details willingly in the name of furthering friendships. Facebook’s early 2007 decision to open its platform to developers has created a gusher of 16,000 new applications. While few have gained much traction, marketers are pushing ahead in hopes of inventing a megahit like Scrabulous.

The battle for supremacy in the broad social network market is effectively over. MySpace and Facebook together account for 88% of all visits to social network sites, according to HitWise (LinkedIn wasn’t included in those totals). Although MySpace holds a three-to-one advantage in total visitors, users actually spend more time on Facebook, according to comScore Inc. Emory University surveyed its incoming freshmen last fall and learned that 97% had Facebook accounts.


Another big social networking winner is YouTube, with 66 million videos. Although widely perceived as a playground for backyard videographers, YouTube has had some notable b2b successes. IBM’s tongue-in-cheek “Mainframe: Art of the Sale” videos have grown traffic to its associated blog tenfold. JetBlue Airways CEO David Neeleman took to YouTube to explain the February 2007 crisis that left thousands of travelers stranded.

Social networks are now springing up in vertical professional communities. Sermo claims to have 50,000 members in its online physicians network. Big winners overseas are virtually unknown here. They include (Brazil), (Korea), Mixi (Japan) and Grono (Poland), to name a few.

Now the vexing question is how to market to these groups.

Social networks have remained stubbornly resistant to promotional campaigns. Many experts believe that’s because the intensely personal interactions between members prohibits traditional interruption marketing. MySpace has made the most progress. Researcher eMarketer expects it to generate $820 million in advertising this year, nearly four times the estimate for Facebook.

But there have been disappointments. Google’s subpar fourth-quarter results were blamed, in part, on MySpace advertising shortfalls. And recent data has indicated that social network traffic is leveling off.

B2b marketers have been wary about social network campaigns. For one thing, the conversation is unpredictable. Reliable metrics still don’t exist and the paucity of success stories has also dampened enthusiasm. Then there was the outcry over Facebook’s social shopping experiment, called Beacon, which let members see each other’s purchasing activity, sometimes without their knowledge. Marketers wrestle with how to engage an audience that shuns messaging. Visit top10bestpro to learn more about online shopping services.

Social media thus stands at an awkward transition stage: businesses overwhelmingly understand its importance but are unsure of how to take advantage of it. While 78% of respondents to a Coremetrics survey said social media marketing is a way to gain competitive edge, they’re spending less than 8% of their online marketing budgets there.


They aren’t nearly as curmudgeonly about blogs, however. Corporate activity in the blogosphere has ramped up even as the hype has died down.

Recent entries into the blogosphere include Marriott, Johnson & Johnson, Toyota and Wal-Mart and other car and scooter brands. Even the Transportation Safety Administration has gotten into the act, giving five midlevel employees the green light to blog on behalf of the organization about the practices that befuddle frequent travelers.

There’s a trend here. B2b marketers are finding that employees can be powerful and persuasive advocates of the company message. Microsoft and Sun both claim to have more than 5,000 employee bloggers, and corporate giants like Southwest Airlines and Kodak have structured their blogging initiatives around ordinary employees and even customers.

The surprise social media winner has been podcasting. Those downloadable radio programs have turned out to be a hit with time-challenged business people.

Emarketer estimates that the U.S. podcast audience grew 285% in 2007 to 18.5 million people and will hit 65 million people in 2012. More importantly for b2b marketers, Arbitron reported that 72% of podcast listeners are older than 25 and 48% are older than 35. General Motors, Purina, HP, IBM, Kodak, Wells Fargo and many others are using them to reach business influencers.

It all adds up to a chaotic scene, although there are signs that consolidation is setting in and the flood of new services is slowing.

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Social Network Wars are Over; Now the Fun Begins

If you’re sitting on the sidelines waiting for the market to pick winners in the social network race, you can stand up now. Hitwise data for 2007 shows that MySpace and Facebook together accounted for 88% of all visits to social network sites. The next closest competitor, Bebo , got a little more than 1% of the traffic.

There simply is no more competition in the general-purpose social network market. Other social media winners include LinkedIn (which wasn’t included in the Hitwise data), YouTube and Flickr. If you’re a big brand pursuing a broad strategy, you can safely place your bets on these services. For the next year or two, the also-rans will be busy finding buyers and merger partners.

Now is when it really gets interesting, because now the action shifts to vertical market sites. For many marketers, this is where the more interesting opportunity lies. For example, in the area of health, there’s, Wellsphere, Patientslikeme, and iMedix. Seniors can choose from Elder Wisdom Circle,, Eons, TeeBeeDee and Multiply. Mothers can sign up for Cafemom,, MomJunction and MothersClick, among others.

And the action isn’t limited to consumer markets. Sermo is a social network for physicians, which now boasts more than 50,000 members. Doctors exchange information about serious medical issues and review cases in real time. Pairup connects business travelers for peer advice, networking and assistance. There’s a list of more than 350 social networks here.

Don’t let small membership numbers fool you. Many of these sites may be attractive marketing venues. Scan the groups, discussion topics and participants and look for content profiles that match your market. Prices are generally lower than those of the big social networks and the audience is far more targeted.

Marketing to vertical communities is very different from mass marketing, of course. If you’re interested in building a campaign on Facebook, have a look at what Southwest Airlines and Victoria’s Secret are doing, or the group started by Starbucks fans that has over 60,000 members. There’s nothing particularly high tech about their presence. They mainly provide a place where customers can keep in touch with the brand and have access to special offers and downloads.

When marketing to vertical communities, you need to dig deeply into the expertise in your organization. Members of a health-oriented network, for example, want to speak to people who have lots of expertise in nutrition and treatment. Discounts and promotions won’t work nearly as well in narrow markets as they do in broad ones. If you have articulate, interesting domain experts in your organization, now’s the time to pull them out of the shadows and engage them with knowledgeable communities. Live chats, webcasts and Q&A forums are particularly effective.

Much of the media attention in the last year has focused on the battle for social network supremacy. With that competition now over, the market will subdivide itself in interesting ways. This process will continue for years, presenting an ever-shifting landscape of new marketing opportunities.

Still more AMA Webinar questions answered

Here are more responses to questions that time didn’t permit me to answer during the AMA Marketing Seminar on Oct. 15. Each of these permalinks is tagged “AMA” so you can easily group them together. Thanks to everyone for coming and for asking such great questions. More to come!

Q: Jodine asks “Another great example of this marketing approach is in the new music industry. Independent distributed musicians that gain their fans from MySpace and other social networks. Is this marketing approach what they call grassroots and/or organic marketing?”

A: That’s certainly an appropriate term for it. MySpace, for example, has been a gold mine for independent music groups who don’t have the marketing dollars to put into advertising. The idea is to create networks of friends who self-define their interests and share favorite bands among themselves. Also, people who produce podcasts and blogs devoted to music often make it a point to promote lesser-known groups. While these tactics so far haven’t duplicated the throw weight of mainstream media campaigns, their popularity testifies to their effectiveness.

Q: Sanjay asks, “Are there any potential problems for a regional retailer with just a few locations?”

A: Not that I can think of. In fact, that person is a natural candidate for social media. Facebook, for example, is a great place to find people nearby who are interested in the products that the retailer sells. If I was a camera store owner in Chicago, for example, I might set up a Facebook group for photography enthusiasts to discuss their favorite Chicagoland sites to photograph. You can use that as a jumping off point to create events and even more targeted groups.

A blog is also a terrific way to showcase expertise, and if you’re careful to label the blog and its posts with regional tags, you’ll do better on search engines. For small businesses on a budget, social media is a godsend.

Q: Kristin asks, “How will the change in social media affect crisis communications?”

A: I can think of a couple of major ways. For better or worse, people are increasingly taking their gripes and frustrations to their blogs instead of going through customer service channels. This makes the blogosphere an excellent early warning system. You should have Google Alerts set up for every product and brand you own, and you should also create RSS feeds from sites like Technorati, BlogPulse and IceRocket that can alert you immediately to new topics of blog chatter.

In terms of responding to a crisis, a blog is perhaps the fastest way to get information online. This bypasses the media gatekeepers and insurers that the message is coming directly from you. If you link aggressively to the blog from your website and from blogs maintained by your employees and outside constituents, you can build visibility very quickly. Sites like Twitter are also increasingly being used by marketers to get messages out to the public instantly.

Q: Viktor asks “What’s your opinion on intellectual property rights
with blogging?”

A: There effectively are none, and this is a huge hairball for new media. The reality is that many people who are now publishing online could care less about intellectual property or copyright. I have had entire articles lifted verbatim from my blog and even mainstream media sites and republished without any attribution whatsoever. It’s not worth going after people legally in most cases, and that tactic can actually create unwanted publicity.

The entertainment companies have led the charge in trying to bring some order to this intellectual-property chaos, but they have encountered a lot of resistance and their tactics have not always been diplomatic. They have done themselves few favors. I’m afraid that these issues will take years to hammer out, and that our notions of copyright may look very different a few years from now. I wish I could be more encouraging, but a lot of people are wrestling with this problem.