T RUSTe WHITEPAPER

The Pros and Cons of Social Media Marketing

Surviving and Thriving in the Era of User Generated Content

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2010 TRUSTe. All rights reserved.

Social media is here to stay. Since the rst user-generated content (UGC) sites emerged over eight years ago, social media marketing has quickly ascended into one of the most talked about and most promising venues for todays enterprises and on-line advertisers. Popular social media sites including Facebook, MySpace, Twitter, LinkedIn, and many others are now enabling enterprises to connect with their customers cost-effectively, on a one-toone basis. In addition to the handful of social media giants, thousands of other industry and personal blog sites are now gaining power and presence over users and end consumers. It is hard to remember that just a few short years ago companies were still in control of their presence on the Web. Now, the handful of techie guys who set up your blogs just a few years ago are having tremendous inuence over your companys image and reputation, with both positive and negative effects. All of these social media sites and blogs have never been more powerful, and will continue to grow in importance for the foreseeable future. Social media marketing is much more than just placing paid ads onto social networking sites. It also includes the writing and posting of industry articles, blogs, Webinars, and other content on these social networking sites. All of these social media marketing activities can dramatically increase the visibility of your company to a global audience of potential customers. But before diving in to the lucrative world of social media marketing, it is important to rst examine the pros and cons of advertising and marketing on the various UGC sites. To help you succeed with your social media marketing initiatives, this TRUSTe white paper will provide with valuable tips that will help you avoid many of the common pitfalls of social media marketing.

The GrOwiNg WOrLD OF SOCiaL MeDia

It seems like everyone is now using social media. Consider these staggering usage statistics posted in June of 2010 on Facebooks Web site: 50% of Facebooks 400 million active users log on in any given day The average user has 130 friends Users spend over 500 billion minutes per month on Facebook  More than 25 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) are shared each month on the Facebook site MySpace was one of the early leaders in social marketing, but has been recently passed in user volume by Facebook. However, MySpace still garners an impressive following with more than 113 million monthly active users around the world. Twitter is a relative newcomer to the social media space, but it is growing at a phenomenal rate. From February 2008 to February 2009, Twitter achieved a 1,3821 percent growth rate, according to statistics recently published by Nielsen research.

http://news.cnet.com/8301-13577_3-10200161-36.html

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LinkedIn also has a very loyal user base. The site currently has over 70 million members in over 200 countries. A new member joins LinkedIn approximately every second, and about half of its members are outside the U.S. LinkedIn also has tremendous visibility with company management, and claims that a signicant percentage of executives from all Fortune 500 companies are now LinkedIn members.

Source: The Nielsen Wire. http://blog.nielsen.com/nielsenwire/global/facebook-and-twitter-post-large-year-over-year-gains-in-unique-users/

The EXpLOsiVe GrOwth iN ONLiNe ADVertisiNg

According to comScore Inc., a global provider of digital marketing intelligence, Americans received one trillion display ads in the rst quarter of 2010 as the online advertising market rebounded from the 2009 recession. Facebook.com led all online publishers during Q1 with 176 billion display ad impressions, representing 16.2 percent market share2. Clearly the increasing volume of users accessing social media indicates that this is a marketing venue that can no longer be ignored if a company wants to expand its reach to new users as well as improve communications to its existing client base. But before you dive in, you should rst review the following top ten lists to understand and evaluate the many advantages and disadvantages of social network marketing.

http://www.comscore.com/Press_Events/Press_Releases/2010/5/Americans_Received_1_Trillion_Display_Ads_in_Q1_2010_

as_Online_Advertising_Market_Rebounds_from_2009_Recession

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The TOp TeN ReasONs tO LeVerage SOCiaL MeDia MarKetiNg

Social media marketing can provide you with many signicant benets, including: 1.  Leveraging your existing user base to nd new customers. By using social network links, friends can easily recommend interesting products and brands to their friends. Social media ads or blogs will provide you with the ability to reach new customers that your traditional marketing approach may have overlooked. 2.  Understanding the effectiveness of your advertising content. With social media marketing, advertisers can conduct polls to see if users like their ads. Companies can save a signicant amount of money and avoid damage to their reputation with the ability to kill ads quickly if users are rating the content or approach poorly. 3.  Creating more relevant content. Advertisers can more accurately target their ads to very specic user demographics. Social media sites usually provide the ability to select ad recipients with specic job titles, age groups, geographies, and other criteria. These demographics can be further rened to reect the recipients personal characteristics and interests including certain books read or blogs frequently visited. Social media sites can also provide an estimate of how many people will receive the ad in the advertisers chosen demographic, enabling enterprises to spend their marketing budgets more effectively. 4.  Increasing your global presence. Social networks reach users around the world. For example, 70% of Facebooks 400 million active users are located outside of the United States. Marketing on social media will present an opportunity to expand your reach into countries and markets you have never approached in the past. 5.  Building brand awareness and increasing customer loyalty. Companies can use social media to interact with their customers on a more informal, friendlier basis. By asking for feedback, customers will build a stronger affinity to your brand, which can boost your reputation and build long-lasting relationships. 6.  Improving your products and services. By enabling feedback from your ads and encouraging open communication on UGC sites through public comments, you can gain valuable insight into ways to improve your products and make your advertising messages more effective. 7.  Saving money. Social media marketing is very cost-efficient in comparison with print media, television ads, and other traditional marketing channels. It will be possible to reach more leads with a smaller advertising budget. And with the exception of some of the larger sites (including Facebook and Twitter) there are still many venues where you can get most of your social media marketing done for free. Examples include: a.  Zozi which enables you to easily nd and book things to do locally and around the world, at a discount of up to 70% off. b.  Groupon a collective buying web site available in major US cities. Each day the site features something great to do at an unbeatable price. But you only get the deal if enough people join that day, so you need to invite your friends.

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c.  DailyDeal a consumer site that nds great new deals on things from clothes, books, electronics, sports, and more items every day. d.  KnowEm a site for mass social registration. KnowEm allows you to check for the use of your brand, product, personal name or username instantly on over 350 popular and emerging social media websites. e.  HootSuite a professional Twitter client. With HootSuite, you can manage multiple Twitter proles, pre-schedule tweets, and measure your success and related twitter marketing tools, and many others. 8.  Increasing the buzz of company news. Information travels at the speed of light on social media sites. This can work to your advantage when you have good news that you want to spread quickly. Social media can provide an excellent platform for free publicity for your new products, services, messages, or events. 9.  Learning more about your customers and target market. Companies can gain valuable information about their client base by studying the various analytics available from the social networking sites. You might be surprised to nd out who is actually interested in your products or services! 10.  Increasing revenue. Social media can help increase the number of purchases per customer. Users tend to visit social networks frequently, with many logging on to a particular site multiple times per day. No other marketing channels provide the opportunity to interact with potential customers as often as your ads and content placed on social media sites.

The TOp TeN PitFaLLs OF SOCiaL MarKetiNg

Although the advantages and opportunities of social media marketing are extremely compelling, there are some pitfalls you need to be aware of. The top ten issues you need to evaluate before you launch into the world of social media marketing include: 1.  Loss of control over your messages. After you have created and posted your content or ad on a social networking site, anything you publish is now fair game for others to use and comment on. Information on social sites may or may not be accurate. Without the ability to control comments, you open yourself up for negative publicity that you cant remove, even if it is unfounded. 2.  Online advertising is often ignored. Web users tend to ignore online ads. Many sites place ads around user proles or busy multimedia pages. These ads are never seen by the intended audience since they get buried in the content. 3.  Bad reviews are semi-permanent. If you receive bad press or reviews on a social media site they can remain on the site for a very long time. One example is Yelp, which uses peer feedback to rate various businesses and establishments. A bad review can be seen for months or years by the sites many millions of daily viewers.

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4.  The inability to accurately time ads. Social media has a degree of permanence. Once a message is posted, it will be available by search engines for many years to come. So your ad or blog may not be relevant when actually seen by the end user. 5.  Social media marketing can be time consuming. It takes a lot of time and effort to create new, compelling content for social media. After the content is created, it must be edited, approved, and published. After posting, all comments must be responded to pages must be maintained. This can take time away from other strategic initiatives that better serve company growth. It is possible to outsource the companys social media services, but this will increase the cost of exposure. 6.  Return on investment can be hard to calculate. It is difficult to measure the immediate impact of improved relationships and increased brand loyalty. Most social media marketing campaigns will not demonstrate tangible results overnight. A long-term vision must be acceptable if you decide to launch a social media marketing initiative. 7.  Bad news travels fast. The existence of social media has now made it impossible to hide bad news from the public. Information travels extremely fast on social media. You need to keep up with the reactions (good or bad) from your followers in real time to counteract the effects of any bad publicity that is traveling like wild re. 8.  Possible copyright or privacy infringement issues. With the ease of posting material to social networking sites, copyrights can easily be infringed upon. It is very easy for company employees to bypass the companys legal department approval processes, and illegally distribute copyright protected material online without permission from the original right holder. 9.  Spreading condential information. With UCG, your tech guys that are writing to your blog may not being as rened or cautious when sharing company information. Printed information typically progresses through the companys marketing, editing, and legal department before posting, but posting to a blog is easy and usually done by the individual contributors. With social media marketing the lter on what should be reported to the world has been removed. 10.  The growing proliferation of internetworking of SMM sites. Internetworking sites (e.g., Facebooks Open Graph) have the ability to proliferate content on a massive scale. According to the Facebook developer site3, Open Graph protocol enables you to integrate your web pages into the social graph. It is currently designed for web pages representing proles of real-world things things like movies, sports teams, celebrities, and restaurants. Once your pages become objects in the graph, users can establish connections to your pages as they do with Facebook Pages. Based on the structured data you provide via the Open Graph protocol, your pages show up richly across Facebook: in user proles, within search results and in News Feed. But users have some legitimate privacy concerns with the concept of internetworking. Facebook users can opt out by checking a blue bar that appears at the top of the site, but many users will not understand the need to opt out, meaning that these consumers have not willingly agreed to share their personal information with the businesses in question.

http://developers.facebook.com/docs/opengraph

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Tips FOr SOCiaL MeDia MarKetiNg SuCCess

Social media marketing can provide many lucrative benets to todays enterprises. But the path to success has some issues and obstacles that can be avoided with careful planning and ongoing attention. Here are a few simple tips will help you succeed with your social marketing campaigns:

How to do it well:
Provide relevant content that is good enough for people to tell their friends about Be open and honest in all of your content and advertisements Be consistent with your messages Provide updates regularly to keep your content fresh Track the social sites and blogs daily to stay ahead of any issues or bad publicity

How to botch it:

Being too pushy with your ads or content  Delivering messages with too much marketing avor, as opposed to providing positive and relevant content Sounding disingenuous or insincere Not providing content worth forwarding to others or linking from other sites  Posting ads or content, and then forgetting to update messages or track the comments on the social media sites. With careful planning, you can now effectively leverage social media to further your marketing campaigns!

2010. TRUSTe. All rights reserved.