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How is Social Media Changing the Face of


Marketing?
By Katie Ford

For years, traditional marketing involved a one-way communication effort. Through public
relations and advertising campaigns, companies put forth value propositions to generate
INSIDE market appeal, attract and retain customers, and drive sales. However, with the rise of social
media such as blogs, online forums, and social networks like MySpace and Facebook, the
voice of the consumer is quickly drowning out those carefully crafted company messages.
Why Companies Should
With 3.5 million brand-related conversations taking place online daily in the United States,
Include Social Media..................1 companies are realizing that marketing to today’s technology-driven consumers means
engaging in two-way communication.

Social Media Rules of “With the rise of social media, the transparency of information is increasing and companies
are not able to hide behind their branding experts any longer,” says Micha Mikailian, founder
Engagement............................... 2
and CEO of eBoost Marketing in San Diego, Calif. “The successful companies of the future
are going to have to establish a sense of community with their customers, listen to their
concerns, and get them involved in the company.”
Social Media Tools: Are
Some Better Than Others?..... 2 Indeed, with democratization of information through social media, marketers are finding that
consumers expect to engage in dialogue with brands rather than merely listen passively, says
Eric Weaver, president of Brand Dialogue in Seattle, Wash. “Marketers who leverage these
tools are showing their markets that they are not merely window-dressing when it comes to
Companies Least Likely To
expressing an interest in their customers,” Weaver says.
Benefit from Social Media........ 3

Why Should Companies Include Social Media in Their


Measuring Social Media
Marketing Plans?
ROI................................................ 3 Experts say that social media platforms are ideal for building community and soliciting con-
sumer feedback. Forward-thinking companies are leveraging blogs, in particular, to open com-
munication lines between product developers and end users. Like virtual water coolers, these
blogs become a meeting point for troubleshooting, relaying feedback, and offering ideas for
Summary.................................... 3 improvement, which can result in products and services that are more relevant and useful to
the consumer. Not only does this new level of “conversation marketing” enhance customer
satisfaction, but it also builds community. End users feel they are a part of the company’s
process and become evangelists for the brand.

“Brands don’t have to spend money to attract people; they just have to figure out how they
can add value to the existing conversations that are taking place online,” says Kim Gregson,
an assistant professor in communications at Ithaca College in New York.

Adds Weaver: “If marketers value their customers, they must consider social media as part
of their brand strategy. Any Google search — typically the first place customers go to find out
more about your brand — will not only turn up your official company Web site, but it will likely
show customer-generated commentary on your brand — both positive and negative. Market-
ers who ignore this community conversation do so at their brand’s peril.”

Adds Weaver: “If marketers value their customers, they must consider social media as part
of their brand strategy. Any Google search — typically the first place customers go to find out
more about your brand — will not only turn up your official company Web site, but it will likely
show customer-generated commentary on your brand — both positive and negative.

Hoover’s, Inc. • 5800 Airport Boulevard, Austin, TX 78752 • 866-541-3770 • www.hoovers.com


Hoover’s White Paper: A Guide to Marketing in the Age of Social Media 2

Marketers who ignore this community conversation do so at positive and negative commentary. Use it to learn about your
their brand’s peril.” market and your brand impression.

Mikailian says ignoring the dialogue opens the door for your 4. Draw up engagement boundaries. When should you respond
competitors to forge more meaningful relationships with your to a negative critique? When should you be silent? When should
customers. “However, it’s important to recognize that social you ban someone from your corporate blog? Determine how
media is more than a marketing tactic, and its success is de- you will behave in the public eye – in other words, when you’ll
pendent on integrating it with a genuinely open and customer- assert control and when you’ll let the market be itself.
centric company culture.”
Cory Treffiletti, president and managing partner of marketing
What are the Rules of Engagement capital firm Catalyst in San Francisco, Calif., says a surefire way
for Marketing through Social Media? to nip negative commentary in the world of social media is to
make sure your promise matches your experience. However, in
Though technology-based companies were the pioneers of en- the event that you uncover unfavorable comments floating in
gaging consumers through social media, many household con- virtual space, damage control in social media operates pretty
sumer brands have taken the leap now as well. From Facebook much like it would with any other medium. You must catch the
profiles to podcasts to virtual stores in the Second Life virtual negative commentary early on, listen carefully to what is being
world, mainstream companies like Coca-Cola, Ford Motor Co., said, and then react accordingly.
Toyota, Whirlpool, and Target are tapping into the online action.
“If you ignore it, the momentum of the commentary will only
These companies have learned – and some have learned the get stronger and worse,” Treffiletti says. “Even though you
hard way – that promoting your brand through social media re- might be drawing more attention to the problem initially,
quires chucking out old marketing rules of thumb and adopting you’ll actually increase customer loyalty if you address it and
new rules of engagement. Adages like “never let them see you respond. That says to the consumer, ‘We’re working on it. We
sweat” are mantras of yesterday. hear you.’ And if you can’t change whatever prompted the
negative comments, you have an opportunity to explain to your
“Marketers of old generations were taught to try to displease customers why that change can’t be made. This type of proac-
as few people as possible and to be appropriate and acceptable tive engagement with your customers makes you a leader, not
to as wide an audience as possible, in hopes of maximizing rev- a follower.”
enue opportunities,” Weaver says. “In other words: high level of
polish, avoid dissent, and control your image.” John Cass, author of “Strategies and Tools for Corporate
Blogging,” says that being genuine with your customers is the
No more, says Weaver. Generation X and Y marketers have crux of success in social media. In fact, those who have tried to
learned to share more with others and to worry less about manipulate the system in their favor have given rise to negative
façade and more about substance. new terms. One example is “astroturfing” -- the practice of rep-
resenting oneself as a disinterested member of an online com-
“To me, they seem less concerned about appearances and more munity when you’re actually paid by a company to post favor-
interested in being understood. They prefer to be themselves able comments. Another example is “ghost blogging” -- when
and to find others with shared outlooks and affinities rather the person doing the writing on a blog is not the showcased
than trying to be all things to all people,” he says. “With the personality, but a hired hand. Says Cass: “I think it’s fine if, for
search and affinity tools inherent in social media, younger instance, an executive gets his blogging entry ideas from peers,
marketers seem to embrace these tools more readily, compared but he should be the only one doing the writing in the end.”
to older marketers who are more likely to vet image and copy
through management, public relations, and legal departments.”
Are Certain Types of Social Media Tools Better
According to Weaver, companies that decide to leverage social than Others?
media in their marketing plans should do four things: As with any marketing plan, it’s important to take the time to
study and participate in all types of social media as an audience
1. Be transparent and honest. Consumers often assume mar- member before engaging in marketing to those audiences. Mis-
keters are self-interested. By being transparent, you curtail steps are painful — and very public.
doubt.
2. Ask your visitors to provide feedback on your communica- Treffiletti says that the core marketing principles of yesterday
tion efforts. These tools allow you to easily gather feedback. apply to marketing to tech-savvy consumers today: Identify
3. Be fearless. Many marketers will cringe when they get your audience and then find the best way to reach the largest
their first scathingly negative comment. You will receive both group with minimal waste. “As a general rule, bloggers are very

Hoover’s, Inc. • 5800 Airport Boulevard, Austin, TX 78752 • 866-541-3770 • www.hoovers.com


Hoover’s White Paper: A Guide to Marketing in the Age of Social Media 3

targeted to niche groups, whereas social networks tend to be online metrics, such as page views, click-throughs, and number
very broad,” he adds. of downloads no longer apply.

Just as marketers study the media kits of newsstand publica- “How do you know that someone downloaded the entire pod-
tions before placing an advertisement, they should also find cast? How do you know they listened to the entire podcast?”
out which blogs, Web sites, or social networks their current and Weaver says. “Also, many metrics are based upon the end con-
potential customers are engaging in. clusion of a marketing effort: a sales conversion. Yet, marketing
through social media is as much about building affinity as it is
Audio or video podcasts can be ideal for brands that need a about a conversion. Given this, many marketers are advocat-
personal touch — a “face” to which consumers can relate. “They ing measuring social media from the perspective of outcomes:
can create a stronger personal connection between the team awareness or conversion. Rather than trying to measure down-
members behind the brand and their audience,” Weaver says. loads or blog comments, many suggest focusing on measuring
“These are great channels for brands that need to show more overall results.”
personality. However, audience quality expectations are high, so
devote the resources it takes to express your brand well.” (This Yet Gregson says some of the traditional metrics are still worth
doesn’t mean you always need Hollywood-caliber production tracking and noting. She says you can measure the spread of
values, but you should do better than a shaky handheld camera your message by the number of bloggers who mention your
with scratchy audio.) company, Web sites that link to your site, friends or contacts on
your social network page, and requests for more information.
Social networks can be good channels for disseminating special
offers and company information that might not be worthy of a Summary
press release but is still interesting enough to share with con-
Social media is changing the face of marketing. The carefully
sumers on a particular network.
crafted messages of yesterday are giving way to a more open
dialogue between companies and consumers. As more of the
“Like viral videos, social networks make it easy to spread
marketplace embraces communication through blogs, online
interesting content to friends,” Weaver says. “This content will
forums, and social networks, more consumers are giving unfet-
have a natural advantage in breaking through market noise, and
tered feedback about companies and their products every day.
if it’s a positive impression, it will be given more credibility than
Companies that don’t participate in these conversations are
highly crafted marketing messages.”
neglecting the reputation of their brand and opening the door
for competitors to come in and build more meaningful relation-
What companies are less likely to benefit from ships with their customers.
marketing through social media?
Highly regulated industries such as health care are less likely to Before engaging in social media, companies need to explore the
leverage social media as a marketing tool, simply because of all various options available and decide which methods will likely
the red tape surrounding company information and documenta- have the greatest impact on their target audience. No mat-
tion. More than likely, the rules would put a kibosh on any real ter which avenue they choose -- a blog, a podcast, a store in a
dialogue that could happen with consumers. virtual world, or whatever else -- marketers need to think ahead
and be sure they’re devoting the appropriate resources to
Gregson of Ithaca College says companies that aren’t willing ensure that their content is relevant, engaging, and frequently
to put the personnel and time behind the effort should also refreshed. That’s how to fulfill every marketer’s dream -- by
refrain from leveraging social media. “It takes time to grow a keeping consumers coming back for more.
social network and you need to give people a reason to belong
— information, access to products, access to behind-the-scenes About Hoover’s, Inc.
industry or company gossip,” she says. “Companies [that have Hoover’s puts you on the fastest path to business. We deliver
set up a store] in Second Life discovered that you can’t just comprehensive insight and analysis about the companies,
‘build it and they will come.’ They might come once just to see industries, and people that drive the economy. Hoover’s global
what you did, but there has to be a reason to come back. The database of 23 million companies, 600 industries, and 29 mil-
same is true for a Facebook page, a MySpace profile, or a blog. lion executives provides you access to powerful research and
There needs to be good content and it needs to be updated networking tools to find and connect to the right people to get
regularly.” business done. Learn more at www.hoovers.com.

How do you measure ROI with social media


marketing?
That is the (multi-)million-dollar question, indeed. Opinions
vary in this burgeoning field, but generally speaking, traditional

Hoover’s, Inc. • 5800 Airport Boulevard, Austin, TX 78752 • 866-541-3770 • www.hoovers.com