BUILDING LOYALTY THRU SOCIAL

NETWORKING
Making Friends and Making Money


Cheryl Guerin
VP Promotions and Interactive Marketing / MasterCard
Karen Webster
President / Market Platform Dynamics

SourceMedia ’ s Reinventing Loyalty Conference

New York , New York
December 1 , 2008

© 2008 Market Platform

© 2008 Market Platform Dynamics
Critical success factors for loyalty


10/14/09 2 © 2008 Market Platform Dynamics

 Social Networks Provide Scale and


“ Viralability ”

In the U . S ., 57 % of all web users aged 13 + have use

25
25%%

23
23%%
35
35%%
99%
%
33
33%% 66
66%%

ill extend from its 489 million users today to over 1 billion

Source: comScore, August

2008

10/14/09 3 © 2008 Market Platform Dynamics

 A Channel No Longer “Just For


Kids”

Source: NPD Group, September

2008

A third of MySpace and Facebook users are 25 +.

Women between the ages of 35 and 50 is the fastest growing

social networking segment , especially on MySpace .

10/14/09 4 © 2008 Market Platform Dynamics

 Facebook and MySpace Dominate


07 and is now the leading social network site . In the last yea

153
153%%
33%
%

100
100%%
50
50%% 41
41%%
32
32%% 19
19%%

Source: comScore, August

2008

10/14/09 5 © 2008 Market Platform Dynamics

Apps Keep Users "Sticky"


10/14/09 6 © 2008 Market Platform Dynamics

 Successful Networks are Incredibly


Addictive

etworks than they do on news and media sites . Traffic to these

Unique Audience (000) Time Spent (hh:mm:ss)

Site March 2007 March 2008 YOY March 2007 March 2008 YOY
Growth Growth

Overall 80,811 86,687 7% 1:54:48 2:04:13 8%

MySpace 55,937 60,398 8% 2:10:04 2:11:23 1%
Facebook 12,622 24,940 98% 0:54:38 1:08:18 25%
Classmates Online 12,991 13,559 5% 0:11:13 0:09:25 -16%
Linked In 1,878 7,877 319% 0:09:04 0:11:43 29%
Windows LiveSpaces 9,076 7,852 -13% 0:08:30 0:05:17 -38%
Reunion.com 5,217 5,940 14% 0:05:19 0:05:46 8%
AOL Hometown 9,246 5,785 -37% 0:01:50 0:01:56 5%
Club Penguin 3,482 4,623 33% 0:53:36 0:09:28 -82%
AOL Connectivity 4,640 3,229 -30% 1:05:05 0:35:06 -46%
Buzznet.com 1,822 2,717 49% 0:12:21 0:02:13 -82%
Source: Nielsen Online, March
2008

10/14/09 7 © 2008 Market Platform Dynamics

Filling An Important Information


Gap
People visit and spend
Source Extremely or time on social to share
Very Credible and receive information
Business magazines 62%
from credible sources .
Wikipedia 55% 59 % of social networkers
Radio news 53% use these outlets to “ vent ”
Analyst reports 51% about customer experiences
Friends, peers 51%
Newspaper articles 48%
TV news 46%
72 % research companies ’
TV talk shows 45% customer care online prior
Company communications 43% to purchasing products and
Online message boards, forums, newsgroups 38% services
Company’s Web site 37%
Blogs 29% 74 % choose companies / brands
YouTube 28% based on others ’ customer
MySpace, Facebook 23% care experiences shared
Corporate or product advertising 22%
online

81 % believe blogs , online

rating systems , and
discussion forums can give
consumers a greater voice
regarding customer care
Source: Edelman Trust Barometer, 2008
Society for New Communications Research, April 2008

10/14/09 8 © 2008 Market Platform Dynamics

Marketing and Social Networks Are


Converging

GR
CA
%
43

Source: Paul Gillin, Society for New Communications Research, 2008 Source: eMarketer, May 2008

10/14/09 9 © 2008 Market Platform Dynamics

 But, Questions Remain About


Effectiveness

is often difficult to measure and control – particularly with

Source: Paul Gillin, Society for New Communications Research, 2008

10/14/09 10 © 2008 Market Platform Dynamics

MPD’s “Five Forces” of Social


Networks
We believe that five major forces will shape
the social networking landscape over the next 1 - 3
years .

10/14/09 11 © 2008 Market Platform Dynamics

 Me-driven: The User Decides

Social network membership , by design , is an extension of

a person ’ s interests . 50 % of users visit social
networking sites at least once a day .

The idea of reciprocity drives these co

s reciprocity that has contributed to the rise of the leading social

10/14/09 12 © 2008 Market Platform Dynamics

 Me-driven: Implications for


Marketers
nities is all about the community , and not about you .

Traditional advertising has been all about

u do this in social networks – trying to disguise yourself as a fello

is harder and it is different , but in the end , you ’ ll be more success

10/14/09 13 © 2008 Market Platform Dynamics

 Peer-driven:
 The Influence of
Friends and Family

nnections with several degrees of separation , are stronger than

Source: The Nielsen Company, October 2007

10/14/09 14 © 2008 Market Platform Dynamics

 Peer-driven: Implications for


Marketers

ral degrees of separation , are stronger than connections with adverti

Knowing who has the influence in social networks is

find that efforts to engage the community will be as effective as ma

10/14/09 15 © 2008 Market Platform Dynamics

Trust-driven: The Fuel of Social


Networks
“ A person like me ” is considered the most credible
source of information about a product or company .

Peer - to -
peer

Top - Down

Source: Edelman Trust Barometer, 2008

10/14/09 16 © 2008 Market Platform Dynamics

 Trust-driven: Implications for


Marketers
o reduce customer acquisition costs and to create a loyal group of ev

However , the viral nature of the network can be

not get you very far , but forging a trusted relationship with each me

10/14/09 17 © 2008 Market Platform Dynamics

Time-driven: The Need for Relevance


The great ( social networking ) debate : niche versus

general sites

10/14/09 18 © 2008 Market Platform Dynamics

Second Generation Social


Networking Sites

© 2008 Market Platform Dynamics

 Time-driven: Implications for


Marketers
ting for time and attention means being relevant

e age of marketing that pushes down to consumers based on what market

Consumers now have the power and technology to beco

unction of the user ’ s needs at a specific point in time

10/14/09 20 © 2008 Market Platform Dynamics

Cause-driven: Sharing and Engaging


Members

10/14/09 21 ©© 2008
2008 Market PlatformDynamics
Market Platform Dynamics
 Cause-driven: Implications for


Marketers

begins by showing interest in what the community cares about .

But the interest needs to be genuine

s are smart enough to sniff out a commercial pitch disguised as a cau

10/14/09 22 ©© 2008
2008 Market PlatformDynamics
Market Platform Dynamics
 The Spectrum of Social Networking
Strategy
The Social Suite tm
Human Recruit: Use commercial on - line networks , such as
resources LinkedIn
Research and Listen Gain ideas for new product development through
Development
communities

Procurement Generate Use community to generate inputs you can sell

Products Work Talk Energize Service

Make Use on - line Leverage Use brand Get

individual social conversatio ambassadors customers
© 2008 Mikolaj Jan Piskorski

based networks ns between and social to help

products into for or with networking each other/
those based employees customers sites trouble
on social to share to promote instead of shoot
networks best products or company
practices , services sales force
improve
coordinatio
n
Product Operations Marketing Sales After - sales
offering service

© 2008 Market Platform Dynamics

Who’s Doing (Interesting) Stuff
Now

The Social Suite tm

Blue Shirt
Nation
P&G

Chevy Tahoe

Sears . com
© 2008 Market Platform Dynamics
 Creating "Buzz" About Travel

10/14/09 25 © 2008 Market Platform Dynamics

L e v e ra g in g T h e U tility o f S o c ia l


N e tw o rk s

26 © 2008 Market Platform Dynamics

L e v e ra g in g T h e U tility o f S o c ia l


N e tw o rk s

27 © 2008 Market Platform Dynamics

M o n e tiz in g E x is tin g C o m m u n itie s


10/14/09 28 © 2008 Market Platform Dynamics

T h e “ S o W h a t? ”


Social networks are an

efficient channel that
can reduce customer
acquisition costs and
create evangelists ,
virally .

These ecosystems aren ’ t
yours to control —
they are already
vibrant communities .

The key to accessing
these networks
successfully means
reshaping your thinking
and approach .

It ’ s imperative that you
be willing to cede
control in return for
credibility and
10/14/09 29 ©© 2008
2008 Market
Market Platform authenticity .
PlatformDynamics
Dynamics

Developing a Social SAVVY tm Strategy
The development of a social SAVVY tm strategy begins with an assessment
of the customers, products and brand “readiness” to engage with
customers in a new and different way.
Strategy
refinement
Measurement and
evolution in real
time

Strategy
development
Approach channels
and incentives

Strategy
inputs
Customer, product
and brand
“diagnostics ”

MPD Social SAVVY Strategic Framework. © 2008 Market Platform Dynamics

© 2008 Market Platform Dynamics

Thank You!


CHERYL GUERIN
cheryl_guerin@mastercard . com

KAREN WEBSTER
karen . webster@marketplatforms . com

10/14/09 31 © 2008 Market Platform Dynamics