Much has been written about social media, conversational marketing, buzz marketing, and shared networks. Let's compare social media to direct mail, email marketing, word-of-mouth, referral marketing, lead generation, coupons, and other traditional marketing.
What is Social Media?
Wikipedia defines social media as:
Social media are primarily Internet-based tools for sharing and discussing information among human beings. The term most often refers to activities that integrate technology, social interaction, and the construction of words, pictures, videos and audio. This interaction, and the manner in which information is presented, depends on the varied perspectives and "building" of shared meaning among communities, as people share their stories and experiences.Huh!
Let's try English.
Social media websites enable sharing - Youtube for video; FlickR for photos; Blogger for blogs; Facebook, LinkedIn, and MySpace for friends; Digg, Stumbleupon for recommendations; Yelp for reviews; ... the list goes on with hundreds of sites.
Many support fan-bases, friend circles, or other viral marketing tools that become distribution channels for your marketing messages.
Over one billion people access the Internet daily. More time is spent on social media websites than email, search, and other Internet uses combined.
What Businesses Want
What's the relevancy of social media? How do we integrate social media with business?
Any business wants reach, brand recognition, and mindshare that generates more orders. If you can reach 100,000 customers, and have a recognized product or service - then, each time you reach the customer with a message, they are more likely to respond. These orders can be online or offline through retail.
Reach, recognition, and mindshare lead to results. It's simple.
Traditionally, businesses gather addresses or email addresses and send ; or pay for flyers, coupons, or ads through publishers who have the mailing addresses. These have been high cost, high friction activities.
- A stamp costs $0.39 and is rising. Total mailing budgets cost $2.00 plus and rising.
- Effectiveness of direct mail is declining. Few open unsolicited mail.
- Users are reluctant to register and give you an email address. Registration is high friction.
- eMail addresses decay 20% per year. An unmanaged list decays to uselessness in two years.
- Spam blockers prevent bulk mailings - most bulk email don't arrive.
- eMail formatting is limited and complex. No flash, video, or interactive component.
- Few people read the email - deleting without reading.
Not surprisingly, return on investment (ROI) on a direct mail campaign has dropped to insignificance.
Social Media - the Low Friction Approach
Effective use of social media replaces the list building, message sending, and mindshare maintenance functions. A blog is your media archive - with multi-media postings and an RSS subscription mechanism. Your presence at social networks like Youtube, Facebook, or LinkedIn are like magazine racks at popular cafes to reach fans, friends, and interested parties.
- Readers discover you or your products by friending or subscribing. Compared to registration or supplying an email address - these actions reduce the friction to join to clicks - no typing, easy decisions, less commitment.
- Lists are decentralized. Each member maintains their own current address. The connections - whether a friend or a subscription - are maintained automatically. The list stays fresh.
- The lists scale - to millions. With addresses, the cost to mail a million is prohibitive - not scalable. With emails, blocking of bulk mail stops scalability. (ed: Obama leveraged his ad budget with social media to impact 4 million voters per month.)
Like traditional media, the likelihood that a member would see/read a social message is low. However, social media compensates with:
- Scale. Your lists sum to millions of connections.
- Frequency. You can publish 1, 2, ... 10 messages a day - thus increasing the chance that a fan would see your message.
- Format. The message can be video, interactive, musical, or otherwise capture the attention of a fan.
Social Media's Impact on the ROI
The bottomline measures results relative to costs.
Although the creative costs can be the same as traditional marketing, the distribution costs is zero dollars. This means you can send more messages, test messages, and actively manage the message flow with very small investments.
Returns are measurable at each step in the sales funnel.
- Cost per action advertising, such as Google CPC or tEarn CPV, reduces the cost to bring a suspect to your website or blog.
- Low friction capture of prospects increase the likelihood for first stage engagement.
- Frequency of contact builds recognition and mindshare.
- Social referrals from existing customers among your social networks accelerate decisions by prospects to buy.
- Online convenience leads to quicker purchases.
With lower investment and higher returns, social media improves ROI. Most importantly, the solution scales from a few customers to millions.
What is social media? It's an efficient replacement for direct mail marketing.
Every business needs to learn. What do you need?