Part I of this series introduced the subject of social media as a phenomenon that is changing marketing dramatically. This installment looks more deeply at the undercurrent trends for which social media is cause and effect. Read the full article.
Part II: CMO Guide to Social Media
Before you can use the new market realities to your favor, you have to understand the changes at a deeper level than the symptoms that show up in morphing marketing plan assumptions. The key takeaway here is that social media is much, much more than just another communications channel.
It's all about power shifts
The most fundamental change is a sudden power shift from the organization to the individual. Enabled by inexpensive, high-quality production tools and global reach, ordinary human beings - including your employees - can now produce compelling content to entertain themselves and their peers (sometimes by re-purposing others' video, audio and text), pass on juicy information or breaking news and become niche forces overnight. These people are just people, motivated by a wide variety of drivers, some of which you can impact and most of which you can't. But in all cases, you do not control them and they do hold potential market power over you, as Dell, Apple and a host of others have learned. As a result of this power shift, the professions of journalism, public relations and marketing are changing dramatically. Marketers in particular, can no longer get away with "megaphone marketing" and indiscriminate push marketing (especially through social media channels) because the public now pushes back (or yells back).
These power shifts offer your company opportunities too
Luckily the power shifts and tools that make your company more vulnerable are available for you to use in response, not just to market your wares but to build a stronger business. Your social marketing options go beyond advertising, poofy viral opportunities and word-of-mouth strategies. Marketers are catching on to the reduced effectiveness of advertising; a study at the end of 2008 showed that a majority of CMOs planned to lighten up on social network advertising (35% showing interest in ads on Facebook and MySpace) in favor of social media participation and content creation (well over 50% planning to create podcasts, webinars, forums and blogs). This is good news, because it means your peers are recognizing that commercial success in the social sphere is presaged by adding value of some kind. Why add value through marketing? Simply put, if you don't give people something that interests them enough to socialize around, they'll make their own entertainment and ignore you (which is what they're doing to social advertisers using traditional advertising formats like banner ads). While some of these content strategies are promising, the potential and impact of social technology goes much farther, reaching into the very core of your business model.
Three examples of this deeper business model impact are captured in the Crowdsourcing, Long Tail and Free Economy phenomena, all of which capitalize on the new economics of technology (including, but not limited to, social technology) to adjust the economics of business itself.
- Crowdsourcing enables a company to use social strategies to remove costs from the business model and (in most cases) increase customer loyalty and create word of mouth opportunities at the same time.
- Long Tail economics allows companies to aggregate (though increased reach) dispersed markets to run profitable businesses in previously untapped niches.
- The Free Economy speaks to the power of free services and the gift economy, often powered by social, to generate tangible revenue thanks to rapidly declining costs of service delivery.
So while with one hand new social technology is taking away stability in our markets, with the other hand it offers up new opportunities to create value and wealth.
The market demands more than transparent and authentic communication
As the head of marketing you are shaping your brand by how you respond (or don't) in the social marketplace. The market opportunities that come with new technology also come at the price of greater transparency, authenticity and accountability, the demands for which run deeper than public relations to the very core of your company's identity. In short, the public - which is now empowered to take you down or buoy you up - has become intolerant of "spin." Your audience now demands straight talk, and will penalize those who insult their intelligence by 'faking it', at the same time they reward authenticity where they find it. This pressure to "be real" is often felt most acutely by the marketing department, often the generator of the inauthentic "spin" messages in the first place. As tempting as it is to think of increased transparency and an authentic-sounding voice as tactics prevent PR disasters to and appease a vocal few, it's more accurately understood as one of many forces coming into alignment with broad consumer demand for social responsibility and increased accountability. The way in which you respond will shape your brand identity irrevocably in the eyes of your customers, employees and the media.
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Part III in the series will delve into the the first recommendation for how a CMO can use social strategies to take a leadership role within the company related to customer relationships. To read ahead and view the slide presentation, visit my web site or download the full article.
