August 03, 2012

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The Facebook Factor: Chicken or Egg? The crux of the Facebook advertising pitch is that the 800-pound guerrilla social network drives business for the brands that use it. New research from Forrester suggests that the chicken or egg question still remains open. In a new reported titled “The Facebook Factor” Gina Sverdlov and team admit that quantifying the RI of Facebook investments is difficult and then go on to run regssions against survey data. They asked respondents to their on-going Q4 2011 North American Technographics Online Benchmark Recontact Omnibus Survey if they were fans of brands on Facebook. They focused on Best Buy, Coke, Blackberry and Wal*Mart – all iconic brands with lots of Facebook fans and large consumer audiences. They also asked survey questions about purchase frequency and volume. Then they did logistic regressions against the self-reported data. The findings showed generally that fans are much more likely to know about, consider and buy from highly visible brands. No surprise there. Forrester chose to spin the data to conclude that “Facebook fandom has the largest impact on purchase” based on the results of serial regression analysis. For Best Buy, Facebook fans were 5.3 times more likely to buy though its not clear if they bought because they are fans or if buyers, already in a relationship with the brand, became a fan to publicly signal their on-going endorsement or advocacy of the brand. It’s the chicken or the egg scenario. The fancy math, which is based on self-reported and therefore inherently unreliable data sets, cannot show us if there is causality, correlation or just coincidence. My hunch is that people who already love brands are the ones who fan them on Facebook primarily because they want deals and advanced or inside notice of new products, services or prices. The other significant value of fans seems to be their role as ambassadors and advocates. In the study Blackberry owners have an 87% probability of recommending Blackberry to a friend while non-fans only have a 44% referral probability. Given RIM’s issues, these numbers are astounding (or dated) on their face. But I’d buy the idea that Facebook fans are also twice as likely to talk up and recommend brands as non-fans. It’s logical. There’s also a healthy dose of RFM (recency, frequency, monetary value) evidence in the survey data. People who bought from any of the brands were 20-40% more likely to recommend the brands they bought. I’d guess they have an equally high probability or making a second purchase from the brand and it’s a fair bet that Facebook fans do this more and possible more often than non-fans. There is self-reported data that suggests that Facebook fans spend from 2X to 3X more than non-fans, but in the absence of real purchase histories, color me skeptical. This research seems to prove that Facebook fans can be powerful brand advocates. The jury is still out on their value as super customers. The real ROI question is … can brands cost-effectively mobilize these advocates to drive sales?
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Word People Dominate Social Media Want to make a big splash in social media? Target the “Word” people who dominate the space. Social media appeals to select personality types. Heavy social media users tend to be “Word” people; individuals who articulate their feelings freely and who get pleasure in expressing themselves publicly according to new research by my friend and colleague Linda McIssac. Linda, President of Xyte, Inc. developed and perfected a 16-cell Cognographics profile methodology for understanding how individual brains process information. Beyond the usual demographics or even psycho-demographic profiles, the Xyte categories sort people and segments based on the way they think. The methodology surfaces 80-95% of subconscious thought, which drives behavior. By understanding thinking styles, marketers can predict (with statistically valid certainty) how individuals will respond to messages and ads. People, even those of the same age, income, education and social class, are all wired differently. Innate preferences, which determine thinking process decision-making style, motivations, cultural sensibilities and information processing and retention, tend to remain fairly constant and predictable over time. They determine how each person will react to talent, media channels, humor, storytelling, offers and just about everything else. According to Xyte Insights, clusters of people like different social media platforms and use different types of technology based on their individual brain processing styles which can signal how, what and why they chose the social platforms they do. Using this insight we can better produce and target content for each platform based on the proven interests and preferences of the heaviest users. To test the theory, Linda studied the social media behavior of 3000 individuals classified in the Xyte database during February 2012. She discovered that “Word” people; roughly 39.5 million Americans with similar brain processing patterns dominate social media. Word people are abstract thinkers who use words easily to express their emotions, which factor heavily in their decision-making. They respond much more to emotive language and appeals, make gut decisions frequently, are quick witted and respond extremely well to humor, wit, wordplay, puns and clever turns of phrase. Empathetic, Word people need the interaction, input and validation of others. They need to be seen and heard. As you might imagine they tend to be lawyers, writers, actors and a large majority of advertising and marketing professionals. So much so that in crafting social media content and strategies we run the real risk of talking to ourselves rather than our intended audiences. They are not big shoppers but go along with friends for fun. They tend not to plan shopping trips and favor quality over price. But they look for incentives and deals as much as the next guy and they use social media to keep track of the latest products, technologies and trends. Extroverts they love the company of others and choose activities based on surrounding themselves with others. They are light TV viewers but revel in talking about their short list of favorite shows. They are among the dwindling cohort of newspaper and magazine readers and are frequent moviegoers. Subsets of the Word row – Perceive and Verbal profiles – are most likely to have 500 or more friends on their chosen social platform. Totally wired, they are constantly online posting, sharing, liking and commenting way more than anyone else. Social networking is their number one online activity followed closely by visiting friend’s social network pages. Forty percent visit social media websites multiple times each day. Being on social networks is their principle creative and connective outlet. Their top preferences (in rank order) are Facebook, Google, YouTube, blogs, Forums, Twitter, LinkedIn and Pinterest. 74% are very or somewhat apt to “like” a brand, a person or a posting because “like” connects directly to their emotional core. And yet Word people prefer Google and its perceived precision in delivering search results significantly over Yahoo. Interestingly they are among the residual users of MySpace, probably because it provides an unstructured outlet for personal verbal and graphic creativity. On Twitter, they are above average users but prefer to retweet or comment on a tweet from a friend than post an original tweet. Twenty four percent read and respond to blogs, microblogs and forums daily. These verbal consumers are very comfortable expressing feelings about brands. They are more likely to promote or criticize a brand or product in social media and are likely to pile on when their friends are praising or dissing a brand. If you are looking for advocates or eager to stimulate viral content distribution, find, befriend and activate Word...

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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