The rise and rise of social media

No other recent phenomenon has generated as much hype and anticipation as social media, but the potential offered by these emerging channels is still far from realised. Matt Eaton reports.

Millions of people across Hong Kong are connected via social networks with tens of thousands more signing up everyday to become part of a movement rapidly changing the way we communicate.

For consumers, it has become an ingrained part of our online experience, but for brands it remains a very different story. Social networking needs to be part of your marketing plan, your company needs a social networking strategy, you must be on Twitter ... or so they say.

But for all the buzz, there is still a reluctance from brands to embrace social networking as the all-powerful medium it is destined to become. But it is easy to see why.

Outside the obvious arguments of mass aggregated audiences, there are few convincing arguments about why brands should engage these platforms and even less talk about monetising social media. But a growing band of the territory’s biggest brands and smaller SMEs are quickly realising that with innovation, a little know how and budget, social media can be a powerful complement to any marketing plan.

“There’s no question the boom of social networking and the use of global communications for customers is a platform smart companies in any sector will want to leverage,” says Julie Lyle, chief marketing officer of Prudential Corporation Asia.

“But by the same token, the vast majority of it is in its embryonic stages, much like when the internet came into the marketing mix, which by and large was not that effective.”

And herein lies the problem. How effective is social media? For all the activity on Facebook, Twitter, Sina, Foursquare, blogs and community forums, measurement tools are many and varied and marketers are largely relying on performance metrics set in-house. While it’s true Twitter has found success with its “sponsored Tweets”, the value of a re-tweet or a Like is still largely unknown.

The economics of Like

A joint report released by Facebook and The Nielsen Company last year showed marketers do not understand the value of social media marketing. Both Facebook and Nielsen are now making major investments in this area.

The report, Advertising Effectiveness: Understanding the Value of a Social Media Impression, analysed data from more than 800,000 Facebook users in response to some 125 Facebook ad campaigns from 70 advertisers. While many studies have looked at how trust among friends influences purchase decisions, this report sought to look beyond this argument.

“It’s critical that we understand advertising not just in terms of ‘paid’ media, but also in terms of how ‘earned’ media (advertising that is passed along or shared among friends and beyond) and social advocacy contribute to campaigns,” says Sean Bruich, head of measurement research at Facebook.

The rush for Facebook connections heated up in April when the 600 million-plus social network site shifted from brand fan pages to Likes. It also released its Like button into the wild, letting any site place it next to content. Beyond simply showing off – look at how many people like us – Facebook Likes has a critical practical purpose. Once a consumer “likes” a brand, a message is sent via their News Feed to their friends, generating earned media impressions.

This year will be the year that social media evolves from being tacked on to your marketing efforts to becoming fundamental to your business strategy.

Jeremy Woolf

Senior VP and global social media practice lead at Text 100 Hong Kong

Updates from the brand can then appear in the user’s News Feed. Additional interactions with the brand lead to more earned media, netting more fans.

Such a network effect is of critical importance to brands in a world where users spend more time on Facebook than any other site.

Similarly, a DDB study looking at the value of Facebook fans and Likes, showed brands seem to be in a honeymoon phase with their fans because the majority of them rate fan pages extremely high. But it also warned it would not last if brands failed to “get it right” and provide the quality content.

A credibility factor

So how exactly do you keep them coming back? Just like a television channel, Twitter and Facebook need programming, new content and interaction, argues Jeremy Woolf, senior vice president and global social media practice lead at Text 100 Hong Kong.

“While many companies have created social media presences on Twitter and Facebook with a view to sharing their happy news with keen fans or followers, these channels need editorial direction, management and investment,” he says.

Woolf adds that while 2010 was, for many businesses, a year of social media experimentation, 2011 must be the year of action.

“This year will be the year that social media evolves from being tacked on to your marketing efforts to becoming fundamental to your business strategy. Specifically, consolidation on the so-called ‘Big Four’ social media properties of Twitter, Facebook, YouTube and LinkedIn.”

PR disconnect?

Last year, WPP CEO Sir Martin Sorrell told a packed room of marketing executives that social media was a channel better left to public relations practitioners.

“It’s all very sexy, but if you’re a CMO and you commit a greater proportion of your budget to Facebook, Twitter, YouTube or whatever, we don’t actually know whether investing an extra dollar in new media is better than investing an extra dollar in traditional media,” Sorrell says.

“I would just caution that the jury is still out as to whether new media is more about promotion rather than branding. It’s all a question about balance. We all have to play together and if we don’t play together we will lose.”

That idea seems to have resonated with the industry with many arguing social media is really just an online brand reputation portal, and not marketing at all.

Tim Williams, founder of Ignition Consulting Group, argues a similar point, but adds it is more to do with traditional agencies’ lack of understanding about social media channels.

“Marketers are realising that it is not really media in the same way mass media is media. It is not a medium. It’s one-to-one communications that is more in the province of PR firms than it is advertising agencies.

“It’s not presentation, it is participation. Agencies know presentation, they don’t know participation, PR firms do. Social media will never replace mass media,” Williams says.

Aside from this ongoing argument, John Kerr, director of digital for Edelman Asia Pacific, says another emerging issue surrounding social media for business is the sheer lack of privacy.

Privacy, he says, is a “massive, massive issue” for the industry, but is only being talked about from a consumer perspective.

“Privacy for business has been badly handled by the PR industry as a whole over the past 12 months, but it has to change. Business privacy will no longer exist,” Kerr warns.

Local or global?

While global social channels such as Facebook, Twitter, Foursquare and YouTube are without doubt giants of the online world, increasingly local portals are becoming just as important as their US cousins.

Karen Tam, senior manager of promotions and advertising at Harbour City, argues social media is a useful part of the marketing mix and a good complement to its traditional media activities.

She says Harbour City was a first mover on many local trends, including blogger outreach programmes and promotions on local platforms such as Jiepang and Sina Weibo.

Without giving too much away, Tam says some of the secrets behind its successful social media executions have centred on its local brand personality.

“Harbour City is very active in Sina Weibo and we set up an account on 31 January last year. We were one of the first corporate brand accounts and until now have accumulated more than 188,000 followers.”

Tam adds that content is king, but its marketing team is still exploring how social media can complement traditional channels to maximise marketing effectiveness.

“We can get direct customer feedback from various forms of social media and it is useful for marketers.”

Nowhere are these local trends more important than in Mainland China where social media has been growing at a phenomenal rate with specialist social networking sites such as Renren.com, Kaixin001.com, qzone.com and 51.com gathering huge followings.

So where to from here?

Late last year, Mark Zuckerberg, Facebook founder and CEO, told Time magazine that within the next five or so years any industry could be remodelled in a social way.

“We think that every industry is going to be fundamentally rethought and designed around people.”

But many within the industry believe this may still be some time off.

We look across the mix with every initiative to try and find which of our tools in the toolbox makes the most sense.

Julie Lyle

Chief marketing officer of Prudential Corporation Asia

Bob Pickard, president and CEO of Burson-Marsteller Asia Pacific, says few companies are taking bold steps to leverage the exploding use of social media channels in Asia because “most appear largely driven by short-term marketing considerations or are hampered by concerns about resourcing, cost or lack of control over message and content”.

In addition, he says brands in Asia Pacific are using social media to portray a gentler corporate image less likely to invoke interaction or negative commentary.

Another study by The Nielsen Company reveals social media has already dominated internet usage in Asia Pacific with Facebook, Wikipedia and YouTube being three of the seven biggest global online brands.

Megan Clarken, managing director of The Nielsen Company’s online business in Asia Pacific, says: “With three quarters of the global internet population now participating in some form of social media, businesses [in Asia Pacific] can no longer afford to simply observe the social media phenomenon – they need to embrace it.”

But right at the senior levels of the marketing food chain, social media is well and truly on the radar.

“It’s not dominating conversations, but it is certainly part of every conversation,” says Prudential Corporation’s Lyle.

“We look across the mix with every initiative to try and find which of our tools in the toolbox makes the most sense. We want to be much more targeted with not only the message we deliver, but also in the way we deliver it. The challenge is how do you make your content intriguing and relevant so that stakeholders talk with you?”

So is social media for everyone? Yes, according to Lyle, but different strategies must be applied.

“I think it offers something for everyone, but it is different for everyone. We all can’t talk to consumer the same way on the same devices.”