Simon Mainwaring. The We First Blog.

How your brand wins over empowered customers to profit from social commerce

I recently had the pleasure of speaking at there First Data ‘Engaging Today’s Empowered Customer’ Summit in New Orleans where we discussed in detail the shifts that financial institutions, credit card associations, and merchants across all industries must make in order to command the attention of the social customer and earn the loyalty, trust, and goodwill that translates to profit. We discussed the new co-creative relationships between brands and customers, the importance of authentic purpose, and the ability of brands to architect communities that build their business with them. Here’s my answers to a few questions including the pitfalls, trends, and rewards of social commerce.

READ MORE

How social ads are winning over advertisers and consumers

Over the last two years we have seen a steady shift from Google Search to Social Search as consumers, faced with an overwhelming amount of choices and information, are turning to their peers within social networks for trusted recommendations as to what to buy. Now it seems advertisers are recognizing this trends and following suit.

Over the past 12 months, the proportion of Facebook ad budgets allocated to “social ads” has increased fourfold, from 5% in March 2011, to 23% in March 2012, according to a report from Marin Software. What’s more social ads are expected to account for 50% of Facebook ad budgets, on average, by the end of 2012, the study reports.

This implies a rising recognition by advertisers of the growing influence of peers in decision making over generic Search or traditional display ad units, since social ads (such as Facebook Sponsored Stories) have word of mouth advertising built into. This trend is reinforced by data outlined in detail in the new book Grouped, by Paul Adams, the Global Brand Experience Manager for Facebook, in which he outlines the rising importance of peers in decision making as a response to the marketing noise.

Unlike Marketplace Ads (which operate similarly to traditional display ad units using targeting), Facebook’s new social ads like Sponsored Stories have word-of-mouth recommendations built into them bringing a social context to traditional ads.

Image: Marin Software

It’s no surprise, then, that the report finds that on the advertiser’s side, the cost-per-click (CPC) rates of social ads are rising (over the previous 12 months, the CPC of social ads increased 86%, whereas CPC for Marketplace ads fell 15% over the same period). While on the consumer side, engagement with social ads is up: Click-through rates (CTR) rose 78% over the previous 12 months.

It was an issue of much debate as to whether advertisers and consumers would embrace Sponsored ads putting their confidence in a social context for advertising, but as Matt Lawson, VP at Marin Software, states:

“Based on our data, the answer to both of these questions is an emphatic ‘Yes.’ In the last year advertisers have directed more budgets to social ads and Facebook users have responded by clicking more often. This trend is not only positive for Facebook from a revenue standpoint, but also provides important validation of the opportunity advertisers have to drive revenues from word of mouth marketing efforts.”

So while some commentators bemoan the appearance of Facebook social ads, such BTIG analyst, Rich Greenfield, who describes them as “unexciting,” what they fail to realize is that they are not being designed around what the advertisers want but rather what Facebook users want. It’s this non-traditional focus that will in part help Facebook avoid the pitfalls of traditional display advertising that could rapidly drive users away in droves. That said, there is little doubt that Facebook had much to prove on the mobile front and their question remains whether their growing success with desktop social ads can translate to mobile success as well.

Do you think Facebook’s social ads are “unexciting”? Would you rather see them function more like traditional display advertising?

READ MORE

Why you need more than good intentions to build a purposeful brand

Image: Hetemeel.com

One of the most encouraging trends in today’s social business marketplace is the demonstration of greater social responsibility by brands. At one extreme you see large brands showing a greater commitment to their purpose, and at the other a growing number of  in social enterprises and entrepreneurs are emerging with responsibility baked into their business models. That said, no amount of good intentions will suffice if you overlook three key drivers of business success:

1. Brand Singularity: Too often brands (and many non-profits) mistake the cause for their brand. As a result, they get lost in a crowded marketplace because their brand distinction or competitive advantage is not sufficiently defined. Instead, brands of all sizes must define their purpose in a way that is authentic and unique to them and then communicate that consistently. One need only look at the number of companies that claim they are “green” to see how easy is can be to get lost in the noise of good intentions.

2. Services/Products:  Too often many young companies throw well-intended energy and resources at a cause and overlook a clear articulation of their service and product offerings. It’s almost as if their service to the cause is their selling proposition, yet that is perilous from a business model point of view. Instead, the company must define it’s business model, articulate its products and services, identify it’s target audience, and plan its sales strategies, and build social contribution into its marketing.

3. Long-term Vision: The solution to a cause issue is often so large and complicated, it’s easy to think your company vision is simply the elimination of that problem. Yet thinking this way avoids making the necessary long-term strategic decisions for your business that will ensure your survival and growth. Instead, every company must identify specific goals within the content of that cause, and articulate a long-term vision that is shared with employees and customers.

In short, while good intentions are critical, a commitment to a cause can hurt your business if it distracts you from the core requirements for business success:

Who is your brand? What does it stand for? What is your business model? What services and products do you offer? What makes you different? What is your long-term vision?

Only by answering these questions can your business succeed and provide the financial success that will allow your to transform our world for the better.

READ MORE