Archive for the ‘Social Media’ Category

Everything I Know Is Wrong

As a long-time paid search advertiser, I’ve had to do as much unlearning as learning as I’ve gotten up to speed on Facebook advertising. In paid search, the key to success can be summed up in three words (to paraphrase the cliched real estate adage):

relevancy, relevancy, relevancy

This is in part because AdWords and other paid search systems reward relevancy in ads, moving them up the results. It is also due to the state of mind of the searcher. A person using a search engine is purposeful. She is looking for the answer to some form of question, and does not want to be distracted by superfluous jabber. A well-placed ad that answers her question will perform well, while an ad unrelated to her query will not.

In contrast, relevancy is relatively unimportant with Facebook ads. The mechanics of Facebook advertising do not reward relevancy as Google does. And a Facebook user is much less directed than a search engine user. People don’t go to Facebook to do anything in particular, and so are open to distraction. This means that advertisements that are distracting rather than useful can be very effective.

Take, for example, the raging advertising battle between LivingSocial and Groupon going on in Facebook. They are direct competitors, both running the exact same pointless ads.

I’m not quite sure what I’m supposed to “do” in either case, but the truth is much more mundane. With the real deals running today on Groupon and Living Social, I can go bowling or take a three hour walking tour of Denver.

Given my long-ingrained bias towards relevancy, I assumed these guys didn’t know what they were doing. I figured they were just aiming for high traffic numbers like the naïve search advertisers of the early days, without regard for ROI. But recently I’ve started working on some big Facebook campaigns, and recognize the merits of their approach.

Shoot for High Click Through, Low Cost Ads

Facebook ads with higher click through rates cost less and get better placement. Really high click through rates can lead to very low click costs. For example, we have run two ads in the same campaign for the same advertiser, one informational and the other sensational, and the former costs about $2 per click, while the latter costs about $0.20. In Google, cost differences often correlate to the revenue potential of keywords. Some of the most expensive keywords in Google are expensive because they tend to lead to high-dollar sales. But the same cannot be said of Facebook.

Facebook ads rarely lead to direct sales. If your goal is to sell products, Facebook ads will probably disappoint. If, on the other hand, your goal is to form relationships with potential customers, Facebook can be very effective. And we have found that ads that speak to emotion lead to connections, while ads that speak to reason do not. Also, on the whole, ads that have high click through rates also tend to lead to connections. Take Groupon as an example. Groupon wants me on their distribution list, so they can send me daily deals. The ad above is much more exciting than today’s actual deal. Looking at it, I’m left wondering what kinds of deals I might be missing out on. Groupon’s advertising is anything but naïve. Their ads not only have higher click through rates than factual ads, they probably lead to more conversions.

But …

It always ends with a but …

While relevancy and truthfulness in your ad copy may not improve the performance of ads, relevancy in ad targeting does. One of the things I love most about Facebook ads is the ability to target locations, demographics and interests. These are powerful tools for audience building. For example, if you know your customers tend to live in the suburbs and listen to NPR, target those groups.

In summary, let your right (creative) brain take over when creating ads, and try to strike an emotional chord, but put your left (logical) brain in charge when targeting.

Have you tried Facebook advertising? I’d love to hear your opinions in the comments!

As a business, we sometimes find ourselves slipping into bad behavior, so we came up with this Twitter code of conduct. We aspire to the code, but don’t always succeed. Please let us know if we are falling short.

twitter.com/twooctobers

Oh, and here is our formula for Twitter success: there is no formula, see 1. above.

And these are some of the fine people who’ve taught us about good twitizenship: @alizasherman, @boulderrunner, @clearviewwater, and @timeforcake

I was having lunch a few weeks ago with my friend Chandler who sells advertising at an online publisher and the topic of Twitter advertising came up. His personal viewpoint on Twitter is similar to one I’ve heard quite a bit recently: “I tried it out, but I didn’t get much out of it.” He said it tentatively, as if I might be offended, or exclaim some secret to extracting value from Twitter that had escaped him. But I have found myself questioning the value of Twitter recently as well. Our conversation evolved to this: there’s a lot of talking on Twitter and not much listening. As an advertising medium Twitter appears to have decent reach, but is reach meaningful if people aren’t really paying attention? Further, I have noticed that many of my recent followers look like this:

Notice the thousands of followers and the clear commercial agenda. What seems to be in vogue now is to follow thousands of people, then drop the ones that don’t follow back, then follow thousands more, and so on. Having lots of followers creates the impression that people give a crap, but it turns out that on Twitter, followers don’t equal influence.

My lunchtime conversation with Chandler concluded with the supposition that Twitter users must be getting more selective about who they actually listen to, if they are listening at all. An increase in advertising on Twitter will only heighten the need to filter out the signal from the noise, which means that advertisers will be putting a lot of effort in to marketing to the void.

I’ve been researching this topic and mulling it over since my conversation with Chandler, then got this email today from another friend:

It’s hard not to agree!
http://www.mediapost.com/blogs/raw/?p=3679
Hal

The link describes the story of Leo Laporte, a well-known technology journalist who stopped Tweeting for a few weeks only to find that nobody seemed to notice. In Leo’s words, “I was shouting into a vast echo chamber where no one could hear me because they were too busy shouting themselves.”

Laporte has nicely phrased what Chandler and I were trying to articulate, but my intervening research tells me that we had it at least partially wrong. I didn’t find any data trending people’s propensity to listen. A few things I did find:

• Only 7% of Americans actively use Twitter, but those 7% are more affluent, more educated and tend to be early technology adopters in comparison to the online population as a whole. They also seek and give brand and product advice using Twitter. Source: Edison Research
• 300,000 new users are signing up for Twitter every day. Source: Huffington Post
• Globally, Twitter use has exploded.Worldwide traffic to Twitter.com has more than doubled in the past year. Source: Comscore

With that kind of growth, it is too soon to say what Twitter is or isn’t. The way people are using Twitter is bound to be evolving. And anecdotally I know several local businesses that are finding new customers through their Twitter accounts. I still believe that broadcast advertising will fail on Twitter, but I don’t think we can extrapolate from our own personal experiences to say that Twitter is not an effective marketing medium. It may take work to get people to pay attention, but the payoff is a fast-growing, affluent population. If you are an SMB with limited time and resources, you should gauge the effort versus the return. If your target market is well-to-do, educated early-adopters, it is probably worth it. If you are a plumber or a dry cleaner, you should give it an honest try and see if you enjoy tweeting. If you find it a chore, your time is better spent elsewhere. At least for now.

And if you are looking for more tweets to ignore, mine are as good as any  @nicobrx

So you’re thinking about launching a Facebook page for your business, but what could you possibly talk about? The good news is, you probably have more to say and share than you realize. A Facebook page is a great place to share your passion for your business area with a group of people who are also passionate about that topic. And an informal, conversational style works great on Facebook. As opposed to the buttoned-up marketing copy and well-styled images on your website, the Facebook page can and should be a place to let your passion and personality shine through. Just make sure you stay on topic for your business area.

Most of the time you’ll be creating text updates, sharing links, and uploading photos and videos. Here’s some ideas and examples.

1. Make updates about your company
Promote real-life events. Upload a snapshot of a new product that came in. Introduce a new employee. Mention a great interaction with a customer you had today. If you have a blog, post links to new articles (this can be automated).

2. Share
Share topical articles, videos, or other links. Share tips and advice. Share information about your business partners, neighbors, and customers’ successes. Don’t make it all about you.

3. Ask questions to get business feedback
Considering longer hours? Wondering whether A or B will sell better?

4. Make offers
Studies show one of the top reasons people follow businesses in social media is to get access to promotions and coupons. Help your followers feel special.

5. Interact
Facebook is an interactive medium. You want to add content, and you want your community to respond and add their own content. How do you do that? Ask users to tell stories about their challenges & triumphs, their use of your products, or something recently in the news. Ask users to post photos. When fans create content on your page, they’re endorsing your business. And don’t forget to think of how you’ll incentivize people to contribute. (But be careful of contests, which Facebook regulates.) And plan to respond to every wall comment users make and answer most questions posed.

Work towards learning about which posts resonate with your fans and cause them to interact with the page more. People like to be where there is activity going on. Your followers may learn as much from other followers as they do from you. And you will hopefully learn from your followers, building better business relationships.

Business pages on Facebook are a great way to stay connected with customers. Have any additional tips or know a local business who has a great Facebook page? We’d love to hear about them in the comments below.

Social networking tools that combine location with a status update have been around for a few years. Among them, Gowalla and Foursquare have gained some traction among the uber-connected. Both of these tools broadcast “this is where I am right now” to other users in some way, shape or form. Collectively, such systems are called “location based services” (LBS). Twitter also recently announced support for location-based tweets, prompting some analysts to predict the demise of the aforementioned tools. But if Twitter was going to kill them, Facebook will for sure.

Ad Age reported today that Facebook is getting ready to release location-based status updates. But the reason I am writing about this is not to report another Goliath-kills-David story. It is because both Gowalla and Foursquare employed a marketing strategy which is effective, but risky. And now they face the business end of that risk, so to speak. They both focused their marketing efforts on digital hipsters, in particular choosing the super-cool SXSW conference as a launching pad and battleground for the attention of social mavens. The strategy worked, and both reported significant adoption in 2009 and growth in 2010.

The risk of this strategy? Hipsters are fickle. Being hip is about knowing what’s next, not doing what your neighbors do. Sometimes, hipsters can skyrocket a product or brand into the mainstream, as when Corona beer went from super-cool to mainstream import. But if a big, well-known brand copies a hip product before it goes mainstream, all you are left with is a bunch of hipsters who are eager to turn their backs on you and get on to the next new thing.

Will all of my friends who spend time on Facebook switch to Foursquare or Gowalla for location-based services? I don’t think so, and according to Ad Age, big brand marketers don’t think so either. Will Foursquare and Gowalla’s current users bring mainstream users into those services? Nope. That’s not what hipsters do.

Network Solutions has partnered with the Robert H. Smith School of Business at the University of Maryland to produce a series of studies tracking a variety of factors that affect the competitive health of small businesses. The most recent installment is detailed here: The State of Small Business Report – December 2009 Survey of Small Business Success. There is a lot of useful information in the report, ranging from statistics on methods of acquiring capital to characteristics of an effective workforce.

Below I have pulled out some choice statistics from the study relating to small business marketing and in particular social media. The number of small businesses who are using social media has doubled in the last year! While small businesses have been slower to adopt social media than big companies, they are starting to catch up. I believe this harkens a sea change in consumer habits, as social connections are strengthened between local consumers and local businesses. Mass marketing benefits big brands and big box stores, because it favors price as the common denominator across all consumers. But social media benefits businesses that are owned and operated by people who live in the community, because it favors social connections between individuals.

• “The incidence of small businesses having a social media presence has doubled from 12 percent to 24 percent in the past 12 months.”
• 70% of small businesses who use social media believe the medium has met or exceeded expectations.
• 50% of small businesses who use social media say it has used up more time than expected.
• 46% of small businesses have a web site – down from 50% a year ago.
• Marketing & innovation was second to capital access in affecting overall competitiveness. Workforce, customer service, computer technology and compliance were all less important factors.
• Referrals from existing customers are the most effective source of new customers.

Oh, and unrelated to marketing, but I couldn’t resist pulling this statistic out as well:

60% of small business owners are highly satisfied and 33% are somewhat satisfied with their jobs. Only 43% of the overall population are satisfied with their jobs. Source for the latter: The Conference Board.

I’d like to follow-up yesterday’s report with a little more perspective on the massive Einstein Bros free bagel campaign. The campaign offers Facebook users a free bagel in return for following the Einstein Bros fan page on Facebook. The resulting increase in Einstein’s fan base has been incredible (source: allfacebook.com):

That’s the kind of growth chart that sends ops people hiding under their desks. And while Einstein Bros is making a big investment by giving away so many free bagels, they see Facebook as a prime channel for acquiring new customers. Chief Concept Officer James O’Reilly says “I’m confident that when consumers come into our restaurant they will become key customers for life.”

Kudos to Einstein Bros for this bold experiment. With today’s news that 175 million people log on to Facebook every day, businesses around the world should be thinking about their strategy for the social network. In particular, I see several ways in which Facebook can transform marketing for businesses:

First, as Einstein Bros has demonstrated, Facebook and other social networks present an online marketing opportunity for companies who sell discretionary consumer products. As effective as search engine marketing has been for many businesses, it doesn’t work very well for the kind of product Einstein Bros sells. People rarely search for bagels, but they do often eat them. And the same can be said for much of what we buy.

Second, the Facebook fan list could replace the email mailing list to a large extent. As a consumer, I like the control I have over promotions I view in Facebook. I can easily scan updates on my Facebook page, and I don’t have to delete anything: messages  just go away if I ignore them. With email, my only choice is to keep subscribing or unsubscribe. And as a business I can have two-way conversations with Facebook fans, as demonstrated by the Einstein Bros fan page. Just as Facebook has replaced a lot of person-to-person email communication, it is likely to replace email communication between businesses and consumers.

Third, Facebook allows locally-targeted broadcast promotions. A local bagel shop can execute a promotion just like Einstein’s, but only pay to reach local consumers. And Facebook also allows targeting by age, gender and other profile characteristics. Here are some helpful tips on Facebook advertising from AllFacebook.com: 9 Rules of Facebook Promotion Every Small Business Should Know. And here is Facebook’s guide to setting up a page.

So go and get your fan page set up, if you haven’t done so already. And if you already have a fan page, do a promotion and tell me about it. I’m excited to see where this all goes.

This is my first effort at a weekly round-up of what’s happening of note in viral and social media in the Colorado Front Range. In general, I will be favoring projects and campaigns that have a big impact on a small budget, but will throw in other stories if I find them particularly interesting.

A highlight of my month was reading local advertising celebrity Alex Bogusky’s attempt at neighborhood detente:

I congratulate you on the turn of phrase, “septic scum.” The vitriol and imagery, and creative use of alliteration more than make up for the fact that it’s a bit redundant.

This is an excerpt from Bogusky’s post: Blogging on Telephone Polls, which has been viewed more than fourteen thousand times since he posted it on January 12th. While I doubt that Bogusky received his recent promotion because of this post, it does make me happier for him.

Another story I love is that of the Gatorade bottles that were modified to display “Unfaithful” labels, featuring Tiger Woods. This prank was executed by Longmont resident Jason Kay, and received a bit of national and international attention. Unfortunately, Kay now faces federal charges for product tampering. He probably helped sell more Gatorade, while also drawing attention to our commercial idolatry of sports figures. In my opinion, everyone wins except for Tiger Woods, so can’t they just drop the charges and stop wasting taxpayer dollars?

“Haiti” is one of the fastest-gaining search terms locally as well as nationally. While the tragedy of what is going on there is beyond description, I am glad to see people wanting to help in so many different ways. In one example, the vibrant Denver/Boulder software community is participating in a remarkable crowdsourcing project called CrisisCamps, where developers from around the world are creating and refining applications and tools that are contributing to the relief effort.

A few videos of local interest have gone hot on YouTube. The first features CU Senior, Paul Robinson. It is a Prana-sponsored mini-documentary of Robinson’s extraordinary climbing talents. Robinson also writes a blog with a strong following in the climbing community. The second is actually a series of videos featuring the National Western Stock Show in Denver, put up by Brad Hook. Hook also promotes the No Bull Auction, in Unionville, Missouri. The auction is a “sexed semen special event”. I really don’t want to know what that is, but Hook’s videos are very well done, and capture a side of American life that most of us don’t see.

And last-but-not-least, former Denver resident Jack (he’s a dog, he doesn’t have a last name) is getting some buzz for the fact that he has been nominated for the 2010 VPI Hambone Award. As prestigious as the award is, this is not the real cause of the buzz. The buzz is because he earned the nomination by almost being eaten by a carnivorous Australian lizard. In general, encounters with bizarre carnivores are an effective, if risky way to get attention.

I’m sure I’ve missed important and/or noteworthy goings-on, so please comment if you know of something I didn’t mention.

Yesterday I posted about the Twitter list I created for local businesses: Denver-Boulder-Local-Biz

I reviewed over a thousand Twitter feeds to come up with the list, but I didn’t provide much explanation for why I think the businesses I selected are worth following. I’ll start with a quote from Aliza Sherman:

Twitter is about listening to what others are saying, thoughtfully engaging others in conversation, contributing meaningfully to the conversation, and building real contacts and connects.

Well said. I was looking for businesses that fit that description, while actively seeking to promote themselves. I do think that businesses can gain benefit from tweeting without being conversational, but a salesperson who doesn’t listen gets pretty tiring after a while. There is more benefit to be had by actively engaging with the Twittersphere. Here are a few tweets from @ClearViewWater, one of the businesses I put on my list:

There’s a lot of goodness in just these few tweets. For example, he is very positive. I don’t know for sure, but I imagine he’d be that way to work with. And he is promoting other businesses. You can bet that those businesses will return the favor. And he is promoting himself with a real, compelling example of a project he’s worked on. To be sure, he also occasionally tweets in a more overtly self-promotional way, but he keeps people engaged with interesting content and meaningful, positive commentary on what’s going on around him.

In my list I tried to find a variety of types of businesses using Twitter in different ways, but all engaging with prospects and/or customers. If you know of others I should include, please let me know!

Here are a few resources to help an aspiring business Twitterer:

Aliza Sherman’s How To Avoid Seven Common Twitter Mistakes – this is a good list, and I much prefer advising on what not to do. The businesses I like to follow don’t appear to follow a formula, they just express themselves. But they do avoid these mistakes.

Kris Skavish commented with this great article on various styles of business Twittering: Four Styles of Marketing on Twitter – thank you Kris!

Klout is a service that measures influence and audience. You type in your Twitter name and it provides a detailed analysis of how you rate. It also has helpful tips for how to improve. I rate a pathetic 16, so I guess I have some work to do.

I’ve been looking around for a list of local businesses that are making good use of social media. So far I haven’t found any, so I decided to create my own Twitter list as a starting point: http://twitter.com/nicobrx/denver-boulder-local-biz#. If you are a local business, I recommend that you follow this list as a source of ideas for how to create and strengthen relationships. There are also great businesses on this list, which anyone in Colorado should want to follow!

My list is not comprehensive. I’ve done my best to find out which local businesses are actively using Twitter, but there is no authoritative source of such information that I have found. It is also very subjective. My intent is to list businesses that are engaging with their customers and the local community using Twitter. This rules out, for example, @denversolarguy who is incredibly prolific and has many followers, but is mostly one-directional as far as I can tell. This also rules out the many businesses who follow the crap out of people to up their follow numbers, but don’t have much of interest to say.  I have also tried to represent a variety of types of businesses. Since restaurants and bars are making heavy use of Twitter, I set the bar a little higher for these categories. Otherwise, the list would be hundreds of restaurants and bars with a few other businesses strewn about.

I plan on updating this list frequently and welcome any suggestions. Sources of information I have used include:

• Businesses followed by people I follow
• Wefollow.com
• Twellow.com
• Listorious.com