Wednesday, October 29, 2008

The Impact of Social Media

Yesterday the Razorfish newsletter arrived. The October newsletter is not yet up on their archive page, but I imagine it will be soon. There are a number of interesting items, but the big news is the publication of their 2008 Consumer Experience Report (get the pdf here). Fred Aun has done a nice summary on ClickZ that covers some sections of the 84-page report, especially mobile and widgets. I wanted to look at some of the general marketing issues that are highlighted.

It’s important to point out that this isn’t a representative sample of the Internet-using population. They call their sample “connected consumers” who have broadband access, spent at least $200 online last year, visited a social networking site, and consumed or created some kind of digital media. The respondents were distributed geographically and by gender. Most of the respondents were between 18 and 55. Two of the findings about basic behaviors surprised me:

1. 91% of their sample use one of the 5 large portals—Google, Yahoo!,MSN, AOL, and their start point. I thought Facebook and MySpace would be part of that list. Two reasons they don’t seem to be. One is that it’s not obvious you can easily use either as a portal page. Perhaps more important is that people are customizing these pages with a variety of content that’s not similarly accessible on the social network pages.
2. The second was the age issue. According to the report: “Digital Behavior Defies Age: We found today’s connected consumers equally distributed across all age ranges, with a slight skew to older segments." (p. 21)

Their results support and add to other data that emphasize the importance of UGC in product purchase, even though 76% of them are fine with brand advertising on social network sites. They are influenced by what they see on those sites; 40% have made a purchase based on advertising and 49% have purchased based on a user recommendation on a social media site. Search is still king when consumers start looking for a product or service online. However, UGC is key in the decision to purchase. According to the report: “peers are the largest influencers when determining when and what to purchase. The large majority of consumers (61%) rely on user reviews for product information and research, with a much smaller group (15%) preferring editorial reviews.” (p. 19)

How should marketers go about designing consumer experiences in this environment? The report gives 5 recommendations:
1. Share the spotlight. People are coming to the networks because they want to participate. Put the emphasis on the customers, not the product.
2. Leverage the platform, not just the site. Let people post, share, and embed—distribution of content is the aim. Hording content doesn’t make sense in this environment.
3. Embrace the network, but beware of the network effect. The report points out that social activities take awhile to catch on and spread.
4. Make it interactive and plan for multiple levels of participation. Their assessment of levels/types of participation is interesting.
5. Don’t forget the business model. They point out that advertising has not proven to be the key to monetization of social networks. New business models are needed. (pages 21 – 26)

There’s so much more, but I’d like to end with two important thoughts. The first is that people really want to participate, to contribute. Welcome their contributions! The second is the importance of distributing content widely. In the words of the report:

Distribution Trumps Destination: All signs point to the continuing disintegration of “one-stop” digital destinations, at least as far as consumers are concerned. We’ve found that they don’t want a one-size-fits-all solution for their needs. Consumers prefer using multiple destinations, and then aggregating media and services, via simple tools like RSS, into a highly personalized view of their digital world. (p. 24)

Getting your content out there is critical. How great is it when consumers put that content on their personal pages, on their social networks, and share it with their friends? The question for marketers is “where does content that compelling come from?” The answer seems to be “from users.” Then the question becomes, “how and where do we seed with marketer-initiated content that will generate great user content?” That’s the marketer dilemma of Web 2.0!

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