Social Media – Panacea or Fad?

Depending on whom you ask, Social Media is either the ultimate communications tool to build your brand and make your customers love you or simply the latest shiny new toy for marketers wanting to appear cutting edge but with little or no return on investment.

My 2c worth – it is both . . . and neither.

For a start, Social Media is not a media at all – certainly not in the traditional mass sense. Sure, the 500 million (and counting) people on Facebook are a large audience but they are not there to simply watch and listen, they are there to participate. They constitute a very large number of interrelated communities where like minded people congregate to talk about and share – well, just about anything.

Broadcast or Chat?

Do you want to talk to the population or speak with a defined community? ie are you looking to broadcast or have a conversation?

If you are a large company like Telstra and wish to position your brand with the whole of Australia then there is certainly a place for this but Social Media sites are not that place. Consider that Telstra has 4363 Facebook friends (last I checked) – less than 0.02% of Australia’s population. Even if we assume that just half of the population are in Telstra’s target market this is still a very small result for the investment.

However, if you have a defined audience with a common interest that relates to what you have to offer then Social Media may provide an opportunity to join or start a conversation.

We Haven’t Sold a Small Car Since 1997. Want to Buy One?

In launching the Fiesta in the US market (the first compact car launch since they withdrew from this segment 13 years ago), Ford could have produced a great television commercial. Instead, they gave 100 consumers in their demographic a free car for 6 months. In return the consumers had to complete monthly “missions” and communicate about them in their Social Media communities.

Ford received 6.5 million YouTube views to the 700 videos produced, 3.4 million impressions on the “Fiesta Movement” on Twitter and 670 000 hits on the photos taken by the 100 participants. These are big numbers but so what? More important than “hits” is that Ford was able to initiate a conversation with a new audience. 50,000 consumers (97% of whom had never owned a Ford) requested information about the Fiesta and Ford sold 10, 000 units in the first 6 days of sales.

Ford identified the niche that it wanted to communicate with. They facilitated a conversation and then allowed them to speak with each other, sharing their own experiences and making up their own minds.

Ford provided the context but let its audience develop their own content. This is the key to Social Media success – marketers can be part of the conversation but cannot control it (or do so at their own peril).

What Is Your Social Media Strategy?

If you are starting with this question then you run the risk of falling into the “shiny new toy” camp. Before you work out your Social Media strategy you first need to work out if you need one at all. Consider these questions first:

What are your business and marketing objectives?

What are your business and marketing strategies for meeting (or exceeding) these objectives?

Does Social Media fit with this?

Who is your target audience and are they part of social media communities? If so, are they open to your brand joining their conversation?

Only then can you begin to develop a strategy for engagement.

To Conclude

In short, Social Media provides a great opportunity for brands to engage with defined audiences but you must be prepared to commit to a conversation, not simply a message broadcast.

Be clear on your objectives and broader strategies and only then should you consider if Social Media is appropriate.

Remember, Social Media is neither a panacea nor a fad, simply a potential tool in a marketer’s arsenal.

Lessons From The Last Year

No doubt about it, 2009 wasn't easy but as they say, we learn through adversity. Over the summer I reflected on what I learned in 2009 and in gathering similar feedback from other marketers I have compiled a list of lessons from the last year.

I am not as smart as I thought I was nor as dumb as I feared. When times are good, it's easy to believe you, or your team, created the momentum that you are riding. When times are not so good and that momentum is gone and you're still doing the things you've always done, you realise that you're not as smart as you thought. If you have the good sense to realise that the macro-environment has changed and you adjust, you're not as dumb as you feared. That's what happened to me and our marketing/development efforts in too many ways to detail in this post. A little humility and a lot of hard work are required in good times or bad.

The brand matters except when it doesn't. Our brand mattered throughout 2009 and continues to matter. What the brand doesn't do is close the sale. In 2009, every sale was harder to close for a myriad of reasons: the customer didn't want to spend the money, the customer didn't have the money to spend, prospects were delaying buying decisions, competitors' pricing didn't make sense, etc. If you believe your brand is bullet-proof, think again. You've got to prove everyday that your brand has value and do the hard work to nurture a prospective customer to a close.

Don't lose your head while those around you are losing theirs. In 2009, some pricing decisions from in the market were astounding in their lack of foresight and/or possibly desperation. In some cases, companies seemed to be giving away their products or services. While these firms made have had strategic (or cash flow) reasons for these pricing decisions, they confused the market. Smarter companies (or at least that weren't faced with staving off immediate oblivion) responded and continue to respond to pricing pressures but didn't lose their heads because they knew that 2010 was coming, and then 2011, and so on. They took the long view in order to be here to provide the same level of quality and service.

Moving forward requires taking a step back. When things get hard it is tempting to assume the "head down - tail up" position and push forward. The problem is that in this position you can't see where you are headed and what obstacles might be in your road. There are times to run hard but don't forget to pause and consider the bigger picture, question your assumptions and think differently about your business, your market, your competitors and your approach.

Relationships are key but hard times touch everyone. When the client who loves you and your work but doesn't have the money, s/he doesn't have the money. When the intermediary who has worked with you for years and believes you are the best choice for a number of reasons has a client who is only interested in price and the market is full of extremely low-price competitors, the relationship with that agent won't bring the sale. That doesn't diminish the importance or power of relationships. They need to be continually nurtured through good times and bad.

Testing is good but not when it hurts. When budgets are tight you have to make sure every dollar is working hard. If you don't test you won't improve but be honest about what it really costs and make sure that even allowing for unsuccessful activity (how else will you learn?) your overall cost per acquisition is within your allowable. This applies in good times and bad but in tough times it is more challenging due to generally lower response rates.

It's better to be the tortoise than the hare. Short-termism may save the day but if you take your eye off where you are headed and compromise those things that you (and your business plan) hold sacred then when the fog clears you may find yourself far off course and unable to get back to where you - and your brand - need to be. Weigh every seemingly short-term decision against the longer-term consequences. Perseverance and a daily focus on the finish line can get you there.

I'm looking forward to 2010 and the challenges that it will bring.Bring it on!

Circulation Revenue - The other Revenue Stream

This is a presentation that I recently gave at Publish Asia 2009. It examines why newspapers should not lose focus on circulation revenue in the pursuit of advertising revenue and how it is possible to both increase price and hold circulation.

Circulation Revenue - The other Revenue Stream

View more documents from ebaral.

Thriving Beyond Surviving

The business environment is tough with low consumer and business confidence. Budgets are being cut and marketers are hunkering down to ensure that their brands and businesses (and they themselves!) survive this difficult period. This is kind of action is certainly appropriate for the times but business cycles are called cycles for a reason and it is only a matter of time before things improve. Smart marketers are planning for the inevitable upswing now to ensure that they remain ahead of this curve and set themselves up to thrive beyond this survival period.

Which Way Is Up?

How will you know that we are back on an upswing? If you wait for backward looking economic data you will only know after the event and your competitors may have stolen the jump on you. What are the forward looking indicators for your industry? Sustained stock market growth (how do you define this?)? Perhaps it’s the lunchtime queue returning to your local sandwich shop? Work out your harbinger of growth and start to monitor it now.

What then? Once you are reasonably confident that the upturn is nigh what will you do to leverage it? Plan your activity now so you’ll be ready to act quickly. Will you return immediately to your previous level of advertising (assuming you have cut now) or slowly ramp up? Will you need to bring your customers along on a new journey or reassure them that this in indeed a good time to buy / buy more? By knowing what you need to do and planning your lead times you’ll be best placed to get the jump on your competitors.

Plan Now, Save Later

Governments around the world are working hard to avoid deflation by flooding the economy with stimulating cash, however, policymakers have a poor record when it comes to overshooting the mark. Many commentators (including Warren Buffett) warn that this could lead to significant inflationary pressures (and potentially stagflation).

The best protection against rising prices is to lock in low prices (hey, I never said I was a rocket scientist!). What future costs can you hedge now? Is now the time to lock in future pricing with suppliers? Obviously be careful of committing to purchases that you may need to extract yourself from if this recession turns out to be longer than you initially expect.

Cyclical vs. Permanent

The global financial crisis had a significant impact on all manner of markets. Some of the changes we have seen will revert when things improve but inevitably we have experienced some fundamental shifts in consumer behaviour that will turn out to be more permanent. For example, will consumers revert back to name brands after trying supermarket generics and, in many cases, finding out that they are not too bad?

What changes are you experiencing in your market? Will these revert or are there some fundamental changes to be made in your business model or product offering? Now is the time to plan and commence implementing these changes.

Great Tactical Advertising

The photo below shows how a local BMW dealer in Santa Monica responded to a national campaign by rival Audi. Bravo!








The Audi billboard promoting the Audi A4 on the left reads "Your Move, BMW". The BMW response shows the BMW M3 with the headline "Checkmate".

Marketing in a Downturn

All the textbooks say spend up in a downturn to set yourself up for the inevitable upswing - but how many marketers are doing this? McDonald’s is one marketing company that certainly is looking to make hay whilst the sun is obscured behind the storm clouds with advertising spend tipped to increase by just under 5% this year according to the Australian Financial Review.

McDonald’s Australian chief, Peter Bush, was quote stating “We see an increased ad budget as a source of competitive advantage. At a time when other companies will be cutting back, we’ll be able to increase our presence, market share and sales.”

Research from the early 1980’s backs this up. Tracking the performance of 600 companies in the United States researchers found that the companies that decided to hold or increase their ad budgets during the 1981-82 recession had significantly higher sales after the US economy recovered. Companies that advertised aggressively during the recession had sales 256% higher than companies that did not continue to advertise.

When bottom lines are threatened it is tempting for companies to look for a quick fix by cutting costs. This then raises the age old question – Is marketing spend a cost or an investment?

I’m not suggesting that marketers should be reckless, clearly we need to ensure that we extract maximum shareholder value from every dollar that we spend but economic downturns can provide an opportunity to get a leg up on the competition and position our brands to extract maximum leverage from the current environment as well as the during the inevitable upturn.

Brand Strategy

Now is a good time to revisit your brand strategy (if you haven’t already). This is not to say that you should be reinventing your brand but you should consider tweeking the expressions of your core values to ensure that they reflect the current environment and maximise opportunities.

Accepted wisdoms of the last few years may no longer apply so question everything. For example, conspicuous luxury consumption is out, austerity is in. Foxtel recognise this in their recent promotions, positioning their service as a cost saver (no videos and movies, affordable bundle with no install cost and short contract) rather than a luxury.

At a minimum you should endeavour to keep your share of voice, however, you may find that you can even grow it on the same (or lower) spend.

Sales Promotions

Sales promotion should similarly tap into the current mood. Now may not be the best time to give away a “frivolous” prize but rather to give your customers (and community) something that is more meaningful. eg

1. Value bundles – ie Meal deals, price caps, etc

2. Value adds – Bonus (useful / valuable) widget

3. Support for charity – This is a classic win-win-win. Your customer feels good about purchasing from you, your brand affinity is increased and charities get a leg up at a time when donations are down.

Leverage Every Touch Point

Your company communicates with its customers (and potential customers) in many different ways but are you maximising your returns on these. Bill inserts, customer service contacts, etc. For more on this see my 4 September, 2008 post http://edwardbaral.blogspot.com/2008_09_01_archive.html


2009 is not a time for the faint-hearted. Be brave, think differently and make sure your brand is ready for the inevitable upturn – their called “cycles” for a reason!

Would You Want to Be Friends With Your Brand?

Ask someone what a brand is and most people will say that it’s a logo or a name. Dictionary.com defines a brand as “kind, grade, or make, as indicated by a stamp, trademark, or the like: the best brand of coffee”.

Such a definition is akin to suggesting that a person is simply their name, however, a brand, like a person, is more complex.

Just as a person demonstrates outward signs of who they are such as hair colour and clothing so to does a brand have outward expressions such as logo and advertising.

But ask the people who know you well to describe you and their description will generally go beyond looks to describe your personality and the history and experiences that they have with you will colour their view.

And whilst you may have different personas at work and at home the essence of who you are doesn’t change. Similarly, whilst a brand may express itself differently to different audiences the brand essence must remain consistent in all spheres or risk appearing schizophrenic.

Every experience that your customers have with your company / product is a brand experience. You might have the coolest logo and the funniest ad but how will a customer feel about your brand when they are cut off by a harried (rude?) customer service representative after sitting on hold for 30 minutes?

Brand management in many respects is like image management. It is not simply about packaging and advertising but taking responsibility for every experience that a customer (or potential customer) has with your brand. Sure, some aspects of this relationship are not generally under a marketer’s direct control but your customer doesn’t care about “channel management issues” and the like. You can either take responsibility for optimising the experience or you can put your head in the sand.

Just as a strong friendship will endure mistakes and tensions (have you ever left a friend waiting somewhere because you forgot that you were meeting?) so too a strong brand relationship will endure occasional “slip-ups”. In order to endure, however, you must invest in your relationships with your customers so that they know you respect them and are dependable.


In short, brands are as complex as people. Every interaction that a customer (or potential customer) has with your brand will impact on their perception of it.

Is your brand someone that your target audience would want to be friends with?