February 15, 2012

Embracing Social Beyond Marketing

There’s a very interesting article on the HBR Blog Network called “Rules for the Social Era” by Nilofer Merchant. Definitely give it a read, but the big takeaway I got was this:

“social is more than the stuff the marketing team deals with. It’s something that allows organizations to do things entirely differently — if we let it become the backbone of our business models.”

Social – both in terms of businesses and technology – certainly deserves consideration beyond a piece of the marketing mix. But is it a fundamental shift in the way companies need to approach their business? Or just a short-term phase by which businesses have come to identify with consumers?

More and more I’m seeing the idea of social extending far beyond the marketing function within an organization. At a very base level, social success is achieved via transparency and dialogue – and these are things that can’t happen superficially. The companies that really excel are the ones that behave “socially” to their core. It’s not just a line item in a marketing plan – it is their plan.

Zappos is a great example of a company doing it well. Netflix is a social company – sure, they’ve made some missteps lately, but their likely rebound will be largely due to the way they embraced open dialogue to address their problems. In a sense, they had an honest conversation with their stakeholders, presented their case, heard the rebuttal, and adjusted accordingly.

Bank of America had a similar issue when they tried instituting a $5 fee for debit cards. They put something out there, the public reacted negatively, BoA took it back. But, the big difference I saw in the handling of those situations is that with Netflix I saw and heard directly from Reed Hastings, their CEO. I never heard from BoA’s CEO (see, I can’t even name him/her).

What’s the big deal you ask? Well, I still have my Netflix subscription. But I’m slowly migrating all of my banking away from BoA (to a combination of ING and Fidelity).

It’s not that a personal touch to communications will sway me. It’s that some companies operate knowing from the outset that they’ll make missteps and that it’ll be a constant touch and go with consumers – in a positive way. Others make blunders and try to backtrack and fix them. They didn’t anticipate consumer backlash or engagement, they simply reacted to it.

What this means is that companies need to build social engagement into their business model – product development, positioning, market entry, etc. – and it has to be a constant force underlying everything you do. It has to be an expected element of your business, not a reactionary tactic.

April 7, 2011

Did the Cola Wars Prove Social Media Doesn’t Have Value?

Recently it seems every social media marketer out there fears the worse for their profession in the wake of news that Pepsi has dropped to the #3 cola brand for the first time in forever. Many have pointed to their decision to forego advertising on the Super Bowl in favor of a purely social media driven campaign. Not only was the campaign – the Pepsi Refresh Project – driven only on social media, but it was centered around a cause marketing push rather than a product push.

First I’ll tackle the debate around whether cause marketing translates into sales. Studies have shown that consumers do prefer brands tied to a cause over ones that aren’t. However, there’s also a strong correlation with the particular non-profit partner to driving that preference. Pepsi Refresh is more of a grassroots effort that didn’t tie into one particular cause, but rather into any cause that entrants put forth. While the wide range and general “doing good” message are admirable, consumers are less likely to personally identify with the campaign. When you try to be everything to everyone, you end up being nothing to everyone.

But the real question is – is this a knock against the merits of social media marketing? In short, I think not. On the surface, you hear that the company lost market share during this time and assume that its marketing mix is to blame. Well, perhaps, but this is an instance of correlation not equaling causation. So many factors go into play that it’s impossible to pin it to one thing. You have to really look at the goals of the program (which I confess I don’t know). Obviously everything drives sales, but what were the specific metrics they were measuring? Without that knowledge, I really can’t tell whether they met their goals.

The point being, nothing happens in a vacuum. This campaign wasn’t the only marketing Pepsi did. There’s a ton of other factors (distribution, coupons, etc. etc.). If their goal was to increase public perception of the company, with the thinking that doing so in combination with everything else they were doing would increase sales, then can we really blame this campaign? Or do we blame the impact that perception has on sales? Or do we blame another element of their marketing mix?

Another component that has received lots of press is their foregoing an ad on the Super Bowl. I say big deal. Super Bowl advertising captures a moment in time (granted a lot of eyeballs, but still only a moment) and you can’t blame loss of market share on absence in this space. However, you can blame a much longer-term focus on social media at the expense of traditional media. Without basic product promotion – let’s face it, hammering home the simple Pepsi messages via TV commercials does work – your social marketing, especially a cause marketing campaign, are left untied to a product. I know, it’s not an unbranded campaign and who doesn’t know Pepsi. But, the campaign lacks a call to action that drives sales. It’s very tangential – Pepsi does good, you like Pepsi for that, therefore you buy Pepsi over Coke. Makes logical sense, but consumers aren’t logical.

So at the end of the day, where does this leave us? We know the campaign did great from a top-line social media metrics standpoint – millions have engaged on some level with the campaign. So why didn’t it work? Same as I said above, marketing doesn’t happen in a vacuum. If the other parts of the marketing mix failed, no amount of social media success can prop up the brand. Especially not a cause-driven vs. product-driven campaign. Moral of the story – don’t put all your eggs in one basket, don’t throw away all other channels to focus on social media, and don’t expect social media to be the magic bullet.

And just so we’re clear, I completely applaud Pepsi for what they did. The campaign is truly amazing in what they’re giving back to the community. They took a gamble – over 20 years of Super Bowl advertising that seemingly worked, and they rolled the dice on trying something new. They’ve been #2 to Coke forever, sometimes you just have to change it up and see if you can move the needle.