Small Business Labs

Baby Boomers and Social Media

Marketing Charts has a good article on a survey of online baby boomers (born 1946 to 1964) social media usage.  The survey was done by ThirdAge and JWT Boom.   Key quote:

"People over age 40 participate heavily in word-of-mouth and value personal recommendations and expert opinions, but they have not embraced social networking or blogs despite being heavy users of other online services..."

The survey said only 22% of the respondents used social networking.  It also found their boomer respondents expressed "little or no interest" in the following activities:

• 67% writing blogs
• 63% in participating in general social networking
• 55% listening to podcasts

I find the survey results credible and roughly consistent with other studies on this subject.  I also see this data as "half full."  By that I mean I think it is impressive that 22% of online boomers are using social networking.  Given the short period of time online social networking has been around, this indicates that boomer social media usage is growing very rapidly. 

But it also means that while growing rapidly, online social media usage is not yet mainstream for baby boomers.

I saw this on the Masterful Marketing blog via MyVenturepad.

Blogs Go Mainstream; Advertisers Follow

eMarketer has a report out saying that blogs have gone mainstream and will continue to grow rapidly over the next 5 years.  Key quote on the growth of blogs:

"The number of people creating blogs in the US will also grow, reaching 34.7 million people by 2012—16% of the Internet population. By contrast, there were some 22.6 million US bloggers in 2007, a number that correlates to 12% of Internet users."

Blog related advertising is also expected to grow:

"Buoyed by these massive levels of consumer engagement, US blog advertising will reach $746 million in 2012, up from $283 million in 2007."

Duct Tape Marketing on Social Media Marketing

The always excellent Duct Tape Marketing blog has a post on social media marketing called The Ultimate Social Marketing Question.  According to the post, the ultimate question is:

"What do I want the relationship with my customer to look and feel like?

I would add to this "what do my existing and future customers want our relationship to look and feel like?" After answering these questions you can (quote from the post):

"...determine if you can enhance and amplify that relationship by setting up a Facebook group, finding and being found on LinkedIn, installing Twhirl to keep up with your Twitter world, creating and promoting company videos on YouTube, building networks within StumbleUpon or, lest we forget the obvious, blogging."

You can also decide not to use social media marketing if it doesn't fit your needs or the needs of your customers.    

I've posted recently on the debate around whether or not to use social media marketing methods.  Duct Tape's post provides a simple and concise framework for deciding. 

Facebook and Mass Interpersonal Persuasion

Fast Company has an interview with Stanford Professor BJ Fogg called Why Facebook is Even Bigger Than You Think.  The subtitle is "why the social networking site is the most powerful thing ever invented." 

While I think things like the wheel, printing press, steam engine, antibiotics and few other inventions might place just slightly ahead of Facebook on the all time list, online social networking is clearly important.  Key quote on what Fogg calls mass interpersonal persuasion:

"Facebook takes very strong interpersonal influence dynamics -- the way people persuade each other face-to-face in small groups with peer pressure, reciprocity, flattery -- and allows those to be used on a mass scale because your social networks are built in. Friends influence friends, who influence friends, and that keeps rippling out. They can reach people very quickly for very little cost and ordinary people can set these in motion. It doesn't require a big broadcasting company or a big PR campaign. If you get the right message in the right way, you'll effect millions of people. Facebook has been the best platform for that, but I think in the future it will be commonplace."

The Society for New Communications Research recently released a study showing that consumers are increasingly using social media as described by Fogg.  And while I believe online social media usage is not yet fully mainstream, the era of mass interpersonal persuasion has clearly begun.

Social Media Not For Everyone - At Least Not Yet

The Small Business Trends blog has two "point-counter point" posts on social media.  One is called Why Social Media Should Be a Key Ingredient in Your Marketing Mix and the counter-point is 10 Reasons I Won't Use Social Networking.

Obviously I'm biased towards social media.  I'm an active blogger and I serve as a Senior Fellow and board member at the Society for New Communications Research - a non-profit think tank focused on researching and promoting social media.  And in my work I've seen a broad range of companies and people substantially benefit through the use of social media.

But using social media as a marketing tool is not for everyone - at least not yet.  The reason is simple.  Despite the hype, active online social media usage is not close to ubiquitous.  Many businesses serve markets where their customers and prospects do not use or even know about social media.  So matter how good your social media marketing is, it won't matter if:

1.  Your target market is not online.  Not everyone is online.  According to Pew Internet, about 25% of American adults are not online.  Generally speaking older, lower income and rural households are less likely than average to be online.

2.  Your target market is not aware of and/or doesn't use social media.  Despite all the hype, most online users don't actively use social media.  Less than 60% of online teens have Facebook and or MySpace accounts.  The numbers for adults are obviously much lower.  And while Twitter usage is growing very rapidly, it is still a niche service and less than 1% of online Americans actively use it today.  Pew's research also shows that roughly half of online Americans use online connective technologies sparingly and many "bristle at electronic connectivity."  These folks may be online, but they are not big social media users.

3.  Social media plays no role in the purchase decision process for your products or services.  Even if your customers are online and using social media, they may not be using it in a way that matters to your business.  I was recently involved in a study measuring the effectiveness of a B2B social media marketing campaign.  The target market was online and relatively sophisticated in their use of social media.  But for a variety of reasons, their social media usage had almost no impact on their purchasing decisions for this product category.  Because of this the campaign was ineffective. 

For many small and personal businesses using social media makes enormous sense.  And over the next 3-5 years the growth of social media usage will make it an increasingly important part of the marketing mix for many more businesses.  But like all marketing methods, make sure social media marketing fits with your target market before making a major committment.      

Fast Company on Blogs as Businesses

Fast Company has a story on blogs growing up and becoming real businesses called The Big Tease.  It focuses on one of the most successful and interesting blogs - the Huffington Post.  Key article quote from Arianna Huffington:

"Blogs need to do the hard work of breaking more stories," she says. She's hiring reporters, and also diversifying her readers' heavily political diet, adding sections on business, entertainment, and lifestyle.

The Fast Company article goes on to say  "What she envisions feels quaintly familiar--like a bits-and-bytes version of something we've seen before. In fact, there may be a word for it: newspapers."

The media and technology industry tends to refer to blogs and other social software as "consumer generated media".  What this term misses is the enormous growth of small and personal media companies.  While consumers are actively creating online media, online publishing tools have also led to the creation of thousands of small media companies. 

These new media companies are mostly focused specialized niches that are too small for traditional media to serve.  However, as the Huffington Post shows the new media companies are also capable of competing directly with traditional media. 

Blogging for Money

Lots of discussion these days about blogging for money.  Problogger, which in my opinion is one of the best blogs on how to make money blogging, has a blog post called "How Much Money Do Bloggers Earn Blogging".  It covers the results of an informal survey conducted by ProBlogger.  They asked how much bloggers earned from blogging in the month of October.  Their results:

• 28% earned nothing
• 49% earned under $100
• 23% earned over $1000
• 16% earned over $2500
• 9% earned over $15000

The survey had roughly 3000 respondents from ProBlogger's readership, which is obviously very skewed towards folks trying to make money blogging. 

This data reflects the two realities of the business of blogging: (1) most bloggers make little or no money directly from blogging; and (2) a small number of bloggers make substantial amounts of money directly from blogging.   

The reason for this is pretty simple.  Generating substantial amounts of revenues blogging can be done, but is not easy. 

Getting Customers to Answer Customer Questions

The user generated review company Bazaarvoice has released a new product called "Ask & Answer" that allows customers to answer other customer questions.  From their site:

"The Ask & Answer service is the first to encourage shoppers to post and respond to specific questions about products and services directly alongside standard product information."

I found their reasons why this is a good thing for online retailers very interesting.  They of course mentioned the high cost of support, increased customer satisfaction and increased word of mouth.  But they also focused on search engine results.  Quote on this from their site:

"Ask & Answer search engine optimized (SEO) landing pages effectively attract natural search traffic from Google, Yahoo!, and other leading search engines."

Their pitch is word of mouth and SEO.  It seems marketing may be coming down to simply those two activities.

Conversational Marketing Set to Surpass Traditional Marketing

The Society for New Communications Research (SNCR) released a study indicating that spending on social media and conversational marketing will exceed the spend on traditional media by 2012.  The study is a joint effort between SNCR and advertising guru Joseph Jaffe.  The study results are incorporated in Jaffe's new book Join the Conversation.  Driving the need for conversational marketing is the new prosumer.  From the book website:

"the “prosumer” (or producing consumer) comprise a small fraction of the people who buy your product but have a disproportionate ability to create, harvest and - electronically or otherwise - disseminate an enormous raft of uncensored messages about your brand to their “closest strangers”.

As part of the study, SNCR, assisted by TWI Surveys Inc., surveyed senior PR, marketing and marketing communications professionals.  Key findings:

• 70% of the respondents reported they are currently spending 2.5% or less of their communications budgets on conversational marketing
• Two-thirds of the respondents plan to increase their investment in conversational marketing within the next twelve months
• 81% of the respondents project that by 2012 spending on social media and conversational marketing will equal or exceed the spend on traditional media.

While Jaffe's book focuses on large corporations and major brands, the same shift towards conversational marketing is impacting small businesses. 

Disclosure:  I'm a board member and Senior Fellow at the Society for New Communications Research.  I was not actively involved in this study, but I did review the research plan and study methods.

The Good (and Bad) of Online Users Reviews

Tim Berry has a good post on his Planning, Startups and Stories blog on some of the growing Internet problems, including the downsides of online social media.  Tim covers a lot of ground, but I focused on his points on fraudulent user reviews and social media rankings. 

As Tim points out, many online user reviews are biased and/or bogus.  There is no question that one has to skeptical of online reviews, and everyone should know that organizations like Subvert and Profit exist and are influencing reviews and online social media rankings.  However, despite all the problems I continue to believe online user reviews add value to purchasing decisions.

About a year ago we did a qualitative, ethnographic research project looking at how consumers go about researching products online, where they go for trusted information, and whether or not they think they can find trusted information online.  Our research focused on experienced online broadband users (online for at least 5 years, broadband users for at least 2 years), and looked at how they evaluated a health-related consumer product.  The work was funded by a group of corporate sponsors.

The results of the research were clear.  The online users we researched felt they could discern between good and bad information online, and were very confident that they could find trusted information online - and they saw user reviews as a very good source of information.  It was also clear from evaluating their information gathering results that their research mostly did result in them finding "good" information, or at least information that we viewed qualitatively as "good".

Their decision on whether or not a site and/or consumer reviews could be trusted was based on: 

(1) The site the information or reviews was on.  If the site was perceived as high quality - which they defined as: looking professional, having lots of traffic, having a good reputation and perceived as written in professional manner - they were likely to trust information from the site.  Community sites that the online user participated in were considered especially good sources of information. 

(2) The number of reviews and the consistency of the reviews.  The greater the number of reviews (and reviewers) and the more consistent (positive or negative) the reviews were the more likely the reviews were viewed as good sources of information.

(3) The perception that the review was written by someone in a similar situation or facing a similar problem.  If the review was viewed as being from someone who faced a similar issue or problem, the review was more likely to be trusted.   

(4) The views of "alpha reviewers".  Many review sites have reviewers that have become opinion leaders or alpha reviewers.  They post often and often reply to questions.  They tend to have high user ratings if the site supports them.  Alpha reviewers on a trusted site were considered very trustworthy.

What I found interesting was that the group we studied treated the process as an information outsourcing project.  They viewed online information sources and review sites as a way to tap expertise they did not have or did not want to develop.  While our research focused on leading edge users, other research has shown that mainstream Internet users believe they can find trustable information in user reviews.  One interesting piece of recent research from Bridge Ratings, shows that "strangers with subject matter experience" are 2nd only to "friends and family" in terms of trust.  Many of these trusted strangers are likely found online.

Access to online information clearly empowers consumers with information and information sources that weren't available prior to the Internet.  It also puts a research burden on the consumer, requiring them to be a smart online researchers and networkers, and making them decide what information is good and what is bad.  The Institute for the Future calls this "the burden of empowerment", and consumers increasingly face the burden of having to make complex decisions across many aspects of their lives (retirement, health care, careers, etc.). 

Although a growing number of consumers are able to deal with the burden of empowerment, it is clear that not all consumers are up to these tasks. Because of this there will continue to be, unfortunately, online consumer abuse and fraud - and consumer decisions based on bad information.  However, I believe overall the good of online information sources - including user reviews - greatly out weighs the bad. 

More information and information transparency makes for more efficient markets, and we all benefit from more efficient markets.  I also think business integrity will become increasingly important because the increased flow of information will expose bad corporate behavior.  Simply put, news about firms without integrity will quickly spread, and those firms will be punished.