Social media hype outpaces reality for marketers

No recent phenomenon has generated as much hype and anticipation as social media, but the potential offered by these emerging channels is still far from realised.

Millions of people across Hong Kong are connected via social networks, with tens of thousands more signing up every day to become part of a movement rapidly changing the way we communicate.

For consumers, it has become an ingrained part of the online experience. For brands, it remains a very different story. Social networking needs to be part of your marketing plan. Your company needs a social media strategy. You must be on Twitter - or so they say.

But for all the buzz, there is still a reluctance among brands to embrace social networking as the all-powerful medium it is often positioned to be. And it’s easy to see why.

Beyond the obvious argument of mass aggregated audiences, there are still few convincing answers as to why brands should engage these platforms - and even less clarity around how to monetise them.

That said, a growing number of the territory’s biggest brands, along with smaller SMEs, are beginning to realise that with innovation, a little know-how and budget, social media can be a powerful complement to any marketing plan.

“There’s no question the boom of social networking and the use of global communications for customers is a platform smart companies in any sector will want to leverage,” says Julie Lyle, chief marketing officer of Prudential Corporation Asia.

“But by the same token, the vast majority of it is in its embryonic stages, much like when the internet came into the marketing mix, which by and large was not that effective.”

And herein lies the problem: how effective is social media?

For all the activity on Facebook, Twitter, Sina, Foursquare, blogs and community forums, measurement remains fragmented. Marketers are largely relying on in-house metrics, while the value of a Like or a retweet remains unclear.

The economics of Like

A joint report released by Facebook and The Nielsen Company last year suggested marketers still do not fully understand the value of social media marketing.

The report, Advertising Effectiveness: Understanding the Value of a Social Media Impression, analysed data from more than 800,000 Facebook users across 125 campaigns from 70 advertisers. While many studies have examined how trust among friends influences purchase decisions, this research aimed to go further.

“It’s critical that we understand advertising not just in terms of ‘paid’ media, but also in terms of how ‘earned’ media - advertising that is shared among friends and beyond - and social advocacy contribute to campaigns,” says Sean Bruich, head of measurement research at Facebook.

The rush for Facebook connections intensified when the platform shifted from fan pages to Likes and introduced its Like button across the web.

Beyond simply signalling approval, Likes serve a functional role. Once a user “likes” a brand, that action is shared through their News Feed, creating earned media impressions among their network.

Updates from brands can then appear in users’ feeds, with further interactions generating additional reach.

This network effect has become increasingly important in a landscape where users spend more time on Facebook than any other site.

A separate study by DDB into the value of Facebook fans suggested brands are still in a honeymoon phase with their audiences, with fan pages rated highly. However, it warned this would not last unless brands consistently delivered quality content.

A credibility factor

So how do brands keep audiences engaged? Like a television channel, platforms such as Twitter and Facebook require programming - regular content, interaction and editorial direction - argues Jeremy Woolf, senior vice president and global social media practice lead at Text 100 Hong Kong.

“While many companies have created social media presences on Twitter and Facebook with a view to sharing their happy news with keen fans or followers, these channels need editorial direction, management and investment,” he says.

Woolf adds that while 2010 was a year of experimentation for many businesses, 2011 must be a year of action.

“This will be the year that social media evolves from being tacked on to marketing efforts to becoming fundamental to business strategy - particularly through consolidation around the so-called ‘Big Four’: Twitter, Facebook, YouTube and LinkedIn.”

PR disconnect?

Last year, WPP CEO Martin Sorrell told a room of marketing executives that social media may be better suited to PR than advertising.

“It’s all very sexy, but if you’re a CMO and you commit a greater proportion of your budget to Facebook, Twitter or YouTube, we don’t actually know whether investing an extra dollar in new media is better than investing an extra dollar in traditional media,” Sorrell said.

“I would caution that the jury is still out as to whether new media is more about promotion rather than branding. It’s all a question of balance.”

That view has gained traction, with many arguing social media functions more as a reputation channel than a traditional marketing platform.

Tim Williams, founder of Ignition Consulting Group, agrees, suggesting the issue lies in how agencies approach the medium.

“Marketers are realising that it is not really media in the same way mass media is media. It’s not a medium - it’s one-to-one communication,” he says.

“It’s not presentation, it is participation. Agencies know presentation, they don’t know participation. PR firms do. Social media will never replace mass media.”

Local or global?

While global platforms such as Facebook, Twitter and YouTube dominate, local social networks are becoming increasingly important.

Karen Tam, senior manager of promotions and advertising at Harbour City, says social media plays a valuable role alongside traditional channels.

She points to early adoption of blogger outreach and local platforms such as Jiepang and Sina Weibo.
“Harbour City is very active in Sina Weibo. We were one of the first corporate accounts and now have more than 188,000 followers,” she says.

Tam adds that while content remains critical, the team is still exploring how social media can best complement broader marketing efforts.

“We can get direct customer feedback from various forms of social media, and it is useful for marketers.”

Nowhere is this trend more evident than in Mainland China, where local platforms such as Renren, Kaixin001 and Qzone have built large, engaged audiences.

So where to from here?

Facebook founder Mark Zuckerberg has predicted that within five years, every industry could be reshaped by social dynamics.

“We think that every industry is going to be fundamentally rethought and designed around people,” he said.

But many in the industry believe that transformation will take time.

Bob Pickard, president and CEO of Burson-Marsteller Asia Pacific, says few companies are making bold moves.

“Most appear driven by short-term considerations or are hampered by concerns around resourcing, cost or loss of control,” he says.

A Nielsen study shows social media already dominates internet usage in Asia Pacific, with Facebook, Wikipedia and YouTube among the region’s most visited platforms.

“With three quarters of the global internet population now participating in some form of social media, businesses in Asia Pacific can no longer afford to simply observe - they need to embrace it,” says Megan Clarken, managing director of Nielsen’s online business in Asia Pacific.

At senior levels, social media is now firmly on the agenda.

“It’s not dominating conversations, but it is certainly part of every conversation,” says Prudential’s Lyle.

“We look across the mix with every initiative to find which tools make the most sense. The challenge is how to make content intriguing and relevant so stakeholders engage with you.”

So is social media for everyone?

“Yes,” says Lyle. “But it’s different for everyone. We can’t all speak to consumers in the same way, on the same platforms.”