Social marketing evolves

31 March 2011

STAMFORD: Digital marketing will help shape purchase decisions covering 80% of consumers' discretionary expenditure by 2015, research provider Gartner has predicted.

In a new report, the company argued habits among the online audience are apparently returning to the internet's "roots" as a tool for interaction, originally replaced by "Web 1.0" push marketing techniques.

The current environment therefore demands conversational models and communications tailored to the preferences of individuals, and holds out the promise of more effective campaigns than ever before.

At present, there are an estimated 1.8bn netizens worldwide, and this number is growing fast, especially in countries like India and China.

By 2014, 6.7bn devices will boast web connections, ranging from desktop PCs to smartphones and tablets.

An indicator of this emerging trend is that US mobile marketing spend reached $877.2m last year, a 138% improvement on the $368m recorded across 2009.

Looking ahead, Gartner forecasts corporate investment in social customer relationship management applications should rise from $600m during 2010 to $1bn by 2013.

"Marketing departments are the most likely organisations to launch social projects in a company," it added.

"However, most marketers still need to shift much of their traditional thinking regarding marketing, campaign management, its channels and approaches."

A useful example is the Golden State Warriors team from the NBA, which developed a contest tied to the roll out of its new logo, leveraging Twitter, Facebook and YouTube.

An initial outlay of below $5,000 generated incremental ticket sales valued at $440,000, demonstrating the results that follow when passionate fans participate in key events.

In contrast, Gartner revealed mass marketing efforts typically deliver a 2% response rate, a figure that is actually falling, a decline not halted by online strategies thus far.

"Just using digital channels is not the answer," Gartner said.

"Although most marketers are using more than one digital channel, their approach is no different from a spam model, where success is driven by high volumes and attempting to make a profit from nearly everyone who accepts the offer."

Rather, firms must now adopt addressable branding and advertising, embracing measurable, personalised channels from in-game ads and podcasts to video and banners only hosted on extremely select sites.

"Because these digital marketing activities are addressable, customers can respond to, and interact with, a brand in real time (that is, click on a display ad, search for more information or request information," the study said.

Contextual approaches also yield advantages by assisting shoppers at important stages of the purchase funnel, as might be achieved via location-based apps supplying directions to bricks and mortar stores.

Further alternatives could involve search engine optimisation for specific enquiries, and augmented reality tools allowing consumers to visualise what items such as pieces of furniture may look like in the physical world.

Social marketing is a third vital tactic, be it exploiting product review sites, branded communities and co-creation or driving word of mouth on Facebook and similar platforms.

"By 2015, internet-supported social marketing processes will influence at least 80% of consumers' discretionary spending," said Gartner.

Finally, transactional marketing - say email, virtual gift cards and loyalty schemes - can exert an impact at the moment of truth, alongside fostering deeper long term relationships.

"Marketers will need to consider campaign management as a way to orchestrate the complexity of a complete online and offline marketing strategy, while incorporating the evolving customer approach of digital marketing," Gartner concluded.

Data sourced from Gartner; additional content by Warc staff