Social Media Marketing for the Small Business Environment Solutions for Small Business Reports are designed to demonstrate how new technologies enabled by cable providers help small business owners and managers address key challenges, solve problems and achieve mission critical objectives. “The Internet’s not written in pencil, it’s written in ink.” – The Social Network More resources can be found at solutionsforsmallbusiness.com In the Web 2.0 era, first generation e-commerce tactics are no longer enough to deliver the winning edge. Today, organizations of all sizes are looking for new ways to unleash the power of the Internet. and the next new frontier is the realm of social media. Social Media Marketing for the Small Business Environment Introduction Social media runs the gamut from social networking sites like Facebook and MySpace to microblogging forums like Twitter, to wikis, virtual communities and shared multimedia. Social media offers great strengths over traditional marketing approaches including collaboration, low barriers to entry (in cost as well as usability), and the ability to edit and revise content in real time. At this early stage in the social media marketing lifecycle, there are few well-marked routes and even fewer rules of the road. Even so, businesses are flocking to social media marketing as a low-cost, highly effective way to take their Internet strategies to the next level. A new survey conducted by email marketing provider StrongMail found that half of all businesses plan to increase their email and social media marketing budgets in 2011, while 43 percent plan to maintain current levels. “As marketers head into 2011, they are focused on increasing subscriber engagement through increased relevancy and automating lifecycle communications,” says Ryan Deutsch, vice president of strategic services at StrongMail. “While it’s clear that marketers are struggling with insufficient resources, this is a challenge that can be easily overcome with the right marketing partner.” The “2011 Marketing Trends” survey1 reveals that email marketing (65 percent) and social media (57 percent) will be the top areas of marketing investment in 2011. The respondents also say they plan to decrease spending on direct mail (36 percent) and Tradeshows/Events (33 percent). This paradigm shift away from traditional marketing strategies like direct mail and tradeshows indicates that businesses place a great deal of value in client engagement and segmentation – two of the primary strengths of social media marketing. Forty-three percent of respondents to the StrongMail survey consider integrating social media and email marketing to be a high priority, and 71 percent plan to integrate their email and social media strategies by the end of 2011. 1 The StrongMail “2011 Marketing Trends Survey” was conducted in conjunction with Zoomerang © BizTechReports.Com 2011, All Rights Reserved 2 ‘Community, Identity, Stability’ If you disregard the dark subtext, Aldous Huxley’s motto for his “Brave New World” might well fit the social networking revolution. In the 21st century, this is the way your customers interact, collaborate, form communities, influence each another, and, most importantly for businesses, how companies reinforce brand loyalty. 22 percent of all time online now is being spent on social media and blog sites. While some organizations are tempted to dismiss social media as a consumer phenomenon, it offers businesses powerful brand-building and customer-engagement tools. One key reason for the success of social media marketing: it’s where your customers are. According to a survey conducted by Nielsen in April 20102, social media sites account for three of the world’s most popular online brands – Facebook, YouTube and Wikipedia. Additionally, 22 percent of all time online now is being spent on social networks and blog sites – an increase of 24 percent over 2009. Social networks and the like can be used to attract and influence customers. And that time means money. Recent research indicates that social media is having a strong influence on consumer preferences. “It is increasingly on social media that retail brand awareness is established and brand image is built,” explains Ivano Ortis, research director, IDC Retail Insights. “Social networks, blogs, price comparison Web sites, and the like can all be used by retailers of all kinds and sizes to attract and influence customers, to study demand patterns, to improve brand reputation, and finally, to provide customer support.” New Trends IDC researchers found that the innovative nature of social media can turn multiple account profiles into an opportunity for retailers to capitalize on same-shopper sales growth prospects3. Additionally, shoppers are making greater use of mobile social networks, a trend that is likely to bridge the gap between online and physical shopping. Another important factor businesses must consider when evaluating social network marketing is the fact that a majority of consumers rely to some extent on social networks to guide them in their purchase decisions. According to a new report by Gartner4, these social networks often include individuals who fulfill different roles or functions in recommending products to people with whom they are connected. “Companies attempting to use social networks should develop relationships with key customers over a period of time and progressively refine the social network profiles of those individuals,” says Nick Ingelbrecht, research director at Gartner. “In this way, the most suitable individuals can be targeted with the right information, products and promotions in the most cost-effective way. Retailers who 2 “Social Networks/Blogs Now Account For One In Every Four and a Half Minutes Online” http://blog.nielsen.com/nielsenwire/global/social-media-accounts-for-22-percentof-time-online/ 3 IDC’s report, “Business Strategy: Social Commerce Opportunities, Strategies, and Risks for Retailers Globally” 4 The Gartner report, "User Survey Analysis: Consumer Marketing Using Social Network Analysis, Worldwide, 2010." http://www.gartner.com/resId=1381514. © BizTechReports.Com 2011, All Rights Reserved 3 run small shops have instinctively done this with their best customers for years, with the intention that these ‘VIP’ customers will not only buy the new products, but recommend them to their friends.” B2C and B2B marketers must determine how social media tactics complement the rest of the marketing mix. The value proposition for social network marketing is not just applicable to business-to-consumer (B2C) markets; business-to-business (B2B) firms can benefit as well. “Emerging social behaviors will fundamentally change the nature of the marketing relationship between B2B buyers and sellers, especially in a down economy,” says Oliver Young, senior analyst at Forrester. “B2B marketers must use social profiling data to determine how social tactics complement the rest of the marketing mix. Integrating traditional and online tactics is essential as the groundswell of social activity grows.” Emerging Strategies A social media presence can improve brand image and help businesses gather useful consumer data. In this brave new world, IDC believes that retailers must have a balanced presence across social media networks, allowing consumers to feel in control of their own personal spheres. A friendly, interactive presence on a social network can greatly improve brand image and help the company gather extremely useful, unstructured data about demand trends, the researchers say. Also, organizations should realize that a social network presence does more than drive traffic to their Web sites. Listening to current and potential customers on social network sites helps businesses gather useful information about their market in a non-intrusive way. "Most B2B marketers miss the nuances of their audience's preferences by jumping directly to deploying social technology without first profiling the social behavior of their customers,” Young says. “Knowing buyers’ behavior lets marketers set the most effective social media strategy, instead of blindly trying every new technology that comes along." Overcoming Implementation Challenges Although available data clearly demonstrates the value of social network marketing, many still struggle with the logistics of implementation, according to a new report by The Boston Consulting Group (BCG)5. Mirroring the digital marketing buzz, about 90 percent of respondents to BCG’s survey said their companies plan to spend more on socialmedia, mobile, and online advertising in the next three years. However, many of these companies are taking a leap of faith, investing despite gaps in in-house talent, measurement tools, and agency support. For example, only 31 percent of survey respondents agreed that their advertising agencies are helpful in making the right tradeoffs between digital and traditional media. Most respondents said they do not believe that they have developed the right tools for managing their increasingly complex media mix. 5 Boston Consulting Group, “The CMO’s Imperative: Tackling New Digital Realities”. © BizTechReports.Com 2011, All Rights Reserved 4 “Once again, we see some companies taking bold steps to invest, even amid massive uncertainty,” says John Rose, a senior partner in BCG’s New York office and an author of the report. He points out that there is no single winning formula for integrating social network marketing into the overall organization, however, businesses most likely to succeed in digital marketing share certain characteristics: Succeeding in social media marketing depends on the right investment, analytical tools, integration with traditional marketing and executive support.     They are more likely to set minimum levels for investment in digital marketing. They are more likely to possess analytical tools required to make tradeoffs across media vehicles They are more likely to integrate campaigns across digital and traditional marketing More of their marketing executives will believe that digital marketing is important to their personal success Partnering with firms that have an expertise in social network marketing also can yield good results, particularly for smaller organizations or those that are less technology focused. “Companies know that by failing to effectively integrate digital campaigns, they risk wasting marketing dollars by the millions,” says Jens Harsaae, a BCG partner and co-author of the report. “By fumbling conversations with digital consumers, they risk damaging a brand’s reputation. Inaction is not the safe option.” ### About BizTechReports.Com BizTechReports.Com is an independent reporting agency with offices in Washington, DC and the San Francisco Bay Area that analyzes user trends in business technology. BizTechReports.Com explores the role that technology products and services play in the overall economy and/or in specific vertical industries. For more BizTechReports.Com white papers, case studies and research reports, visit www.biztechreports.com. About Solutions for Small Business Solutions for Small Business is an initiative of CTAM, the Cable & Telecommunications Association for Marketing, which is dedicated to helping the cable business grow. Cable companies supporting the initiative include: Armstrong; Atlantic Broadband Business; Bend Broadband Business; Bright House Networks Business Solutions; Cable One Business; Charter Business; Comcast Business Class; Cox Business; Insight Business; Mediacom Business; Optimum Business; Suddenlink Business and Time Warner Cable Business Class. Small business owners can learn about the initiative at www.solutionsforsmallbusiness.com. © BizTechReports.Com 2011, All Rights Reserved 5