Friends trust friends: Time for companies to embrace social media marketing
We are immersed in information.
Google has spawned a culture that expects immediate answers to complex questions.
In theory, you should never need to ask your friends for advice on what products to buy or what music to listen to. Just read the reviews on Amazon, right?
Right. However, the proliferation of social media - including tools like Facebook and Twitter - is teaching us a new lesson about business marketing. People are more likely to trust information from their friends than information from strangers.
That’s why the best marketing executives know that the most effective marketing campaigns can’t rely exclusively on traditional advertising.
Not in a world in which Twitter users can get instant product recommendations from their friends by sending out a tweet.
Advertising can generate legitimate buzz. Witness the surge in interest in Ann Arbor venture capitalist Rick Snyder’s Michigan gubernatorial campaign after the Republican aired an unconventional TV ad during the Super Bowl in Michigan markets.
However, advertising is no longer enough to attract most consumers. Companies need thousands of consumers to act as proxy marketers through their social networks - online and offline.
And consumers are increasingly branding companies. In 2007, Twitter users posted an average of 5,000 tweets a day, the company announced last week. Now, it’s 50 million.
The best marketing campaigns in today’s social media society are the campaigns in which consumers are independently promoting your products through their own social networks.
Why? Because friends trust friends.
MyBandStock CEO Drew Leahy
That’s why Ann Arbor startup MyBandStock.com, led by University of Michigan student Drew Leahy, has reconfigured its business model to leverage social media tools.
The firm, housed at U-M student-led business incubator TechArb, plans to allow users to buy “shares” in musical artists in exchange for extra benefits such as T-shirts and concert tickets. They can purchase shares with real money or earn additional shares by promoting their activity via Twitter and Facebook, for example.
By engaging consumers and enticing them to tell their friends about their activity, MyBandStock hopes that music fans will transform into marketing agents for their favorite bands.
“On our platform, we say, ‘Hey, you can generate shares by inviting your friends, by sharing new stories on your social networks,’” Leahy said. “We allow the fans themselves to go out there and promote the bands on their social networks and provide exposure.”
U.S. companies are intermittently embracing social media.
In 2009, U.S. firms spent $716 million on social media marketing, according to Forrester Research. That figure will rise to $3.1 billion by 2014, Forrester projected, but that’s still paltry compared to traditional media.
The forlorn newspaper industry, for example, recorded $34.7 billion in print advertising revenue alone in 2008, according to the Newspaper Association of America.
What’s the takeaway? First, marketing through social media costs less than traditional advertising. For companies, marketing services through Twitter, for example, is free right now - except for the manpower it takes to maintain an account.
“With dollars moving out of traditional media toward less expensive and more efficient interactive tools, marketers will actually need less money to accomplish their current advertising goals,” Forrester analyst Shar Van Boskirk wrote in a blog post.
But the other lesson is that many companies are still too sluggish to embrace social media marketing.
That’s a mistake. Consumers trust friends, and, in the realm of social media, companies look just like friends.
Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or firstname.lastname@example.org or follow him on Twitter. You can also subscribe to AnnArbor.com Business Review's weekly e-newsletter or the upcoming breaking business news e-newsletter.