BUILDING LOYALTY THRU SOCIAL NETWORKING

Making Friends and Making Money

Cheryl Guerin
VP Promotions and Interactive Marketing / MasterCard

Karen Webster
President / Market Platform Dynamics
SourceMedia ’ s Reinventing Loyalty Conference New York , New York December 1 , 2008
© 20082008 Market PlatformPlatform Market Dynamics ©

Critical success factors for loyalty

10/14/09

2

© 2008 Market Platform Dynamics

Social Networks Provide Scale and “ Viralability ”

In the U . S ., 57 % of all web users aged 13 + have use
25 % 25%

23 % 23%

35 % 35%

9% 9% 33 % 33% 66 % 66%

ill extend from its 489 million users today to over 1 billion
Source: comScore, August 2008

10/14/09

3

© 2008 Market Platform Dynamics

A Channel No Longer “Just For Kids”

Source: NPD Group, September 2008

A third of MySpace and Facebook users are 25 +. Women between the ages of 35 and 50 is the fastest growing social networking segment , especially on MySpace .
10/14/09 4 © 2008 Market Platform Dynamics

Facebook and MySpace Dominate

07 and is now the leading social network site . In the last yea

153 % 153% 3% 3%

100 % 100% 50 % 50% 41 % 41% 32 % 32% 19 % 19%

Source: comScore, August 2008

10/14/09

5

© 2008 Market Platform Dynamics

Apps Keep Users "Sticky"

10/14/09

6

© 2008 Market Platform Dynamics

Successful Networks are Incredibly Addictive

etworks than they do on news and media sites . Traffic to these

Unique Audience (000) Site March 2007 March 2008 YOY Growth 80,811 55,937 12,622 12,991 1,878 9,076 5,217 9,246 3,482 4,640 1,822 86,687 60,398 24,940 13,559 7,877 7,852 5,940 5,785 4,623 3,229 2,717 7% 8% 98% 5% 319% -13% 14% -37% 33% -30% 49%

Time Spent (hh:mm:ss) March 2007 March 2008 YOY Growth 1:54:48 2:10:04 0:54:38 0:11:13 0:09:04 0:08:30 0:05:19 0:01:50 0:53:36 1:05:05 0:12:21 2:04:13 2:11:23 1:08:18 0:09:25 0:11:43 0:05:17 0:05:46 0:01:56 0:09:28 0:35:06 0:02:13 8% 1% 25% -16% 29% -38% 8% 5% -82% -46% -82%

Overall MySpace Facebook Classmates Online Linked In Windows LiveSpaces Reunion.com AOL Hometown Club Penguin AOL Connectivity Buzznet.com

Source: Nielsen Online, March 2008

10/14/09

7

© 2008 Market Platform Dynamics

Filling An Important Information Gap

Source
Business magazines Wikipedia Radio news Analyst reports Friends, peers Newspaper articles TV news TV talk shows Company communications Online message boards, forums, newsgroups Company’s Web site Blogs YouTube MySpace, Facebook Corporate or product advertising

Extremely or Very Credible
62% 55% 53% 51% 51% 48% 46% 45% 43% 38% 37% 29% 28% 23% 22%

People visit and spend time on social to share and receive information from credible sources .
59 % of social networkers use these outlets to “ vent ” about customer experiences 72 % research companies ’ customer care online prior to purchasing products and services 74 % choose companies / brands based on others ’ customer care experiences shared online 81 % believe blogs , online rating systems , and discussion forums can give consumers a greater voice regarding customer care

Source: Edelman Trust Barometer, 2008

Society for New Communications Research, April 2008

10/14/09

8

© 2008 Market Platform Dynamics

Marketing and Social Networks Are Converging

43

%

CA

GR

Source: Paul Gillin, Society for New Communications Research, 2008

Source: eMarketer, May 2008

10/14/09

9

© 2008 Market Platform Dynamics

But, Questions Remain About Effectiveness

is often difficult to measure and control – particularly with

Source: Paul Gillin, Society for New Communications Research, 2008

10/14/09

10

© 2008 Market Platform Dynamics

MPD’s “Five Forces” of Social Networks

We believe that five major forces will shape the social networking landscape over the next 1 - 3 years .

10/14/09

11

© 2008 Market Platform Dynamics

Me-driven: The User Decides
Social network membership , by design , is an extension of a person ’ s interests . 50 % of users visit social networking sites at least once a day .

The idea of reciprocity drives these co

s reciprocity that has contributed to the rise of the leading social

10/14/09

12

© 2008 Market Platform Dynamics

Me-driven: Implications for Marketers

nities is all about the community , and not about you .

Traditional advertising has been all about

u do this in social networks – trying to disguise yourself as a fello

is harder and it is different , but in the end , you ’ ll be more success

10/14/09

13

© 2008 Market Platform Dynamics

Peer-driven: Friends and

The Influence of Family

nnections with several degrees of separation , are stronger than

Source: The Nielsen Company, October 2007

10/14/09

14

© 2008 Market Platform Dynamics

Peer-driven: Implications for Marketers

ral degrees of separation , are stronger than connections with adverti

Knowing who has the influence in social networks is find that efforts to engage the community will be as effective as ma

10/14/09

15

© 2008 Market Platform Dynamics

Trust-driven: The Fuel of Social Networks

“ A person like me ” is considered the most credible source of information about a product or company .

Peer - to peer

Top - Down

Source: Edelman Trust Barometer, 2008

10/14/09

16

© 2008 Market Platform Dynamics

Trust-driven: Implications for Marketers

o reduce customer acquisition costs and to create a loyal group of ev

However , the viral nature of the network can be

not get you very far , but forging a trusted relationship with each me

10/14/09

17

© 2008 Market Platform Dynamics

Time-driven: The Need for Relevance
The great ( social networking ) debate : general sites niche versus

10/14/09

18

© 2008 Market Platform Dynamics

Second Generation Social Networking Sites

© 2008 Market Platform Dynamics

Time-driven: Implications for Marketers

ting for time and attention means being relevant

e age of marketing that pushes down to consumers based on what market Consumers now have the power and technology to beco

unction of the user ’ s needs at a specific point in time

10/14/09

20

© 2008 Market Platform Dynamics

Cause-driven: Sharing and Engaging Members

10/14/09

21

© 2008 Market Platform Dynamics © 2008 Market Platform Dynamics

Cause-driven: Implications for Marketers

begins by showing interest in what the community cares about .

But the interest needs to be genuine

s are smart enough to sniff out a commercial pitch disguised as a cau

10/14/09

22

© 2008 Market Platform Dynamics © 2008 Market Platform Dynamics

The Spectrum of Social Networking Strategy
The Social Suite tm
Human resources Research and Development Procurement

Recruit: Listen

LinkedIn

Use commercial on - line networks , such as

Gain ideas for new product development through communities
Generate Products

Use community to generate inputs you can sell
Work Talk Energize Service

© 2008 Mikolaj Jan Piskorski

Make individual based products into those based on social networks

Use on - line social networks for employees to share best practices , improve coordinatio n
Operations

Leverage conversatio ns between or with customers to promote products or services

Use brand ambassadors and social networking sites instead of company sales force

Get customers to help each other/ trouble shoot

Product offering

Marketing

Sales

After - sales service

© 2008 Market Platform Dynamics

Who’s Doing (Interesting) Stuff Now
Blue Shirt Nation P&G The Social Suite tm

Chevy Tahoe

Sears . com
© 2008 Market Platform Dynamics

Creating "Buzz" About Travel

10/14/09

25

© 2008 Market Platform Dynamics

L e v e ra g in g T h e U tility o f S o c ia l N e tw o rk s

26

© 2008 Market Platform Dynamics

L e v e ra g in g T h e U tility o f S o c ia l N e tw o rk s

27

© 2008 Market Platform Dynamics

M o n e tiz in g E x is tin g C o m m u n itie s

10/14/09

28

© 2008 Market Platform Dynamics

T h e “ S o W h a t? ”
Social networks are an efficient channel that can reduce customer acquisition costs and create evangelists , virally .  These ecosystems aren ’ t yours to control — they are already vibrant communities .  The key to accessing these networks successfully means reshaping your thinking and approach .  It ’ s imperative that you be willing to cede control in return for credibility and authenticity .

10/14/09

29

© 2008 Market Platform Dynamics © 2008 Market Platform Dynamics

Developing a Social SAVVY

tm

Strategy

The development of a social SAVVY tm strategy begins with an assessment of the customers, products and brand “readiness” to engage with customers in a new and different way.
Strategy refinement
Measurement and evolution in real time

Strategy development

Approach channels and incentives

Strategy inputs

Customer, product and brand “diagnostics ”

MPD Social SAVVY Strategic Framework. © 2008 Market Platform Dynamics

© 2008 Market Platform Dynamics

Thank You!

CHERYL GUERIN cheryl_guerin@mastercard . com KAREN WEBSTER
karen . webster@marketplatforms . com

10/14/09

31

© 2008 Market Platform Dynamics

Sign up to vote on this title
UsefulNot useful