Hi I'm Kartik and this session is on social media. Social media offers unprecedented scale for marketers. Social networks reach most of the world's online population. For example, Facebook today has close to 1.5 billion users and marketing on Facebook therefore provides a lot of reach. Social networking sites also account for roughly 28% of time users spend online. And so for a marketer looking to reach the consumer on a medium where the consumer spends time, social media is particularly attractive. As a result, social media offers unprecedented and unparalleled reach to marketers and a lot of start-ups have been using social media quite successfully. For example, consider Blendtec which is a company that sells blenders. This company started posting videos on YouTube where they showed their blenders blending interesting products like an iPhone and other objects. These videos caught the attention of consumers, and they started sharing it with one another, and before you know it, this product became quite successful and Blendtec's sales went up by nearly 400%. Another example is Runkeeper, which has a fitness product. Runkeeper uses Facebook to engage with consumers, and has managed to use the platform, and all the content it's created on the platform, to build a very large following on Facebook. Before we discuss social media strategies, I'll take a few minutes to discuss why social cues and social media are so powerful. To do so, I'll discuss an experiment with an artificial music market run by Professor Matt Salganik. The motivation for Matt's experiment was the success of the Harry Potter book at the time. Matt had read that several publishers had rejected the book before it was eventually published. Now we hear stories like this all the time. A book or a movie that's eventually a blockbuster success gets rejected by experts in the field. So Matt wondered what drove that. He wondered whether the quality of the product drove the success of the book or was it social cues? Or was it a mix of the two? To test that, he ran an experiment where he created an artificial music market. In this market, he invited 14,000 participants to come and listen to songs and select songs that they would like to buy or download. He had 48 songs from 48 previously unknown artist in this market. He divided the users into a bunch of different treatment conditions. Some of the users were assigned to an independent control condition. In these conditions, songs were ordered randomly and participants listen to the songs, and downloaded what they wanted. Some of the other participants were assigned to experimental markets which had social treatments, or social cues. In these markets, songs continued to be ordered randomly. However, participants could see how many times each song had been downloaded by others in their universe. In other words, users saw a screen with a list of songs along with their download counts at the time they entered the market. The impact of these social cues was immediate. Markets with social cues became blockbuster markets. Products that had been chosen by early customers in that condition, tended to become more salient to later participants in that market. These later participants gravitated increasingly to the songs that were chosen by prior participants and that made popular songs even more popular, and unpopular songs even less popular, resulting in the market becoming a significant hits-driven or a blockbuster market. Furthermore, he also noticed that it made the market somewhat unpredictable. In this graph here, I plot on the x-axis the download rank of a song in the independent condition, where users cannot see the number of downloads of the song. On the y-axis, I plot the download rank of the song in the eight different social conditions. What you'll observe is that the download rank of a song in the social condition is somewhat correlated with the download rank of a song in the independent condition. In other words, songs that generally do reasonably well in the control condition tend to do reasonably well in the social condition as well. However, it's possible for a song that ended up in the top quartile in one market to end up in the bottom quartile in another market. For example, there was one song that ended up as the top downloaded song in one market and as the 40th or the 48th downloaded songs in another market. In short, the Britney Spears or the Katy Perry of one universe might end up going unnoticed in another, simply because the first few users did not choose that song, and therefore, that song ended up not being noticed by later participants as well. So, social cues make markets more hits-driven and also highly unpredictable. In short, social cues can be highly powerful in driving product discovery. And that's why social media marketing has to be an important part of the marketing strategy for any entrepreneur. Having discussed why social cues matter, let's explore the scope of social media marketing. Social media marketing may include having a presence on social media platforms like Facebook, Twitter, LinkedIn, and other such platforms. It may also include blogging through tools like WordPress,Tumblr, or other such software. It may include social shopping on Instagram or Pinterest. It might include viral marketing strategies to encourage your early adapters to market your product to later potential adapters. It may include user-generated content, wherein consumers write reviews about your product, which had done influence future product sales. Given the breadth of options available to an entrepreneur, it is important to first identify what kinds of social platforms are your customers on, and based on that determine which social media platforms are appropriate for you. For example, for B to B company, Facebook might not be the first choice of social media platform. On the other hand, LinkedIn or Twitter might be appropriate based on the kind of product the company is selling. It should be clear by now that social media offers a very unique opportunity to marketers. By building a base of brand loyal followers on social media platforms, a firm can instantaneously spread information about deals and products and new product launches. Also anytime a customer engages with your social media content, that engagement is viewable to their friends, therefore creating the chance of viral marketing spread of your messages. At the same time, social media offers several challenges, which imply that in practice, very few firms are successfully able to leverage social media to gain any benefits. This is because, for example, on Facebook, only 0.2% Of total possible status updates actually reach end users. This is because there is so much content being generated on these platforms all the time, that these platforms like Facebook have to select a much smaller subset to show the user. Furthermore, studies show that less than 1% of Facebook fans of brands actually engage with those brands. This is again because of the wealth of content on social media. And given the amount of activity and content, it's hard to get noticed amidst all the clutter. As a result, content marketing, which is a term that refers to designing content carefully in order to achieve higher rates of engagement among consumers, is becoming more important in social media marketing. For example, in a recent study, we evaluated over 100,000 Facebook posts by nearly 1,000 different brands on Facebook. We evaluated what was the impact of content attributes on engagement by their Facebook followers. We found that posts that were emotional and humorous tended to get higher levels of comments or engagement from consumers. In addition, posts that talked about philanthropic activities by the firms and showcased some of their social initiatives also tended to get high levels of engagement. In contrast, a lot of posts that talked about product attributes and prices did not get the same levels of comments and engagement. In short, posts that show brand personality tend to do better than posts that merely inform customers about product attributes. Similarly, when we looked at the number of likes each post got, we again found that posts that had emotional content, that talked about social initiatives, got more likes and therefore, greater visibility than posts that merely talked about product attributes. In short, our conclusion is that when firms share product information and price information on social media, it is important to pair that with attributes such as emotion, humor, and others that showcase brand personality in interesting ways. Designing good content is clearly a very important step in order to get high levels of engagement. But that alone may not be sufficient. There are many companies that invest a lot in social media, but ultimately see very limited impact. Effective social media offers not only engaging content, but also fits very naturally into the customer journey. One has to think about the customer pre-purchase process, the purchase process, and the post-purchase process, and evaluate where exactly social media might fit in very naturally. To illustrate this point, let me walk you through an example of Warby Parker. A company that sells prescription eyeglasses online that was founded by some former students of mine. Now when the company was selling eyeglasses online, one of the things that they discovered was that a lot of consumers want to try on eyeglasses before they eventually purchase the product. That's clearly the experience that you or I would have when buying eyeglasses. Now in order to provide that kind of experience to customers, the company decided to offer a home try-on program. In that program, customers could order five different pairs of eyeglasses, try all of them, decide which one they want to retain, and then send the rest back to the company. A lot of people would get the five eyeglasses, try them on, and then wanted to get social feedback from their friends on which eyeglass fits them or suits them the best. So, they started posting these photographs on their Facebook walls. Warby Parker sensed a nice opportunity here and started sharing these photographs on their own website, and that increased the number of incidences where customers would post their photographs with eyeglasses on the Warby Parker wall or on their own Facebook wall. This allowed Warby Parker to get its brand name out to friends of their customers. In short, get viral marketing spread without having to invest any money. And this is a great example of Warby Parker identifying the social need, specifically somewhere in the purchase funnel. And this is usually post-ordering the product when people are trying to select which eyeglass to retain, that's where they have a social need. Rather than using their Facebook presence or their broader social media presence to just push messages down to customers and solicit engagement, Warby Parker identified the clear social need that customers had during the purchase process. That information need or a social need was to get a second opinion at the time of purchasing an eyeglass. Warby Parker used its Facebook page to service the social need that customers had, and got amazing engagement on its Facebook page. GoPro provides another interesting example. GoPro sells small miniature cameras that are used in conjunction with sports and recreational activities. Now the social need around the use of GoPro usually happens post purchase. Most buyers buy GoPro and use that camera when they're engaging in activities like biking or parasailing and things of that nature. And they like to share those videos with their friends. GoPro uses its YouTube channel to help people share their GoPro videos with others. Therefore, GoPro uses its social media presence on YouTube to serve as a social need that their customers have. In this instance, that social need arises after the purchase process is completed. And GoPro makes its social media relevant at the time when the social need arises. Many innovative companies are using social media in interesting ways. For example, some of your customers might post photographs after they bought your product on social media channels like Instagram and Pinterest. Some companies are using these user-generated content to push social surfing. For example, urban out filters finds photographs that have been posted by customers on Instagram, and offers social shopping features like the ability to like the product in order to buy it directly on the website. Many other firms are using social media platforms like Instagram and Pinterest to drive social shopping. In summary, social media can be powerful in building brand personality and increasing brand affinity among customers. Social cues left behind by customers are powerful in influencing future customers. However getting a return on investment in social media requires placing attention on a few key factors. First, identify the right social media platform. Identify where your customers are likely to be most active. For BlendTec, that meant engaging with YouTube. For GoPro, that again means engaging on YouTube. For RunKeeper and Warby Parker, that meant leveraging Facebook. Second, place careful attention to content design. Merely providing product information and price information without showing brand personality doesn't usually get the kind of return from social media marketing that you would seek. And finally, match social to the right stage in the customer journey. Notice how Warby Parker leverage social during the customer service process to help them select the right product by getting a second opinion. In contrast, GoPro leverage social in the post-purchase process in helping customers share their videos with their friends. Bottom line, there's no single strategy for social media. Succeeding on social media requires flexibility, understanding customers, and choosing the right social media platforms and messages at the right time.
