Chapter 5 - I Care More about What My Neighbor Thinks than What Google Thinks
The author suggests the term "social commerce" to encompass all of the peripheral activity related to commercial transactions that takes place in social media. This is based on the principle that people value the opinions of other people, and trust in peers more than they do in the "authoritative" sources who have a mercenary agenda.
This is not a new concept, as word-of-mouth and user advocacy have long been a tradition in private conversations. The internet and social media have merely increased the convenience, frequency, reach, and visibility of people speaking to one another about products.
Companies that traditionally operated under the illusion that they have the power or the right to control what anyone says about their brands and products are very much chagrinned, whereas consumer advocacy groups are very much delighted at the free and democratic flow of information.
In this chapter, the author proposes to provide "examples of social media in action." (EN: browsing forward, it looks like a stew of random topics without much cohesion except for that theme.)
Buying the Right Baby Seat
There is a made-up story about a new father attempting to purchase a baby seat (EN: which seems entirely fabricated, but it's a plausible fiction.) The man in question reads magazine articles and uses the Internet to research various models, but still is feeling uncertain - the safety of his child is important, and he's particularly anxious about making the right decision, but is at the same time aware that his anxiety makes him vulnerable to buying expensive features he does not really need.
Online, there is a lot of information, mainly from retailers and manufacturers who all naturally want readers to believe that their product is the best. To sort it out, he turns to social media to find:
- 23 of his "friends" have purchased a baby seat in the last two years
- 14 purchased the same make and model,
- 10 of them purchased online
- They paid an average price of $124.99
- Three are looking to sell them because their babies have outgrown them
- People in his network posted links to seven online videos and four articles showcasing this model
- 11 of them posted positive reviews, nine in text and two as videos
(EN: I expect that this level of detail would not really be available - the number of people who share extensive information such as model, price, retailer, etc. is very few for most products. A more realistic scenario is that the new father would have to ask to gather this kind of information - post a question to Facebook, follow up with private messages to gather more information, etc.)
This information is likely more influential than the manufacturer's claims about the product because it comes from people he knows who do not have a financial interest in promoting the product, but are instead speaking of their genuine experiences.
Following the purchase, the author suggests that the buyer will "feel compelled" to write and post his own opinions. He suggests, based on his own experience, that people like being viewed as subject matter experts and feel gratified when others act on their advice - and that the popular belief that people only post something when they are dissatisfied and wish to vent does not hold true, given that the majority of reviews are positive ones.
(EN: linguistic analysis of reviews suggests there are a wide range of motives for writers of both positive and negative reviews. Some are self-expression [to brag about a good decision, be clever in criticizing a product, or to demonstrate knowledge and expertise], others are more social [a desire to be imitated by other people, or a concern for the welfare of others, or a desire to be part of the conversation]. )
In another hypothetical scenario, the author portrays a character who experienced a modest financial windfall and decided to use it to buy something for herself, but wasn't sure what she ought to spend it on. By tapping into her social network, she finds out which products are popular with her friends or peers by way of the products they mention in their social media posts. (EN: This seems very contrived, as I do not believe there is a facility for conducting this kind of search. It seems likely that a person might browse their Facebook "wall" and see the odd posting from a friend bragging about a new possession - but I'm not aware of an affordance for performing a search focused on this sort of thing.)
Because she knows which people in her network have similar tastes, she is able to hone in on the products that specific people desire or possess and make a selection for herself of a product she might like. (EN: It seems worth mentioning here that people who are "friends" in social media may not know each other very well in real life, so I'm not sure if this level of knowledge can be presumed.)
(EN: I realize the comments above seem dour, but I've also seen a growing interest in recommendation engines that help a person select a product based on the likes/dislikes of people with similar tastes. Netflix experimented with this and then abandoned it, whereas Amazon's analysis of shopping carts to suggest "people who bought this item also bought [other items]" is allegedly quite successful. It is also valid to suggest people learn what to want by looking to other peoples' consumption. So while I disagree that this has been successful, I believe there to be much potential in getting it right.)
Friends as Travel Agents?
The internet long ago replaced travel agencies for many customers, who can now book their own flights, hotels, and rental cars; make restaurant reservations; and buy tickets for shows and attractions on their own. But for others, who wish to take "a vacation" without knowing where to go or what to do when they get there, a travel agent who could recommend a destination and activities was still worth the extra cost.
Sites that provide user reviews and recommendations are not new (Lonely Planet and Trip Advisor have been around for ages) - but the problem is that these were largely anonymous reviews written by complete strangers, who may enjoy different kinds of vacations.
The author presents the improbable scenario of a woman who "goes to her social network of choice" and searches for "South American Vacations" and immediately gets a list of five friends who have gone there within the last year with a convenient list of their itineraries as well as prices and recommendations.
(EN: A more likely scenario would be for this person to browse their wall, or to ask friends for suggestions in social media and wait on responses. It seems highly improbable that there would be many people who would take time out of their vacation to document everything in minute detail so that it might be served up as search results.)
After this, the author comes unraveled and babbles randomly:
- Customers are turning to one another for information instead of listening to marketers
- Investing in buzz in the social media will become more important than television advertising
- Comments, positive and negative alike, provide valuable feedback for product and service improvements
- The mobile device, with its ability to instantly post comments, increases the scope and immediacy of user feedback
- The mobile device also empowers consumers to retrieve information on the spot that can serve to increase or decrease likelihood to purchase - and
- The author predicts that consumer will become much less tolerant of poor service, poor products, and high prices as a result of social media
Willingness to Review
The author pauses to suggest that "many may take umbrage" with the assumption that people are going to be willing to invest time in publicizing and reviewing every purchase. He acknowledges some people will not, others will share only certain decisions, whereas others will share "everything and anything" - but the technology is available for this to occur and he feels "it's only a matter of time" for everyone to jump on the bandwagon.
(EN: This seems to be supporting an opinion with more unsupported opinions, but the counterpoint remains that it takes considerable time to document every experience, and that excessive journaling is not normal behavior, but a genuine psychological disorder. Rather than assuming it will become a practice just because the technology exists, it would likely be better to consider the motivations within the bounds of normal psychology - there are reasons people share information of certain kinds - and arrive at a more sober conclusion as to what events will be shared and in what level of detail.)
The author does mention the way in which some brands attempt to provide incentives for people to write reviews and comment on their products - whether they receive a special offer or an entry into a drawing. The author expects more brands will use these tactics to get people to be more vocal about their brand experiences.
(EN: The problems with promotion have been noted by other authors - namely, it becomes harmful. When it is discovered that a person posted a comment or review to get a reward, their credibility suffers. And when someone posts too often, commercial or otherwise, they become annoying. The need to preserve one's own integrity and to refrain from abusing the attention of others are also factors that will make people more selective about the information they post to social media.)
Friends as Medical Advisors
The author mentions a survey (iCrossing 2008) that found 34% of respondents turned to social media for health research. (EN: The survey included sites like Wikipedia as being social media, which makes that number seem entirely reasonable.) It's also noted that the age group of people who use the internet to research health is older than the typical age of social media participants.
He suggests that asking questions about health issues is more comfortable over the Internet than it is in a face-to-face situation. Also, it is not uncommon for a person to post a status of a medical nature (I have a terrible headache, I just burned myself, etc.) and to receive advice from friends in response.
While patients still place their highest trust in qualified professionals (physician, nurse, dentist, pharmacist, etc.) many still turn to friends and others who are not in the medical profession for guidance, specifically those who have dealt with similar problems. (EN: my sense is that this will vary over time, as medicine is a highly politicized topic latterly and peoples' regard for those in the profession vacillates frequently.)
The nature of medical information individuals seek online varies: in some instances it is to get practical information for dealing with a medical issue, in others it is merely to connect with others for emotional support, and still others are looking for product recommendations and cost information.
The Value of True Stories
The author refers to Subway's highly popular and effective marketing campaign that featured "Jared," a college student who lost weight by eating their sandwiches for every meal. This was first mentioned in his college paper, later picked up by a magazine with a list of "Stupid Diets that Work," and later was noticed by an advertising agency executive, who pitched the idea of using him as a spokesman to Subway.
The corporate office was not immediately impressed, but when the agency proved the concept with an on-spec campaign with a few local franchises, headquarters picked it up. It was during this time that Subway passed McDonalds as the fast food chain with the most locations in the US. While all of this occurred before social media, the author's point is that "an avid user" of a product or service can be very influential.
(EN: The "Jared" campaign was indeed brilliant, but should not be given sole credit for the brand's success. It's also noted that Subway's meteoric rise was also due to resurgence in health consciousness and the low cost to open a franchise.)
Consumer testimonials have for many years been leveraged in advertising to provide proof of a brand's claims - but this has always been taken with a grain of salt. Customers are savvy to the tricks of the trade: celebrities who don't like a product will endorse it for a fee, companies will use fake "experts," the man-in-the-street testimonials are often rigged or skewed in some way, etc.
But in this regard, social media reclaims the credibility of testimonials. When it's someone you know saying something, the presumption is that they are expressing a genuine opinion rather than one for which they are being rewarded in some way. Also, advertisers do not control what is said in social media and cannot generally suppress negative information.
Not All Applications Are Created Equal
The author mentions Facebook's API that enabled developers to connect to Facebook to retrieve or post data related to a user account, whether in a widget that became part of a user's Facebook page, a widget on another website, or even a stand-alone application. The author wishes to contrast three companies that attempted to leverage Facebook data:
- Where I've Been - a new company
- Trip Advisor - a popular online travel-booking site
- ACME Travel - a large full-service travel agency
Each of these firms had the idea that people would want to input and track all the places they had visited.
ACME's idea was to enable people to list the places they have visited and display them as push-pins on a digital map, the main idea being that people could tell their friends about their travels in arrears and to show off the extent of their travels. Their idea was to require people to provide an email address to use their app, and that this would become a marketing database for them - and while some suggest that users would balk at this, they were receiving 50,000 names per day.
Where I've Been
One programmer who user the ACME widget figured he could do better - so he created a very similar application that was a bit more visually appealing and easier to use, but essentially did the same thing - with no requirement for the user to enter an email address. Their revenue model would be entirely advertising-driven. The application "quickly" became the top-downloaded travel application and grew to 800,000 active monthly users.
As an online travel booking site, Trip Advisor saw great potential to augment an application made to announce, report, and record travel with the ability to book future travel. The first attempted to buy Where I've Been, but when the price was too high they determined they could simply build their own from scratch at a much lower cost.
They began with a very similar application called "Cities I've Visited" and rather than developing a mapping system that was specific to their application, to leverage Google Maps - a well-established service that has many capabilities, and which most internet users have familiarity.
Within a few years, their application grew to serve over five million active monthly users, dwarfing both of the other applications.
(EN: Here, the account ends - there is no indication or suggestion as to the reason Trip Advisor so quickly and thoroughly routed the other similar applications.)
Measuring User Activity and Reach
There's been ongoing debate about how to measure user activity: hits, page downloads, logins, user sessions, unique visitors, etc. None of these measures have proven entirely satisfactory because there is no perfectly reliable correlation between these behaviors and the outcome that commercial sites wish to achieve (increased sales).
Social introduces another imperfect measurement: "active monthly users" - which is slightly better because it correlates activities with individual people who actually visit the site. The people are identifiable as individuals because their social media identity is the equivalent of a login account - but having a large number of dormant accounts (people who log in to see something once, then never return) is less meaningful than having users who visit the site.
In social media, people can easily "like" a brand (particularly when they are offered a reward for doing so), but never visit the brand's Facebook page, comment, share, or post anything that mentions the brand. These users are of little value or interest to the firm. Having a million "fans" on Facebook means nothing if they never see your messages, visit your page, or purchase your product.
Aside of measuring engagement, the ability to flag active users gives you the ability to better target your marketing efforts. A database of 100,000 leads that have a 1% response rate to your messages is worth less than one of 10,000 leads who have a 50% response rate. Also, social media accounts are tied to profiles that disclose a lot of information about each user's demographics, education, location, profession, hobbies, interests, and more. This enables marketers to take a very narrow focus and craft messages that are highly relevant to smaller numbers of users.
Active users are also more likely to pass the word along to others, or at least post about their experience for others to see, and enable a message to spread through a vast network. In one instance, a company investigated a group of 800 active followers to find that they had a "social influence" that had the potential to reach 8.5 million people.
(EN: That number seems a bit inflated, and the link provided to proof is defunct. Given that the number of "friends" a person has is about 130, then 800 would link to 104,000 - and even this is presuming that all their friends are also active users and not abandoned or seldom-used profiles. It's still quite an impressive number, but not as grandiose as this example suggests.)
The value of a service in social media has less to do with a cool design or useful features than it does with having a sufficient number of users to make the service appealing to others. It's more than just a popularity contest - as users create the value a site offers. A site that enables users to share restaurant reviews is practically useless when there are only 100 people entering reviews for others to read, but highly valuable when a million people are feeding the database.
Once you have achieved critical mass, your market research changes: you no longer need to call people in to participate in focus groups to talk about how they think they behave, but can witness their actual behaviors. You can monitor public comments to identify problems and opportunities, and you can generate data that will be of acute interest (and salable) to other firms, and can even pursue partnership and revenue-sharing opportunities.
There is also opportunity to go further. For example, if a travel application discovered a large number of its members were planning to visit the same city on the same dates, it could offer to arrange a package that included common opportunities, negotiate bulk discounts, and even coordinate a tour group. Should this happen enough, the firm may find that there is significant business opportunity in doing more than helping people book travel reservations.
Letting Customers Decide
There's a brief and superficial mention of an Australian company that engaged participants in social media to vote on their new logo. Since their customers were members with ownership in the company, it made sense for them to engage them directly in the decision.
(EN: This is old hat by now. There are many firms that kick decisions to social media, though it is generally for superficial decisions such as "what new flavor would you like to try" and the like. Whether this is particularly useful or productive is subject to argument - and there are stories of success and failure in terms of both participation and outcome.)
The author speculates a bit about how advertising can be placed in entertainment such as books, music, and videos. Users typically pay for content and do not wish advertising to intrude. (EN: A number of services have "free" versions that contain advertising and "paid" versions that are ad-free and offer more content - the free versions are more popular, an indication that people will accept the ad-sponsored model if the advertising is not too intrusive. But since ad-free is part of the deal for paid services, little quarter is given.)
There's a belabored example of product placement in fiction: a character can order a specific brand of whiskey or drive a specific model of car. (EN: This is already done in film, quite extensively, so the level of detail is entirely unnecessary.)
The author suggests it could go further - particularly in print, to offer the reader the opportunity to click the brand name to visit the company's web site. (EN: This is speculative, and seems rather hare-brained. There once was an advertising service that did this with blogs - made certain terms serve as links - and the click-though rate was dismal, such that the firm was never profitable and eventually folded. People generally do not appreciate being distracted while they are engaged in leisure activities. Brand mentions to build identity without interrupting the experience are likely as far as advertisers can intrude.)