Retailers Should Go Slow on Social Sites

Discussion
Jul 06, 2007

By George Anderson

As it turns out, consumers may really want retailers and brands to give them their space on MySpace and other social networking sites.

The results of a new study of more than 2,000 online consumers conducted by JupiterResearch found most gave little credence to the notion that advertising messages on social networking greatly influenced purchasing decisions.

Patti Freeman Evans, lead analyst and author of the report, told E-Commerce Times, “The social and community web sites that are out there are nice experiences, but not the main places where people are looking to make purchase decisions.”

Retailers, Ms. Freeman Evans said, would generally be better off developing networks through company sites by creating customer generated product reviews, as an example. “That’s something that is of great value, but it’s most valuable when it’s right on that retailer’s web site.”

Ms. Freeman Evans said retailers should not expect to drive big traffic numbers if going the social networking site route. She expected traffic from social networking sites to be the rough equivalent of shopping comparison sites, which account for about three percent of traffic to online retailers. By comparison, she pointed out, Google drives about 15 percent of consumer traffic to e-tail sites.

While caution is being urged, retailers are making their way onto social networking sites. The online jeweler Ice.com has ventured onto YouTube with video promotions.

Pinny Gniwisch, co-founder and vice president for marketing for the company, told the E-Commerce Times, “We had to use a very soft pitch. People on YouTube don’t appreciate it when brands get involved in their entertainment.”

Mr. Gniwisch said the company plans to run up to four more pinnysworld videos so it may better assess its impact in driving actual sales. A recent video where Mr. Gniwisch spoke with rappers Three 6 Mafia about Mothers’ Day was viewed more than 36,000 times on YouTube. The video received 32 comments (many favorable, others not) and received a three out of five star ranking.

Discussion Questions: Are most retailers ready for social networking sites? What are the keys to avoid brand suicide on sites such as MySpace, Facebook, YouTube and others?

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10 Comments on "Retailers Should Go Slow on Social Sites"

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David Biernbaum
Guest
10 years 5 months ago

Consumers definitely prefer that retailers and brands refrain from using MySpace and other social networking sites for blatant advertising within the social activity and content, itself. In fact, in this environment, most blatant advertising will be ignored, or even worse–it will be resented and resisted, and it could have erroneous impact.

o However, creative and entertaining efforts are often well rewarded.

o My recommendation, if your company determines that there is value in using social networking sites for advertising or public relations, is to be absolutely certain to give the assignment to true experts.

o Do NOT try to do this on your own, nor should you give this assignment to the traditional marketing or PR department, if they do not have the exact expertise that is needed to make it work effectively.

This is not your father’s Oldsmobile.

Steve Weiss
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Steve Weiss
10 years 5 months ago

My 17 year-old son and his crowd have almost entirely stopped using MySpace. They keep their sites for confidential communications (no one allowed on their sites except the invited)…away from parents who have figured out how to get on the site and advertisers who have aggressively compromised and fairly RUINED the open experience. Mark my words…this beast is mortally wounded.

Brian Anderson
Guest
Brian Anderson
10 years 5 months ago
Are most retailers ready for social networking sites? What are the keys to avoid brand suicide on sites such as MySpace, Facebook, YouTube and others? For the early adaptors yes, for all the rest it’s a long slow learning curve. WOM ( Word of Mouth Marketing) is hot and growing. Giving people a reason to talk about your stuff and making it easier for that conversation to take place is where the rubber meets to road. Several keys to review. • Happy customers are your best advertising. Make people happy. • Marketing is easy. Earn the respect and recommendations of your customers. They will do your marketing for you, for free! • Ethics and good service come first. • UR the UE: You are the user experience (not what your add says you are). • Negative word of mouth is an opportunity. Listen to learn. • People are already talking, your only option is to join in the conversations. • Be interesting, or be invisible. • If it’s not worth talking about, it’s not worth… Read more »
Mel Kleiman
Guest
10 years 5 months ago

MySpace, Facebook, YourTube; Social networking in general takes a lot different approach then straight advertising as every comment above as mentioned. So it is unanimous.

Look at the ways a number of smart retailers and restaurants and other companies that rely on this audience are beginning to use the medium…that is, for recruiting employees. It’s still a slippery slope, but if you can create the feel that your organization is a fun, upbeat place to work, embraces technology, and is willing to venture out into the electronic world, this is a place you may want to have a presence.

The best employees come from referral and social networking and that’s what these sites are all about.

Joel Warady
Guest
Joel Warady
10 years 5 months ago
It isn’t the vehicle, it is the message. Social Netwoking sites like MySpace, Facebook, Eros, etc. are great opportunities to connect with consumers. But the last thing that you want to do is to sell to the consumers using these sites. If you have the right message, and you have the right offer, online users of these sites will connect with you. For example, if a major retailer offered free downloads of music on MySpace, they would build a network of friends who would visit the site, and those friends would then have a positive brand experience with the retailer. Now the retailer can leverage this relationship. Possibly they introduce one new indie band per month, and allow for a free download of 2 tracks per month, with the remaining songs available on CD exclusively at the retailer. This could help drive traffic to the stores. The point is this. Retailers have to understand that social networking is just that; it is about being social. It isn’t proper to sell in a social setting, but… Read more »
Bill Bittner
Guest
Bill Bittner
10 years 5 months ago
There is a huge risk/reward disconnect with promotions targeted to social networking sites. Just ask any politician who has been followed by their competitor’s camera man and had a momentary indiscretion broadcast to the world. The reach of these sites is huge (hence their appeal), but the whole understanding of what is “acceptable” is still evolving. Any promotion targeted to this channel runs the risk of “instant backlash.” If one member of the community takes offense, they can quickly flash their displeasure to hundreds of online comrades. Any company venturing into this arena has to make sure they understand their audience and that their message is not seen as an intrusion. If you have a product that is of direct interest to this segment the risk might be worth taking, but for retailers in general I don’t think it is imperative to jump right into the fray. The one exception might be those situations where shopping is the direct topic of interest. The effort to create an online “promotion store” on second life to offer… Read more »
Ben Ball
Guest
10 years 5 months ago

Taking David Biernbaum’s pithy quote to heart (“This is not your Father’s Oldsmobile”) I decided to go to a more authoritative source for insight on this one. My 22 year old with the newly minted Marketing degree seemed the perfect choice. His surprisingly lyrical response to my query was…

…”MySpace makes places where fools show their faces.”

Sounds to me like brands should think twice about just what they are associating themselves with–even if they do figure out the “right” way to be there. When pressed about the example of ice.com–Son’s response was “that they were probably selling grilles or something.” If you don’t know what a “grille” is either, then we probably shouldn’t be offering opinions on how to market there. Ouch, I feel old!

Mark Lilien
Guest
10 years 5 months ago

Social networking sites like MySpace.com definitely drive music sales. But the best hooks aren’t blatantly commercial, since the pages are positioned as personal musicians’ pages, not music conglomerates’ pages. Furthermore, dollar sales aren’t the whole picture. Sales driven from low-cost affiliates can be much more profitable than sales driven by pay-per-click sites like Google. Even if a click only costs 25 cents, it’s not cheap if the advertiser has to pay for 100 clicks before one retail purchase is made.

Lisa Bradner
Guest
Lisa Bradner
10 years 5 months ago
No great surprise here–social networks are called “social” for a reason. They are fundamentally about people getting together and talking to each other. They are a place for peers to connect, not a place where people go to learn about products and services. Some of that happens incidentally but any marketer who goes in with a hard sell is going to be in for some backlash. Best practices we see? Have a reason for being there–some reason why the consumer wants to connect with you, something they’ll get for participating that is legitimately part of your brand and is something they’re interested in. “Give/get” is an important concept in this space, as is not shamelessly promoting your brand with no reason for being there. All that being said I think Ms. Evan’s quote misses the point a bit. No one said this was about sales–it’s about brand awareness and brand relevance. Once of the problems of the online metric mentality is we miss that building brand awareness is a legitimate objective and that even if… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
10 years 5 months ago

For retailers, the successful execution of this idea is so far in the future you can’t see it from here. For brands, pick your spots carefully and pay close attention to demographics. In fact, demand demographic data before you get involved with any social networking site. Then, only get involved if your product matches the demo perfectly. As Olivia Newton-John sang to John Travolta in Grease’s “You’re The One That I Want,” “Feel your way.”

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