BrainTrust Query: Facebook Participatory Promotions
Commentary by David Dorf, Director of Technology Strategy, Oracle Retail
Through
a special arrangement, presented here for discussion is an excerpt from a current
article from Insight-Driven Retailing Blog.
Last week, Lowe’s and Gap
joined Walmart in launching what I’m calling Facebook Participatory Promotions.
These retailers are taking Facebook marketing up a notch by adding an element
of fun.
Lowe’s "Black Friday Sneak Peek Party" campaign on Facebook
offered consumers a limited number of items at a ridiculously low price for
their fans. Paid-search and display ads encouraged consumers to check out its
Facebook page just after midnight on Friday, Nov. 5 for a sneak preview of
its doorbuster deals planned for Black Friday. As an extra incentive, the first
100 Facebook visitors at 2:01 Eastern time received an option to purchase a
KitchenAid stand mixer at 90 percent off. The following 900 fans earned the
right to purchase the appliance for 20 percent off.
Lowe’s told Mediapost.com that
the "Party" weekend featured
more than 5,000 90 percent-off coupons covering more than 20 items.
Of course
these deals are only visible to Facebook fans of Lowe’s and, once they’re a
fan, other marketing messages can be posted on their newsfeed. These types
of campaigns are sure to increase Lowe’s number of fans and generate some excitement
heading into the holidays. It remains to be seen if those fans will stick with
Lowe’s after the holidays.
Also last week, Gap partnered with Facebook Places to reward
customers with free jeans for Facebook check-ins on Nov. 5. According to Fast
Company,
more than 28,000 users signed up on Gap’s Facebook page to attend the event,
although Gap only offered 10,000 free jeans. The retailer handed out 40 percent-off
coupons to those who checked in but missed the freebie.
The Gap and Lowe’s
promotions follow Walmart’s Crowd Savers program on Facebook that was launched
the prior week. Wall posts invite fans to vote on a promotion — most call
for around a 40 percent discount — and when enough "likes" are
recorded, the promotion takes effect on the walmart.com site. They then let
everyone know about the success of the promotion in another wall posting, and
everyone (not just those that voted) can benefit. It’s an interesting way to
push promotions to customers and also let them "play along."
Targeting
promotions only to fans reinforces loyalty, and having them do things rather
than just sending coupons adds the excitement and buzz. I predict these types
of promotions get even more creative as we near the holiday season.
Discussion Questions: In what ways will Facebook promotions be able to reach
consumers that traditional media can’t? Which of the mentioned promotions represent
the best example of how to reach consumers through social media?
Facebook Participatory Promotions will put retailers and consumer brands in front of a target audience early and often.
I started noticing something a couple of weeks ago. Instead of showing their web site addresses in TV and print ads, retailers and other brand managers are now using www.facebook.com/brandnamehere. In other words, facebook is becoming its own separate channel, with more power than the sites’ own names. To me that’s a stunning change, and certainly disabuses those with the notion that Facebook has “jumped the shark.”
Each of the promotions above has the promise of driving business, but to me the biggest change of all is placement on Facebook rather than through email. We’re witnessing a Google-like phenomenon, and maybe even bigger than that. The underlying message for retailers is “Use social networks to drive business.”
“targeting promotions only to fans reinforces loyalty” Yes but…talk about buying friends! The risk with these programs is they encourage the cherry-picking customer, unlikely to develop long term loyalty towards the brand. Hey, if they like your deals (and only the deals) they will like those of your competitors too.
Keep in mind this is a tech savvy crowd accustomed to price-comparing online. I am not saying that the programs are not worth-while, they do generate a certain buzz. But they are costly (zero margin) and may not in fact develop as much brand affinity as one would hope for.
Facebook is traditional media.
The various mechanics that brands use will be a matter of trial and error like any marketing concept but the simple truth is that there is not currently, nor has ever been to my knowledge, a media channel as “sticky” as Facebook.
When you have some users spending up to 5 hours a day on it, who can argue with Facebook as a channel?
This is the beginning of a new marketing era by three of the largest companies in their particular specialties. Walmart, Gap and Lowe’s are among, if not the market leaders in their field. Others will follow. We could be seeing the next new wave of marketing. Facebook, as the media source, offers a path for the marketers to reach a large segment of the buying population who pay little attention to traditional TV or magazine ads.
Facebook can be viral–if I get the promotion, all my ‘friends’ get the promotion too, way more effective than straight up email. Having said that, I’d bet on Walmart for word of mouth.
This is the kind of promotion that retailers and customers have been waiting for! Meaningful, targeted, and mutually rewarding.
Facebook promotions will continue to grow. One of the major challenges facing marketers is going where their shoppers are. The average use of Facebook is reported to be around 4hrs/week, making it an easy reach for brand users. Finding shoppers in a specific area is easy – they can be identified by geographic location, making opt in easy for targeted promotions. Having friends on Facebook who also might be interested spreads a message quickly. Tradional email as a way to reach shoppers is fast losing importance with the ease and scale available through facebook.