With Facebook going public this week, there is a lot of talk about whether its advertising works. Since the social network’s valuation is based on an uncertain business model, that is a good question. But we are not here to evaluate the worthiness of the investment in the stock — instead let’s look at whether Facebook ads make sense for marketing managers.
To answer the question in the headline, you should recognize the various ways a brand can use Facebook. Marketers can create a Facebook fan page and invite customers to “like” the page. After liking the page, posts to that page appear in that person’s news feed. The cost to the marketer is to create the page and keep it up — but there is no media cost. There is also no revenue to Facebook, so the firm has developed other types of advertising. In theory and probably some time in the future, Facebook knows so much about users (through elaborate analysis of likes, posts, photos, the user’s network, etc.) that it can target customers.
Do you ever click on Facebook ads? Have you “Liked” any brands? Do you read brand posts in your news feed? What messages appeal to you? Why? What can Facebook offer advertisers?
Getting back to the question in the headline — the jury is still out. Time will tell, and the value of Facebook stock will likely follow.
Electronic Arts (EA) has been a dominant player in gaming — especially with their live action sports games that are usually played on computers or TVs. Then, along came Zynga, which offered mobile games through social media like Facebook. Since this market is relevant to many of our students, it might be useful to keep up with the latest competitive battles. Now EA is trying to play catch up; EA has a lot of cash to invest into these new markets. n this “listen” at NPR’s Morning Edition, “Game Giant Forced To Play Catch Up” (May 4), you can hear what EA is trying to do. The strategy relies on mining customer data and anticipating customers’ behaviors and needs. While Zynga has been mining customer data for many years, they traditionally monitored customer behavior to decide how to adapt or when to drop current games. EA hopes that its efforts to anticipate behavior will help it leapfrog Zynga.
Zynga’s strategy is also evolving — as the game maker tries to move away from its reliance on Facebook, see “Zynga Posts Loss, Sees World Beyond Facebook” (Wall Street Journal, April 26, 2012).
In effect, we are seeing these game makers battle over channels of distribution as consumers change behavior. Can EA catch up? Which firm will win in the long run? Why?
The financial services industry may have identified a new and underserved target market — women. More than a quarter of all the world’s millionaires are women — and that number is growing. In the U.S., women control$8 trillion in assets with that number expected to grow to $20 trillion by 2020. This Wall Street Journal article “Clients from Venus,” (April 30, 2012 – non-subscribers may need to click here) explains how women investors have different needs than men.
How could a financial services firm adapt its marketing mix to better meet the needs of women? Think about the firm’s website, its advertising, and its products. Think about how sales force recruiting and training might be different when women are the target market.
In “Battle of the Digital Brands: Fender vs. Gibson” Digiday (May 1, 2012) compares the social media activity of two American icons — Fender and Gibson Guitars. The two brands are pretty heavily invested in social media.
What do you think? 1) Which brand is doing a better job with its digital strategy? 2) Who is (are) the target market(s) for each brand’s social media? 3) What else would you suggest to improve each brand’s social media blend?
The CMO’s Guide to the Social Landscape is a great tool for understanding how to pair social media tools with different types of promotion objectives. Marketing managers should begin with promotion objectives — what do they want to accomplish. This guide suggests four promotion objectives that might be addressed with social media: 1) customer communication, 2) brand exposure, 3) traffic to your site, and 4) search engine optimization. Then 14 social media tools — from Twitter and Facebook, to Pinterest, Instagram, Slideshare and more are briefly critiqued on their ability to achieve that objective.
This year’s guide is interactive –when you click on each objective, the list resorts to bring the most effective tools to the top of the graphic. This is a great resource for marketing majors, entrepreneurs, and others interested in social media and marketing.
Mountain Dew’s sales skews toward young whites — a declining demographic. While the brand sells well in the southeastern part of the United States, it doesn’t do as well in other parts of the country — or in major cities. One of PepsiCo’s major brands (accounting for 20% of its sales), for growth Mountain Dew has targeted blacks and Latinos with new advertising and products (see “Mountain Dew Wants Some Street Cred” Bloomberg Businessweek, April 26, 2012).
Read the article, check out one of ads in the new “This is How We Dew” campaign below. What else could Mountain Dew could do to appeal to these new target markets? Think about all 4 Ps.
Everyone sells something — whether we are clinching a deal, getting a job, winning an argument, or seeking a spouse. After author Philip Delves Broughton got to Harvard Business School he wondered why sales wasn’t part of the curriculum. The former journalist decided to teach himself — by interviewing master salespeople and writing a book about it. I just listened to an interview with Broughton on NPR (Weekend Edition Saturday, April 28, 2012) about his new book “The Art of the Sale: Learning From the Masters About the Business of Life.” From a rug seller in Morocco, to an insurance saleswoman in Japan, to a contractor in Baltimore, Broughton learns what makes for great salespeople and shares what he learns.
I suggest you add the book to your summer reading list. In the meantime, listen to the interview, watch the video below, click through to Amazon’s page on the book, and share your opinions and experiences “selling” anything.
Target stores is launching a new concept — specialty shops they call “Shops at Target”. This short article “Would You Pay More For Fancy Versions of Target Products?” (Fast Company, April 16, 2012). provides examples of the efforts to sell upscale and considerably higher priced products just a few aisles from Target’s usual discount fare.
Read the short article, peruse the examples, and thoughtfully consider these questions: Will Target’s usual customers buy these products? Is this is consistent with Target’s positioning? What other products might be sold in the Shops at Target?
I recently gave a talk at Colorado State University’s Future Visions program titled, “Marketing and Social Media: Creepy or Cool.” As I prepared for my presentation, I was surprised to see that some marketing practices I thought were years away — are being practiced now.
For example, did you know that Facebook apps are gathering data about users and user’s friends? You can read more about this in “Selling You on Facebook” (Wall Street Journal, April 10, 2012). Looking ahead, you can be sure that Facebook and Google are developing techniques for mining many types of data — everything from your “likes,” gender, and political leanings — to your status posts and photo stream. Facebook wants to be able to anticipate your needs — so that it can help marketers address those needs. Yes, that is the reason the company is worth $100 billion.
What do you think of this practice? Are you concerned about these apps taking your private data — or your friends’ data? Do you look forward to marketers having this information about you — so they can better serve your needs?
Showrooming is the practice of shopping in a physical store and then purchasing the product online from home. Online retailers often have cost advantages over their brick-and-mortar competitors; online retailers don’t build stores in high-traffic, high-cost locations, and they don’t need to employ a large, knowledgeable sales staff, many do not have to charge sales tax. Brick-and-mortar retailers do have those costs – and increasingly, customers are going to those physical stores to view products and talk to sales staff before buying online. These advantages, and some great marketing and technology, have fueled Amazon’s rapid growth. This article from the Wall Street Journal, “Can Retailers Halt ‘Showrooming’?” (April 11, 2012, non-subscribers may need to click here) discusses how retailers like Target and Walmart are fighting back.
Do you engage in these practices? Are consumers behaving ethically? What should producers do about this? What should brick-and-mortar retailers do?
With Facebook going public this week, there is a lot of talk about whether its advertising works. Since the social network’s valuation is based on an uncertain business model, that is a good question. But we are not here to evaluate the worthiness of the investment in the stock — instead let’s look at whether Facebook ads make sense for marketing managers.
