learnthe4ps.com - For students of marketing.

[UPDATE] Last week we made a post, “Does Facebook Advertising Work?” (Learn the 4 Ps, May 17, 2012) with a number of links. One of the links was to a blog post at the Planet Money blog. Well, this morning I listened to the Plant Money podcast “Facebook: Now What?” (May 22, 2012) and it provides a lot more details about advertising on Facebook. So if you would like to understand a bit more about how Facebook advertising works, give this 22 minute podcast a listen.

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.

GM offers one answer to that question in “GM Says Facebook Ads Don’t Pay Off” (Wall Street Journal, May 16, 2012, non-subscribers click here). A case study reported by NPR found equally dubious results – “Pizza Delicious Bought An Ad On Facebook. How’d It Do?” (Planet Money Blog, May 16, 2012).

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.