What's New in Internet Marketing

Social commerce is experiencing explosive growth.  Marketers and merchants are finding myriad ways to use social media to enhance the selling effort, whether at a brick-and-mortar store, or online in e-commerce. 

The opportunities are so vast, it’s difficult to fence off “social commerce” and define it with any precision.  Some of the most prominent strategies in the marriage between social media and commerce include:

• Retailers who use external social media to pull customers and prospects to their stores and websites, usually leveraging viral word-of-mouth methods.
• When retailers add social functionality to their e-commerce environments, where customers can comment and share information about products and offers.
• Building an e-commerce extension store within a social network like Facebook.  (Lady Gaga’s store on Facebook has 30 million friends.)

Look at the variety of approaches!  The possibilities seem endless.  Let’s look at a few examples of new ideas that are showing promise.

Organize.com: Party animal

Organize.com sells products to help consumers get organized, like shelving, racks and boxes, for every room in their households.  Recognizing that getting organized can benefit from group participation, Organize.com has been holding special events, each generating as much as $18,000 in sales, and hosted on Facebook and Twitter. 

The two-hour parties run on a Wednesday evening in the middle of the month, from 6:00 to 8:00 pm Pacific time, which allow after-work participation across the U.S.  During the 2-hour period, Organize hosts post questions about consumers’ favorite products, and encourage visitors to talk about recent organizing projects in their homes, and share tips on what worked best.  Prizes and coupons are offered every 15 minutes, to keep the excitement going. 

Parties may be set up around a theme, like Halloween, Christmas or spring cleaning, or to promote a particular product line.  The company hosted 10 parties during 2010—each attended by anywhere from 500 to 1500 participants—and is keeping the technique going strong in 2011. 

 Sears: Harness Influential Bloggers

Sears, the $43 billion general merchandise retailer, is signing up bloggers to help promote the chain’s consumer electronics product lines.  The program is called Sears Blue Blogger Crew, and launched with 5 recruits attending the giant Consumer Electronics Show in Las Vegas in January 2011.  The strategy is to give influential bloggers early access to upcoming products, and allow them to interview key Sears executives, to generate copy for their own blogs.  From the consumer perspective, then, the discussion comes from peers, who are generally more trusted than large companies.

BeautyChoice.com: Let Your Customers do the Work

Like many e-tailers, BeautyChoice.com realized that video is a great way to demonstrate product usage and results in a vivid, entertaining way.  But they were unable to pull together the budget to produce videos on their own.  Noticing that many consumers were uploading product-oriented videos to YouTube anyway, BeautyChoice approached some of the more popular video producers and asked them for help. 

BeautyChoice has set up deals with about 40 YouTube stars, sending them free products to talk about in their videos and also paying them a fee based on the number of their video channel subscribers.  

The results have been astounding.  The dedicated videos have generated more than 300 million views, driving huge spikes in both site visits and sales at BeautyChoice.com.  Click-through rates range from 2% to 4%, and 4% of those visitors convert to buying products mentioned in the video.  About 30% of the site visitors typed the BeautyChoice name to get to the ste, indicating that the video content is compelling enough to motivate new prospects to try out the firm. 

BeautyChoice.com also uses the YouTube videos at their own site, on the appropriate product pages. 

Country music stars sell social

Musicians have a unique understanding of the power of a fan base.  So it’s no surprise that they have been ahead of the curve in connecting social media with direct sales of albums, merchandise and performance tickets.

Well-known country stars like Reba McIntire, Taylor Swift and Steel Magnolia are using the social commerce platform Moontoast to sell their music on Facebook, fan sites, and their own sites.  Artists can embed the commerce capability on any site or social network, and not only sell, but let fans share messages and videos, stimulating even more loyalty.  The platform also provides analytic tools to let the musicians test offers and help build their audience.

The Reba store on Facebook has 1.7 million friends

We know that marketers are experimenting with social media, but what is really going on, in detail?  Some new research from the University of Massachusetts Dartmouth Center for Marketing Research reveals the most used—and most successful—social media tools for marketers among the Inc. 500, which is the fastest-growing companies listed in an annual ranking from Inc. Magazine.  Facebook, Twitter and blogging lead the list.   We shouldn’t be surprised that fast-growing companies are ahead of the curve in trying out these new ways to connect with customers and prospects. 

Foursquare is at the bottom of the Inc. 500 usage list, but given that the tool was only introduced in 2009, it is clearly a rising star.  Foursquare lets its 6 million (so far) users announce their locations via their mobile devices, and invite their friends to join them, while at the same time earning points for promoting the bars and cafes where they hang out.  

Interestingly, when it comes to the question of what social media tools the Inc. 500 marketers find most effective, however, the list shifts considerably.  Message boards lead, possibly because they have been around many years longer than the newer tools like Facebook and Twitter, giving marketers a chance to get a feel for their results.   That video would be deemed so successful is not surprising, since video has been shown again and again to lift response and conversions in advertisements online.  Myspace has been in decline for several years, and its owner, Rupert Murdoch’s News Corp., recently indicated a desire to unload the property. 

The perceived value of social media for marketing among the Inc. 500 is growing dramatically, with 56% of responders in 2010 calling it “very important,” compared to 43% in 2009. 

The outlook for social media marketing is strong, as marketers and agencies gain experience and the media themselves continue to grow.  Very likely, among the trends for social media marketing in 2011 are:

• Continued growth of social media usage by consumers.  eMarketer says that 65% of U.S. Internet users will use some form of social media in 2011, compared to 35% at the end of 2008. 
• Steady spread of social media marketing.  eMarketer predicts that 80% of all companies in the U.S. will be using social media by the end of 2011, up from 73% in 2009, and growing to 88% in 2012.  But there are pockets of non-adoption.  The industries least likely to use social media are manufacturing, government and utilities. 
• Growth in social media marketing spending.  Ad spending on all social networks in the U.S. is predicted to comprise 10.8% of all advertising spend, according to eMarketer, with 83% of companies increasing their budgets from last year.
• Hiring marketing staff dedicated to social media. In its 2011 Digital Marketing Outlook report, The Society of Digital Agencies says that 50% of agencies and 31% of clients will be looking for social media marketing skills in their hiring plans for the year.  They are also looking for skills in social community site management, and social media monitoring. 
• Emergence of additional social media channels.  New networks and methods for connecting with others seem to arrive on the scene daily, most of them serving niches, like SplashVision for people who work and play on the water.  One new general-interest site is Quora, a question-and-answer tool that is now beginning to gain some traction.  But it’s not just entrepreneurs launching new media.  Businesses can easily create their own social networking sites using development tools like SocialGo.