Ron Lunde … Potpourri

A compendium of disparate topics, ideas and opinions

Category: Digital Marketing

Peer Influence (Social Media) Effectiveness … Is There Such A Thing?

Peer Influence (Social Media) Effectiveness

 

Marketers, for some time, have believed that some customers have a disproportionate influence on others when it comes to purchase decisions. There is a growing belief, and some evidence, that contagion does exist … in other words there are customers who are influencers / opinion leaders and that they tend to influence the purchase decisions of others. [Is this true?]

Importance To Marketing Initiatives

 

Key questions for marketers: “How do I optimize my marketing communications MROI?” “Should I invest in Social Media / Peer Influence marketing?”

Consider … Nielsen Online estimates advertisers create slightly over 2 trillion online advertising impressions each year. People [Social Media / Peer Influencers] create about 500 billion impressions on each other about products and services each year according to a 10,000-person survey conducted by Forrester research concerning blog and social media usage habits. Internet sources state “78% of consumers trust peer recommendations when making purchase decisions, but only 14% trust advertising.” The Pharma industry dedicates, by some counts, 20% of marketing budgets to peer influence marketing.

 

The Challenges of Peer Influence Marketing

  1. Preliminary academic research indicates that contagion does happen … i.e. there are those who are opinion leaders, and they tend to bring other customers with them.
  2. Marketers have traditionally used “mass influencers” in mass media campaigns, [product endorsements] such as celebrities, sports stars, movie / TV personalities, academics, etc. to motivate sales based on the contagion premise. A major issue is that this approach is expensive and there, to date has been no ROI story for influencer marketing.
  3. Researchers, because of social media adoption, are now discovering “micro influencers”. Micro Influencers may not have ‘formal’ positions that validate their influences, but they can be recognized as being knowledgeable and trustworthy on specific topics. Some research indicates that they can generate three times more word of mouth communications than non-influencers. Social media such as Twitter, Facebook, LinkedIn and others have all brought a dynamic growth of information and capability that is beginning to allow for the scientific identification of patterns of influence.
  4. Research, in general, has confirmed that consumers form overall evaluations of each product using a multi-attribute screen and then choose the product with the greatest utility or satisfaction. Current analysis, however, typically assumes that one consumer’s attribute preferences and product choices are independent of the choices of others. Therefore, the ability to incorporate social interactions in multi-attribute decisions is a new and important area for research.
  5. There is a growing sense by marketers, both retail and CPG, that decisions are not just made with reference to traditional / ‘formal’ marketing. Understanding and validating informal influence networks is going to be the next stage in leveraging this understandingand establishing the incremental value of social media.
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Understanding The Digital Communication Tool Marketplace

Understanding The Digital Communication Tool Marketplace

What exactly does the digital marketplace look like?  Understanding the foundation is a critical initial step. 1st answers appear in new research from Prosper’s just released Mobile Insight Center. http://prospermobile.com/.

Click on the red box at the right of the screen and register … it’s free. Examine all the tabs. You’ll get a very good set of insights. One interesting insight for example, from a marketer’s perspective,  is the study on planned switching from one carrier to another and the reasons why. (Look for the tab at the top of the screen.)

The Prosper Data  Presentation … is Mass Customization

But most importantly, look at the data presentation. It is a true 1st tier example of Mass Customization. Data … customized … frictionless.  Data served up anyway you want it … just like Starbucks.

Turning Possibilities Into Opportunities

Digital devices are the ‘gateway’ tools for marketers to shift into the future. Those that successfully master targeted interactions will first gain insights from individual data perspectives and then go on to envision the power of each variable. These ‘sights’ will enable a marketer to build foresight and create tomorrow’s hindsight … today. These marketers will have an unfettered perception of what truly meeting customer needs looks like … hence the ability to turn possibilities into opportunities.

Efficiently Serving Customers Uniquely … the new power of digital communication

Mass Customization … is efficiently serving customers uniquely

“The ability to customize an offering on demand for an individual customer and produce it on an efficient, non-craft bases is known as Mass Customization.” Stan Davis in his book Future Perfect.

Example of Mass Customization? Think Starbucks!

Digital communication is THE link that enables Mass Customization  customer communication …

The Marketing Function Is About To Be Radically Altered

Smartphones, tablets and e-readers, digital communication tools,  are rapidly capturing the majority of American consumer market. Asia and many European countries are more advanced in penetration and apps than the US. The product shelf life is short as a constant parade of ‘better’ hardware and software continually hits the market. The consumer is demanding and unforgiving to laggards. Think Motorola.

As digital communication tools penetrate the market, many think the marketing function will be radically altered from the present form of mass communication to an approximation of 1:1 or Mass Customization. Products, information and incentives are all part of the Mass Customization mix.

Understanding The Digital Communication Tool Marketplace

What exactly does the digital marketplace look like?  Understanding the foundation is a critical initial step. 1st answers appear in new research from Prosper’s just released Mobile Insight Center. http://prospermobile.com/.

Click on the red box at the right of the screen and register … it’s free. Examine all the tabs. You’ll get a very good set of insights. One interesting insight for example, from a marketer’s perspective,  is the study on planned switching from one carrier to another and the reasons why. (Look for the tab at the top of the screen.)

The Prosper Data  Presentation … is Mass Customization

But most importantly, look at the data presentation. It is a true 1st tier example of Mass Customization. Data … customized … frictionless.  Data served up anyway you want it … just like Starbucks.

Turning Possibilities Into Opportunities

Digital devices are the ‘gateway’ tools for marketers to shift into the future. Those that successfully master targeted interactions will first gain insights from individual data perspectives and then go on to envision the power of each variable. These ‘sights’ will enable a marketer to build foresight and create tomorrow’s hindsight … today. These marketers will have an unfettered perception of what truly meeting customer needs looks like … hence the ability to turn possibilities into opportunities.