By BoLOBOOLNE payday loans

How Social Media will change Marketing

A number of years ago, a bunch of my friends were reading Naomi Klein’s book No Logo and getting really riled up by it.  The book is certainly written to make you angry, describing how brands and logos have become more and more prominent in our society as the marketing industry has become more sophisticated at delivering their messages.  When I read it, I had a very different reaction.  I found it to be a fascinating history of marketing.  Klein gives examples of how advertising of the past was very simple — think back to classic TV ads which amounted to a person standing in front of a camera saying little more than “Buy this dogfood.  It will feed your dog.”  When television was young, these ads worked.  But as people got used to it, they learned to tune these simple messages out.  What has followed has been a steady co-evolution of new marketing techniques and people learning to understand them and be less swayed by them.  If you’re old enough, you’ll remember that first Diet Pepsi commercial that ran before Top Gun in theaters.  Remember how odd it was to see a commercial in movie theaters?  Or consider the evolution of product placement within movies — how actors used to turn their heads and unnaturally hold their beverage so the entire logo was clearly visible on the side of the bottle.  Now it’s much more common to just see a part of a logo — enough to be recognized and enter the subconscious, thus bypassing the conscious filters which weed out blatant product placement.  Klein presents this history, punctuated with outbursts of “we’re not going to put up with this any more!”

Simultaneously, technological advances have allowed advertising to progress along a different axis — to become more targeted.  Advertising used to only be broadcast widely through newspapers and television shows.  The best an advertiser could do to ensure their message reached the right kind of people was to select the aggregate demographics of everybody who read a particular magazine.  Now the internet allows ads to be targeted as precisely as you’d like.  Today, Google lets you get your message only in front of people who are about to buy a product like yours.  The ability to connect to people who have expressed an intention to “buy digital camera” is a literal gold-mine, making billionaires out of Larry, Sergey and Eric.  As effective as it is, targeted advertising won’t replace broadcast advertising, because there is still value in abstract brand-building.  Rather, the two will complement each other.

Enter Social Media

Social media has been all the buzz recently.  At its core it’s just a more convenient way for friends to communicate.  The “killer app” for computers has always been helping people communicate, and this is just another chapter in that book.  With this new communications medium comes a new opportunity for organizations to tell their stories.  In fact, I believe that social media will bring another tectonic shift in the entire marketing industry, possibly as important as search-based advertising.  As consumers have gotten more and more sophisticated at filtering out advertising from broadcast media, advertisers have gotten more and more desperate in their attempts to connect with people.  Social media marketing offers a new path — instead of hearing about products and services through ads, people can hear about products and services from their own friends.  Exactly how this will play out through Twitter/Facebook/Foursquare/whatever is not at all clear to me right now, but I fundamentally believe this change is coming, and it will take the entire marketing industry with it.  Klein and her fans are free to unplug from popular culture in order to avoid the onslaught of brand advertising, but they would be foolish to stop talking to their friends just because their friends are happy with things they’ve bought.

This vision is one of the main things that prompted me to jump off the comfy Google cruise liner and start paddling hard in Banyan Branch‘s crowded dinghy.

Is marketing intrinsically evil?

I sometimes feel a need to justify this line of work to those who think that marketing is inherently dirty.  I admit that I’m more of a capitalist than many of my friends, but I certainly recognize that capitalism has its limits.  The vast majority of economic transactions are both consensual and mutually beneficial, and I will argue vigorously that there is nothing wrong with an economic system consisting of these transactions.  The biggest exception to this happens when transactions are not mutually beneficial because one party is not fully informed.  But what we’re doing is helping people share honest opinions and feedback about the things they buy and use.  By lubricating the flow of information between real people, I believe social media will reduce the effectiveness of deceptive marketing.  Moreover, it will help companies connect to their customers and hone their goods to people’s real concerns and desires.  It will help hold companies accountable for their mistakes, and enable companies to better make things that make people happy.

Additionally, I will point out that my employer represents no small amount of “pure good” for the world, including organizations such as The Bill & Melinda Gates Foundation and Vittana, helping them tell their stories.

Taking a chance on a startup

Why did I choose this opportunity out of the sea of possibilities?  I evaluated the landscape as an investor would, since I am investing no small chunk of my life in this effort.  From my entrepreneurial training and experience, I know that smart investors care more about the people than the specific business plan.  The plan will almost certainly change, but the key management will not.  Having known one of the founders of Banyan quite well for a number of years, I am certain that many key elements for success are in place.  The corporate culture and governance will be solid.  I will be working in an environment where I am supported, and where I can learn and grow as a manager and a technologist.

Exactly what will I be doing or building?  I admit I’m not sure yet, but I have some very interesting ideas that I won’t be sharing here anytime soon.  I am sure that my work is very well positioned to be a part of a major shift in an entire industry — a rare opportunity.  Whether or not my work will play a key role in this shift is somewhat out of my hands — these things are always a roll of the dice.  But in another sense, it’s entirely within my control, and this is what I love about working in a small company.  There’s almost nothing but work between me and effective execution of our ideas.  Many people tend to exaggerate the importance of the idea itself, forgetting that it is incredibly important to execute well on whatever ideas you have.  I’ve heard people say that they had the idea for YouTube years before YouTube did.  How quickly we forget the dozens of other companies all working on the same problem in 2006, which almost all fell by the wayside because they didn’t execute as well as YouTube did.  Ideas matter for sure.  But hard work is critical.

If you’d like to jump on this raft and start paddling too, get in touch with me.  I need a few key rock-star developers who are’t scared of chaos and can think creatively about business problems.

  1. Greg Linden says:

    Hi, Leo. I think we are emphasizing different parts of what you said. I was reacting to your statements that ” technological advances have allowed advertising to … become more targeted”, “social media marketing offers a new path – instead of hearing about products and services through ads, people can hear about products and services from their own friends”, and “social media will reduce the effectiveness of deceptive marketing.” Those would seem to be about targeted advertising over social networks, so I thought you might be interested in talking through some of the issues with that approach.

    I completely agree that aggregate data from social media can and should inform product development. Most companies already do that, in fact, and, as I am sure you are aware, there are dozens of existing startups providing services to analyze social media.

    So, perhaps there was a misunderstanding. I assumed your statements above meant you were thinking about targeted advertising using social networks. From your latest comment, it appears instead that you are thinking instead about aggregate analysis of social media. So, yes, I agree, there is plenty of evidence that aggregate data from social media on customer sentiment and preferences is useful.

  2. leodirac says:

    @Greg – Your distinction between advertising and marketing is largely semantic, but I think I see what you’re saying. IMHO “Marketing” has a different scope from how you seem to be thinking of the term. I think of Marketing as spanning the range from Sales to Product Development. It’s a two-way conversation. The Sales side is more about getting people to want the product you have, and this is the part that I think offends. But Marketing departments are also the groups that traditionally run surveys and focus groups which listen to customers and adapt the products to their desires. In many companies Marketing is the function with thought-leadership to create new products.

    The idea of using social media to help people satisfy existing needs is a good one. I’m not at all convinced that sparsity of data will prevent this. Even very sparse data sets when aggregated across millions of people can be very effective. Facebook is offering detailed psychographic data about hundreds of millions of people today. Moreover, there’s clearly a trend for people to make more of their activities and preferences known online, and it appears to be accelerating. So even if the data are too sparse to be useful today, I don’t expect that problem to last long.

  3. Greg Linden says:

    I think Nathan has a point. Marketing at its core is deceptive, not informative, trying to create perceived need where there was none.

    I think of the ideal of advertising not as marketing but as providing useful information. I think if we could show the right ad to the right person at the right time, that would mean an ad that was helpful and useful to existing needs, not an ad that created a new desire.

    If your goal really is social media marketing, I think you might as well throw in your hat with the hordes of others who are paying “influencers” to prostitute themselves by shilling products to their followers and network connections. That model has little to do with improving advertising, though, and is inherently deceptive. It certainly does nothing to improve the state of advertising.

    If your goal is to improve advertising, if you want to make advertising more relevant and useful, then you probably don’t want to create needs, but try hard to find and satisfy existing needs. As you say, social networks could help with this — what your friends buy for their needs may help you find things for your needs — but I think that is only one of several data sources that would be required. The overlap between what your immediate friends have done and what you are doing is just too sparse for social network data alone to be sufficient.

  4. Jon Bell says:

    Hey Leo, long time no see.

    I think you’re on to something and I wish you luck :)

  5. leodirac says:

    Hi Nate — Thanks for the comments. I completely agree with your first two points.

    I certainly don’t mean to equate the collection of objects with happiness. The two are absolutely distinct concepts. But they do overlap. By which I mean you cannot accurately say that acquiring an object never makes a person happy. Sometimes it does.

    A flaw with our consumer culture is the idea that unhappiness is caused by a lack of stuff — an idea which has been scientifically proven false. It’s definitely a problem when people think that acquiring things is the way to solve their woes. I’m not quite sure where to point the finger of blame for this. The traditional practice of marketing is a reasonable candidate, but I’m not sure the link is very strong. My gut feeling is that it’s an emergent cultural phenomenon, perhaps from idolizing the wealthy. I think there are plenty of other cultures which have equal access to marketing but don’t suffer from this particular malady nearly as much.

  6. Nathan says:

    A few thoughts:
    – The oldest form of marketing is “word of mouth.” Social media just makes it more convenient to take the word and act on it.
    – Branding takes advantage of the ability of the human mind to recognize patterns/symbols and assign meaning to them. It is not inherently evil. It provides a convenient shortcut.
    – The primary deception of marketing is the connection between “things” and “happiness.” I was a little surprised to see you make that connection as well. Things can be convenient, useful, efficient, and effective, but they do not make one happy.

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