“Skechers USA Inc. will pay $40 million to settle charges by the Federal Trade Commission that the footwear company made unfounded claims that its Shape-ups shoes would help people lose weight and strengthen their butt, leg and stomach muscles. Kardashian, Burke and other celebrities endorsed the shoes in Skechers ads. (USA Today, May 17, 2012)
This case provides a current example of deceptive advertising.
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).
Any in-class discussion should distinguish between the various ways brands 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.
Ask students if they ever click on Facebook ads? Ask if they have “Liked” any brands — and if they read the brands’ posts in their news feed? What messages appeal to them? Why? What can Facebook offer advertisers? The articles I posted above tend to discount the role of advertising in brand building. These questions are also posted at Learn the 4 Ps.
Getting back to the question in the headline: well, the jury is still out. Certainly a lot of investors buying Facebook stock are hoping that the company finds a formula to make it work.
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.
You could assign this reading to your students and then ask them: 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? We have asked those questions over at Learn the 4 Ps.
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. The guide includes 14 social media tools — from Twitter and Facebook, to Pinterest, Instagram, Slideshare and more. The chart evaluates each tool on four promotion objectives: 1) customer communication, 2) brand exposure, 3) traffic to your site, and 4) search engine optimization. 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.
Social media is a fast-changing landscape — and with everything else we cover in our marketing classes it can be a challenge to keep up. This graphic will give you a quick tour of the various tools if you only need to understand the basics. It might work well when you cover promotion objectives to provide a tool to discuss how a few of the tools work to achieve each objective.
This Bloomberg BusinessWeek article, “Coming Soon to Your Desktop at Work: Ads” (April 19) exposed me to new media useful in targeting highly specialized B2B markets – including doctors, accountants, and IT professionals. The software is free to the user, in exchange for watching ads. Advertisers pay up to $200 per thousand views — almost 20 times what they pay for Facebook ads.
This provides a nice B2B example when you talk about segmentation and targeting, media or advertising. The business model also could be used as an example of an alternative pricing model for software.
I just listened to an interview on NPR (Weekend Edition Saturday, April 28, 2012) with Philip Delves Broughton, author of the “The Art of the Sale: Learning From the Masters About the Business of Life.” As the author notes, and I try to tell all my students, everyone has to sell something. Broughton decided to travel the globe and learn from the masters what makes great selling. 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 just placed my order for the book and added it to my summer reading list. I think if you listen to the interview with the author or watch the video below, you might do the same.
The ideas in the book and interview have relevance for our students, so we also posted this at Learn the 4 Ps.
In our books we classify social media tools like blogs, Facebook pages, and Twitter as forms of publicity. Inc. magazine regularly surveys members of the Inc 500 (fastest growing businesses — so generally small businesses). A recent survey found a decline from 2010 to 2011 in the number of firms using business blogs – falling from 50% of respondents to 37% of respondents. The decline appears to be because new firms to the list are not using blogs and not because firms are dropping blogs — among those blogging 92% reported the platform was a success. This short article, “Where Have All the Bloggers Gone? Business blogging on the decline” (Inc., April 3, 2012) also includes data on Facebook and Twitter.
This article might be useful to provide some current data on social media usage when you cover that in class and/or if you like to give special attention to entrepreneurship or small business.
In our text books (see chapter 15 in Essentials and 16 in Basic Marketing), we use the results of Nielsen’s 2009 “Global Trust in Advertising Study” to demonstrate the importance of public relations and social media in the promotion blend. Now the results of the 2011 “Global Trust in Advertising Study” has been released. This survey of 28,000 people from around the world shows that consumesr trust recommendations from friends and online reviews much more than various sources of advertising. The results provide a nice segue to social media and help explain why marketers are increasingly moving communications budgets in this direction. The latest results (released just last week, but collected during 2011 ) don’t differ significantly from the 2009 study. But you might want to present more updated results to your students.
OK, it is a bit sexist, but so is a lot of advertising. I like that it speaks directly to its target audience — the 18-40 year old male.
As our previous post noted, a big part of the future of marketing involves data analytics. When you think about how much information about consumers is already out there — through credit card buys, customer loyalty cards, search activity online, and social networks like Facebook and Pinterest — it is mind-boggling. In the past, firms were drowning in data — but some are beginning to get a handle on how to use this information to improve marketing effectiveness. For example, I recently talked to the president of an online retailer. He was telling me that they send out highly targeted e-mails — and adapt content as they go. So this retailer might send out 5 different variations on a subject line/promotion combination to 250,000 consumers over a 6 hour period. They might start with an even amount of each version of the e-mail — but if real-time data shows one version has a higher open rate — the mailing adapts and shifts more customers to receive the more effective message. Makes sense to me – but not so easy to do.
As we look to the future and how this data might be used, I found this Wall Street Journal article “The Benefits of Data Talking to Data” (April 2, 2012) insightful with some useful marketing examples.
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