How Facebook’s IPO Could Transform Marketing

Media reports suggest that Facebook will file for an IPO this week that could value the company at $100 billion — and leave the company sitting on $10 billion in cash. I’m not a financial analyst, so I’ll leave it to Wall Street to discuss and debate that valuation. But the fact is this newfound wealth could not only allow Facebook to solve its biggest business challenges, it could also help Facebook finally achieve its longstanding goal to change how marketing works. So how should Facebook use its IPO windfall?

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I'm Back In NYC

I'm really pleased to announce that I've moved back to New York City. I actually started my interactive marketing career in New York almost 15 years ago, and I started my analyst career in New York nine years ago. But for the past seven years I've been plying my trade elsewhere: in London, Berlin, Vancouver, and then back in London again. Now, after half a career spent abroad, it's great to be back home.

What does this mean for my research coverage? Not much, really. I've still got the same job on the same team, and I'll still be focused on the same topics I've covered for years:

  1. Social media marketing. I've been writing about social media since 2004, and I've got no plans to stop now. Last year I published Five Ways Interactive Marketers Should Use Social Data, Social Media Marketing Metrics That Matter, and It's Time To Make Facebook Marketing Work. In 2012 I'll continue to lead our coverage of social media marketing with research on the staff and resources you need to succeed with social media, how marketers can take their social programs to the next level, and even how Facebook might justify its valuation. I'll also keep actively researching how social media can best fit into the marketing mix, most notably through an idea we call The Interactive Brand Ecosystem
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Know About Interactive Marketing In China? We'd Like To Give You Some Free Data!

Yes, really. If you make decisions about your company's interactive marketing programs in China, I want to give you some data you probably don't have access to: Survey data on how your peers and competitors are using interactive tools in the country.

You see, I'm working on a handful of reports covering the interactive marketing landscape in China — based on a long trip to the country in August and September of this year, as well as dozens of interviews with marketers and agencies in the country — and now it's time for my final piece of data collection: a marketer survey. So if you set or influence interactive marketing plans in China, and you've got 5 or 7 minutes to spare, I hope you'll take our short online survey. Just leave your email address at the end of the survey, and we'll get you an aggregated copy of the survey results.

And if you don't know about intearctive marketing in China, just sit tight: We'll be publishing some very interesting highlights from that survey right here on the Forrester blogs shortly.

It's Time To Make Facebook Marketing Work

Nearly a billion people around the world use Facebook — and it's no surprise marketers are chasing all those users. In fact, Facebook says 96 of the top 100 marketers are on the site. But I haven't spoken to many companies that are thrilled with their Facebook programs. Marketers worry about how few fans they have, about how few comments and wall posts they get, and about the ROI of their Facebook spending — and many of them have good reason to worry. In fact, we think most Facebook marketing programs are entirely too unfocused, too under-resourced, and don't make enough use of the entire platform.

So how can you make your Facebook marketing program work? We recommend following four steps:

  1. Set clear objectives. If you don't know what you're trying to achieve with Facebook, you run the risk of not achieving anything at all. Are you trying to drive brand impact or sales? Generate word of mouth, increase loyalty, or provide customer service? Deciding on a few clear objectives for your Facebook program will answer most of the other questions you have — like who should fund the programs, or how you measure success.
  2. Provide value for your fans. Once you've figured out how Facebook can drive value for your company, make sure it's driving value for your fans as well. Otherwise, why would anyone bother to hit the 'like' button? According to Carolyn Everson, VP of global marketing solutions for Facebook, the brands that succeed on Facebook are "the ones that give people a reason to be fans." This doesn't have to mean discounts and coupons — exclusive content and information works just as well.
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My Forrester EMEA Forum Speech On The New-Fashioned Brand

Two weeks ago we held our 2011 Forrester EMEA Marketing & Strategy Forum in the UK. We had a great turnout, as well as fantastic speakers including Sir Martin Sorrell of WPP, Georges-Edouard Dias of L'Oreal, Ian Maskell of Unilever, and dozens of others, and I also had the pleasure of giving my first Forrester keynote. My speech covered how companies fail when they try to build old-fashioned brands, and what they must do to build new-fashioned brands. If you missed the event, then here's a highlight from my speech:

 

The Problem With Measurement Proxies

I've noticed a disturbing trend in one of the markets I study. Thirty percent  of marketers say their top social media goal is creating brand impact, but only 10% tell us they measure brand impact — a gap of 20 percentage points. But then while just 4% say sentiment or engagement are their top goals, a whopping 26% measure these numbers —leaving us with an almost identical gap of 22 percentage points, but in the other direction. It’s clear what's happening here: Marketers are using sentiment and engagement numbers as a proxy for brand impact surveys.

Deep down I love the idea of measurement proxies. A properly constructed and proven proxy could be a cheap, quick, and effective stand-in for direct measurement of things that are quite frankly hard to measure — like brand impact.

But there’s a big problem here: I've been looking pretty hard for good measurement proxies for a while now, and I’ve found very few that could be described as "properly constructed and proven." And I'm pretty sure none of the marketers in our survey have proven their proxies — because if they'd tried, they'd have almost certainly failed.

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Why Don't European Marketers Spend More On Social Media?

European marketers are as excited about social media today as ever before. In fact, according to our annual survey, three-quarters of interactive marketers in Europe either already use social media or plan to use it by the end of 2011 – and they expect social media marketing to grow in effectiveness more than any other online or offline marketing channel in the coming years. But there’s a problem: European marketers still aren’t spending very much on social programs. In fact, a quarter of the marketers in our survey plan to spend less than €35,000 on social media this year – and many of the rest won’t spend much more than that. And most European marketers said they had no plans to increase their social media budget this year compared to last.

I think this lack of spending is both a symptom, and a cause, of problems inherent in how European marketers use social media:

  • It’s a cause, because the resources aren’t there. One of the biggest problems social media marketers face right now is a lack of resources. When it comes to social media they have trouble finding budget, staff, time, and even good help from their agencies. And that actually makes a lot of companies afraid of success. You’d be surprised how often I hear statements like "I want to start a Facebook page, but what if it takes off? I don’t have the budget to staff it full time!" When marketers are afraid of success, rather than failure, then you know you’ve got a problem.
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Why Apps Aren’t The Killer App For Mobile Marketing

It was more than 10 years ago that I listened to my first sermon about the growing importance of mobile as a marketing channel. It was late 2000 or early 2001; I was working at DoubleClick at the time, and my boss left the company to join a mobile startup, claiming we should’ve already had a mobile ad offering in place because it wouldn’t be long before smartphones replaced PCs entirely.

Suffice it to say I’m still waiting anxiously for a chance to throw away my computer -- and likewise, marketers are still waiting for mobile to become a genuinely important marketing channel. It’s not that they’re pessimistic: In fact, the marketers in our surveys rank mobile just a hair behind social media in terms of channels they think will grow in effectiveness over the coming years. But anticipation has never quite equaled reality -- and so most interactive marketers across the US and Europe continue to bide their time, waiting for a mobile marketing opportunity that’ll match the hype.

And that’s where mobile apps appear to come in. Few interactive marketing opportunities are more hyped than mobile apps, but in our search for a mobile marketing channel that really works we’ve lost sight of one crucial point: Marketers’ target audiences don’t care nearly as much about branded applications as the marketers themselves do. In fact:

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Want My Job? (Or One Very Like It?)

Don't worry, I'm not planning on going anywhere just yet! In fact, I love what I do at Forrester: Put simply, I look for the most interesting and difficult-to-answer questions in interactive marketing, I spend a month talking to really smart people and collecting data on those questions, and then I write reports and give speeches that answer those questions for our clients. (My favorite recent questions have included "What's the best way to use interactive marketing as a branding channel?" and "How can marketers use social data?") In the process I get to collaborate with fantastic, thought-leading colleagues like Shar VanBoskirk, Sean Corcoran, Thomas Husson, and Zach Hofer-Shall; I get to dig into the best and richest data anywhere in the industry; and I get to work for some amazing clients all over the world. It's a pretty sweet gig.

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How To Use Social Data - And How Not To!

We work with a lot of different types of marketers at Forrester, and we always customize the recommendations we deliver to different clients based upon their unique situations and needs. But over the past few years there's one piece of advice I've found myself giving nearly every company I work with: "Hire a listening vendor."

I love listening platforms and the social data they create; it's a powerful source of information that, used correctly, can make marketers and their programs more effective. But not enough marketers are taking advantage of these benefits.

No matter what type of company you work for -- indeed, whether you work directly with social media or not -- you should be using social data right now to:

  1. Develop your messaging. If you want to create messages that resonate with your audience, you need to know what they care about. Many of our past Forrester Groundswell Award winners have used private listening communities to craft their marketing messages; increasingly, we're seeing companies use data from public social media to guide their messaging as well.
  2. Source your creative. We know that consumers trust what they hear from other consumers more than any other source of information -- why not use listening platforms to identify positive social content that can be included in campaign creative? I've even seen a UK bank, First Direct, use social sentiment data in an outdoor advertising campaign.
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