Infinite Touches – Segmentation on Steroids

In the previous posts in this series, Social Media is Not Advertising. Duh! and It’s the End of Segmentation As We Know It (And I Feel Fine) we took a look at brand marketers’ penchant for seeing social media as another advertising channel – the hammer and nail problem. We examined the lessons brand marketers can learn from the Big Data and microsegmentation techniques of the Obama for President campaign in 2012.

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In sum, we believe that the way most marketers approach social media misses the point. And the point is: Social media provides a means to not only microsegment but to establish actual relationships with your customers and prospects. To show that we’re not totally out in left field on this, let’s take a look at what some of the most advanced brand marketers are currently doing with microsegmentation.

Television, always on the vanguard of customer analysis, offers a good paradigm to understand social media microsegmentation. In an article in Broadcasting Cable magazine,^[1] Steve Silvestri, director of advanced advertising sales at DirecTV, described how his company is approaching their addressable base of about 11 million DirecTV homes. DirecTV can know a lot about their customers simply by knowing what they’re watching. This can enable them to very finely tailor their marketing.

“We want to get down to the household level, and that’s exactly what we can do today and that’s exactly what we are doing,” Silvestri said. For example, DirecTV could target dog-food ads to dog owners, cat-food ads to cat owners and, to a home nearby with three kids, a minivan ad.

Cable and entertainment giant Comcast has tested addressable-advertising technology, including a Baltimore market test that involved 60,000 homes, and plans more extensive testing. For example, homes already getting cable, phone and Internet could stop seeing triple-play bundle ads and instead see promos for Comcast’s home-security offering, said Kevin Smith, group vice president at Comcast Spotlight.

These efforts are trying to realize the destiny of marketing as described by Peter Drucker:^[2] “There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.”

This future is trying to be born in TV advertising, but there’s a network that exists today that can deliver similar addressability with even better results: social media.

SMPG’s Infinite Touches™

Social Media Performance Group has developed a process – called Infinite Touches – that leverages social media’s ability to enable microsegmentation and also incorporates the power of personal recommendations.

Let’s take a quick look at the effect on buying recommendations by friends have.

Josh Mendelsohn, Vice President of Chadwick Martin Bailey, sums it up nicely:

While social media is not the silver bullet that some pundits claim it to be, it is an extremely important and relatively low cost touch point that has a direct impact on sales and positive word of mouth.

Companies not actively engaging are missing a huge opportunity and are saying something to consumers —intentionally or unintentionally — about how willing they are to engage on consumers’ terms.^[3]

Mendelsohn’s company surveyed 1,500 consumers and found those who are Facebook fans and Twitter followers of a brand are more likely to not only recommend, but also more likely to buy from those brands than they were before becoming fans/ followers.

A study across 20 brands by analyst firm Syncapse^[4] found:

• On average, fans spend an extra $71.84 they would not otherwise spend on products they describe themselves as fans of, compared to those who are not fans.
  • McDonald’s saw the largest variability, with Fans reporting spending $159.79 more per year than non-fans
  • Oreo saw the lowest value with a difference of $28.52
• Fans are 28 percent more likely than non-fans to continue using a specific brand
• Fans are 41 percent more likely than non-fans to recommend a product they are a fan of to their friends
• An average fan may participate with a brand ten times a year and will make one recommendation. But, an active fan may participate thirty times and make ten recommendations.

Lest you think that social media only works for B2C brands, take a look at some supporting evidence that shows B2B brands can also benefit from social media: ^[5]

• In a June 2010 Harris Interactive poll, when asked what sources “influence your decision to use or not use a particular company, brand or product” 71 percent claim reviews from family members or friends exert a “great deal” or “fair amount” of influence.
• ROI Research for Performance found that 53 percent of people on Twitter recommend companies and/or products in their tweets, with 48 percent of them following through on their intention to buy the product.
• In the January 2009 study, “Tech Decision Maker” by Hill & Knowlton, when considering purchases, tech decision-makers gave user-generated sites equal importance with traditional media sources. Decision-makers first consider their personal experience (58 percent) when short-listing tech vendors, followed by word-of-mouth and industry analyst reports, tied at 51 percent. Advertising (17 percent) and direct marketing (21 percent) were listed as the least important information sources when short-listing possible vendors.

So how can you use this powerful segmentation and recommendation tool for your brand? That’s a question for tomorrow’s post.

Next up: Infinite Touches vs. Advertising