How Social Media Can Benefit Marketers

The trends feature on Google Zeitgeist is a really useful tool for scoping out competitors in the marketplace. By comparing the popularity trend line of different firms, you can sometimes observe how one company’s growth affects another company’s decline. For example, when I searched facebook.com, the trend line indicated the site grew in popularity at a steady fast rate between July 2007 and October 2009. Myspace.com showed the opposite—a steady decline in popularity between those same two dates, which would reasonably indicate the extent to which the emergence of facebook stole its marketshare.
When I searched “The Killers,” the trend looked almost seasonal—spiking in a regular manner. To help explain some of the points on the line, Google labels them and indicates an explanatory news story or press release (e.g. The Killers Beat Guns ‘N Roses to the Top of the UK Charts), which can be useful. However, the site would be even more effective if it included a similar explanatory citation for every large peak and dip in the trend instead of arbitrarily noting some points while leaving out other, more prominent ones. These explanations would be useful for a marketer to understand what types of events may be influencing a product/service—or in this case, band’s—popularity.

Upon using the Zeitgeist’s hot trends feature to see the top 100 fastest-rising search queries in the U.S., I was surprised that I had never even heard of most of them! Although a lot of the queries listed look like nothing more than a bunch of lame celebrity gossip, it does list some businesses (e.g. Fran’s Chocolates)…which may or may not be relevant/useful if the business you’re in has some stake in chocolates or food in general.

The best way for a company to use social media to gain consumer insights depends on the type of information it’s trying to understand. If the company is trying to understand what college girls’ biggest frustrations about their current cosmetics are, it can host an online chatroom or forum that allows these girls to not only express their frustrations, but also how they mitigate them. Conversations like these can help marketing firms develop or communicate products that better satisfy their prime prospects. P&G uses this technique—“consumer council chats”—to gain consumer insights. When I was working on Downy, I organized one of these chats to better understand the reasons why consumers were or were not purchasing and using the brand. This chat revealed a lot of interesting information. Oftentimes some of the most surprising and useful insights to be gained from such media are ones that indicate that your consumers are misinformed about the product or has current irrational behavior that can be easily modified with proper marketing communication.

Also, social websites like Facebook are really useful to marketers whose target market is high school/college students. The number of different applications on Facebook amazes me. You’re able to view the different websites other users are visiting, their interests, etc. Perhaps more importantly than the information these features directly suggest (e.g. Favorite celebrity) is seeing which applications are being used most often and understanding the appeal of these applications. This information can be useful to companies like Amazon, Ebay, and Google in further personalizing their own services.

In addition, if the firm is trying to understand how much personal information college students are willing to publicly disclose, it can observe these students’ facebook profiles. By understanding how “open” these prospects are (which, we know, is pretty open), the company can further realize how to design their services. (For example, I’m assuming that there was a time it seemed strange for people to be able to see that you were online on AIM before instant messaging became popular. There might have been some key insight from observing people’s habits on other sites that led instant messaging services to allow you to display certain information and not others.)

Walmart and Data

I believe that Walmart has definitely used its enormous database to successfully create a meaningful experience for a certain group of consumers. As the article quoted, “Shoppers might buy cold medicine along with chicken soup and orange soup during flu season, but not all of those products need to be priced at rock-bottom…the other items in the basket might not be the lowest price in town, but the entire basket will be 10 to 20 percent less.” Walmart not only uses the information to offers consumers cheap products at the right time, but more importantly, it offers many people—particularly moms—a sense of pride in being smart shoppers: taking care of their family while saving money. I think that this sentiment fosters a sense of loyalty that many people overlook…usually the obvious advantages of shopping at Walmart is that it sells “cheap” products. However, there’s a significant difference between “cheap” and “good value.” The loyal consumers consider Walmart “baskets” to be a good value.
Although I think Walmart has created a distinct shopping experience, I still believe the company can do more to further refine this experience. As the article notes, Walmart has historically focused on their products, not their target consumers—although the latter kind of fell into place. This strategy probably has to do with the high costs of obtaining such rich information. However, perhaps Walmart can leverage the information they already have…or maybe the information their suppliers already have. For example, P&G supplies a lot of Walmart’s products, and the basis of P&G’s competitive edge is linked to its immense investment in consumer market research. Therefore, perhaps Walmart can obtain information from such suppliers. In fact, I remember reading an article about how P&G already discloses information about the consumers of its products because doing so benefits both parties. In any case, Walmart should strive to use the information it has to develop an even stronger, more conscious sense of loyalty within its most regular consumers. Compared to Walmart shoppers, Target shoppers seem to be much more enthusiastic and expressive about the fact that they shop at Target.
There’s a fine line between exerting “positive pressure” on your suppliers and taking advantage of them. To answer the question, I believe that Walmart is doing both: reducing their suppliers’ profitability in the short run and making them more efficient and competitive in the long run. If Walmart has the ability to track purchases in real time, it only makes sense for them to order merchandise immediately—order shortages and excesses are expensive. In fact, if these suppliers are able to stay on their feet when it comes to Walmart, this means that they will be equally efficient when it comes to other retailers who aren’t as strict. Ultimately, the pressure these suppliers receive from Walmart make them more competitive against other suppliers competing for shelf space in other retail stores.
However, it might be a bit unreasonable for Walmart to punish suppliers who miss sales goals with future tough negotiations if the reasons for those missed goals were not feasibly preventable. Normally, enacting such stringent “take it or leave it” conditions would deteriorate business relations and ultimately hurt Walmart, but of course, due to Walmart’s size and prominence in the marketplace, there’s a lot of “bullying” involved.

Innovation and Technology

Dictionary.com defines innovation as “the introduction of new things and methods.” However, I have a more specific definition of innovation. Besides being “new,” I believe the method needs to be meaningful based on the purpose it’s trying to achieve. A good example of an innovative service is the personalized Google ads that run along the right side of your gmail screen. Before these ads existed, Amazon already had the “suggestions list,” recommending other books you might like based on your browse history. Similarly, the interesting thing about the gmail feature is that these ads correspond directly to the content of any given email.
For a long time, I didn’t know that those ads were “personalized” until one day, my friend mentioned as he was checking his gmail, “Aren’t these ads freaky?” It was only then that I realized that all the photography ads on the side panel of my email weren’t due to photography’s sudden popularity. (I do photography and therefore sometimes mention the topic in my emails.) After that, I began to pay more attention to those ads, and it made me laugh one day to see a panel full of therapy and anti-depressant ads on my gmail account just because I had lightly mentioned something about feeling “depressed” (an exaggerated use of the word) that particular day.
The reason this service is innovative is because it’s an easy way to catch a viewer’s attention—put up ads about topics they’ve mentioned! This idea is intuitive and may even seem obvious, but it’s the recent advent of certain technology that has made this technique feasible. As “The New, Faster Face of Innovation” discusses, technology is transforming and facilitating innovation. It’s getting easier and cheaper to test ideas on consumers. The article mentions that Google surveyed viewers about their satisfaction with the number of available search results. Although the viewers wanted more search results, Google overcompensated with too many search results, which led to decreased traffic. It turns out that consumers are complex. We want variety and choices, but we want relevancy and speed too!
Similarly, Google has probably conducted tests and surveys to see how effective the targeted ads are. Since they’ve been around for a long time, I’d assume that enough people click on these ads to justify the continued use of this method. It would be interesting to understand Google’s rationale behind this service. It doesn’t seem like it’s aimed at benefiting users so much as it’s intended to benefit companies who pay to put their ads on Google. However, I might be wrong. A key insight could very well be that users like me are attracted to products and services that “know us.” With all the choices on the market these days, it’s getting increasingly more important to personalize not only the functionality of products and services to a targeted consumer group, but also to personalize that message.
Users may enjoy using Google features such as gmail because there’s comfort and convenience in a service that’s set up just the way you like it, with ads about relevant topics you’re interested in. This is the same reason why I enjoy using Amazon.com—those suggestions tend to be pretty accurate. The article mentions that technology has enabled companies to keep up with trends more closely. We definitely see this phenomenon with online companies such as Google and Amazon—one firm may be the pioneer of some new idea (e.g. targeted ads/suggestions), but soon, many firms will follow.
I believe that the gmail ads are innovative because previously ads were broadcasted to the population at large. That may have been alright in the 1950’s, but with today’s choices and communication clutter, it’s absolutely crucial to create a “bond” between the consumer and the product/service they’re using.

Expectations Matter!

The primary lesson from the Predictably Irrational chapter is that pre-conceived expectations can oftentimes create self-fulfilling prophecies. In other words, our experiences confirm ideas that we already believe or want to believe. It is these individual self-fulfilling prophecies that explain why people can observe the exact same events and make completely divergent, conflicting conclusions. Recognizing that these influential biases will always exist can not only help us better gain valuable insights from our consumers, but also—and perhaps more importantly—help us design effective research to help us gain these insights. Besides realizing that consumers are deeply influenced by their beliefs and personal experiences, we must realize that our own beliefs and personal experiences affect our interpretations of these consumers’ responses. We are in danger of projecting our own judgments as those of our consumers. To minimize this risk, researchers should constantly question stereotypes and generally-accepted industry ideas. For instance, when I was working at Procter and Gamble on the Downy brand, the marketing team kept promoting Downy’s superiority as its key message…because consumers always want the best product, right? For months, these marketing managers had inadvertently used consumer feedback to reinforce the ideas they had always believed. It turns out that Downy’s new value consumer segment did not want to pay more for the best, so reinforcing the brand’s superiority was a turnoff.
The main example that Ariely uses to illustrate the immense power of expectation involves beer laced with Balsamic vinegar. He and his colleagues offered samples of two different kinds of beer to hundreds of MIT students at a local pub: 1) standard commercial beer (e.g. Budweiser, Sam Adams) and 2) Budweiser with balsamic vinegar. The students were to try the two beers and express a preference for the beer they liked better. Sometimes the researchers revealed the “secret ingredient” in the second choice before the students sampled the beers, and other times, the students were kept in the dark. For the most part, students who didn’t know about the Balsamic vinegar chose beer number two while those who knew about the vinegar upfront chose the first beer, as they were pre-disposed to dislike a beverage with such an unconventional and seemingly unfitting ingredient.
To test whether or not the timing of the revealed information affected the respondent’s reaction, the researchers re-conducted the beer experiment, this time revealing the secret ingredient after the students had sampled the beers. This time, the students who were told of the vinegar afterwards liked the second beer just as much as those who were never aware of the secret ingredient. The reason for this different reaction can be attributed to the fact that knowing about the vinegar before trying the beer already began shaping the students’ perception of the beer’s taste while getting the information later had less of an impact because the students had already formed an opinion. The important takeaway from Ariely’s beer experiment is that expectations can profoundly impact a person’s—and more specifically, a consumer’s—perception of a product and ultimately their trial and repeat of that product.
The Pepsi/Coke challenge Ariely offers makes complete sense in hindsight. As a kid, my cousins and I re-enacted the famous commercials and conducted Pepsi/Coke challenges on each other. I always insisted that I would choose Coke, despite the fact that the blind-tested participants on TV chose Pepsi. However, to my dismay, I did choose Pepsi! The reason why I so adamantly wanted to choose Coke was completely irrational, especially at that age—I just liked the brand…which, I reasoned, should make the beverage taste better.
In my high school statistics class, my partner and I conducted a similar experiment. Instead of two brand names, however, we tested Cocoa Puffs against the store brand Cocoa Puff copycat. (See, I don’t even know what to call the product without using the brand name!) Surprisingly, the majority of our respondents preferred the store brand cereal. When we asked them which one they thought they had chosen, most of them assumed it was the true Cocoa Puffs. And who could blame them? The fun Cocoa Puffs package with the inviting trademark bird on the front looks way more legitimate than the sheen-less competitor, thereby increasing consumers’ (in this case, my classmates’) expectations for the product’s taste. While this experiment was meant to teach us about statistical significance (considering that it was conducted within the context of a statistics class), what I vividly remember taking away from this experience was that expectations matter! And packaging is only one technique through which marketers strategically enhance consumer expectations and, ultimately, experiences.

10 Nice-to-Know's to Delight Me!

1) I hate texting. I am old-fashioned and miss the good old days when people actually visited their friends face-to-face or at least picked up the phone to call now and then. Technology has made relationships feel a lot like fast food and microwavable dinners: not completely fulfilling but “gets the job done.”

2) I’m uncomfortable with making online purchases. I would much rather swing by a physical store and either try on the garment (if it’s clothes I’m buying) or rent the movie (when I impulsively feel like watching one). While Blockbuster has been suffering considerably with the advent of online video renting companies such as Netflix, I still appreciate the fact that they have brick and mortar locations. At least we’re given a choice.

3) Splenda is a big turnoff for me. I can always tell when my beverage has been contaminated with fake sugar. I figure that if I’m going to eat/drink something less than super healthy, I’ll spring for the real thing and actually enjoy it. Artificial sweetener feels insincere—Coke should always be original.

4) I’m a value consumer. I’m selective about which products I purchase premium and will only spend the extra dollars on items that make a difference in my life. Therefore, splurging on Tide when I don’t normally have heavy-duty clothing stains is wasteful while paying more for shampoo is worth it because it makes my hair softer and shinier. Brands like Bounty and Charmin seem to have caught on to this persona trait, leading to the launch of their less expensive “Basic” line-ups.

5) I love finding out about effective unconventional uses for products. Hair conditioner to shave your legs. Hand lotion to remove make-up. Baby powder to get out stains. Bengay to alleviate headaches. Besides the fact that these quirky functions make me feel smug, like I’m a savvy consumer—they also increase the value equation, an instant 2 for 1.

6) I hate using can-openers. They are clunky and awkward—that’s why I love user-friendly cans with little metal tabs attached or packaging innovations such as those microwavable Campbell’s soup bowls.

7) I’m not loyal to many brands, but if a brand is there for me in dire times, I’m its number one consumer. Motrin is a great example. I’ve tried other pain relievers for some of my worst headaches, and so far, Motrin has worked the fastest and lasted the longest. Now, I never go anywhere without a bottle in my purse, just in case.

8) Negative experiences stay with me much longer than positive ones. I may seem zealous about promoting a product that has worked really well, but I’m even more adamant about discouraging my friends and family from buying brands that have disappointed me and services where the representatives have been rude or unhelpful.

9) I purchase functional items and render them useless. Right now, I have on my bookshelf two small unused Italian coffeemakers (one silver, the other baby blue) because they’re quirky, and I believe they add aesthetic value to my living space. Similarly, there’s a bright green fondue set circa 1970’s perched on my kitchen counter—as a decoration, of course.

10) Technology intimidates me. So when I hear about a hot new innovation, I don’t get nearly as excited as my peers because I’m apprehensive that the product will be complicated to use and “more than I need.” For example, I wasn’t too impressed with the Iphone, despite all of its many groundbreaking applications. However, (going back to point #7) when my friend’s Iphone was able to guide us to our destination when we were late and lost, I developed a newfound fondness for what I before deemed as an

over-designed phone.

just checking :)