Ch 3 - Foundations of Marketing

Influencer Marketing Chain of Events

Brand and its message -> Influencer -> Influencers followers -> impact

Assessing the Efficacy of Influencers

But simply counting followers may not be sufficient to determine the value of an influencer, especially considering the growing problem of fraud, as when unethical "click farm" service providers offer to sell followers to social media personalities.76 Therefore, when brands decide how much to offer influencers to carry their messages, they need a method to predict the value they will receive. One way to do so is to consider the 4Rs: relevance, reach, response, and return.

redlining

The historical practice by which housing providers have prevented certain protected classes of citizens from moving into an area, using subtle and difficult-to-prove methods of discrimination.

The Timeliness Effect

The timeliness effect of social media engagement is concerned with the firm being able to engage with the customer at the right place and time—that is, 24/7 from any location. Responding in a timely manner can impact customers' buying intentions: 80 percent of people expect a response to social media complaints within 24 hours, and 50 percent of them will not buy from companies in the future if there is no response. Customers have grown accustomed to an incredibly fast pace on social media. On average, companies offer Twitter responses in 1 day, 7 hours, and 12 minutes, and yet 64 percent of users still expect a response within just 1 hour.

microblog

Differs from a traditional blog in size. Consists of short sentences, short videos, or individual images. Twitter is an example of a microblog.

crowdsourcing

Users submit ideas for a new product or service, and/or comment and vote on the ideas submitted by others.

personal blog

Website created by and usually for individuals, with relatively few marketing implications.

professional blog

Website written by a person who reviews and gives recommendations on products and services.

To excite customers

an offer must be relevant to its targeted customer. Relevancy can be achieved by providing personalized offers, which are determined through insights and information obtained from customer relationship management (CRM) and/or loyalty programs.

ad-supported apps

Apps that are free to download but place ads on the screen when using the program to generate revenue.

paid apps with in-app purchase

Apps that require the consumer to pay initially to download the app and then offer the ability to buy additional functionality.

The Dynamic Effect

The impact of the dynamic effect of social media engagement is twofold. First, it describes the way in which information is exchanged to network participants through back-and-forth communications in an active and effective manner. This back-and-forth exchange promotes engagement, which makes consumers more likely to buy. The dynamic nature of social media is a very efficient way to get information or to resolve disputes, and it can provide the firm with insights into how to best provide a product or service in the future. Customers can communicate their level of satisfaction with an issue and suggest further actions to be taken.

social media

The online and mobile technologies that distribute content to facilitate interpersonal interactions, with the assistance of various firms that offer platforms, services, and tools to help consumers and firms build their connections.

Research has highlighted seven primary needs that apps meet: the needs to find "me time," socialize, shop, accomplish, prepare, discover, and self-express.

The most popular need is all about entertainment and relaxation—that is, "me time." People spend nearly half their time on their smartphones seeking fun, whether by playing Candy Crush Saga or by watching Stranger Things through their Netflix app. Page 101 Because apps enable people to stay connected with friends both near and far, specialized entrants are growing to meet people's need to socialize. For example, in China, the social networking app Weixin (pronounced way-SHEEN), known as WeChat outside China, allows users to shop, read news, share videos, make payments, and more.49 In 2019, WeChat had over 1.16 billion monthly active users, with over 50 percent of those users between the ages of 25 and 35 years. 19 percent of the users are between 19 and 24 years old. 45 billion messages are sent on WeChat daily.50 Shoppers want to shop anytime they choose. In a process that facilitates 24/7 shopping called showrooming, a customer visits a store to touch, feel, and even discuss a product's features with a sales associate, and then instantly compares the prices online to see whether a better deal is available. Using the showrooming Amazon app, if the Amazon price is better, the customer can buy the product online with a single click. On the flip side of the need for fun, the need to accomplish means that people seek to manage their finances, improve their health, or become more productive through apps.51 MyFitnessPal allows users to track their daily exercise, calories, and weight loss, and its social component enables people to post their successes. This app also can interact with Fitbit, Jawbone UP, and iHealth Wireless Scales.52 Calendars, flight trackers, and trip planning apps help consumers meet their need to prepare.53 For example, Google Travel helps people plan vacations by storing and organizing all their travel information, such as flight itineraries and hotel reservations. In addition, it offers customized tours and maps for when you get to your destination. Google Travel links with your Gmail account to gather your travel information and stores it offline so you have access to it even if you don't have access to Wi-Fi.54 When people seek information due to their need to discover, they now turn to weather and news apps. Flipboard produces a full-screen magazine, aggregating multiple news and entertainment sources to provide top stories, entertainment, local news, and business news personalized to your interests. Its social component also allows readers to send selected stories to friends.55 Finally, people have diverse interests and tastes and thus a need for apps that allow them to express themselves. Tapatalk aggregates tens of thousands of interest groups into a single app, making it easy to connect aficionados of just about any interest or hobby.

The Wheel of Social Media Engagement

Information, Connected, Network, Dynamic, Timeliness

paid search

A method used by firms to appear higher up in the search results of a search engine. The position on the search page is based on a fee charged by the search engine, and often an additional fee is charged every time a user clicks on the entry.

Campaign Steps.

1. Identify strategy and goals 2. Target audience 3. Campaign: experiment and engage 4. Budget 5. Monitor and change

7 Cs Framework

1. core goals 2. contextual elements 3. content 4. community 5. communication 6. commerce 7. connection

App Pricing Models

A key decision for firms producing apps is what to charge for them. There are four basic ways of generating revenue from apps—ad-supported apps, freemium apps, paid apps, and paid apps with in-app purchases. Ad-supported apps are free to download, but ads appear on the screen. They generate revenues while users interact with the app. Although there are many of these types of apps, the majority of app revenue is generated from the remaining three pricing models, discussed next. Paid apps charge the customer an up-front price to download the app ($0.99 is the most common), but offer full functionality once downloaded. Similar to the freemium model, paid apps with in-app purchases require the consumer to pay initially to download the app and then offer the ability to buy additional functionality.

influencer marketing

A marketing strategy that uses opinion leaders, popular on social media, to drive marketing messages to a targeted audience.

conversion rate

A measure that indicates what percentage of visitors or potential customers click, buy, or donate at the site.

keyword

A phrase that describes the contents of a web page.

in-app purchase

A purchase made on a freemium app that enables the user to enhance the app or game.

hit

A request for a file made by web browsers and search engines. Hits are commonly misinterpreted as a metric for website success; however, the number of hits typically is much larger than the number of people visiting a website.

sentiment analysis

A technique that allows marketers to analyze data from social media sites to collect consumer comments about companies and their products.

corporate blog

A website created by a company and often used to educate customers.

digital marketing

All online marketing activities, which includes all digital assets, channels, and media spanning not just online but also social media and mobile marketing.

Experience the Product or Service

Although most of the top videos on YouTube are funny, silly, or otherwise entertaining, the site's most useful contributions may be the vivid information it provides about a firm's goods and services—how they work, how to use them, and where they can be obtained. YouTube and similar sites can come relatively close to simulating real, rather than virtual, experiences. Such benefits are very common for products that have long been sold online—so much so that we might forget that it used to be difficult to assess these products before buying them. But today, consumers can download a chapter of a new book to their tablet before buying it. They can try out a software option for a month before buying it. They often view tutorials on everything from how to purchase caviar to how cowboy boots are made. Being able to experience a product or service before buying it has expanded the market significantly.

search engine marketing (SEM)

An activity used in online searches to increase the visibility of a firm by using paid searches to appear higher up in search results.

keyword analysis

An evaluation of what keywords people use to search on the Internet for their products and services.

Educate the Customer

An imperative of well-designed digital marketing offers is that they have a clear call to action to draw customers through their computers, tablets, and mobile devices into online websites or traditional retail stores. When potential customers arrive at the websites or stores, the marketer has a golden opportunity to educate them about its value proposition and communicate the offered benefits. Some of this information may be new, but in some cases, education is all about reminding people what they already know. Therefore, by engaging in appropriate education, marketers are expanding the overlap of the benefits that they provide with the benefits that customers require.

blog (weblog)

An online diary with periodic posts that allows people to share their thoughts, opinions, and feelings with the entire world; corporate blogs are a new form of marketing communications.

freemium apps

Apps that are free to download but include in-app purchases that enable the user to enhance an app or game (see also in-app purchase).

paid apps

Apps that charge the customer an upfront price to download the app ($0.99 is the most common), but offer full functionality once downloaded.

Reach

As we discuss in Chapter 18, the general concept of reach refers to the percentage of a target population exposed to a specific marketing communication at least once. For the specific context of influencer marketing, reach depends on the number of followers, the level of activity by the influencer, and the degree of engagement between followers and the influencer as well as with others (i.e., friends of followers). Such engagement might result from the appeal of the influencer or the post; for example, an entertaining, hedonic post likely spreads further than a basic, informational one.78 Influencers accordingly seek to present exciting messages, even if their underlying goal is to market a brand.

the 4E framework

Excite customers with relevant offers. Educate them about the offering. Help them experience products, whether directly or indirectly. Give them an opportunity to engage with the firm's digital marketing activities.

showrooming

Customers visit a store to touch, feel, and even discuss a product's features with a sales associate, and then purchase it online from another retailer at a lower price.

Communication

Digital communities rely on clear, helpful, meaningful content (the third C). The communication vehicles that appear on any website or blog determine how effectively the firm can interact with, educate, and engage site visitors. Virtually all websites provide a mechanism for customers to communicate with them through live chat, instant message, telephone, or e-mail. The various types of blogs described in the previous section also can engage consumers by providing a compelling platform for two-way communications

Do

Even the greatest analysis has little use if firms fail to implement what they have learned from analyzing their social and mobile media activity. That is, social media may be all about relationships, but ultimately, firms need to use their connections to increase their business. They might launch a new Facebook campaign, actively blog, or provide mobile offers.

Analyze

First, it is important to determine the amount of traffic using their sites, visiting their blogs, or tweeting about them. A measure used for this purpose is the number of hits (i.e., total requests for a page). More useful, however, is the number of unique visitors and page views. If, for instance, Sam visits a site once, but Sol visits it five times, there are six hits, two unique visitors, and Sam has one page view, while Sol has five page views—Sol is potentially a more important customer than Sam. Second, although knowing how many people are using a firm's social media is important, it is even more critical to learn who those visitors are, what they are doing, and what engages and excites them. To analyze these factors, marketers use metrics such as the bounce rate, which refers to the percentage of times a visitor leaves the site almost immediately, such as after viewing only one page. The bounce rate is similar to walking into a store, taking a quick look, and leaving. So, the higher the bounce rate, the less effective the site. Similarly, following visitors' click paths shows how users proceed through the information—not unlike how grocery stores try to track the way shoppers move through their aisles. A firm can use frequent entry and exit locations and click paths to improve the way users navigate through the site so they can more quickly find what they are looking for. One of the most important data analysis tools is the conversion rate, a measure that indicates what percentage of visitors or potential customers act as the marketer hopes, whether by clicking, buying, or donating. Not only does it measure how well the site is achieving its goals, it can also signal a serious problem. For instance, a sudden drop in the conversion rate may signal a navigation problem or even a broken navigation path. Third, some companies want to analyze data that come from other sites, such as measuring where people have come from to get to the company's site. Did they search through Google or Amazon? Did they receive a referral from a friend? Which keywords did they use to find the firm? As mentioned earlier, firms can use keyword analysis to determine what keywords people use to search on the Internet for their products and services. With this information, they can refine their websites by choosing keywords to use on their site that their customers use. These keywords should be placed on the website pages, in the page titles, and in the website's URLs. Then they can assess the return on investment (ROI) made by improving the site.

Listen

From a marketing research point of view, companies can learn a lot about their customers by listening to (and monitoring) what they say on their social networks, blogs, review sites, and so on. Similar to being at a party or in class, it is best to listen before engaging in a conversation. Listening can help marketers determine their digital marketing objectives. If no one is talking about a product or brand, then stimulating brand awareness or excitement may be required.

Engage the Customer

In a sense, the first three Es set the stage for the last one: engaging the customer. With engagement comes action, the potential for a relationship, and possibly even loyalty and commitment. Through social media tools such as blogging and microblogging, customers actively engage with firms and their own social networks. Such engagement can be positive or negative. Positively engaged consumers tend to be more profitable consumers. When the International House of Pancakes (IHOP) announced on Twitter that it would be rebranding as IHOb, it attracted attention all over social media. The stunt turned out to be part of a marketing campaign to introduce IHOP's new burgers. Thus, the "b" signaled "burgers," but it also reflected a flipped "P," mimicking the very act of flipping, whether pancakes or burgers. Social media users were both intrigued and amused, and the brand experienced a remarkable 6,477 percent increase in social media mentions in one day, ensuring substantial awareness of its new menu offerings. A few months later, however, it changed its name back to IHOP.

Types of Influencers

Influencers are not all the same; they can be classified according to their role and expertise (e.g., celebrity or specialized influencers), number of followers (e.g., micro-influencers), or preferred channel (e.g., blog or social media influencers), for example.83 Exhibit 3.9 defines several familiar types of influencers, the campaigns that marketers likely should pursue with each type, and a general range of the costs of hiring them.

Excite the Customer

Marketers use many kinds of digital offers to excite customers, including mobile applications ("apps") and games to get customers excited about an idea, product, brand, or company. Firms actively use social networks such as Facebook, Pinterest, and WhatsApp to communicate deals that are likely to excite consumers, such as when Lush Cosmetics encourages customers to post pictures of themselves using its products on social media by promising that if they use #LushLife, they might find themselves featured on its official page.

Response

Once followers engage with the message, the brand also needs them to go further and respond in ways that benefit it. The measure of the response depends on what the campaign aims to achieve. For example, if the goal is primarily exposure or awareness (see Chapter 18), it can assess how many people liked or commented because those actions indicate they likely can identify the brand and its message. However, if the goal is to prompt sales, the firm needs to determine whether the influencer is the source of a subsequent purchase by one of his or her followers, a measurement that is difficult to accurately obtain. Exhibit 3.8 depicts how a company can use an influencer to broadcast its message to its network and ultimately influence the followers' purchases.

click path

Shows how users proceed through the information on a website—not unlike how grocery stores try to track the way shoppers move through their aisles.

beacon technology

Technology that allows companies to detect where customers (who have enabled the feature) are at each moment through their smartphones.

Core Goals

The basis of any marketing strategy is its goals. In general, the primary goal of any website is to engage its users by encouraging them to spend time viewing and interacting with its content. More specifically, however, the goal may be to engage the customer in commerce, as exemplified by Walmart's site (www.walmart.com). Alternatively, it may be to educate the customer (or potential customer) about the product, such as by introducing an offering using appealing, engaging content, like Hasbro's Hanazuki line and related digital content

timeliness effect

With regard to the Wheel of Social Media Engagement, the timeliness effect of social media engagement is concerned with the firm being able to engage with the customer at the right place/time—their ability to do so 24/7 from any location.

The Network Effect

The connected effect enhances human interaction on a one-to-one basis and enables the impact of the interaction to expand exponentially. The network effect is the outcome of social media engagement in which every time a firm or person posts information, it is transferred to the poster's vast connections across social media, causing the information to spread instantaneously. That is, when a person or company posts something on social media, other people or firms in their network might repost it, as when one "shares" on Facebook. The credibility and influence of the original poster and the network partners that choose to share the post will determine the ultimate influence of the post. From a marketing perspective, people who discuss products are more likely to buy them.

The Connected Effect

The connected effect is an outcome of social media that satisfies humans' innate need to connect with other people. This connection in social media is bidirectional: People learn what their friends are interested in, but they also broadcast their own interests and opinions to those friends. Humans seek connections to other people, and social media have provided them with a new, easy, and engaging way to do so. In particular, people can connect by sharing different types of information, whether their location, the food they have consumed, exercises they have completed, or a news article that they find interesting. And they achieve this connection by checking in, posting a picture to Instagram, uploading a video to YouTube, or sharing a link to an article they have liked on Facebook. Social media platforms constantly add features to foster such connections. Facebook expanded its messenger feature to allow video chats through its Portal hardware, as discussed in Adding Value 3.1. Brands like Hallmark seek to leverage this sense of connection. Using #CareEnough, Hallmark encourages people to reflect on their connections with their loved ones—as well as to remember to buy them a card.

Connection

The final E of the 4E framework involves engagement; but it also might be called connection. A good website or blog engages customers and provides them with a call to action—whether to buy, post, review, comment, or share. Call-to-action buttons such as Buy Now, Learn More, or Show Your Support encourage visitors to delve deeper into a website, to explore other pages and, in general, spend more time on the site. The Warby Parker website includes four call-to-action buttons that invite visitors to get started, order frames to try on at home, take a quiz, or shop online.

Content

The information content on the site (text, graphic, video, and audio) is critical to being successful with the 4Es of digital marketing discussed earlier in this chapter. Marketers must continually monitor the content they share digitally to ensure that the information is relevant to their target market(s) and creates excitement, such that users will be interested in engaging more with both the website and the firm.20 By providing the right content, the firm anticipates visitors' questions and attempts to answer those questions through its content. The home page is particularly important in this regard. When visitors land on this page, the firm's purpose must be clear; if not, visitors will quickly exit the site.

The Information Effect

The information effect is the outcome of digital marketing in which relevant information is spread by firms or individuals to other members of their social network. Information—whether because it is funny, cute, instructive, surprising, or interesting—is the key to turning the wheel. But the relevance of the information, and therefore its impact, depends on its context and the receiver. Marketers work hard to provide information that is somehow contextually relevant, such as interjecting a humorous advertisement into a social network of users who like to joke around and share funny pictures.

Relevance

The notion of relevance encompasses both the focal influencer and her or his followers (i.e., targeted audience) and how they link with the brand and its message. Influencer marketing is more effective if relevant influencers, with expertise in some related element, share a pertinent brand message. Thus, Cristiano Ronaldo clearly can promote soccer cleats (or, as he would call them, football boots) as well as his current team brand and various forms of exercise equipment

bounce rate

The percentage of times a visitor leaves the website almost immediately, such as after viewing only one page.

organic search

The process of listing web page results based on the relevancy of key terms.

Contextual Elements

The second element of website design involves the traditional contextual elements, such as design (e.g., color, font) and navigation. These contextual elements must be in alignment with the target market(s).

Commerce

When it comes to actual purchases, consumers exhibit varying preferences for the types of digital marketing tools they want to use. Some consumers rely on websites; others want a mobile app that enables them to shop quickly. Yet despite the predominate use of apps for checking social media or the weather, desktop usage is greater, and conversion rates are higher, for online purchases.29 Many people might start searching online but then visit a physical store in person for their actual purchase. The most loyal customers use multiple channels. Customers thus demand that firms offer them a range of options, consistently and constantly, so that they can pick and choose the channel from which to purchase at any specific time.

Return

While financial returns can be measured using different techniques,80 return on investment (ROI) is often used. ROI refers to the revenue earned from some action, less the cost of that action, divided by the cost.

connected effect

With regard to the Wheel of Social Media Engagement, the connected effect is an outcome of social media that satisfies humans' innate need to connect with other people.

dynamic effect

With regard to the Wheel of Social Media Engagement, the dynamic effect describes the way in which information is exchanged to network participants through back-and-forth communications in an active and effective manner. It also expands the impact of the network effect by examining how people flow in and out of networked communities as their interests change (see network effect).

information effect

With regard to the Wheel of Social Media Engagement, the information effect is the outcome of social media in which relevant information is spread by firms or individuals to other members of their social network.

network effect

With regard to the Wheel of Social Media Engagement, the network effect is the outcome of social media engagement in which every time a firm or person posts information, it is transferred to the poster's vast connections across social media, causing the information to spread instantaneously.