Social Media Midterm
Why did it make sense for amazon to own an ad network
They have a lot of customer data so they can give people very personalized ads - Amazon knows what people are searching for AND buying, Google only knows what people are searching for
Why does it make sense for amazon, an online bookseller, to get into web services?
They were experts, they had the infrastructure, resources, and technology to make it possible
What type of ads are you unlikely to share
Things that are obviously just ads and for commercial purposes (opposite of what Buzzfeed does, they want to create entertainment with their advertising) - Ads that don't provoke any emotion, don't play to any of our interests, or ads that are obviously just ads. The ones that you want to click out of quickly - Things that are inappropriate because you'd feel embarrassed sharing
What business is amazon in?
ecommerce for many industries
What characteristics should seeds/influencers have?
(1) Influential figure with a loyal audience -- Only need 500-1000 followers (10k+ was only 2% of the influencers) Way less than you would think (2) Uncontroversial, viewed positively (3) Should reflect the values of the company and target market (4) Should have adequate time to edit and post consistent content (5) Knowledgeable with social media platforms
How can Trip Advisor improve its product?
(1) Filter out fake reviews : - proving verification with photos, videos, & receipts - detailed, quality reviews are more likely to be real - (2) Encourage people to leave reviews because users want recent reviews - quality and quantity are both important - updated reviews are important
issues to consider for evaluating Hubspot's pricing strategy
(1) Price sensitivity - Ollies = less price sensitive - Marys = more price sensitive (2) Acquisition cost for customers - Ollies 250 - Marys 500 (3) Value delivery stream - price = value - Mary wants monthly reports and analysis (should be sold SaaS) - Ollie wants sales leads (should be sold SaaP) (4) Customer churn rates - Breakeven for SaaS vs SaaP is 3 years, so this means if Ollies get Saas and they leave before 3 years, HubSpot loses money. This is why they should be sold SaaP - SaaS takes 2-3 times longer to break even than SaaP, which means HubSpot needs to be intentional with who they sell SaaS to (shouldn't be Ollies)
Why do users write reviews?
- Common for particularly good or bad experiences - Helping others - Want to feel a part of the community
Why do users read reviews?
- Reliable way to see if a hotel is a good place to stay - Comparing options - We don't trust traditional advertising anymore, reviews are more genuine and trustworthy
What should competitors do (Best Buy) with the showrooming challenge?
3 things - (1) Improve in-person selling (services) (2) Reducing the number of stores and size (3) Matching Amazon's prices
Native advertising/Sponsored page stories
An advertisement in which a business can have their content promoted on their users' social media feed - They look like regular posts but are marked as "sponsored" - Reach a wider audience and drive engagement. It performs better because advertisers can target specific demographics who will interact with the content - Buzzfeed uses native advertising which creates content out of the ad. For example, an ad about pampers may appear as an article about babies who are "tuckered out" after a long day - Attracts users with content and entertainment, but is really promoting a brand/product
Does Hubspot have the right set of products for its targets?: What do Ollie's want from Hubspot?
An easy and all-inclusive way to get their names out there and their businesses going - They want Hubspot to help them to increase sales - They don't know anything about marketing and they don't want to, they just need somebody to do it for them because they have so many other tasks to do themselves
What are you likely to share?
Anything that's shareable, surprisingly, funny, shocking, will go viral and cause discussion
Why did amazon get into the hardware (kindle) business
Because of the razor blade strategy: Kindle itself was cheaper, but they make money when people buy the books - Amazon was also already an online book seller so it was the next logical step and made sense since they had access to all the books already
hard to copy buzzfeed
Content management system which is technologically advanced - Advanced creative team, human capital - Buzzfeed is an established player in the market - 150 million new users per month (Huge reason why it's hard to be as successful as them) - Buzzfeed understands the shareable culture
pros of saas
Cheaper May encourage customers to continually use the hubspot software Steady stream of income since it's subscription-based Lower upfront cost = low barriers to entry
Why are Facebook ads so cheap?
Facebook ads are so cheap because they have such a large consumer base and a high click through rate - Since publishers know that people don't want the pop up ads on Facebook and will click through it really quickly, they're willing to pay a super small amount for a FB ad - Similar to why ads on tv at 4am are gonna be a lot cheaper than at noon - Cost per thousand for Facebook is $0.10 and Buzzfeed is between $8-9
open source or freeware
Free, but to get a better version you have to pay (like paying for youtube without ads) - Or product is free, but revenue comes from infrastructure, implementation, maintenance, etc.
cons of saas
High customer churn Attract wrong kind of customers Hubspot needs to book as much revenue as possible ---- Why do Ollies not stay very long?: They want to get the perks of the software when they buy it and then unsubscribe So maybe Hubspot should use SaaP for Ollies so that they can't get away with paying less and then leaving
digital strategy
Increase a company's competitive advantage by broadcasting information to customers. (ads) - Doesn't do anything to connect others
social strategy
Increase competitive advantage by getting people to undertake tasks for the company in return for improving their own relationships - Connecting others! Biggest defining factor of social strategy
pros of SaaP
Low customer churn, filters out people who don't really know much about it
Hubspot's customers: Marketing Marys
More advanced marketing firms that needed help with their analytics and technology to improve their insights - Want to know the details unlike Ollies - Harder to acquire but they stay longer (Becoming a customer of Hubspot is more complicated since it's a firm, approval has to go through multiple people) - They have to pay Hubspot 500 a month (more profitable for HubSpot) vs Ollies only have to pay 250 - More expensive to acquire (5000) - Hubspot sells them more of a complex product with the marketing details and analytics
easy to copy buzzfeed
Native advertising and use of social media can be easily replicated - Funny lists are funny now, but people will soon get tired of this type of content - idea of shareable content as a whole
Incentives for these seeds. What should seed consumers be given to encourage them to spread positive word of mouth? Should they be paid?
Need to be paid or at least given merch and perks - Money should be based on performance to encourage them to post quality content - Influencers receive a lot of offers so incentives are important to stand out - Example → a lot of influences are given all-inclusive trips to promote brands - Could also do commissions for purchases (affiliate marketing)
Evaluate the Nike+ ecosystem as a foundation for the company's social strategy. What kind of devices collect inputs that are then fed into the ecosystem?
Nike+ Fuel band and shoe chip - Collects data (calories burned, distance, speed, and Nike fuel (intensity)) Can upload your data and compete with your friends online
Is Mycoach (Adidas) a replica of Nike+? Explain
No ----------- Nike has the network effect, huge market share - Why would you want to join MiCoach if all your friends are on Nike - Soccer, training, basketball, etc. (Nike has economies of scope) ---Even if you and your friends are playing different sports, you can still compare because of the common measurement of Nike Fuel - Nike has developed a sustainable competitive advantage with its network effect (economies of scale and economies of scope), hard to replicate
Did it make sense for amazon to produce its own phone
No - big failure - Thought it would work well because consumers were doing the showroom effect so they wanted to make it easier for people to buy the phone - Compatible with Kindle - Didn't work because Google and Apple were already such big players in the industry
How did Trip Advisor become a successful source of hotel reviews?
Pioneers - first mover advantage - Huge volume of reviews - Unbiased and free - Company relies on user generated content (UGC) - All reviews in one place makes it more convenient - Hotels are asking customers to rate them on Trip Advisor
Evaluate FFM's performance
ROI of FFM was 5 times higher than any other pre launch campaign run in the past - 8.3% purchased the car! Average in this industry is 1-2%. (11,000 out of the 132,000 sales leads) - Brand awareness was on par with other car companies with traditional advertising but they did it for cheaper and had a longer lasting word of mouth since it was so unique - Kept the campaign at a lower cost which was important during the recession - When the case study was written, there were 50,000 sales leads (97% of them didn't own a Ford car before, so this was a big success)
strategies for increasing customer profitability
Reducing the customer acquisition costs Margin expansion Customer retention
What did Best Buy do to combat high fixed costs since they're a physical store?
Rented out rooms in the store for a store-within-store strategies (ex: a Sony store within Best Buy) and it helped them a lot - they had to do this to be able to match Amazon's prices to combat the show-rooming effect
Is Chance a Social strategy? What's Nike getting as an economic benefit?
Scouting training camp, allowed talented soccer players to try to play professionally - Yes, it's a social strategy - Connects people In exchange, Nike receives awareness and brand loyalty. The players produce a lot of videos and share them which creates a lot of traffic for Nike (UGC)
What does Nike do with the data it collects from Nike+?
Send ads, compare workouts with friends - Can upload it to Nike.com to compare with friends and do competitions - Leaderboards (aggregated information) (motivates people to run more to appear on the leaderboard)
Does Hubspot have the right set of products for its targets?: What do Mary's want from Hubspot?
The analytics. They need to understand sales needs
Is Buzzfeed content just a fad? Does the company have a sustainable competitive advantage
The concept is easy to imitate (shareable content), but in practice, it's not easy at all because Buzzfeed has such high traffic
outbound marketing
Traditional marketing - cold calling, general advertisements, cold emailing, etc. - not as personable as inbound - more about quantity than quality
Nike's social strategies
Users and Nike help each other - Nike helps the users come together and when users upload stuff to their accounts it creates awareness for Nike - You can strengthen your relationships with friends through running challenges and seeing your friends info on social media, in exchance, your UGC creates awareness and WOM for Nike - Leaderboards are a huge social strategy too
Why did amazon offer instant video and launch a studio to create its own original content
Video creates a competitive advantage, increases Amazon's bargaining power by lowering the churn rate - Adds value to the prime subscription which gives people another reason to be a subscriber - Prime is another razor blade strategy, relatively cheap, but the profit comes from when prime members buy products because Prime members buy a ton more than non prime subscribers - Original content to compete with Netflix, Hulu, HBO, etc.
Why did amazon acquire whole foods
Wanted to get more higher income customers for Prime - More value for prime subscription - Easier way to enter the grocery industry
How does Nike use Facebook, Twitter, and youtube for its digital strategy?
You can connect your Nike+ account with your Facebook or Twitter account - You can see your friends info then too - You can also let your friends know when you're about to start a run through facebook and twitter
What is a market place and why did amazon launch it?
a platform for 3rd party sellers to sell their products - launched it to increase people using amazon and to create better targeted ads
saap
licensed software - one time cost and you have unlimited use (upfront cost is much higher) - should be sold to Owner Ollies because they're more likely to take advantage of SaaS and leave right away. with Saap, Hubspot is guaranteed their money
inbound marketing
marketing approach that's more customer centered - pulling your customers to you, empowering your buyers - SEO, blogs, social media - 5-7 times cheaper than outbound - inbound marketing is much more personable and genuine, so customers feel more connected to the brand. More quality vs quantity
Hubspot's customers: Owner Ollies
small business owners & startups - Doesn't care about how the marketing works, all they want are to increase sales leads - Are easier to acquire but don't stay as long (Becoming a customer is easy because it's up to just one person) - They make up about 73% of Hubspot's customers - Also cheaper to acquire them (1000) - You only really have to convince the owner to become a customer, not go through a bunch of people in a big firm - The tools they have to use are less complex
saas
subscription service - should be sold to Marketing Mary's because it takes 3 years to break even vs. SaaP, and Mary's stay longer
Has the role of marketing changed?
yes - inbound marketing is more common, digital marketing changed the game, consumers are more empowered, UGC has more credibility
