Interact and Engage: Social Media Marketing and the Future of Advertising

It's projected that global spending on advertising by companies this year will be $US518 billion. Yet, the world of advertising is in a state of flux, with traditional forms of print and television gradually giving way to online campaigns and social media marketing.

“The effectiveness of advertising, both online and offline, is a concern for all marketers,” says Liem Viet Ngo, a senior lecturer in marketing at the Australian School of Business (ASB).

Ngo points out that companies may have different objectives for an online campaign, such as increasing the number of unique visitors, conversation rate, search-term usage, enhancing brand awareness, generating stories about the brand, launching causes and sponsorship. Many firms and metrics exist for measuring the effectiveness of online campaigns, such as Nielsen Buzz Metrics, Google Analytics, Omniture, Alexa and Compete.

“Nevertheless, how to measure the return on investment of an online campaign remains a challenge for marketers,” says Ngo. “Importantly, it is still difficult to compare the effectiveness of one interactive media over another as well as [with] traditional media.

“Technological advance is creating a new market reality, with the emergence of a new generation of engaged customers. They are better informed, more empowered, and more willing to engage in the co-creation of value with firms, and also with other customers.”

The internet, computer technology and new media have allowed customers to become producers (user-generated content) and distributors (via media such as YouTube). According to Ngo, in this digitally empowered world, a customer’s ability to search for information, review and rate products and services, and interact actively with firms and other customers has fundamentally changed the way the customer makes purchasing decisions. This has created an increasing number of communication touch points that are beyond marketers’ control.

“Brand equity is now increasingly built by activities outside a company’s direct control – and that’s challenging,” Ngo says.

Engagement, Participation and Sharing

For Vicki Arbes, CEO of market and social research company Hall & Partners / Open Mind, “the new model of advertising is all about engagement, participation, and sharing information”.

Arbes cites the so-called “NAB breakup campaign” in 2011 as a benchmark for what can be achieved. The bank campaign combined print, social media and guerilla marketing (including singing stunts and ads towed behind helicopters), and was widely recognised throughout the industry as being hugely successful, with viewers repeatedly sharing and re-tweeting content.

“Engaging with customers online requires the utmost transparency,” says Arbes. “If not, the opportunities for failure, such as the recent Qantas Twitter competition, are enormous.” (Qantas invited customers to share their thoughts on a luxury holiday, but instead received a litany of complaints about the company. Qantas subsequently closed their Twitter account.)

According to Nitika Garg, also a senior lecturer in marketing at the ASB, online ads have the ability to target consumers that marketers of a previous generation could only dream about. “Facebook, for example, looks at your profile information, and [also] that of your friends,” she says.

So does this ability to target mean that the days of traditional advertising are numbered? Garg thinks not. “As long as people are watching TV or picking up a magazine, there’s a place for traditional advertising. And in general, online ads are less attention-getting than, say, TV ads. It’s about the way the space is utilised. Online, the ad is juxtaposed to something else,” she says.

Garg believes TV advertising is still one of the most effective forms of advertising, as measured by a consumer’s ability to recall a campaign in surveys, and ultimately in increased sales. The pinnacle of TV advertising remains the Superbowl in the US (with the broadcaster charging as much as $US3m for a 30-second slot).

“The Superbowl has a very large, captive audience, who all want to see the show live,” notes Garg.

“Companies frequently place new ads [in Superbowl slots], and consumers are often curious about these. Research shows that the more involved the audience is with a TV program, the better their recall of an ad, the more positive evaluation of that ad, and the greater the purchasing intent.”

Product Placement and Live Feeds

An alternative to TV advertising is product placement. “[It] has always been a part of marketing,” says Arbes, “but if it’s not done subtly and/or transparently, it can be irksome.” Indeed, product placement has found its way into unlikely places, such as the ultra-violent zombie apocalypse TV series The Walking Dead, where Hyundai cars feature prominently. “Perhaps they’re saying, these cars will survive anything,” suggests Arbes.

For Garg, the desire in some consumers to avoid ads altogether – aided as it is today by technologies such as Foxtel IQ  – is rooted in their psychology.  “If we had unlimited capacity to process information, it wouldn’t be a problem,” she says. “But given our limited capacity, we are very protective of it. We want to preserve our cognitive resources, and only spend it on things we care about.”

Tim Vincent has been producing and directing TV content for 21 years. His work with the Ford Motor Company supplies some fascinating insights into how traditional advertising is being supplemented by non-traditional forms.

“Ford came to me in 2009, prior to a product launch, for a media drive, where about 140 journalists from around the world are assembled, to show them the car,” says Vincent. “Engineers and designers are available to chat, and then journalists get to try out the cars. What we do is to supply all the video content, which includes interviews, shots of the car, highlighting all the high points of the new product.”

So far, so traditional. But now Vincent’s content is also supplied to Ford’s social media site.

“The content that was previously just available for mainstream media – in the hope that they would disseminate it to the consumers in a positive way – is now on offer direct to the consumer,” he says.

The big plan for the future is for a product launch to feature a live feed, where consumers can interact directly with engineers and designers. “The hope is that this will go beyond the traditional fan base for a car, and engage aspirational consumers – those who don’t just buy a car out of brand loyalty, but are looking to see what a car can offer,” Vincent says.

This idea of expanding the fan base for Ford and their vehicles – particularly among younger consumers – has been behind rally driver Ken Block’s promotion of the Ford Fiesta, and also Ford’s involvement with the NBC reality TV show Escape Routes, featuring the Ford Escape.

Ford recently demonstrated an imaginative addition to traditional advertising with an app that encouraged people to customise a Mustang online. Unbeknown to the people who posted their designs, Ford selected four of them, built the actual cars, and then delivered them to the lucky customisers.

Listen to the Customer

Vincent is fond of quoting Sheryl Connelly, manager of Ford global trends and futuring, with what might become the byword for the future of advertising – “Trust is the New Black”.

“Previously, the marketer used to shout at the customer in one-way communication,” says Ngo. “Now the marketer needs to stop yelling and needs to listen to the customer. Then they must make the decision at which communication touch point the customer is most open to influence, and spend their marketing dollar accordingly.

“What the marketer is concerned about today is not that we are behind the technology, but that we are behind our customers.”

Knowledge@Wharton