A Million-Person Marketing Department

By Sherif Mityas
Partner

The social media craze is in full swing—with companies that don’t have Twitter feeds or Facebook fan pages by now clearly in the minority. But what does it really mean to participate in social media? For a brand or product to have "friends"? Is it a fad or a revolution? A defensive maneuver because your competitors are already there, or a legitimate method for business growth? A cheap medium for smaller, cash-strapped startups, or a tool for even the largest, best-known brands to extend their reach?

The short answer: It is all of these. The size, scope and benefits of social media sites far exceed all projections and most historical precedents, and apply to companies of all sizes. For the first time, you can have a million-person marketing department and pay almost nothing for it.

Who Isn’t Online?

Just about everyone is online today. The microblogging site Twitter reached 10 million "tweets" per day in July 2009; by February 2010, that number reached 50 million, with almost 600 posts per second on average. Facebook claims more than 400 million active users worldwide, and estimates that 60 million status updates are posted every day.

These raw numbers alone should be enough to coax overly cautious companies to get involved, not to mention the low cost of entry: almost nothing. A few employees create an online profile quickly and cheaply, and … voilà! followers quickly sign on, and you suddenly have a direct way to reach potential customers. Some of the biggest names in business have huge online crowds. Coca-Cola, one of the earliest to unveil an official Facebook page, has 5.1 million fans. Whole Foods has 1.7 million Tweeters, at last count.

Insights, Brands, and Making Money

There are three major advantages to engaging in social media.

Gain customer insights. In one sense, social media serves as an extremely fast and efficient global focus group. Rather than spending time and money to get a dozen potential customers into a room on a Tuesday afternoon, real-time feedback from customers across all demographics is as close as your computer. “Listening in” on friends talking to other friends with the same interests, likes and dislikes is a good way to find out what is popular in products, retail formats and brands.

Duck Brand duct tape is a good example. Duct tape is clearly a category that doesn’t generate a lot of buzz. But when Duck decided to use Facebook and Twitter to drum up customer feedback about new innovations, they discovered that people were generally happy with their duct tape but wanted colors other than gray. Duck unveiled its tie-dye tape, whose strong sales suggest that followers are getting what they want, and spreading the word.

Expand your brand. Most companies want nothing more than to see their brands and key messages on every billboard from New York’s Times Square to the Champs-Élysées in Paris. But this kind of advertising costs a fortune. Brand “connectivity” through social media is unrivaled by any traditional marketing vehicle and is clearly the future trend. Best Buy, whose Geek Squad has been a strong differentiator, now has an online “Twelpforce” that allows customers to have their issues addressed online—anywhere, anytime. Prada, whose online fans can upload pictures of themselves wearing Prada clothes and accessories, has not only opened up a personal connection with its customers, it is creating a conversation.

Make money. At the end of the day it is all about growth and profits. How can you make money in social media? If it remains merely a way to send out marketing messages, support and promotions, it will eventually stagnate and be replaced.

The fact is, there is tremendous potential to conduct business on these sites. Target is just one of numerous companies that offers daily deals with free shipping to its Facebook fans. Be careful, though, not to alienate friends and followers. Burger King got headlines — and some backlash — when it created the Whopper Sacrifice Facebook page, offering free burgers to those who "de-friended" 10 people.

Friends of the Friendless

Clearly, social media is still evolving. The potential seems endless, but mistakes are still being made and successes thus far have been limited. Ultimately, there will be rewards for those who change their traditional thinking about customers and marketing, whether it means latching on to the social media craze or the next big thing that comes along. Those who stand on the sidelines for too long — watching and waiting for confirmation — may find themselves and their companies virtually "friendless."

Sherif Mityas is a partner in the consumer products and retail practice and former president and CEO of Movie Gallery, Inc.

For more information, please contact the author.

The views expressed in this paper are those of the author(s) and do not necessarily represent the views of A.T. Kearney or the Global Business Policy Council. The views are not meant to suggest specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.