What marketing common denominator connects such diverse household brands as Netflix, Best Buy, Toys R Us, Kohl’s, Wal-Mart, Abercrombie & Fitch, Amazon, Costco, Nordstrom, Target, Victoria’s Secret, Walgreens and Zales? A Facebook fan page. Until very recently, social media was considered too trendy for the advertising budgets of some of the country’s best known retailers. How times have changed!
Recent research conducted by Internet Retailer and Vovici indicates that 32% of U.S. online retailers now have a Facebook fan page. As a result, Facebook has emerged as the number one social media site for U.S. retailers’ B2B and B2C promotional activities. Now, it’s all about brand engagement and co-branding via both traditional and especially social media marketing. Why the change of marketing philosophy? In part it’s because the social media sites, including Facebook, MySpace, YouTube, Flickr, and LinkedIn, have become immensely popular amongst both young and old, student and professional alike. Also, retailers have found that they can make money through social media advertising.
A pertinent case study is Netflix, whose business model defied conventional wisdom which posited that subscribers would be unwilling to wait several days to receive DVD rentals through regular postal snailmail, when they could just jog down to their local Blockbuster Video store and rent the same movie. The skepticism about the integrity of Netflix’ enterprise paradigm was compounded by the fact that Netflix was basing its future success on the fledgling DVD format. Netflix had begun operations in 1997, and at the time videocassettes ruled the market. As more and more studios began releasing their movie libraries, and then new movies, on DVD, videocassettes quickly became obsolete. In fact, no other consumer product had reached an equivalent unit sales and market penetration threshold as rapidly as did the DVD product chain (DVD discs, DVD players and DVD recorders). Netflix now offers over 100,000 DVD and Blu-ray titles, or 55 million individual DVD and Blu-ray discs. Netflix has expanded its content delivery ecosystem to include not only mail delivery, but also cost efficient, instantaneous online content streaming services.
Netflix is one of the most recent converts to the Facebook marketing prototype via co-branding and brand engagement. Netflix customers who also have set up a Facebook account can easily link their paid-subscription Netflix account to their free Facebook account(s). The technology is based on the Facebook Connect extension of the Facebook social networking platform, which becomes the enabler of automatic Facebook page content population. For instance, Netflix customers can have their ratings of their movie rentals in Netflix appear simultaneously on their Facebook pages. Furthermore, they can share interactive comments about Netflix films with other Facebook users. The technology also allows for reciprocal sharing of the subscriber’s Facebook ratings back to a movie’s Netflix page. The numbers regarding the volume of Netflix ratings are compelling, perhaps reflecting how much Americans love movies and love telling others about them. Netflix has more than 2 billion movie ratings from members, and the average member has rated approximately 200 movies.
Why has social media ascended so quickly from a boutique concept to a mainstream marketing outlet? Possibly because it empowers both the ignoble and august amongst us to actively gather, learn, read and distribute content; to establish friendships for personal and business reasons; to self-promote and to reconnect. Social media’s success is in part due to what it is, but also what it is not. Unlike traditional mass media, social media is not owned by conglomerates or governments, existing only in the public sphere and is propagated through inexpensive technologies. Indeed, the grassroots nature of social media was highly beneficial to the 2008 presidential campaign of then-senator Barack Obama.
Social media is also perceived as fresh and immediate, because its content (news, photos, video, gossip, etc.) can be easily updated through comments, editing, submissions, etc. by one, or thousands, of cyberspace reporters. Social media is also nonspecific and conspecific—it is rooted in the Internet “cloud” and yet its examples form one cohesive family tree. There are five branches to the tree: (1) Social networking, Internet forums, weblogs, social blogs and podcasts fit under the communication branch of the family tree. (2) Wikis and social news are part of social media’s collaboration component. (3) Photo sharing, video sharing, art sharing and music sharing comprise the medium’s multimedia arm. (4) Product reviews and Question/Answer sites constitute social media’s Reviews and Opinions element. (5) Entertainment (virtual worlds, online gaming and game sharing) is the fifth aspect of social media. Only time will tell how great social media’s effect will be on advertising and marketing. However, it is clear to see that, as the famous Bob Dylan lyrics proclaim, “times, they are a-changin’.”
By Darrell Woody
Gazette Staff Writer