Dave’s Take

The phenomenal success of the iPhone and iPad has been both a boom and a bust for their proprietary wireless provider, AT&T. On one hand, having the exclusive rights to the millions of smart phones and fancy pads is like owning a money tree; but on the other, it is more like the sword of Damocles, waiting to behead the corporate giant of its profits and reputation for what many customers have described as horrible customer service and shoddy reception. After years of simply ignoring the complaints, AT&T recently decided to change direction and has begun to actually encourage customer input. Is this latest move an act of desperation or inspiration? I firmly believe it’s the latter and industry insiders are beginning to agree with me.

Just how serious is AT&T about rehabilitating its image? Plenty, as evidenced by their proactive hiring of “social media strategist” for customer care, Shawn McPike. After coming on board last August, McPike has moved to increase his department’s staff from one to 19 full-time customer care agents. Among those, are five who do nothing but deal with AT&T social media mentions, which number over 10,000 per day. How successful has their customer outreach been? To date, over 47% of customers reached via social channels like Twitter, Facebook and YouTube have responded to AT&T’s correspondence, resulting in over 37,000 service responses per month. In explaining their (AT&T) new approach to complaints, McPike stated, “It’s hard to sit there and let someone blast you, but that’s the only way we are going to improve. As much as it’s not pleasant, I have to fully acknowledge and encourage people who come to me and listen.”

To mollify customer criticism, the customer care team responds directly to those who engage them via Twitter (@ATTCustomerCare) or through their wall on Facebook. And while they can’t immediately provide any help concerning bandwidth complaints (the number one grievance), they can boast about AT&T’s response in spending over $19 billion this year alone to improve both its wired and wireless infrastructures. The question remains, is this enough of a response to garner increased customer satisfaction? “I’m glad AT&T is pushing forward. They’ve really let the media run the story for the longest time,” says Chris Brogan, president of corporate PR watch dog, New Marketing Labs. Brogan agrees with the philosophy that doing something is better than doing nothing in regards to negative publicity spread via social media sites.

As a long time customer of AT&T mobile services, I welcome any attempt at direct communications between the multi-national giant and its customers. To me, there is nothing more frustrating than failing to at least get someone to listen to your service-related complaints. Whether that channel of communication actually solves any problems is secondary to the mere appearance of concern from a provider. While it may at worst end up being just lip service, at least it satisfies the eternal need for all of us to at least be heard.

What do Papa Johns, Pepsi and American Express have in common? Besides all being successful major American businesses, they have also all decided to truly test the power of the Internet by going out on a limb and placing all their current ad dollars into one basket – social media. No broadcast, no outdoor, no DM and no print – just their brands riding on the wings of Twitter, Facebook and Foursquare. Daring yes, but smart strategy? Only time will tell.

These big players are the just the tip of the iceberg should their daring roll of the dice prove profitable. I’m sure more than just a few TV stations are watching this play with bated breath. If it works, the floodgates will open and the current rate cards for newspapers, radio and TV will drop faster than the stock of British Petroleum. Even though social media has been growing tremendously over the past three years, it still remains an unproven channel for direct sales and marketing. Clearly, there are still a lot of unknowns in the social media world, but apparently not enough to scare off these big players.

“Social media is the hottest thing out there,” says Janet Fouts, a social media coach (whatever that title means). “The ones who succeed are the ones who will land the tech-savvies, the Gen Y’s and the Gen X’s,” she went on to explain. While few doubt the casual impact of social websites, no real studies have shown any quantitative traction for social media channels to actually move viewers into action. In fact, most studies have shown just the opposite – social sites are great for branding and promotion, but not for driving sales.

Not only are sites like Facebook and MySpace ill equipped for actual sales promotions, trying to force-feed social media subscribers promotional gimmicks may actually backfire for the advertisers. According to Jay Baer, a social media “guru” (again with the self-made titles) the growing number of social media promos could in fact create “participatory clutter” within the social media world. This clutter will only produce fatigue and frustration among the participants of social media sites. In short, using social media for advertising and marketing defeats the social aspects of the sites, thereby destroying any credibility a sponsor may have earned through previous sponsorships and support.

Will the inclusion of social media members in product design and promotion outweigh the “big brother” aspects of advertising in a previous ad-free environment? Who knows—but what I do know is that a lot of ad people will be watching these summer campaigns with a nervous eye.

I’ve commented before about the negligible significance of social media in society; how Facebook, Twitter and all the rest are fun diversions, but serve little purpose in daily life. But now it appears that social networking sites have evolved to the point where they can finally offer society some tangible benefits. While they might not offer a cure for cancer, they can now help the American consumer with personal issues.

Led by national retail giant Best Buy, businesses are at long last embracing the immediacy of social sites to solve problems rather than to spin corporate advertising. Best Buy started a pilot program over six months ago that empowers their employees to interact with customers directly via Twitter and Facebook in dealing with product and store service inquiries. Since its inception, the Best Buy program has grown to include over 2,200 employees who are screened and instructed on how to best assist their customers.

And the customers are utilizing the new interactive avenue to the tune of over 15,000 regular “followers”. People are beginning to understand how they can communicate via Tweets to better their shopping experience. From product availability to pricing and delivery issues, consumers can now communicate directly with a store employee who will provide answers spontaneously. The Best Buy employees can accomplish this by referring the customer to a specific section of their website, sending them to a manufacturer’s site, or point them to a demo or ad link.

These new avenues of customer communication provide several advantages to their sponsors – mainly in brand loyalty and in reinforcing media direction and placement. This valuable feedback tells retailers how effective their media message is in regards to reaching the masses in a meaningful way. Clearly, if they keep getting bombarded with price or availability questions, they know it’s time to change their message. On the other hand, if customers share service complaints, etc. they know their employee training programs need some serious revamping.

Regardless of specific issues, consumers obviously like the immediacy of the program. A recent Nielson study discovered that nearly two-thirds of Twitter brand accounts deal with some level of customer service. Big players like Southwest Airlines, Comcast and Patagonia are all jumping into the social media customer service arena. They are now beginning to realize, like the rest of us, that social networking is finally beginning to serve a purpose other than wasting our time.

In what may be the most amusing (and ineffective) attempt at damage control, Hollywood movie studios are doing their best to minimize the “Twitter Effect.” What is the Twitter Effect? It’s the latest method movie viewers are employing via Twitter and other social media channels to get the word out on new movies. As anyone who follows box office receipts knows, if a flick doesn’t make it in its opening weekend, it’s damaged goods. This is especially true for movie franchise blockbusters, like Harry Potter or Star Trek. Prior to Twitter, studios could at least count on a few days of decent box bucks, even when the picture was a dog. With instant messaging, what took days for word of mouth to catch up to reality is now down to hours. “If people don’t like a movie on Friday, it can die by Saturday,” said Paul Dergarabedian, president of the movie-tracking firm Hollywood.com Box Offfice.

How much influence does the social media world influence today’s box office? The summer movie season is by far the most important period for the movie biz. As much as 40% of the annual box office receipts are generated during these three months, so strong openings are a financial necessity. Normally, a weak movie drops 40% in gate totals from week one to week two. This summer however, Twitter and other instant messaging systems have contributed to the average movie dropping a whopping 51% during the same time frame.

So how are the studios attempting to reduce the damage done by instant critics? Why by sending out their own tweets, supposedly from average moviegoers like yourself. They are texting quick one-liners about how great a new release is, regardless of the truth. Case in point – Bruno. While up-front buzz about Sacha Baron Cohen’s latest slag fest was huge, word of mouth via Twitter et al. revealed just how bad of a follow-up to Borat it truly is. Bruno opened with a respectable Friday, earning a total of $14.4 million. But by Saturday, its gate dropped 39% to a mere $8.8 million, hardly the kind of sales the studio expected. And it just got worse as word of mouth caught up to the Twitter effect. How many “bogus reviews” the studio tweeted to combat public opinion is unknown, but obviously they weren’t enough to overcome the legitimate tweets of unimpressed viewers.

Hopefully, social media channels will be one more iron in the fire for better movies. Hollywood needs more flicks with solid storylines instead of the CG studded special effects laden monsters that rule the summer theater fare. Movie studios would be wise to realize that in a free society, honest public opinion rules.

I have been reading and hearing a lot about content marketing lately and how important it is for successful online advertising. Just what is content marketing? Basically, content marketing or aka, inbound marketing, is the practice of intentionally creating content that draws people to your business or service from other locations. In short, it is marketing focused on getting found by potential customers.

Content Marketing differs from traditional marketing in that with outbound marketing, businesses are trying to find customers. This is the basic strategy of channels like direct mail, print, outdoor, TV and spam. While these are what old school advertising is comprised of, they are as we all know, very wasteful and inefficient. For example, to get ten interested customers to a car lot, a dealership will advertise to thousands of people who are not in the market for a car and therefore will pay little or not attention to the campaign, regardless of how good it may be.

Besides being based upon a “shotgun approach,” outbound marketing is becoming less and less effective for many reasons, including technology. Technical innovations are advancing to the point of making old school advertising obsolete. Innovations like caller ID, TiVo, Do Not Call lists and spam blockers are slowly but surely changing the way the world markets and advertises. With consumers under more time management pressure than ever before, the idea of someone forcing them to sit through even a thirty-second ad is abhorrent. Fill their inbox with unwanted spam and not only aren’t they buying your product, they are hating your product.

With content marketing, you start with interested customers and then try to direct them to buy from you by carefully channeling them to your business through a myriad of techniques. Producing a video for YouTube that features your product is one way companies are using inbound marketing. Viewers see the video, like the video and then visit your sight where they view your product with less skepticism. If done properly, viewers will be unaware that any advertising is even taking place.

Another proven way to successfully content market is through social media. Blogs, communities, chat rooms and individual postings are a great way to use nuance and attitude to draw qualified customers. An obvious avenue of effective inbound marketing is SEO. Proper search engine optimization makes the search for your product or business that much easier, which is what content marketing is all about. Building your site with solid SEO techniques and making your inbound links as optimal as possible are sure to maximize your search engine rankings. There are dozens of techniques to enhance your inbound campaigns. They can be found, not surprisingly, on the Internet and in blogs, discussions and communities. Review them and put them to work for you as soon as possible.

Remember, content marketing has to be worthwhile on its own to be successful. Viewers shouldn’t be aware that any advertising or marketing is even taking place. If it doesn’t survive the smell test, it probably won’t deliver. But if done properly, content marketing is not only cheaper and more effective than traditional channels, but by empowering your customers, you will create a customer loyalty program that will last for years. And that is crucial to any effective marketing campaign.

Lately there has been more buzz about Twitter than the plight of the U.S. economy. The MSM has beaten the tweet phenomenon to death, making it out to be just one step short of sliced bread. Celebrities are tweeting, politicians are tweeting, even people who don’t normally embrace new media (Elizabeth Taylor, Larry King, John McCain) are sharing their most inane thoughts via the tweet. Which begs the question, ”Why do we need to be alerted to someone’s mindless140 character thoughts at any time of the day or night?” Personally, I don’t really care when Ashton Kutcher is headed to the grocery store to buy salad fixin’s or what Paris Hilton’s latest buzzword is. In my opinion, only twits tweet. However, actual social networking can provide substantive advantages to the businesses that embrace it.

Before you write me off as another guy who “just doesn’t get it,” think about this: While 83% of the Internet population is using some form of social media, less than 5% actually turn to it for advice on purchasing decisions. In a new study, “How People Use Social Media” by Knowledge Networks, researchers have discovered that social media is indeed lighting a new path for friends to connect, but not one that provides any real guidance on buying products or services. Not only is twitter and it’s brethren not the go-to, one-stop shops for quick advice, but only 16% of social media users say they are more likely to buy from a firm or service that advertise on social networking sites. The overwhelming way people decide on major purchasing decisions? Word of mouth. Wow, what a concept! The good news is that these stats prove you don’t have to spend big money on social sites to be successful, just provide a relevant presence for your company or service.

Despite their apparent inability to create sales, social media outlets are on a popularity upswing and businesses that ignore them do so at their own peril. Like any other tool in the toolbox, social media outlets should be kept in your marketing mix. I advise clients to open and maintain accounts on social sites like Facebook, Likedin and Tagged. I also encourage them to post informative blogs highlighting their solutions to popular problems and concerns. While they probably won’t make the cash register ring, they will keep your business or product topical and in people’s minds, which is half the marketing battle.

So remember, to keep the buzz about your company or product fluid, invest some time and thought into social networking. Concentrate your efforts on sites that allow you to create a positive image, not just a 140-character punch line. In other words, leave the tweeting to the birds.