Welcome to my blog on Content Intelligence and Engagement Performance; I have spent years in collaboration, messaging and social space developing advanced technologies to improve the consumer experience and lead generation. Was inducted into the Viral Hall of Fame by Marketing Sherpa as well as other industry awards. Join me in the conversation.
Wednesday, June 24, 2009
STARTING A BRAND CONVERSATION WITH AFFINITY-BASED MARKETING
A. WHAT IS AFFINITY-BASED MARKETING?
Affinity-based marketing brings together merchants and consumers by identifying and communicating with “influencers” in consumer’s social networks. Consumers have brand affinities based on either a particular product’s identification as a status symbol or common “feel good purchases.” Consumers on social networks connect to brand-based groups and pages, as well as fan pages for musicians, films, and other content. Consumers who link themselves to brands can serve as possible brand advocates. The interaction with the influencer creates an association that links brands to large-scale social networking communities, thus generating ongoing sales revenue.
B. BUILDING AN AFFINITY-MARKETING SYSTEM
Three major components interact to form any powerful affinity-based marketing system: consumer-to-consumer (C2C) marketing, business-to-consumer (B2C) marketing, and network-to-network (N2N) marketing.
1. CONSUMER-TO-CONSUMER (CNC) MARKETING
Most consumers do not save or “bookmark” the websites of major brands. The reality is that social network profiles are the most frequent destinations for users. As a result, sites such as iGoogle, My Yahoo!, MSN, and AOL are all fighting to become the user’s home page. This means that traditional internet marketing is becoming less effective. There is only so much screen real estate for banner ads. Search keyword marketing is also becoming less useful. Businesses are competing for the same key words, which makes it less effective and more expensive than in the past.
The strongest alternative to banners and keyword advertising is word-of-mouth marketing. Taking advantage of the viral nature of consumer conversations has always been the best way for brands to obtain both public mind share and market share. Affinity marketing is word-of-mouth marketing for the Internet age. It combines traditional word-of-mouth marketing approaches with the quantifiable reach of the Internet to build a stronger, more substantial connection with the target audience.
A growing body of research is establishing that certain people have more influence than others on the purchase decisions of friends, family and associates. Brands ranging from the largest to the smallest need to understand that knowing who their potential customer’s influencers are and how to tap into their networks can be the deciding factor for a product’s acceptance.
Influencers can be categorized into a few different types. First, celebrities can be influencers. These people may include sports figures (e.g., professional or Olympic athletes), musicians, politicians, actors, and entertainers of all types. Another type of influencer is the person who has a closer connection with friends and family. These are people who have a direct relationship with an individual and are connected within their social circle. Regardless of the specific type of influencer, brands must both identify with these individuals and incentivize them to talk about their products or services. Thus when marketers purchase web advertising, they are not only communicating to their prospective customers, they are also advertising by proxy to the friends, colleagues, and family members of influencers.
c. WORD-OF-MOUTH MARKETING AND WIDGETS
In the face of the dwindling effectiveness of banners and keywords, widgets are an essential component to word-of-mouth advertising over the Internet. Most significantly, widgets can go “viral” when injected into social networks, and through the use of influencers, a widget can carry a brand’s message further more people than ever before.
d. THE MOMENTUM EFFECT
The C2C value of affinity-based marketing comes from seeing the brand represented within one’s social network. The proliferation of a company’s brand through a social network allows the creation of a momentum effect: the active participation of consumers in communicating personal stories that use a brand, product, song or film as the reference point. The benefits of the momentum effect are significant. Research conducted by Yahoo! found that influencers or advocates have a 2:1 conversion impact across categories. This means that each single sale to an influencer converts two people to the same product. Influencers also tend to embrace consumer-generated media more than their peers, often to an online retailers' advantage. Customers benefit by gaining access to quality goods and services, usually at a discount, while supporting the association or group of their choice.
2. BUSINESS-TO-CONSUMER (B2C) MARKETING
Affinity-based marketing leverages the momentum effect C2C interaction to develop a B2C value creation model. Thus, the measurement of value isn’t just a message sent from a business to a consumer; the measure is the impact the message has on the consumer who receives it. The initial communication is B2C but the message takes on a life of its own as consumers use it, forward it and share it amongst themselves. Thus, social networking becomes part of the product experience, and the value of social networking extends to increase in advocacy and loyalty. Impact repeats as pass along continues. Each interaction is an impression.
3. NETWORK-TO-NETWORK (N2N) MARKETING
By far the most important step for any brand is to establish a N2N presence based on consumer registration. The latest web technologies have created a unique opportunity to truly engage an audience and build a presence where consumer’s friends give brands the power to create syndication networks within networks. Corporations have collected consumer emails from a variety of points such as newsletter signups, product registration and contests. The main problem with consumer email lists is that they are only as good as the collected information. A corporate email list is a treasure trove once these emails are mapped directly to a person’s social presence. Emails lists are valuable assets if they are intelligently segmented based on social demographics, social connections and matched affinities. Companies may create widgets to initiate B2C communications. Users may then share these widgets in C2C interactions. Consumers are demanding more interactivity and a richer media experience on the Internet, thus requiring data-driven C2C interactions. The N2N approach provides a real collaborative hub that empowers companies with the ability to connect and understand its customers.
C. UNBOUND’S AFFINITY-BASED MARKETING SOLUTION IS SUPERIOR TO TARGETED MARKETING
1. SOCIAL MAPPING TECHNOLOGY
For companies interested in reaching consumers, including influencers, the single most important question: where are consumers gathering and who are they connected to? UnBound’s affinity-based marketing platform, which builds upon the previously mentioned concepts, provides the answer.
First, UnBound has developed affinity maps, which are data sets identifying large numbers of social connections. This is achieved by grouping individuals in a social network who have allied themselves with a brand. Second, UnBound has created the first algorithm that enables social ranking based on social connections, thus allow companies to identify influencers.
This algorithm creates social density maps. The creation of a social density map is a multi-step process. It begins with a consumer’s micro-graph, which details a person’s direct connections to other people, places, things, and other affinities. Through the analysis of a large set of these micro-graphs, a macro-graph is created based on second degree connections. By monitoring the social density linked to the most popular key categories, one can determine possible influencers: people that are the most connected to others in a particular social network. Social density mapping can be combined with cross-affinity maps to create very powerful view into the make up of user communities.
2. UNBOUND’S ULTIMATE ADVANTAGE
Brands that have a clear understanding of their consumer’s connections, affinity and social density have the unique opportunity to start a conversation with their key social influencers. UnBound’s technology platform provides the only available tools to analyze social density through consumer affinity maps. The competitive advantage provided by this toolset is essential in developing a truly sustainable social campaign. Established brands that have the insight to collect email from newsletter options, contests, consumer registration and ecommerce sites can both see where their customers are on the social graph and find which existing customers are social influencers. Brands can then target conversation starters.