Facebook and other social networking sites present a quandary for most relationship marketers. Trained in direct marketing, most relationship marketers aren’t sure how to approach an interactive site where some of the primary activities involve people throwing virtual food at each other and sharing music playlists. An understanding of how Facebook is structured and how it can be used provides a range of options for relationship marketers looking to tap into its huge user base and find ways to deepen their company’s relationships with customers.
The most important point regarding Facebook is that it is a closed network, with information about members carefully guarded from the outside. Once inside, companies that secure opt-in from members can access a tremendous amount of data about members through the normal course of using these applications. Information about friends of members is also exposed based on accepted applications. This sets up an environment where individuals can have rich interactive experiences, while companies can access highly accurate information about the individual. To the relationship marketer, this information is worth its weight in gold. The key is tapping into it effectively.
With a little imagination and an understanding of the dynamics of Facebook interactions, marketers can tap into three different approaches to marketing through this community.
Traditional online advertising
Traditional online ads like skyscrapers and banners provide a highly targeted medium. Targeting based on group membership like Dartmouth Alumni, affinity applications like Red Sox Nation, or on the data collected by applications like iLike or Where I’ve Been can be highly relevant and thoughtful.
The main drawback is that, well, it looks like advertising. The same response rate issues that occur on standard online properties will happen here. So while this is a viable acquisition marketing option, there are better ones for retention.
Developing an application that drives referrals to your company, or tapping in to applications that can bring your customers back to your site, is a well understood and deeply implemented experience on Facebook. There are thousands of apps that can bring you customers. The key is finding the right ones, or developing one yourself that can add to the interactive experience without looking or feeling corporate. iLike has become one of the top five referrers to iTunes in a relatively short time, and it provides fast and direct information on tours and new songs. Other companies have developed their own applications that drive traffic to their own site like Cities I’ve Visited by TripAdvisor. Applications focused on existing customers are still few and far between. There are a few apps from eBay and other companies, but for now lead generation apps seem to be the only traffic drivers.
Over the short term, this looks like the most successful use of Facebook. Members use interesting and entertaining applications that drive them to sites related to their area of interest. The most fun and useful applications rise to the top, regardless of whether they link to another company or not.
The drawback is the jump off of Facebook. While many companies are providing a rich experience within the Facebook environment, the payoff often comes from their own Web site. This practice of taking people off Facebook to close business is the main drawback of this approach. It is highly likely that the most successful future revenue generation will come from applications that stay entirely within Facebook.
Uniquely Facebook marketing opportunities
We’re still in the Wild West stage of Facebook. Many revenue and ad models will be tested, and few will succeed. The more promising ones leverage the information inherent to Facebook that is difficult to replicate through any other medium. Companies must be open to creating entertaining and compelling experiences that may not directly drive revenue. Creativity is needed to find ways to ensure these experiences ultimately increase brand value.
Access to information on a member’s friends opens up lots of interesting possibilities. Seth Goldstein of Socialmedia, a Facebook application development firm, talks of personal advertising, where ads are based on the information known about members and their network. Picture ads that remind you to buy a gift for a friend, ads that know you, your friend’s name, and your friend’s birthday.
The barriers to entry are very low. Applications can be developed in just a few days or weeks and pushed into the wild. Companies must be willing to try a range of applications on Facebook, keeping them simple and focused on a few key elements. Some will fail. But some will succeed, and let your company tap into the huge network on Facebook. The most popular apps count millions of users, and even obscure applications have tens of thousands of users when they are relevant and executed well.
Ultimately it is these notions of personal advertising and advertainment that work best on Facebook. Making a Facebook presence work requires a lot of creativity, and for most marketers, some guidance from people or companies that are already active on Facebook today. But with focus and a willingness to try new ideas, you can gain a leadership position over competitors and maybe even some kudos from your customers.
Michael Greenberg is president of loyalty marketing firm Loyaty Lab.