Recession. With the sub-prime fallout spooking the stock market, it’s the word on everyone’s mind this week. The ripple effect has spread well beyond the mortgage industry and now marketing and advertising agencies are tightening their belts as well.
Traditional communications agencies are teetering on the brink of recession, with at least four Washington Area marketing firms that we know of experiencing slumping business. Interestingly enough, not one of them has a serious social media offering.
As businesses look to get the most bang for their buck, social media allows companies to leverage increasingly scarce ad dollars for maximum ROI. As a result, local social media firms are experiencing so much demand, they are in a mad scramble for talent.
(Photo credit: Oscar C. Williams on Flickr)
Jennifer Laycock and Mack Collier recently touched on the subject. Companies launching social media campaigns benefit from increased face time by allowing companies to personally engage customers, creating word of mouth excitement and developing enthusiastic brand ambassadors.
Jennifer asks people to consider, “how much you can accomplish via social media without spending anywhere near as much as you would on traditional media.”
Valeria Maltoni demonstrates that online, targeted advertising using social media can reap the most benefits for companies. They provide an outlet for direct consumer feedback and interaction. Print advertising and TV ads are not going away, but implementing a corporate blog and other new media tools as part of a larger, integrated online strategy will be exponentially cheaper than using traditional means.
Developing a digital technology advertising campaign is a way to break from traditional advertising while also saving hundreds of thousands, if not millions of dollars. Isn’t it better to invest money directly into a program that actually benefits your audience? Whether it’s a consumer, potential client, or business partner, people respond better when they are engaged and feel they have a stake in what is being “sold” to them.
There is value in providing a client with a useful service, be it a blog, social networking, or creating an online community to build your brand. People respond well to online communities and as they interact with friends and family, users themselves become the best advertisements money can buy. From BusinessWeek:
Take, for instance, the much-talked-about Nike (NKE) Plus Web site, designed by New York interactive agency R/GA as a way to provide a useful online community for runners. Available in eleven languages, the site was singled out as an example of the power of branded content. “Running. Music. Running to music. Not only does it fundamentally engage the Nike community, it makes something new from two things that have been around for millennia,” says Waterfall.
Advertisers and marketers are beginning to see the benefit of retooling their approach to reach the right audience with the right message. Video may have killed the radio star but Internet ads have killed the radio ads and digital signs manufactured with GPS capabilities (via Yell.com) may even surpass traditional billboard, TV and print outlets. High-traffic website advertisements can cost up from $10 to $90 CPM, but compared to the cost of a full page print advertisement, that’s pocket change.
When the economy is strong, social media marketing is attractive for its effectiveness. It just works. In uncertain economic times it’s attractive not only for its effectiveness, but also because it’s cost-effective.
I agree that it is the “perfect storm” for Social Media to really take off in the corporate world. A corporate blog can be setup with minimal investment and provides excellent mechanisms to “feed” articles via RSS (Google and Yahoo search engines love them.) Let’s face it, consumers are now being very discriminate on how they choose to receive their information, choosing to subscribe directly to RSS channels that are then “fed” directly to them. Television and Radio advertisements are old school marketing techniques and most people tune them out and the ads themselves have limited reach and shelf life. Using podcasting, blogging, online discussions and social networking sites, the message I am sending has global reach and encourages a direct conversation between the corporate institution and the consumer. I predict that social media and word-of-mouth marketing will not only increase product loyalty for consumers but transform the way we think about marketing. The key is to provide measureable data and ROI which social media is well integrated with – try and track ROI on a print advertisement or explain to your CEO why you paid $50K for a T.V. ad that ran for two weeks somewhere between a re-run of Friends and a cooking show. Great article and I am certainly an advocate of Social Media.
Thanks for the comment Gabriel. I agree and think that in order to effectively use TV and radio ads, they have to be extremely creative and catchy – where the message isn’t necessarily shoved down your throat. Companies can let go of controlling the message by using social media (if it’s done right), which will have a great ROI because consumers will be actively involved in your product or discussions.