SMM as an extension of SEM

Before Social Media Marketing (SMM) created the incumbent buzz, it was Search Engine Marketing (SEM) which was the talk of the buzz town.

Today at almost 12.5 billion USD search engines constitute almost 50% of the total online marketing spending in the US. SEM is widely researched upon at all levels, be it corporate, academic or web 2.0, and has reached a stage where it is structured to a great extent. On the other hand social media is still a black box and it will take some time for it to become the cash cow it promises to be. In the mean time, what is required is a structured approach to the marketing. This is yet to happen. Popular perception is that innovation is the most important criteria when it comes to SMM. While I agree that ingenuity is great especially when it comes to a new (read any) media, I believe that even a conservative approach to SMM might help advertisers do well.

For starters we can try to understand social media marketing from the perspective of structured search engine marketing methods. Though social media and search engine are two completely different platforms, the marketing techniques need not be fundamentally very different. Lets us see why

1. Both mediums need two routes – organic and paid.
2. Organic: While search engine optimization aims at increasing page rankings, the main objective of social media optimization is to increase virality. Yet similar methods need to be adopted for both viz. tagging, bookmarking, mash ups/widgets, inbound links etc.
3. Paid: Paid SEM differs from paid SMM only in its reach (as yet!). Both mediums essentially rely on keywords. In SMM keywords maybe text in the profile information, tags, any part of user generated content etc.
4. Behavioral or historical data (stored in cookies etc.) helps optimize both mediums.
5. Both mediums need relevant content. Better ad has more ‘clicks’ and more relevant content have greater virality.

Unlike most other forms of online marketing, both SEM and SMM are 100% web 2.0 marketing mediums! The purpose of SEM is to provide information one is looking for. The purpose of SMM is to provide information one hasn’t started looking for. One thrives for greater visibility and the other looks for greater virality. But end of the day both mediums need to reach out only to the most qualified consumers available in the online space. And there are limited ways one can do that yet.

Hence SEM and SMM not only have intertwined objectives they also end up using similar tools to meet these objectives. It only makes sense to look at one as an extention of the other.

Cheers!

Twitter, Iran and Buzz Marketing

For those of us who mocked at the “triviality” of social networking sites – the recent unrest in Iran should be an eye opener. When President Ahmadinejad returned to power with a massive win, thousands of Iranians on the grounds cried foul. These supporters of former Prime Minister Mousavi claimed that the elections were heavily rigged and were out on the streets. Had it been a few years earlier, this would have been just another political problem in just another country. But today it is no less than a world event: followed, understood and participated by people around the globe.

Thanks to social media.

It is almost uncanny to think that a political struggle is being fought on social media circles as much as it is being fought on the streets of Tehran. The fieriest battlefield is of course Twitter. To give you an idea how much Iran dominates micro blogging, here are some facts. Every 1 min, almost 10 new feeds on Iran are posted on Twitter; and ever since the election results, “iran” and “iranelectons” has constantly been on the top 10 trended discussions, world over!

What Google did to the internet, and Facebook did to the social networking, Twitter is most definitely doing to both! It has redefined what social networking can achieve, and has become the single most important face of the internet today. Never before has a two year company made so much visible impact to business, media and politics. Untill a few years back blogs were for meant for geeks, celebs and bored individuals! With the advent of micro-blogging, the internet has opened itself to (almost) everyone. Students, professionals, media personnel, marketers, anyone who has the time to type 140 characters has the means to reach out to the world. And the world literally follows.

From the marketing perspective Twitter is a buzz heaven. For any word of mouth campaign to be successful it needs three tools: credibility, reach and speed. Credibility has always been a social media thing. Twitter stands out because of its reach and more so because of it extraordinary speed. The Iran affair has shown the world that the scope of social networking goes far beyond party pictures and funny animal videos: it holds the power to bring about real change. And for people who aren’t really interested in change and justice, this episode also showed what newer levels of success an organic 'word of mouth' campaign can achieve.

Last heard: Twitter Overtakes Google as Leading Search Engine for “Iran+Election”

Also read: How Twitter Can Drive Your Bottom Line

Cheers !

SNS in India - Understanding the competition

Continuation from my previous blog "Defining Social Networking Sites"

The story as of today is that its Orkut vs Facebook for the control of the offline friends’ segment (A) in India; and it is the smaller Indian ones who are warring among themselves for the online friends segment (B). This segment does not have the lock-in effect of a ‘real’ friends’ network, hence traffic is extremely fluid among these Indian sites. Registrations into the site do not necessarily convert into long term traffic or activity. Hence they need to work that much harder to sustain traffic than a biggie like Orkut or Facebook.

Before we move on to these Indian sites, let us try to understand how the Orkut vs Facebook war is poised in India. Round June 2008, Orkut saw a sharp fall in its traffic. During the same period, Facebook had a slight, but sudden jump in its own reach. During the same period, Facebook had a slight, but sudden jump in its own reach.

Putting 2 and 2 together – we can wonder if this was the time facebook stormed the Indian cyberspace capturing the ‘urbane’ and ‘globalized’ sub-segment of the market rather quickly. Obviously Facebook’s urban appeal was its brand essence. However Facebook kept penetrating into the Indian market because of yet another magnificent marketing strategy - the quality and quantity of its activities, applications which were used to engage the user much more than any other site.

Facebook’s unique combination of brand essence and its applications is a social networking model of the Ratchet Effect. For those of you who are not from a marketing background, the Ratchet Effect says that the combined approach of running a series of Advertising and a series of Promotions yields greater results than running either, on their own. Any network which is stable and sufficiently large in number works as a continuous viral advertisement of the site and thus seamlessly contributes in building the brand. Both Facebook and Orkut had this form of advertisement going for them. What facebook did was to invest in the user engagement component of their activities/applications as promotions – just like a ‘sale’ in a retail store. This Orkut had never done. End of it, Facebook had a combination of advertisement and promotion, while Orkut had only the advertising of its strong stable networks. The Ratchet Effect graph below explains Facebook’s penetration into the Indian cyberspace in spite of Orkut having the first mover’s lock-in advantage.

Let us recap our Ratchet Effect scenario once again wrt the definitions of social networking in my previous scrap. We saw that,
1. Building strong Offline friends Networks (A) contribute as an advertisement.
2. Building Actives and Applications (C) is similar to promotions.
Note: Online Networks (B) and Activity based networking (D) do not have the stability or credibility for viral brand building and hence cannot be termed as advertisement nor do they involve quantum investment against a specific objective to be termed as a promotion.

Lets kept this thought on hold for some time, and see what the Indian sites are up to in the ‘online’ or virtual friends networking (B) segment. As of today, Bharatstudent.com is the leader in terms of traffic and they have been consistent for quite some time. However sites like Ibibo and Indyarocks are also doing well and hold a lot of promise. Ibibo has been investing a lot of energy in marketing, technology and applications; while Indyarocks achieved significant growth by introducing some smart ways of engaging their users. Backed by the Reliance muscle, another buoyant site is BigAdda as it owns a coveted Big B blog and a similar-to-Orkut interface. Fropper is the only dating specific site which is doing relative well. All these sites can be clubbed together as centrally placed in this segment. There are tons of other sites like Apnacircle, Blingbees, BhojpuriExpressNetwork, 26thJanuary, Buzzintown, CollegeMantra, CommonFloor, Desimartini, Doctorshangout, FunAdvice, Hooeey, Indiaheartbeat etc. which have positioned themselves in the niche and cater mainly towards active based networking for virtual people only.

Generally speaking all these sites have invested greatly on building activities (C) and networks round these activities (D) either to hold on to their traffic and/or to keep getting newer people to replenish the loss due to the fluidity of the market. Looking at this from the perspective of the Ratchet Effect model we created for Orkut and Facebook, we see that most Indian sites do not have any brand essence generation as they are weak in stable and strong networks. But they make regular investments in activities or promotions. This is how the graph in a scenario which has no advertisement but has promotions would look like.

Though the advertising component of the above graph will not be zero in the real world as there will be some brand building exercise or the other taken by the company – the ‘free of costs’ brand value generation from its own networks is next to negligible. And it obvious from the Ratchet model, that investment only in the promotions (read activities and applications) will do little unless they innovate and start creating stable networks.

So what do we learn from this rather theoretical looking graphs? Three things clearly,

One: Indian companies should not be investing in activities and applications just because it can be one way of attracting new traffic. But instead they should strategically use it to engage its existing user base. Success is proven to be much higher this way.

Two: For any two Indian sites making similar investments in promotions, the growth would be higher for the site which markets its brand better- either through more stable networks or through real world brand building, ad/pr campaigns etc.

Three: Without entering the offline marketing segment, it would be almost impossible for Indian sites to match the growth or penetration of Orkut or Facebook. Unless of course it tries to matches the brand essence of Orkut and Facebook by investing in tons of dollars.

So we come to THE million dollar question? How would a small Indian site build a stable, strong offline friends’ network when two BIG sites are already locking in the entire market? Hmm.. that’s for the product managers of these companies to ponder upon. But for my two penny’s worth, my advice to Indian SNS would be to actively promote vernacular language networking! That can be one way to pull people out from Orkut and try to be the first mover when it comes to building vernacular ‘offline’ friends networks. With the investment continuing in activities/ promotions – the Indian sites can have their very own Ratchet.

More on this laters!!