The Online CMO by Philip Hallenborg

Advertising network WPP recently released a report from Millward Brown on Social Media titled “Make Friends, don’t pitch them”. In the article, Nigel Hollis, Chief Global Analyst at Millward Brown, makes some interesting remarks. He starts by asking why social networks are such a tough advertising nut to crack. Hollis continues with some key observations:

• People go to social networking sites to communicate and interact with friends,
• While a few marketers realize this, far too many don’t, and continue to reach out to people in their virtual communities using heavyhanded mass-marketing techniques. Hollis continues: “not surprising that many advertisers have resorted to using display advertising on major sites,
• Traditional ads and campaigns are served up to people at an inappropriate time in an inappropriate place and finally,
•  Hollis points to three key components of a successful strategy: a) Understand the environment, b) listen learn and respond and c) create unique content.

Basically, it is all about fitting in and being relevant.

Andrew Frank, vice president of research, Gartner, says in a recent eMarketer interview  :“there are still no clear best practices for applying social networks to marketing or media strategy in general” and continues to say that “one of the problems with advertising on social media is there’s so much going on in the average page that it’s hard to get noticed”. So Hollis is not alone in his view that fitting in with relevant content is a key challenge.

A few months ago I started engaging in this very space in an attempt to formulate an approach together with my colleagues and media advisors. I am trying to understand how you can engage without trying to create the very network itself (which is bound to fail) or pushing your message in a typical advertising way. Although the jury is still out, there are some important learnings that I have made already:

• Although MySpace, Facebook etc offer advanced targeting technology, there is no evidence from my standpoint that any attempt to leverage social media networks for traditional banner advertising will be more successful (higher return) than using traditional networks or shopping sites. That approach will probably only extend the learning curve for social networking interaction.
• In many companies marketers are under pressure to show progress in this growing field. But without clear strategies, budgets and creatives to launch, they resort to launching traditional advertising onto sites that contain social networking elements e.g. MySpace. 
• As ROI (return on investment) or ROAS (return on ad spend) is always in the background, there is a natural tendency to focus one “what you know” and resort to classic vehicle mix and practices.

Bottom line recommendation? Allocate spend into social networking only if there is a sincere wish to learn and develop and that you can agree with senior management on a different set of KPIs (e.g. impressions, emails collected, downloaded whitepapers etc). At this stage it is learning money and should not be matched against classic lead/deal type KPIs. Such KPIs will inevitably conflict with the very purpose of social networks and leave little success to wish for in the marketers’ plans. So back to the school bench and start learning.

Philip