Gary Vaynerchuk “Superstar:” Retailer & Entrepreneur Walks the Social Media Walk

If you don’t know who Gary Vaynerchuk is as yet, you will soon. On April 10th, HarperStudio announced that they have signed a “seven figure, ten book” deal with Gary Vaynerchuk. That deal culminates this week with the release of the first book: Crush-It – Why Now Is the Time to Cash In On Your Passion.

Who, you may ask, is Gary Vaynerchuk?

Gary is an early 30s, Belorussian-born wine retailer from New Jersey. And though his relentless diligence and grasp of the medium, he has quickly become one of the first bona fide superstars of social media. A stardom that he has parlayed into a branding agency, a speaking business and a host of associated business endeavours. And to top it off, he is a straight-up business person who is not an academic, marketing/communications professional or guru – and this status is being recognized by the mainstream media.

How did Gary attain his cult/superstar status in the social media world? Quite frankly, dedication to the media, commitment to “always hustling the business”  and staying authentic. And his single focus of one day owning the New York Jets.

When Gary’s dad Sasha moved his family from Belarus (then part of the USSR) to the United States, they eventually settled in New Jersey and took over the operations of a wine retail operation known as Wine Library. As a family run operation, business growth was slow and steady. In his formative years before he was of legal drinking age, Gary spent his time learning about flavours in new and unique ways that few could imagine (I urge all to view the soon to be more famous Episode 148 at the tv.winelibrary.com website to get a sense of Gary’s commitment). After college he entered the family business – which was his boot camp before a serious nose-dive into the wine business.

Things took a dramatic turn about four years ago. With the advent of social media coming on stream, he talked his family into incorporating social media tools into the business, and redefine Wine Library’s sales strategy. With some resistance, the family supported him. Gary then set forth in motion a number of different websites, among the first being Wine Library TV.

Looking at the early episodes of the site, we can see Gary feeling his way in the world. But with more episodes under his belt, Gary became more confident, and started to incorporate more social media tools into his videocasts. He got on Facebook (almost 22,000 fans and counting), Twitter (over 850,000 followers), Tumblr, he was amongst the first retailers to incorporate tags to del.icio.us, Digg and StumbleUpon. He also got his podcasts up on iTunes as well as creating blogs for Cork’d (a discussion group about wine). He also took the time to write a book – 101 Wines: Guaranteed to Inspire, Delight, and Bring Thunder to Your World – that cemented his unique approach and language to reviewing wine (indeed, wine connoisseurs rarely faced such REAL and FRANK descriptors as “Big League Chew,” “Fruit Roll-Ups” and “poopie” in their tasting notes). But, more importantly, he tied everything back to the core business of selling wine (evolving simultaneously as a venue selling himself). His use of social media aligned with the operations of Wine Library to emphasize that there is a dialogue about wine that could be realized through product that could be purchased at Wine Library.

While sales may have fallen in the short-term, Wine Library has experienced phenomenal growth and is now a $50  to $60 million a year business. On his videocast, Gary now has the star power to attract the Great One, Wayne Gretzky, was on an episode this spring. Tack on appearances on Good Morning America, CNN, Conan O’Brien, Ellen and hosting such luminaries as Jim Cramer, Kevin Rose (founder of Digg) and Timothy Ferriss (“The 4-hour Work Week”), Gary has become an industry unto himself. So big that is Gary was one of the keynotes at the 2009 SXSW interactive conference and his appearance/speaking fees are well into the 5-digits a shot (OK, lower 5-digits at this point).

What’s driving this success? Three things – Gary (authentically) LOVES Wine, he is a GREAT STORYTELLER and is WHOLLY COMMITTED to social media. As he says, “if something is new (in social media), I am all over it.” And he lives by that mantra. One needs to watch Gary in action carefully to understand this – he uses his daily broadcast to cross-reference what he is doing by literally, while on camera, pointing to other parts of the computer screen of where to connect with him on social networks, where to link up previous episodes and where to read reviews of the wines he is tasting below the video screen. He always manages to chat about football, and his personal appearances (referenced at the top of the screen), as well is what is going on with the retail operation at Wine Library. Further, he encourages his audience – lovingly named by him as the VaynerNation (even they are branded) – by encouraging them to post comments at the video blog to look at what is going on in the wine club, to follow him on Facebook and on Twitter, and to buy the swag that he has related to wine. Further, he aligned the retail and online operation with his push efforts – staff share their passion for wine with customer and support the social media platform. While it is shameless, he is absolutely authentic in what he does and his cross-platform promotion is natural in his banter.

What is also key to Gary’s success in using social media as a marketing tool is that he rewards his viewership (i.e., Vayniacs and the retailer’s customers) for being part of this community. He is always doing giveaways, he reads comments left by his viewers, he is also putting up special offers on the various social media platforms . For example, there are Facebook specific offers where members of that group get a code for a tremendous deal on when purchasing wine at Wine Library. He understands that the conversation goes both ways and his viewers and customers’ participation in this dialogue should be validated.

Gary has clearly demonstrated a grasp of this medium. He is also fully committed to social media as a pillar of Wine Library’s core business strategy (as you can read in this March 2009 article in the New York Times). Wine Library’s operation has been completely re-engineered to capitalize on social media – sure it takes time, but for them it is substantially more cost effective than traditional advertising. He is also committed to the notion that every opportunity to interact is an opportunity to market the business… as long as one stays true to oneself and understands the marketing is part of a greater conversation of building a relationship.

What can marketers learn from Gary? Social media is an important tool is getting your message out and engaging your customers. If you are going to incorporate social media tools in your marketing strategy, have it connected to your corporate strategy first, commit to it and reward your audience for establishing a relationship and sticking around. And ask your audience for their opinion (no matter how harsh it may be). It is only through such conversations, where there is a mutual reward, that authenticity can be manifested, expressed and relationships become more rewarding.

Gary signs off every broadcast with “You, with a little bit of me, we are changing the wine world.” This is among a host of catch phrases which contribute to the Gary Vaynerchuk “brand,” that reinforces that he is the front man for Wine Library. Gary gets the triad of social media, business strategy and branding, and is now commuting this knowledge into a marketing and branding agency. Yet another rung in his long climb to attain his goal of owning the New York Jets. And this researcher believes that he will get there.

Congrats Gary on the release of Crush It and to your continued success.

Some handy background resources:

Crush It – sample chapter: Click here to download.

Gary’s national television appearances: Click here to view.

Brian F. Singh, CMRP
ZINC Research
Web: www.zincresearch.com
Twitter: http://twitter.com/BFSingh
LinkedIn: http://www.linkedin.com/pub/6/186/181

Starbucks & Instant Coffee: Good Business Strategy?

Over October 2 to 5, Starbucks was offering free samples of its new VIA Instant Coffee product in Canada – a product they refer to as “Ready Brew.”  This Wednesday, the VIA product will begin to be rolled out across the United States.

Starbucks foray into the instant coffee market is intriguing. Why would a company that took great pride in “educating” the world about fair-trade coffee and espresso-based beverages enter a market that is typically scoffed at by java connoisseurs?

One of the primary reasons claimed by Starbucks is that the global market for instant coffee is a $21 billion. But there is more going on here…

Let’s break this down. From a Canadian perspective.

From ongoing national research study, conducted by ZINC Research and its partner Dufferin Research, we recently investigated Canadians coffee consumption habits.

“When you purchase your coffee, where are you most likely to buy it?” Source: Canada Voyageur Omni (September 2009)

“Where Canadians are most likely to get their coffee” was a multiple response question. So respondents had the opportunity to choose more than one outlet for their coffee. It was noted that 23% of Canadians don’t drink coffee. So the market for coffee starts among 77% of adult Canadians.

Almost half of Canadians (49% total, 62% of coffee market) get their daily caffeine fix at Tim Hortons or a similar doughnut establishment. 2 in 5 (or 51% of coffee market) make it at home or get their coffee at the office. 1 in 6 (or 20% of coffee market) go to Starbucks or a similar coffee house chain.

On first blush, a slight majority of coffee drinkers enjoy their beverage at home or the office. Unless you are among the dedicated and obsessed with having an espresso machine, most Canadians would be making either brewed or instant coffee on their own. Yes, convenience and simplicity dominates this market.

Also of interest here are the 13% of Canadians (17% of the coffee market) that enjoy their cup of joe at a locally-owned, independent coffee house. Starbucks evolved out out of this niche, but is now a publicly traded company and considered a global giant in the retail coffee trade. For coffee-drinkers seeking a “more authentic” coffee house experience and wanting to support the “small guy,” they have been turning to local and independent own purveyors of their favourite brew. It is no secret that Starbucks has been losing business to this market based on three factors – quality of coffee, the social coffee house experience and price. To address the bleed to this market, Starbucks has been experimenting with “non-branded community cafes.” This is a curious move by a corporation who invests tremendous resources in branding their coffee experience.  More on this below.

Let’s now consider the beverage of choice among Canadian coffee drinkers…

“What type of coffee do you drink most often?” Source: Canada Voyageur Omni (September 2009)

7 in 10 Canadians indicate that they drink brewed coffee most often. In a distant second, about 1 in 9 indicated that they are most likely to sip instant coffee. This was followed by a stated preference for cappuccinos, lattes and espressos. At a glance, Starbucks was able to cover off 4 out of the top 5 choices of Canadians – 84% out of 95% of the market. With the introduction of VIA Ready Brew, Starbucks can effectively serve the entire spectrum of the top 5 choices among Canadian coffee drinkers. I suspect that this may be the case for the US market as well.

As noted above with the “community cafes,” and the introduction of VIA, Starbucks is entering unique territory with competing interests.

1. New Opportunities. As they may feel that their market space is mature, Starbucks may likely feel that the strength of their brand can be extended across the breadth of the coffee market. With its stated intent to get into big box retailers and served on airlines, Starbucks may feel that a highly regarded brand will translate into a profitable market share. Demography may also be in play here – aging Boomers may prefer the simplicity of making instant coffee instead of using the drip-maker and cleaning a host of equipment. Further, instant coffee is enjoyed around the world and with increasing immigration from Asia and Eastern Europe where the product is well entrenched, Starbucks maybe looking towards the future.
2. Brand Clarity. This may be the risky play. Starbucks’ share price was in decline from the latter part of 2006 to the depths of the recent economic downturn in early part o 2009. With the rise of other coffee choices (e.g., Tim Hortons’ introduction of frozen coffee beverages) and competition from independent coffee houses, two things occurred: (a) Starbucks’ product line became mainstream and substitutes readily available; and (b) Educated and savvy consumers and connoisseurs began abandoning the retailer for independent options (e.g., the rise of Caffe Artigiano in western Canada). It is this latter phenomena that was particularly vexing to Starbucks – these independents mimicked Starbucks attention to process, offered free wi-fi, started to innovate in their product and develop their own community and social networks (e.g., barista slams). As such, Starbucks started to have an identity crisis (hence the “community cafes”). The same could be said for the introduction of the VIA product – is instant coffee (no matter how good it is) congruous with a $5 latte?

Starbucks is very lucky for one critical fact – coffee is addictive. However, they need to carefully consider their product lines relative to their brand. While our polling data clearly indicates a substantial market opportunity, Starbucks is beginning to navigate from a formerly strong and well-defined position into an increasingly cluttered coffee market. From a strategic perspective, I suspect that their executives have to consider the following key questions:

• Will the sale of instant coffee dilute to perceptions of Starbucks’ “premium” position in the coffee market?
• Can the instant coffee market support a premium-priced brand? (At about $1 per serving, VIA is priced substantially higher than other instant coffee brands.)
• What would instant coffee markers do to take on Starbucks entry into this market?

With a sizeable opportunity, Starbucks is certainly swinging for the fences and looking at their bottom line. However, from a strategic perspective, recent performance does indicate that, given their distribution channels, reinforcing and differentiating their core product and experience (especially given the “affordable luxury/indulgence” their products offer) may be a better long-term investment.

We look forward to tracking the performance of the VIA product and Starbucks’ excursion from its core brand.

Interesting aside: Active social media users are almost four (4) times as likely to drink lattes and/or cappuccinos compared to casual and non-users.

“The Bridge – Canadians & Social Networking Sites” is one of a number of nationally syndicated studies conducted by ZINC Research Inc. and its partner, online research specialists Dufferin Research, via their monthly Voyageur Omnibus.

This survey was conducted between September 11 and 15, 2009, via and online poll of 1,200 Canadians (adults, 18 years+). The sample is census representative by region, gender and age. Based on global tracking, approximately 84% of Canadians have access to the Internet (higher incidence when teenagers and adults considered exclusively), and this methodology is considered representative of the Canadian population.

Contact:

Brian Singh
Managing Director – ZINC Research, Inc
brian@zincresearch.com
(403) 861-9462

Rick Frank
President – Dufferin Research, Inc.
rickf@dufferinresearch.com
(613) 730-4664 x 221

Canadians & Social Media: Almost 80% of Canadians use social networking sites (October 2, 2009)

Survey shows almost 7 in 10 of online Canadians are members of Facebook, while Twitter gains momentum

Calgary, AB – Over the past year, there has been a surge in Canadians joining Facebook. And most of the growth has come from adults 35 years or older. In fact, almost 7 in 10 (68%) online Canadians are now on Facebook. An ongoing national research study, conducted by ZINC Research and its partner Dufferin Research, shows that Facebook is the market leader and continues to drive the growth in social media in Canada.

“Online Canadians are gravitating to social media in droves,” says Brian F. Singh, Managing Director of ZINC Research. “Almost 4 in 5 are members of a social networking site, with Facebook being the pre-eminent site. In a matter of 3 years, there are now over 13 million subscribers. Since last spring, Facebook added almost four (4) million subscribers, and has dominated competitors within this market.”

While there is a broad cross-section of Canadians who have a Facebook page, members are more likely to be younger (18 to 34 years) and female, and membership in this demographic has remained stable. However, it is among the 35 years or older segments where memberships have exploded – in less than a year (8 months), memberships among 35 to 54 year olds grew by 46%, and by 113% among the 55 years and older generation.

“Twitter is also gaining momentum,” said Singh. “Membership among online Canadians has increased four-fold (from 3% to 14%), and social networking sites are modifying their offerings to incorporate Twitter or present similar elements in their own real time news feed. Social networking sites are more than a fad and a firmly taking root as a legitimate media choice among Canadians.”

Full News Release: Online Canadians: Usage Trends in Social Networking Sites (October 2, 2009)

Graphs to Accompany News Release: Online Canadians: Usage Trends in Social Networking Sites (Graphs) (October 2, 2009)

Useful Reference: Revealing the People Defining Social Networks, Brian Solis (October 1, 2009)

“The Bridge – Canadians & Social Networking Sites” is one of a number of nationally syndicated studies conducted by ZINC Research Inc. and its partner, online research specialists Dufferin Research, via their monthly Voyageur Omnibus. This ongoing study, started in September 2007 and now in its 8th wave, tracks online Canadians interest, activity and membership to social networking sites.

This survey was conducted between September 11 and 15, 2009, via and online poll of 1,200 Canadians (adults, 18 years+). The sample is census representative by region, gender and age. Based on global tracking, approximately 84% of Canadians have access to the Internet (higher incidence when teenagers and adults considered exclusively), and this methodology is considered representative of the Canadian population.

Contact:

Brian Singh
Managing Director – ZINC Research, Inc
brian@zincresearch.com
(403) 861-9462

Rick Frank
President – Dufferin Research, Inc.
rickf@dufferinresearch.com
(613) 730-4664 x 221

The Science of Social Media

This month, my article “The Science of Social Media” was published in Marketing Magazine (August 31, 2009 issue).

To download a copy (scanned) click on this link:

The Science of Social Media (Aug 31 2009).pdf

The article explores some of the scientific processes (within the bounds of one page!) that have helped drive the growth of social media platforms. It also puts these phenomena in context for marketers – in a brand strategy, what are the components and activities that create the right elements to connect and resonate with an audience?

While it is my sense that social media does present some opportunities for adding “viral” components to campaign, any foray into the use of this medium will need to be considered within the overall campaign strategy and media mix. For those products and services that can benefit from a social media component in their marketing mix, use of this medium and a provocative approach (grounded in authenticity and imagination) can be a key brand differentiator in the promotional clutter.

Further, while marketers are seeking innovative approaches to communicate the unique aspects of a brand via analogies typically derived from popular culture (e.g. movies, music and books), I believe new approach to marketing also needs to be multidisciplinary. Beyond the basic need to build and sustain relationships (our social drive), it is scientific processes that reinforces these connections.

So, for your next campaign, tap into mind of the gal down the hall who has a physics degree and the guy over in IT with an anthropology degree. By tapping into different disciplines we can explore means to establish conditions to enhance the “stickiness” of brand communication.

Brian F. Singh, CMRP
ZINC Research
Web: www.zincresearch.com
Twitter: http://twitter.com/BFSingh
LinkedIn: http://www.linkedin.com/pub/6/186/181

Note: While this article was published on August 31, 2009, the preliminary draft was submitted to Marketing Magazine’s editors in May 2009. While this area is evolving rapidly, we attempted to maintain the integrity of ideas presented and retained examples as they were originally submitted.

Facebook Privacy Ruling: Why Social Media needs Marketing Research

So, Facebook reached an agreement with the Privacy Commissioner and comply with Canada’s privacy laws.

Purveyors of social media services, community panels and monitoring tools take note and prepare yourself. This is going to become more common.

One of the promises of social media is more accountability and better targeting through listening to people and monitoring conversations (as some refer to it – a research-rich platform).

Sure thing, folks.

Until these “people,” who consider their online life to be a natural extension of their “real” life, demand their right to privacy in medium. Very much like what happened to Facebook in Canada.

Yes, people gravitate to social media platforms with the full realization that the getting something for free means giving up a little. However, there are limits to the extent people want to “give up a little” – and this is not the wholesale pillaging of personal information that was going on by third party application providers. In “giving up a little,” people’s right to privacy needs to be respected.

Where can social media purveyors learn about the due diligence required to be privacy compliant? The marketing research industry.

For years, the marketing research business has invested numerous hours, money and energy in respecting the rights of privacy of respondents and subjects. You can check out the some of these code of ethics in the links below. Getting a grasp on this and implementing these protocols – tried and true – would mitigate undue risks and be compliant with personal privacy legislation.

Links (just a few to get rolling):

The Marketing Research and Intelligence Association of Canada’s Privacy Code

The Marketing Research and Intelligence Association of Canada’s Code of Conduct

The Marketing Research Association’s Online Privacy Resources

Bottom line: At some point, any business that engages in social media needs to understand and comply with the privacy regulations.

And think… this medium can begin to set global standards in respecting online individuals’ personal privacy.

Brian F. Singh, CMRP
ZINC Research
Web: www.zincresearch.com
Twitter: http://twitter.com/BFSingh
LinkedIn: http://www.linkedin.com/pub/6/186/181

Social Media Strategy: “Dirt Cheap Labour” meet Game Theory

In the social media stampede, how long would free be truly “free?”

I just read the article “Dirt cheap labour – How businesses are getting the public to work for them for free” by Stephanie Findlay in the Business section of Macleans’ online magazine, published last week. Check it out.

OK. Let’s repeat the question: How long would free be truly “free?”

It is my sense that businesses should be very cautious in hinging strategic initiatives on crowdsourcing and these so-called “free” opinions. And, while most people’s eyes glaze over by its very mention, economic theory has a role to play in organization’s social media strategies and the value of such opinions.

Based on our monitoring, some businesses are considering such crowdsourcing approaches in their foray into social media where such organizations are looking for their consumers to assist them in their product and service development. Such attempts to “listen” to the core audience are admirable.

There are also a host of products that monitor and scan the Internet for consumers’ perspectives on various brands.  Groundswell by Charlene Li and Josh Bernoff discussed at length how corporations are setting up consumer communities (with such tools now readily available from the likes of Toluna and Vision Critical).  Also, organizations are setting up public forums where the public can provide feedback on various initiatives. Results have been mixed to this point – a good example cited in the article (one I have followed with great interest) is the Netflix competition where there was a $1 million prize for the best algorithm to improve the accuracy of the site’s film recommendations.  Beyond this success, some question that in many instances the discussion is that the feedback organizations get is from a motivated segment, and some argue if you are speaking to the most enthusiastic consumers – those who would normally share their opinion.  Others question the representativeness of such feedback (this will be the subject of another post in the future).

Let’s revisit the Netflix example… because at some point all aspects of crowdsourcing will be facing the same critical issue.

The Netflix Competition was a successful application of crowdsourcing because: (1) It was an interesting problem (with a clear objective); (2) There were clear rules for participation (and expectations identified); and (3) There was a substantial financial reward (with ongoing progress prizes).

Marketers should take note, as any crowdsourcing strategies should fulfill these three criteria plus a fourth – vested interest.

However, with some organization considering any strategies in tapping into the creative commons, it is my opinion that participants in these various forums may consider that their opinion and feedback will actually be worth something. A classic example is in the decline in the participation rate of telephone surveys – a more archaic approach to doing surveys – and not wanting to be bothered during dinner time.  People have realized that their opinions are worth something and have become very selective in how they share them. Further, we have also seen declines in participation of public service groups such as the Rotarians and Kiwanis clubs. This will happen too with social media – as social media is about being social and collaborative; and (as I have postulated in this blog) that while social media is alive and evolving, it’s another business tool.

Using Netflix as an example and considering crowdsourcing as another business tool, marketers have now delved into the territory of the economics and game theory known as incentive compatibility.

From the Wikipedia explanation:

(In mechanism design,) a process is said to be incentive compatible if all of the participants fare best when they truthfully reveal any private information asked for by the mechanism. (Where mechanism design is a field of game theory studying solutions concepts for a class of private information games).

Here’s another equally unfriendly explanation of this concept.

Without going into great detail (and my attempt to simplify), the principles of designing a forum for organizations to optimally leverage social media have to fulfill some basic foundations of game theory.  In this case, the mechanism by which parties are collaborating and sharing information, identifying what information is sought, the revelation of how the information is disclosed, implementability of the ability to follow through and necessity and sufficiency that supports the parties mutual desire and need to participate in this forum need to be considered. Also, there are variety of games to be considered – from such candidates as symmetric games, repeated games, sequential games – in any community feedback/engagement/crowdsourcing strategy considered (and a single program may entail a host of different games to fulfill a single objective). Further, social media through its (online visual) articulation improves the transparency of the flow of information. Ultimately, there needs to be a well articulated pay-off for participation by all parties. Yes marketers, mechanism design theory is alive and well with incentive compatibility at its core.

Enough of the technical jargon (but I am happy to chat with interested parties on how this works and in optimizing programs)…

Community/Engagement initiatives and crowdsourcing via social media is and will likely still be cheaper, faster and more efficient in the long run (as it satisfies a host of incentive compatible conditions given the mechanism of social media). Organizations that grasp incentive compatibility, the basic constructs of game theory and are respectful of the real cost of participation and the sharing of perspective via this vehicle are the ones who will thrive in this medium.

Brian F. Singh, CMRP
ZINC Research
Web: www.zincresearch.com
Twitter: http://twitter.com/BFSingh
LinkedIn: http://www.linkedin.com/pub/6/186/181

A short note on “free.” Please note, I appreciate the efforts of many organizations and individuals who post vast amounts of free content on the web. I applaud you in the ability to democtratize intelligence and knowledge resources for the wired masses. The “free” I am focusing on the is the ongoing expectation of entities to tap into the network of individual to progress their own business goals.

Social Media Strategy: Digital Trust – The Case of Facebook

What can social media strategists learn from Facebook? Lots. Especially when corporations are keen to approach the altar of authenticity. Like any sustainable relationship, corporations need to invest the time in getting into the minds of their target markets, and the dynamics of brand trust (and the evolution of “digital trust”). And as they have realized, this is not a straight and clear path.

Among online Canadians, Facebook is ubiquitous – 98% awareness, with three in five online Canadians having a Facebook profile. Facebook is the de facto identity card for the 18-34 generation. It is undoubtedly the leader among social media platforms in Canada. Some now consider the medium as a goldmine for marketers.

While Facebook is still in its youth, marketers need to understand three things: Who are Facebook users? What are they doing online? How do we connect with them?

Let us begin connecting the dots…

If we rewind to this time in May/June 2008, the dialogue among corporations was to shut down our workers using Facebook. Facebook was viewed as a time waster and the perception was that subscribers were busy chatting with their friends and playing games. This may be true to some extent, but in many regards they were playing around with an evolving technology.  Now, corporations are now talking about how to adapt social media tools to their business. How things have changed!

In Malcolm Gladwell’s recent book Outliers, he discusses at great length the rule of 10,000 hours, but also buying into David Foot’s central pieces on demographics contributing to certain individuals being born at the right time. If we look at the adopters of social media, using the 18-34 generation as a core demographic segment, this is Foot’s baby boom echo and this is their platform for communication. Connectivity is important to this generation, may it be via instant messaging, SMS or email. This group considers travel destinations based on their ability to stay in contact with their friends and post updates on their blog and pictures on Flickr and Picasa, to share the experience with their friends and colleagues. These are the kids of the boomers, so while different in age, they do connect with their boomer parents based on the values instilled by their parents.

So we have a dialogue platform and “connected” belief system. Let us now turn to the user. What do corporations need to grasp about Facebook subscribers? At almost 12 million online Canadians, Facebook is about as “real” a group of people that can be analyze virtually. It is an authenticated environment where the vast majority of people identify as the same people offline (i.e., the real world) – they have to use their real names. This is a critical point, especially when authenticity is a quality respected by all, and adopted as a credo in brands and corporate values.

A majority (62%) of members feel that their Facebook profile is an accurate representation of who they are. Further, there is a larger share of subscribers who appreciate that they can keep all their contact information on Facebook and maintain continuity if they change where they live, their telephone number or e-mail address (welcome to the age of your “portable identity” for life). Heavy users (about one-third of members) are a unique segment in this medium – they are more inclined to indicate that they maintain a broad network of friends and acquaintances, more willing to share emotions, more trusting of others, and more brazen and more flirtatious. Based on these “more” personality traits, we can surmise that these are outgoing people.

This leads to some very important findings for marketers. Heavy users of Facebook and other social media are seeking identity enhancement. Individuals now have the vehicles to express themselves online in ways and means they never had before. In the past where techies ruled the web with their knowledge of html coding, social media empowers the individual with simple tools and widgets as long as they have access to the web. The medium facilitates users to be as open as they wish, by letting in friends and colleagues on a permission basis.

This is a realization of what Tom Peters labelled as “personal branding.” Thus, heavier users of Facebook are doing more than just socializing – they are representing their “brand” in online space.

With social media, what individuals are doing a “micro” basis – i.e. personal brand management – is similar to what corporations are seeking via this medium. We are now seeing something akin to the personification of the corporation used as a marketing and engagement tool in online environment. In doing this, companies move beyond the basic tenants of brand management, to brand transparency and brand vigilance (i.e., “define yourself or somebody else will define you”). And some corporations get it.

Within Facebook, we have seen Pepsi launch its “Refresh Everything” campaign, as well as Molson having their own insiders group (Molson Canadian Nation), in ways that support their promotional campaigns. With the news feed in Facebook, friends and colleagues are well aware of what their friends are doing and through affiliation and information, this viral communication helps build the community. In the world of social media, aspects of conversation, collaboration, feedback and acknowledgment build and extend the role of traditional marketing.

Staying with the individual, a key dimension of social media is the notion of trust. If feedback is coming from a voice that is familiar, known and understood, it is more trusted. In Canada, ZINC Research/Dufferin Research have been tracking “societal trust” – where societal trust is measured in public opinion polls via an internationally recognized methodology with the core question being “generally speaking would you say that most people can be trusted, or that you can’t be too careful in dealing with people?” Looking at this within the context of social media, we see Facebook members being significantly more trusting of cousins and extended family, childhood friends from where they grew up, friends from school, college and university, as well as people from hobbies and/or sports, compared to those who are not on Facebook. This emphasizes that social media vehicles can serve as a means to communicate trust in products and services via the advocacy of the individual.

So within Facebook we find outgoing, connected and trusted individuals.

How about consumer activities connected to social media? Are Facebook subscribers more active than non-subscribers in their online activities? Our research shows that Facebook subscribers are significantly more likely to be doing their banking and managing their finances, visiting YouTube, using search engines to find news and entertainment information, going to Wikipedia, and playing games of chance such as poker, compared to NON-subscribers. From a marketer’s perspective, Facebook members are an attractive target for e-commerce, given their predisposition for “living their life online” relative to non-subscribers. Marketers should take note of this niche marketing opportunity – as expressed by Amy Shuen in “Web 2.0: A Strategy Guide,” “Google may know my key word searches, Amazon my wish list and Flickr may know the photos I tag as interesting or cute, but Facebook knows my face, the photos of my friends, my personally created profile, the evolution of my digital persona and my interactive social milieu.”

Social media from an advertiser’s perspective has become the World Series of niche marketing. Using our research into Facebook as a guide, there are nuances in whom to connect with, and how to establish a trusting reciprocal relationship between customers and companies. Marketers have the opportunity to extend traditional promotional activities via engaging social media tools. With the available vehicles, there are now creative means to connect with the under 35 year old demographic – and the reality of appealing to the “power users” of the space with understanding that trust is an extension of the personal brand. However, given the nature of the medium, companies have to reflect the authenticity of their products and services through every supported conduit in their campaign. And now such authenticity will be tested, as once a campaign is long over, the door will remain open to ongoing dialogue in new and unexpected ways. Companies need to consider the objectives of their business, marketing and communications plans and the guidance of strategic market research, and how they can be open to, and positively direct and support the evolving world of social media and using it as a means for building and reinforcing trust.

How will you and your company be building your “digital trust?”

Tim Hortons & Social Media: Learning about the power of the crowd

Today, Tim Hortons learned about the power of social media.

In a release from Change.org, “Urge Tim Hortons to Stop Supporting Anti-LGBT Group” they indicate:

Oh, don’t you hate it when doughnuts decide to go homophobic? The Canadian mega-giant Tim Hortons (which in Canada is the largest coffee chain in the country), has decided to co-sponsor a rally in Rhode Island next week hosted by the National Organization for Marriage. Yup, the same National Organization for Marriage that is currently leading campaigns to take away the civil rights of gays and lesbians in Maine to marry, and the same group fighting marriage equality in places like Washington, D.C., New York, New Jersey and elsewhere.

This was posted at 1:29 pm Eastern Standard Time, August 9, 2009.

In less than 24 hours, this incident was all over the web – much due to the power of social media, and almost all responses universal in their condemnation for Tim Hortons’ support for National Organization for Marriage’s event.

By day’s end Tim Hortons, bowing to the “power of the crowd,” withdrew their support with the following response:

Recently, Tim Hortons was approached in Rhode Island to provide free coffee and products for a local event, as we do thousands of times a year across Canada and the United States.

For 45 years, Tim Hortons and its store owners have practiced a philosophy of giving back to the communities in which we operate. As a company, our primary focus is on helping children and supporting fundraising events for non-profit organizations and registered charities.

For this reason, Tim Hortons has not sponsored those representing religious groups, political affiliates or lobby groups.

It has come to our attention that the Rhode Island event organizer and purpose of the event fall outside of our sponsorship guidelines. As such, Tim Hortons can not provide support at the event.

Tim Hortons and its store owners have always welcomed all families and communities to its restaurants and will continue to do so. We apologize for any misunderstanding or inconvenience this may have caused.

And rightfully so. Tim Hortons’ main base is in Canada where same sex marriage is legal. And Rhode Island is a renown gay and lesbian tourism destination.

The National Organization for Marriage’s response? They criticize Tim Hortons’ response as “stressful, sorrowful and saddening” (Spokesperson Christopher Plante of the National Organization for Marriage in Rhode Island).

In the end, Tim Hortons understood their brand, social media and the power of consumer democracy. They also took a stance that sought to maintain their relationship with their customers.

Social Media Strategy: Does Social Media Offer Legitimate “Research?”

Some may say that social media is a “game changer” when it comes to marketing research. I offer a qualified “yes.” Yes, it is a new way of conducting research and intelligence gathering. However, it is my sense that, beyond building communities, there are those who maybe putting their faith in monitoring more so than prospective intelligence.

Before social media became prevalent, companies were moving more of their advertising budget to online media. The main reason being that online marketing was more accountable than using traditional print and electronic media. With the tracking technology and integrated dashboards (e.g. GoogleAnalytics; webtrends), marketers now had tools to track the efficacy of their campaign and establish performance metrics that align with promotional objectives.

With the current explosion of social media, marketers can build upon this accountability thrust and have more tools available to audit their brand and assess the efficacy of campaigns. There are ample number of firms out there offering tracking tools using a variety of techniques, such as webcrawlers and neuro-lingusitic programming (NLP), to flag online dialogue in various social media forums about brands and campaigns. Firms such as Radian6, Infegy, Sysomos and JamiQ, who provide online dashboards with stunning graphical interfaces to allow marketers to audit and track the performance of their brands online and across social media, offer these tools. These are sophisticated tools that offer deep insights. In my review of such tools, there are plenty of metrics available to assess a company’s brand within the online space.

This is wonderful. Companies now have more access to real-time, detailed information as to how their products, services and brands are performing online globally. They have insights into where, how, the frequency, the context and when they are being mentioned. This is a great complement to traditional media auditing where mentions in number of locations or articles got picked up in the print and electronic media. This new found ability to track campaigns and brands may lead marketers to conclude that social media offers up a rich resource for research.

Well, yes it does. But primarily monitoring and auditing research.

To assess the completeness of this information, marketers should ask themselves the following questions:

• Are you getting a full snapshot of your product’s/service’s/brand’s universe?
• What is the role of data obtained via social media mining/monitoring?
• Is this actionable research for the sustainability and enhancement of the brand?
• Would you support a business case/marketing plan based on research conducted via social media?

This leads to a broader discussion of the role of research in a Web 2.0 world. Especially as there are numerous questions arising about traditional research.

It is my belief that the traditional model for marketing research needs to be overhauled, and social media will be one of the impetuses for changing the role of research in the marketing toolkit. That said we should not throw out the existing research model too quickly.

I have noticed that there are some marketers and bloggers who are recommending using social media to replace traditional research tools. I recently read a blog post titled “Need quick focus groups, use Twitter.” This is key aspect of social media – if you want something quick and efficient, there are ample people online who are willing to share their opinions. This is justifiable if (and only if) your universe is clearly defined within social media users, depending upon interest and forum, and the limitations of such qualitative research identified. Another approach is to build engaged communities. This is increasingly being used as a “listening/iteration/evolution” vehicle by corporation. This is building out marketers toolkits… but marketers should not confuse “crowd sourcing” and “community” feedback as a structured and staged research program. I do acknowledge that such tools do offer rich insights and dialogue, but they do fulfil specific objectives and are bound by raison d’etre.

Marketers and researchers have to do a mutual reality check. For marketers, a key question is – Does using social media as a research tool yield valid insights? Another is, does it really matter? On the flipside, the critical question for the research industry is – What is a representative sample now? There is no denying, unless there is a clearly defined audience, polling and consumer research firms are challenged to define what a representative sample for most studies is. Research companies need to further consider – are we staying relevant with our clients’ research needs?

Social media has brought to the forefront the dialogue on hybrid methodologies. With Web 2.0 tools, hybrid methods can triangulate insights from “prospective” approaches using a combination of company access panels, online research communities, deliberative polling and traditional online, onsite and telephone surveys to those gleaned for “monitoring and audit” sources such as performance tracking metrics and transactional data. Marketers and researchers need to get more creative, as well as be more collaborative as organizations now have access to a war chest of tracking data – GoogleAnalytics, RFID tracking, transactional records and consumer databases. However, the skill will be to calibrate what is a reflection of an organization’s target audience.

In a recent experience, my company, ZINC Research, was challenged to get feedback from an exceptionally difficult to reach immigrant population. In the end, through a combination of Internet panel, Facebook surveys (hey, there are almost 12 million Canadian members – and the response rate-cost ratio was cheaper than the online panel sample), snowball and client sample, we were able to construct a representative reflection of an organization’s universe of interest to address a critical issue and establish a foundation for a long-term strategy. A strategy, which interestingly enough, entails using social media tools to deliver their message and engage their target market.

While social media tools are gaining a toe-hold and holding more promise for the future, there reality is it will never be a complete solution. For marketers, this is a time when the real research begins. With more creativity, usage and awareness, segmentation and trade-off type studies, will be assessed, verified and calibrated with host of monitoring and audit type data.

Does Facebook make you dumber?

So I awoke this morning to this story being plastered on the news feeds:

STUDY FINDS LINK BETWEEN FACEBOOK USE, LOWER GRADES IN COLLEGE

This is the original news release from Ohio State University.

I have found the tone of the various pick-ups by news organizations entertaining. From “Facebook use linked to less textbook time” on USA Today, to “What Facebook Users Share: Lower Grades” on Time/CNN and “Facebook Users Get Worse Grades in College” on Fox News.

Personally, I am pleased to see this research being done. As indicated by the researchers:

While this was a relatively small, exploratory study, it is one of the first to find a relationship between college students’ use of Facebook and their academic achievement.

However, this is only a start. It is a snapshot of 219 students at a point in their academic life.

Here are some quotes and my thoughts from the original release.

Students who spent more time working at paid jobs were less likely to use Facebook, while students who were more involved in extracurricular activities at school were more likely to use Facebook.

Science, technology, engineering, math (STEM) and business majors were more likely to use Facebook than were students majoring in the humanities and social sciences.

“Other research had indicated that STEM majors spend more time on the Internet than do other students, so that may be one reason why they are more likely to use Facebook,” Karpinski said.

This does confirm what many have suspected. The first point emphasizes that if you have to work to support your education, you have less time for extra-curricular activities and thus, less time for Facebook. Further, research into relationship-builders and emotional intelligence indicate and allude to – those who actively participated in extra-curricular activities tended to be “networkers” and more outgoing in their business life.

STEM and business students also tend to have more regular assignments than those in humanities and social sciences where term papers and final exams are the norm. Thus, Facebook may provide a valuable form of communication for study groups and a suppot network for assignment help. (The study does not address if they get distracted trying to chat up someone attractive of having a gossip along the way.)

Karpinski emphasized that the results don’t necessarily mean that Facebook use leads to lower grades.

“There may be other factors involved, such as personality traits, that link Facebook use and lower grades,” she said.

“It may be that if it wasn’t for Facebook, some students would still find other ways to avoid studying, and would still get lower grades.  But perhaps the lower GPAs could actually be because students are spending too much time socializing online.”

Karpinski said it was significant that the link between lower grades and Facebook use was found even in graduate students.  She said that graduate students generally have GPAs above 3.5, so the fact that even they had lower grades when they used Facebook — and spent less time studying – was an amazing finding.

Or maybe they spent too much time participating in studies like this.

I agree with the authors as to the limitations of this study. This is where longitudinal research is valuable, and only then can we truly assess causality.

My question is: What were their grades at least one-year before joining Facebook?

There is a need for a benchmark grade. Have these always been “3.0 to 3.5″ students? And have they measured a decline in a “4.0 student” dropping to a “3.0 student?” These are questions that need to be considered – ideally, Ohio State should follow a cohort all the way through their academic career to see if such finding hold up over time. As a point of comparison, it would be interesting to look at students’ grades from 1994 to 1998 to see if e-mail and the explosion of the Internet had any effect on GPAs in this era (barring an annoying trend in grade inflation, but that is another discussion).

The authors identify lower grades among grad students on Facebook as an “amazing finding.” I would venture that there is a lot going on here. Today, grad school is a substantial shift in time and effort commitment for students. There is also a greater onus on the individual. This can be challenging for a host of students – some of whom maybe over their head (at this point of their life) and others who have other intervening life circumstances.

Is Facebook that much of a distraction? Time will tell.

At this time, it is relatively new implement in the distraction arsenal of students (e.g., radio, television, movies, drinking, getting laid). All things need to be carefully considered and controlled for over time. Such is the rigor required to understand the impact of this phenomena on students’ grades.

An interesting counterpoint to this research was written by Chris Matyszczyk, at CNET in a piece “Facebook messes up your GPA:”

If the researchers had suggested that with every hour you spend on Facebook, your GPA sinks proportionately, then perhaps parents might be entitled to put controls on social networking and demand that their children get rid of their 5,000 closest chums.

But I have a suspicious and entirely unscientific feeling that all this research may tell us so far is that bookwormy, people-uncomfortable types do well in school tests.

From a business perspective: bang on, Chris. Business needs both types of people – the introspective, studious types as well as the outgoing, well-networked types.