Since 2004, Facebook has promised to “help you connect and share with the people in your life”. Now, brands are using the social networking site to connect and share with consumers and even sell direct – not that driving online sales is their primary objective. Daniel Selwood reports
Forget Twitter. Facebook is where the real opportunities lie if you’re an fmcg brand.
Thrust into the spotlight by Oscar winning film The Social Network, the site now claims to have more than 30 million active monthly users and 600 million members worldwide. By 2015, it will account for 20% of global online advertising, predicts Russian investment bank Otkritie (which has valued Facebook at $76.4bn).
And marketing isn’t the only avenue brands are exploring. After online fashion retailer Asos became the first company to sell through Facebook, Heinz scored a food first last month when the limited-edition Heinz Ketchup with Balsamic Vinegar went on sale exclusively via the site.
The move would seem to signal the start of a remarkable evolution of Facebook from something brands use purely as a marketing and advertising tool to one they also use to sell direct to consumers. And perhaps it does. But driving online sales is certainly not the primary objective.
Since its birth back in 2004, Facebook has evolved into a mirror of real life. People talk about the same subjects with their Facebook friends as they do with their family at home or with their colleagues at work and those subjects include the things they buy. “For a brand not to be on Facebook means the discussion will go on without it,” says Ged Carroll, a social media expert at Ruder Finn PR. “It’s going to happen, so the brand might as well take control.”
Which is exactly what many have attempted to do albeit sometimes in a rather roundabout way. It’s perhaps no surprise that, as in real life, Coke is the daddy of Facebook brands. Set up in 2008 by Coke fans Dusty Sorg and Michael Jedrzejewski as an unofficial fan site, Coke’s page quickly became the biggest of its kind. Today, Sorg and Jedrzejewski still run the site but are now in the pay of the beverage giant and the page has about 23 million followers, more than any other brand on the site (and almost eight times that of arch rival Pepsi).
Facebook has become a crucial marketing and advertising tool for brands no wonder it’s appearing on pack and on posters. It has many times the traffic of most corporate websites, is obviously cheaper to use (a page is free to set up) and its ability to generate incredible levels of brand loyalty is almost impossible to overstate.
Usama al-Qassab, head of digital innovation and ecommerce marketing at P&G UK, points to the impact that the Pringoaaals World Cup campaign had on Pringles (a brand P&G hopes to have sold to Diamond Foods by the end of 2011, it said this week). Since the site ran the campaign, which featured ‘augmented reality demos’ that allowed fans to control an avatar of Peter Crouch, Pringles’ Facebook fanbase has shot up 62% to 9.5 million, he claims.
The power of the social network is that it allows brands to forge intimate connections or in Facebook parlance “connect and share” with consumers, he says. “We want to be present and effective wherever consumers look to learn about, be entertained by, or purchase our brands.”
And consumers, particularly younger ones, are increasingly looking to learn about and be entertained by brands via Facebook. According to a recent study by media research agency Conquest, the site is swiftly becoming the main means of social engagement for 16 to 24-year-olds.
Even though they have less cash than their parents, this is the sort of age group the brands should be focusing their attention on, says Carroll.
“Marketing to older web users is a waste of time because they’re well into the consumer cycle,” he explains. “You need to think not about a person’s financial ability to make immediate purchases but about their lifetime spending. And you want them to develop preferences for, say, your brand of coffee and you want them to hand on that preference to their own children.”
A social netw0rking site can arguably generate far more potent brand advocacy within a target market than traditional advertising or marketing initiatives can, partly because of the openness of the medium and the sense of ownership members have. With users able to speak frankly about what they like and don’t like and register their approval by simply clicking the ‘like’ or ‘follow’ tabs on Facebook, endorsements also have greater credibility.
“Recommendations from family and friends trump all other consumer touchpoints when it comes to influencing purchases,” says Stephen Haines, UK commercial director at Facebook. “We know people share and engage more with any type of online content when it has surfaced through people they know and trust.”
In light of this, the launch of Facebook Deals, which offers deals and discounts to users who ‘check in’ at their local retailers and restaurants, seems pretty bold the recommendations are, after all, coming from the brands or retailers themselves.
But crucially, there is still an important element of consumer control, as it’s the consumer who initiates contact by checking in. Whether they will be as amenable to buying a product directly via Facebook is another matter. A procession of fmcg brands are expected to follow in Heinz’s footsteps by selling through Facebook and some experts believe we’re now moving into the second phase of Facebook’s evolution, where the network becomes a direct platform for buying and selling.
“Social commerce is going to be the boardroom buzzword of 2011 as brands look to create shops on Facebook to sell directly,” predicts Daljit Bhurji, MD of social media consultancy Diffusion, whose clients include L’Oréal and Mothercare.
However, others argue that Facebook is not and will never be a primarily transactional website. It simply doesn’t have the logistics infrastructure required. Brands really wanting to drive online sales beyond the traditional supermarket sites are more likely to set up their own e-stores or use a third-party platform that does have the infrastructure, such as Amazon, they contend. Unless, that is, they deliberately want to do something small scale.
Where Facebook could come into its own is as a test bed for new fmcg products. As some brands have already demonstrated via their own microsites, social media is a great way to get consumer feedback on new products or even engage consumers in the NPD process. Offering consumers a chance to buy the product exclusively or at least first is also a way of rewarding loyalty and, of course, building that loyalty.
That certainly seems to have been Heinz’s strategy when it began selling its Ketchup with Balsamic Vinegar on Facebook last month. The company has shifted just over two thirds of the 3,000 limited-edition bottles, which doesn’t sound that impressive. But sales weren’t the key reason it set up shop on its UK Facebook page. It saw the 60,000 people who “like” ketchup on its UK page as the ideal focus group to test the appetite for its new line.
Even experts who think Facebook has significant e-commerce potential agree that brands with a penchant for extensions and limited editions are the most likely to set up shop there. Bhurji suggests Absolut Vodka, with its steady stream of special-edition vodkas, and Uncle Ben’s rice, with its student followers, as suitable brands. Others point to players as diverse as Marmite, Walkers crisps, Haribo and Lynx.
However, a note of caution must be sounded. Although the site itself attracts a huge number of users, brand pages often don’t. More than 75% of brand pages have fewer than 1,000 fans, says Chris Lee, MD of Planet Content, an online consultancy. “And those that failed with Facebook probably saw it as a sales channel, not a community, and didn’t interact and foster a sense of ownership among its users or give them a reason to come back again and again.”
It’s not a space to enter into lightly, warns Joy Armitage, interactive manager of Kraft Foods UK & Ireland. “Many that do fail because they don’t have the right strategy, plans, resources and focus to be there,” she says. “You need to respect the space because, ultimately, the brand doesn’t own it, the users do.”
With EU privacy laws soon to be updated to better protect the details of Facebook users and the ASA now covering online activities, brands looking to take a poke at Facebook will need to tread even more carefully. But it’s a medium the likes of Heinz feel they can’t ignore. As long as its consumers are using social media sites such as Facebook, its web development and digital marketing will be structured around them, it says.
The secret is to understand the medium for what it is a way to socially interact with people, believes Armitage. “The tools are there for brands and Facebook very much wants us to use them. They need to be right for your consumers and brands if they are then there are plenty of opportunities to create really engaging opportunities for consumers to interact with us.”
Facebook isn’t all pokes and posts for brands. Because of the democratic, interactive nature of social media, brands need to keep a close eye on what their fans are posting. It’s highly likely that not all will be glowing with praise.
“Brands need to monitor their pages to make sure no spam or offensive comments are posted,” says Chris Lee of Planet Content. “But if someone has made a legitimate, inoffensive complaint, don’t censor it. You’ll foster more goodwill if you address it head on and in public than you will by removing it.”
No-one likes to be under the gaze of Big Brother, and if users feel a page is being censored they’ll leave in their droves. It’s perfectly okay for a page to set out a clear moderation policy, say experts, but brands must be prepared to roll with the punches by responding to negative comments openly and resisting the temptation to delete them.
Such feedback can be valuable, helping brands get a deeper understanding of their consumers. But consumers will only interact with a Facebook page if it has appeal.
“Pages need daily if not hourly attention,” says Lee. “If a brand’s page hasn’t been updated for a week or more then, well, sorry, it’s clear that the brand is not interested.”
So brands looking to attract consumers to a Facebook page and keeping them coming back need to put the effort in. Success on Facebook for brands takes dedication. And they’ll only get out what they put in.