Ken Mandel, Managing Director, Buddy Media Asia is excited about the way the Facebook IPO is going to change the social media scene. Mandel shares his views with Digital Market Asia, about Facebook, and all things social. Excerpts…
How has social media revolutionised online marketing?
According to a report conducted by market research firm comScore in October last year, social networking is the most popular online activity worldwide, accounting for nearly one in every five minutes spent online. In South East Asia, penetration rates are significantly higher than other global markets, with Philippines, Malaysia and Indonesia leading the way among other countries.
Companies ignore social media at their own peril. With a rapidly growing online population worldwide, brands and marketers cannot turn a blind eye to social media as it is not bound by demographics, geography or socio-economic profiles. Especially in an end-consumer market, we see a return on investment from social engagements as brands build connections, create more value, and foster sustainable relationships with customers. Social media has indeed taken marketing to new heights as it moves beyond traditional mass marketing to a highly targeted and more personalized approach.
Businesses nowadays are compelled to take a more proactive role in managing their social media engagements and interactions for a variety of reasons whether to sustain brand recall, create brand loyalty and the like. Social media provides a rich platform for marketers to innovate campaigns to reach and engage customers to be ahead of the pack.
What are the changes we have seen in the way brands communicate with their audience as social media has penetrated our lives?
With social media, brands are communicating in a more personal and targeted way to their customers than ever before. On Facebook, brands connect, build their fan base and grow the engagement by putting content that becomes a part of the users‟ identity and built around users‟ interests. In this way, brands become more relevant and in tune with what their customers need. If you sell cameras, focus on pictures. If you sell stoves, focus on the food and not the stoves themselves. Due to the evolution of how people look for their friends, research for information, and even seek for life-changing opportunities, this opens up doors that weren‟t even there just a few years ago.
Would you say that Facebook has been the major force or influence in that? Or are there other players who have been major influence as well?
As of end 2011, Facebook had 845 million monthly active users and these speak volumes for Facebook‟s dominance in the social networking space. Its user base worldwide more than enough to be the third most populated country in the world. The social networking site is definitely the most popular among all globally, with more than 70 languages available. Brands are realizing the value of optimizing their presence on Facebook as well as making their digital presences and product social. We have seen clients, especially publishers and retailers succeeding where Facebook is becoming one of the top – if not the top – source of referring traffic to brands‟ web assets. Facebook has definitely changed the way businesses market their brands, and with the growing users of other social sites such as Twitter, LinkedIn and Google+, social media is creating a whole new playground for industry people to innovate their marketing campaigns. Social media is also changing the advertising ecosystem by encouraging the development of different online platforms, creating more opportunities, and enhancing the way companies communicate with different target market for their brands.
What is Facebook’s current market share in social media marketing?
A recent joint study that Buddy Media conducted with Booz & Company revealed that more companies are investing in social media with Facebook, Twitter and You Tube as corner stones of most strategies. 94 percent of the companies surveyed have Facebook as a priority social media platform, followed by Twitter at 77 percent and You Tube at 42 percent. By the end of 2012, Facebook will have signed up more than 1/10th of the entire human populations. It has reported $3.71 billion in revenue. When you think about a prediction from eConsultancy that Facebook will make up 5% of total online spending in 2012, you can see just how much of a market share Facebook truly holds.
The forthcoming IPO has been creating such a buzz, how will it impact the social media ecosystem in the long run?
The social media ecosystem will experience a whole new level of change as it creates more opportunities for industry players. The recent IPO announcement is important not only for Facebook but for the entire social media ecosystem. Businesses, large or small, realize that creating products that are „social by design‟ is no longer an option. Companies that maximize connections with customers and stakeholders will create value, while those that don‟t will fail. Social media has changed the world. It is now the number one online activity. Facebook is enormously successful, but they do not want to do everything when it comes to social media; they are leaving plenty of room for others to innovate on top of their platform. Take Zynga for example who built a massive social gaming business with the help of Facebook‟s platform.
What can the brands and advertisers expect post this IPO? Do you think it will impact their business in a big way?
As of December 2011, there are more than 425 million mobile users that access Facebook through either mobile app or mobile browsers on a regular basis. Facebook‟s IPO filling will definitely trigger the need to generate more revenue, thus eventually opening up the opportunity for marketing through its mobile site. People ask why Facebook is not making money through mobile yet, and the answer is because they haven’t started putting ads on mobile. When they do, you can be sure that it will be a huge business for Facebook. Brands and advertisers will have to look into marketing through Facebook creating a whole new opportunity to innovate the way they execute their advertising campaigns. Social ad spending will increase as the brands learn to advertise on Facebook in a more effective way to maximise return on investment.
What are the industry segments that you see getting most impacted due to Facebook impending IPO?
I think it is more of a question of which industry segments won‟t be affected by social media in general. Facebook‟s IPO will further reinforce the need for brands to have a social media. Facebook is allowing brands to communicate directly with their consumers and attempt to extend their reach through their friends‟ networks. The numbers have only served to show businesses that they truly need to be where people are, and that place is Facebook. For brands to ignore Facebook, especially in light of it becoming possibly the biggest business the world has ever seen, is in our opinion quite foolish.
What does it mean for Buddy Media? Do you expect a positive turn from this?
According to comScore, social media is now the number one online activity and Facebook is enormously successful. The recent developments in Facebook will definitely pave the way for more opportunities as brands and marketers maximize their online and social media presence. Strategies would need to reflect that and Buddy Media will be able to contribute to brands in solidifying strategies and making the process easier. At Buddy Media, we always knew Facebook would be a very valuable global company. It’s amazing to think that when we started working with Facebook, the site only had 20 million users. The numbers speak for themselves, and we’re excited about what’s yet to come.