Tuesday, April 7, 2009

Social Media Myth #1: It's a low cost alternative

Sometimes I get the feeling that companies request new media or social media ideas for the wrong reasons. Sure, they are probably sick of their current media strategy - usually radio, print, a bit of TV, a handful of online ads and maybe even a microsite for a special offer. It could be expected that these old tools offer little ROI, fail to reach consumers in a relevant way, or do not 'tap into the conversation' that is the newest (and oldest) buzzword amongst marketers. But I think that expectation is usually false and presents the wrong motivation. There are at least four myths that go into the decision by most companies to enter into the new media/social media space. For this post, we'll focus on one:

New Media and Social Media are low cost alternatives to the old marketing plan

This myth has been supported by marketers and the perception of free content online. We are used to consuming content online for little to no cost. We are also used to the cost/quality of producing a television commercial. When we view that new viral video in our inbox and see the relevant quality versus our television spots - we're thinking 'that's entertaining and looks like it was made on a shoe-string budget'.

The problem with this perception is that the cost to reach the fragmented online audience and the cost to build a brand using non-traditional offline media is not nearly as free as the content it creates.

Do you remember when the Scion was launched? The Scion - built by Toyota - never produced a television ad or entered the mass advertising space during its brand launch (although it did eventually enter the main stream). It opted for an underground approach to marketing; lending the new vehicle to editors of small niche magazines, block parties, art gallery's, and other not-so-obvious marketing events. This stuff worked, the car brarnd sold 125,00 Scions in 2005 and saw increases each reach after. The reported budget to plant the seed for this new brand? $50 million.

Then there is the commonly known energy drink Red Bull. Rob Walker dissects the launch of this brand in this book "Buying In". No big television spots, no huge radio buys or billboards- this brand started out targeting extremely niche markets and influencers by lending its name to events, organizing odd sporting competitions and dropping product into the hands of the consumer to generate word-of-mouth. This at a time when the Energy Drink was not even a beverage category. The results were huge for Red Bull and it successfully established a market that did not previously exist. You couldn't find a magazine or website that wasn't praising these creative low-cost marketing efforts. In reality Red Bull was spending $100 million a year to reach it's target audience. They knew who they were talking to and they were motivated to reach these people in a way that would embed itself as a lasting brand in the minds of these consumers.

The decision to forgo your traditional ad plan requires greater thought and a more substantial motivation than money. If the cost to acquire new customers or keep existing customers seems to high, it is time to rethink your consumer insight. All the successful brands or campaigns stem from remarkable consumer insight. No amount of marketing or budget cuts will cover for a poor understanding of your consumer.