Evolution of Social Commerce

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1 s-commerce: An opportunity for marketers to reach beyond MySpace and YouTube October 12, 2006

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October, 11th 2006

Transcript of Evolution of Social Commerce

Page 1: Evolution of Social Commerce

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s-commerce: An opportunity for marketers to reach beyond MySpace

and YouTubeOctober 12, 2006

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2Confidential © 2006 Compete, Inc. All Rights Reserved. 2

What we’ll cover today

State of social networking

Marketing challenges

Social Commerce as a solution

Getting off to a smart start

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The MySpace phenomenon

Seventh largest site

56 million visitors

18 visits each month

1000+ page views per person

30 minutes per stay

Refers 35% of visits to Facebook and 13% to Google

myspace backgrounds, myspace layouts top searches on eBay

snapshot:

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The web is becoming more social

Two out of three online consumers have visited a social networking site

Fastest growing online category: 109% growth in people, 414% growth in usage (pages viewed) since January 2004

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Social networking motivations

Meet people

Be entertained

Learn something

Influence others

78% join to communicate with existing colleagues or develop new acquaintances

47% join in order to find entertaining content such as photos, music or videos

38% join to get information from other people about topics that hold particular interest to them

23% join to express their opinions in a forum where their ideas could be discussed or acted upon

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Characteristics of online socialites

Attractive demographics

Younger: 37 years old

Higher household income: $78,000

Greater discretionary income: $8,000

Media & buying habits

35% spend less time with traditional media

75% seek input from peers before buying

25% of total purchases made onlineMarketers’ equals

Early adopters: 40% are the first to buy

Influential: 37% influence others’ opinions

Credible: 63% trust reviews from other consumers as much as experts

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Social saturation tempers growth

Average online socialite already frequents three sites, only has enough bandwidth to join one additional site

Marketers’ demand for new advertising outlets exceeds supply of consumers’ time

14%

18%

24%

20%

12%

3% 2% 1% 0%

7%

1 2 3 4 5 6 7 8 9 10+

How many social networking sites would you consider being a part of?

ave

rag

e

Total number of social networks online socialites are willing to join

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s-commerce offers marketers a new approach

“s-commerce” goes beyond advertising on social networking

sites

Links transactions and online

communities

Broadens benefits of social

networking

Thrives on consumer participation

Incorporates best practices from

• e-commerce: online sales & marketing performance

• social networking: fast growth, deep engagement

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Emerging s-commerce models

Corporate brands grow social New brands create mash-ups

Branded micro-sites Customer Forums Ratings & Reviews

Peer-to-Peer selling Community-created

products Product blogs/forums

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“When it comes to beer, sharing is caring.”

Miller Lite becomes the voice of men

In concert with a new television campaign, Miller Lite launched ManLaws.com to develop a new code of conduct by men for men. Customers that go to the site can view each ad as well as contribute and vote on new entries to the Manlawpedia – the official book of laws that governs all men. Adoption: 50,000 visitors spend over 10 minutes

interacting with the microsite each month

Engagement: Customers submit video auditions to appear alongside “men of the square table”

Influence: Over 50,000 new laws have been submitted to the Manlawpedia by customers

Positioning: 750+ daily blog posts containing ManLaws enhances Miller Lite’s brand among male beer drinkers

Other examples of microsites to study:

Boldmoves; Seventeen & Aquafina MySpace profiles

Manlaws.com Unique Visitors

0

25,000

50,000

75,000

100,000

May-06 Jun-06 Jul-06 Aug-06 Sep-06

0

400

800

1,200

1,600

Accumulated minutes viewed (000’s)

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“What security software do I need?”

Dell Online Forum Unique Visitors

Dell forum helps customers help each other

Dell’s active community forum consists of threaded discussions among Dell employees and community members. Participants create profiles to personalize their posts and add credibility. Dell rewards participants with exclusive promotions & offers for community members. Community: 52% of visitors surveyed said they

feel like a part of a Dell community

Service: 75% trust the content within the community and do not require support from Dell

Loyalty: 68% of members are likely to purchase their next computer through Dell

Advocacy: 90% of members will recommend the online forum to friends and/or family

Other examples of online customer forums to study:

Cingular, Samsung, Microsoft0

50,000

100,000

150,000

200,000

250,000

300,000

Sep-05 Dec-05 Mar-06 Jun-06 Sep-06

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“Getting out of two mortgage payments after condo fire.”

Borrowers bond with lenders at Prosper

Other examples of peer-to-peer sites to study:

Zopa, Lala, Peerflix

Inspired by eBay, Prosper is building a new social-financial marketplace. Borrowers use Prosper’s online platform to create loan listings; lenders then bid down the interest rate to compete for the loan. Borrower profiles, bid histories and “groups” make the process straightforward, transparent and safe. Adoption: 145,000 visitors each month, 50% are

registered Prosper users

Engagement: Users visit the site 3.6 times each month and view nearly over 65 pages per visit

Community: Approximately 3,800 active loans totaling $18.1 million (loans in default: 4)

Affinity: 3,250 borrower groups have formed to pool like people, mitigate risk and lower the interest rates offered by lenders

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50,000

100,000

150,000

200,000

250,000

Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06

Prosper Unique Visitors

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“California-style burger joints in Boston?”

Yelp Unique Visitors

Local businesses & opinionated reviews at Yelp

Other examples of product-focused forums to study:

Woot, Insiderpages, Judy’sBook

Yelp is quickly becoming the definitive city guide by offering community-generated reviews on local businesses from restaurants to dentists. Consumers post reviews to Yelp, and can collect and organize recommendations from peers. Advertisers participate via email ads, enhanced business listings and sponsored search results. Adoption: 500,000 monthly users: 15% submit at

least one review each month

Community: Yelp members are very active contributors; in San Francisco, the average Mexican restaurant has 50 reviews, and the average member has contributed over 100 posts

Influential: 80% of Yelp members consider community reviews as trustworthy as advice from family member or friend

0

200,000

400,000

600,000

800,000

Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06

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Roadmap for launching s-commerce initiatives

Research consumers, while they research you and your rivals.

• Develop new online research program• Benchmark usage and adoption of social sites• Survey consumers to understand motivations

Create a channel to connect consumers and your brand.

• Design, launch and iterate s-commerce site• Focus on sales, service, or positioning brand• Seek customer input into site features

Engage consumers in conversation: listen, learn & leverage.

• Contribute to the dialog and reinforce your value• Participate via questions, discussions, offers• Apply learning throughout sales and marketing

Research

Channel

Engage

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Taking our own medicine – compete.com

Launching compete.com as a consumer service on November 1

Consumers benefit directly from sharing their clicks with each other, Compete and marketers

compete.com – clickstreams as consumer-generated content

Trust:

Detects dangerous phishing sites and spyware offenders

Deals:

Promotions and discount codes across more than 2,000 online retailers

Site profiles:

Timely, accurate website analytics including visitors, rank, pageviews, time spent, etc.

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Questions from registrants

• How does s-commerce relate to my market (travel, auto, financial services)?

• What are the issues around privacy and hosting consumer-generated content?

• What are cost effective ways to incorporate s-commerce into a consumer website?

• How viable an advertising channel are social sites for high-consideration products?

• How effective are profile and sponsored pages on social networking sites?

• What impact are communities having on sales, marketing and/or customer service?

• What specific tools or features impact conversion rates?

• What are online communities three most pressing issues?

• How should marketers partner with social networking sites?

• Do consumers really pay attention to ads on these social networking sites?

For copies of both presentations, please email Max Freiert at [email protected]

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