Why have a Facebook shop?

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Online fashion retailer ASOS recently announced that it would be opening a Facebook store at the end of January, allowing users to buy items directly from within the social network rather than having to click through to the ASOS homepage.

This is becoming a trend for major retailers and we will see more of it in 2011, but is it a fad or is there real reason to take this form of social commerce seriously?

A report from Experian shows that ASOS gets a lot of its traffic from social media sites. In December their Social Networks and Forums category was the third biggest source of traffic to the retailer’s website, accounting for 14.62% of all traffic to ASOS.com. Social networks also seem to endear more brand loyalty for ASOS than other sources of traffic: 65.5% of the visitors coming via the channel were returning to ASOS rather than visiting the site for the first time. By way of comparison, 56.9% of customers that came via search engines were returning visitors.

Facebook is clearly a very big part of the social networking visits delivering traffic to ASOS, and alone is responsible for 12% of all visits to the website. As the second single biggest driver of traffic to ASOS after Google UK, Facebook has become an integral part ASOS’s online strategy; allowing consumers to buy products directly from Facebook is the next logical step for ASOS.

Keeping consumers in one place for any period of time online is challenging, especially given the millions of other websites available for people to visit. The same report highlights that the average session time for a visit to ASOS is just over 12 minutes and interestingly their Search Sequence tool shows that the number one search term that UK Internet users type into search engines, both before and after ‘asos’, is ‘facebook’.

When people online are navigating away from ASOS, the first thing they want to check is Facebook. So if people can shop through Facebook, then they have no need to navigate away from their familiar surroundings. As the average session time for a visit to Facebook is 27 minutes, it could be argued that consumers are more likely to hang around to shop through Facebook than they are on the ASOS site.

The Facebook store is due to go live by the end of January and, although this may lead to a drop in traffic coming from Facebook to the ASOS store, overall the company will expect to offset this decline by making additional online sales that it would not previously have captured. With nearly 400,000 followers on Facebook, ASOS has a huge captive audience to target.

FreshNetworks will be monitoring what happens to see how successful the campaign has been, and what lessons should be learnt.

The Economist on Social Networking

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The Economist on social networking - world of connections

The Economist on social networking - world of connections

What joy. This week,  The Economist, every Capitalist’s favourite magazine, has published a special report on on social networking.

A World of Connections, provides an excellent overview of the current state of social media for those still trying to get to grips with it. You can download a free pdf of the report here. Or check out my summary of key highlights below.

Introduction: A world of connections

  1. “Online social networks are changing the way people communicate, work and play”
  2. Facebook users post over 55m updates a day. 70% of users live outside the US.
  3. Social networks are superb tools for mass communication [NB the report is a bit light on their strategic use as a driver of 1-to-1 customer-to-company communication]
  4. “the most avid online networkers are in Australia, followed by those in Britain and Italy”
  5. Social Networks have “become important vehicles for news and channels of influence”. Indeed, they “played a starring role in the online campaign strategy that helped sweep Barack Obama”
  6. To sceptics all the “talk of twittering, yammering and chattering smacks of another internet bubble in the making“. Social networks still “need to prove to the world that they are here to stay”

“This special report … will argue that social networks are more robust than their critics think … and that social-networking technologies are creating considerable benefits for the businesses that embrace them, whatever their size. Lastly, it will contend that this is just the beginning of an exciting new era of global interconnectedness that will spread ideas and innovations around the world faster than ever before.”

Facebook’s growth: Why social networks have grown so fast—and how Facebook has become so dominant

  1. How the network-effect can drive lightning fast growth on a relatively modest marketing budget.
  2. An openness to external developers helped create thousands of apps. These apps provide part of the service and additional reasons to spend time on Facebook.
  3. Social networks have been beneficiaries of a fall in the cost of data storage and have also been “able to use free, open-source software to build systems that scale quickly and easily”
  4. In a feat of technical wizardry, Facebook’s engineers “quintupled the performance of an open-source memory system called memcached, which allows frequently used data to be retrieved faster than if stored in a database.
  5. Facebook Connect is one of the firm’s most important innovations as it allows members to take their social graph wherever they go on the web.

Twitter’s transmitters: The magic of 140 characters

  1. A key difference between Facebook and Twitter comes from the nature of relationships that underlie them. “On Facebook, users can communicate directly only if one of them has agreed to be a “friend” of the other. On Twitter, people can sign up to follow any public tweets they like”
  2. The most prolific 10% of Tweeters account for 90% of all tweets
  3. Another big difference between Twitter and Facebook is in the kind of content that gets sent over their networks. Facebook allows people to exchange videos, photos and other material, whereas Twitter is part-blog, part e-mail [I disagree with this. On the surface Twitter looks like a text tool, but many tweets link to videos, photos or other media].

Social Networks making money: Profiting from friendship

  1. When it comes to turning users into profits, social networks face two issues. Firstly, users are taking part to spend time with friends, so they do not pay attention to ads. Secondly, brands are nervous about appearing alongside unregulated comments and other content.
  2. Click-through rates are low, but the amount spent on adverts is increasing despite the recession.
  3. In part this may be because Marketers recognise the value that personal recommendations can have on buying behaviour. And social networks provide an opportunity for viral marketing.
  4. During 2009, Facebook turned cash-flow positive on revenues thought to be in the region of $500m.
  5. Games, virtual gifts, premium services and search rights are becoming an important part of some social networks’ revenue streams

Social Media for Small Business: A peach of an opportunity

  1. They cover the well known Kogi BBQ social media success story and mention that according to Razorfish 44% of people follow brands on Twitter  for deals [NB the methodology used in this research was rightly brought into question by Susan Braton in a recent DishyMix podcast]
  2. Social networks can provide a great launchpad for startups thanks to their reach.
  3. This article then randomly veers off into social gaming. A subject that deserves it’s own dedicated piece. But you can’t have everything.

Internal social networks: Yammering away at the office

  1. Social networks are being used to break down internal barriers in the corporate world.
  2. Informal conversations they allow can be a catalyst for creativity and new ideas.
  3. “The networks are also a great way to capture knowledge and identify experts on different subjects within an organisation”

Recruitment in a social world: Social Contracts: the smart way to hire workers

  1. Social networks, such as Linkedin and Xing help firms cut search costs
  2. Business social networks help improve the efficiency of the labour market
  3. They have also made recruitment more transparent as recruiters go onto social networks to check up on candidates ahead of making an hire

As an aside, if you’re interested in social media for recruitment here are a few relevant posts from our sister company, FreshMinds Talent:

How to use Web2.0 for recruitment
Social Media and the forefront of the job market
How to imporve your Linkedin profile

Privacy in social media: Privacy 2.0

  1. Privacy could be the Achilles heel of social networks. Users could decide to start reducing what they are prepared to share with the world online.
  2. Social networks have been developing privacy controls that give users the ability to edit what can and cannot be seen. However these are often hidden away within sites and social networks are making blatant attempts to encourage more sharing of data not less.

The Future of Social Media Towards a socialised state

  1. Social connectivity could become ubiquitous
  2. Mobile adoption will fuel future growth in social networking
  3. Facebook says that mobile users of the site are almost 50% more active than regular users
  4. Geo-networking apps may be the next big thing [unsurprisingly, the Economist can't resist a fleeting mention of Foursquare, the social network tipped for big things in 2010]

Conclusion

It’s great to see social media and social networking getting reported in such depth by mainstream media. This Economist report is not exactly cutting edge when it comes to social media insight or analysis. However it does provide a great base level for the 99% of the business world who do not spend their days glued to Tweetdeck.

Even if the above is not new to you, I recommend you read the report purely for a lesson in good business writing. As ever, The Economist delivers on elegant prose that neatly and efficiently flows from point to point.

Was there anything in the report that leapt out at you?

How Twitter can make or break a movie

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Cinema Box Office
Image by Kevin H. via Flickr

Research in September by 360i, a search agency in London, shows a direct correlation between the balance of negative and positive Tweets about a movie, and its performance at the box office. Looking at four movies (District 9, The Goods: Live Hard, Sell Hard, The Time Traveler’s Wife and Brüno) they show that films that have a greater proportion of negative posts and reviews on Twitter also enjoy a higher day-on-day fall in Box Office ticket sales after launch. And whilst we must not confuse correlation with causality, it seems for these movies that those movies who have more negative posts on Twitter also see a bigger drop in sales after they open.

The relationship between Twitter and the success of a movie is starting to become clearer. Whilst this data is not sufficient to claim that there is a direct impact of negative reviews on Twitter on ticket sales, it is evident that negative reviews in Twitter, among other things, are impacting on consumer choices. And in many cases they are choosing not to view the movie.

Traditional movie marketing and performance is tracked closely, with day-on-day ticket sales being measured and the results feeding directly into the amount and type of PR and marketing activities that take place. This is a long-standing technique that is used to bolster ticket sales if they are not performing as well as expected, and to identify over-performing movies and work to amplify the impact they are having. With social media, this approach needs to adapt and change.

The main impact of Twitter is its speed. It is easy and quick for movie-goers to post a review of the movie they have just seen, and for a blockbuster movie in an opening weekend, you might expect many thousands of reviews in a short space of time. The content is concentrated in a small amount of time and discussions about a particular movie can quickly become trending topics. For a short amount of time it is relatively easy for it to seem that “everybody is talking about” a movie when it opens. And if users are negative about it, then this can have a serious impact on the movie and on ticket sales. This is dangerous for the studios, especially those who don’t have an effective social media marketing strategy. They can very quickly lose control of their movie’s reputation and the positive word-of-mouth can get drowned by the negative.

Twitter is, in fact, a great place for studios. Whether the direct causation between negative posts and decreasing box office sales is true or not does not matter. Twitter provides an instant and detailed feedback mechanism for studios. Those with effective buzz tracking and monitoring services can quickly see the impact of a movie from the moment the audience leaves the first screening. They can then use social media, and traditional marketing and PR activities, to amplify the positive word of mouth and also to help to minimise the impact of the negative. By knowing and tracking what is going on, studios can use this information to their benefit.

  • The Internet Takes Control of Movie Marketing (cinematical.com)
  • Did Twitter bring glory to Tarantino’s new flick? (seattlepi.com)
  • Is Twitter Affecting the Box Office? (mediabistro.com)
  • Twitter Can Bury a Movie. It Can Also Make it a Success (mashable.com)

Don’t get it right; get it written

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fountain pen
Image by [phil h] via Flickr

We sometimes analyse things too much. We spend too much time thinking about what we’re going to do and too little time actually doing it. Don’t get me wrong - we are big believers in planning and strategy at FreshNetworks. When we are building an online community for a client we spend a lot of time on planning, more so than some might, but enough to mean that when we do launch and build the site, we know how to make it a success. At this stage the detailed planning is important - you should try to make as many decisions as possible up front, consider all outcomes and plan for what you will do in different circumstances.

But sometimes you can get too wrapped up in planning things to the smallest detail when really your time is better spent just doing it.

In an online community, copy in forums, newsletters, polls and features is important. It is one significant way in which you can engage the community members, highlight what is happening on the site and how they can benefit from and add to this. Newsletters, in particular, can be a very effective way to engage people and draw them back to certain types of online community.

There is a lot of analysis that you can do on the effectiveness of copy - do certain articles attract people more than others? Do some headlines get more click-throughs and greater time spent reading the particular article once people are there? Do some newsletters have lower unsubscribe rates? All of these are valid and really important measures. They help you to monitor the health of what you are doing and identify things that are not working. But the beauty of online communities is that they are changing and organic environments - you can benchmark what you know typically performs best, and you know what works for an individual community. But there are many unpredictable factors in an online community and with community members. Sometimes it’s best to just get things written and see what the impact is.

The benefit of having a strong online community manager is that they get to know the community and its members. They live and breath it day in and day out. They know the key members, the ones who contribute most and those who are starting to become more engaged that they want to nurture. They understand these people and what makes them tick. They take part in discussions with them and they know when these discussions have gone too far.

A good online community manager will develop an innate sense of what works for their community. They will know how to talk to them, what to talk to them about, and how to engage them in a new idea, discussion or piece of functionality. In short they will know what to write to get the impact they want.

This kind of knowledge can be augmented, refined and enhanced by statistics and measurement. But they are not a substitute for the intimate knowledge that an online community manager will have. Sometimes, rather than spend forever planning, writing, testing and rewriting copy it can be best to trust your community manger. They know what works and test and refine this knowledge with the data from what actually happens. Trust them to get it right. And trust them to get it written.

Customers sometimes do not know what they want

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Image by Darren Hester via Flickr

The promise of co-creation is that getting customers involved in the innovation process, and letting them inform the design of new products, will mean that you develop a product that is better suited to their needs and will ultimately perform better in the market. Of course, it is not always this simple. Often customers don’t know what they want. They can’t necessarily articulate how they would design the ideal product, nor can they say what is wrong with the existing product. They may never have articulated what they like nor what they dislike, but this doesn’t mean that the product isn’t perfect.

Over the weekend, the New York Times looked at this very subject following revelations from ex-Google visual designer, Douglas Bowman. In an unusual move, Bowman explained on his blog the reason he had left Google. As the New York Times discussed, his description of the design process at Google raises a number of questions:

Can a company blunt its innovation edge if it listens to its customers too closely? Can its products become dull if they are tailored to match exactly what users say they want?

Bowman’s suggestion is that that answer to all of these questions is “yes”. That Google relies too much on data, as a proxy of customer input, and not enough on design skills alone. As the New York Times article report:

Mr. Bowman’s main complaint is that in Google’s engineering-driven culture, data trumps everything else. When he would come up with a design decision, no matter how minute, he was asked to back it up with data. Before he could decide whether a line on a Web page should be three, four or five pixels wide, for example, he had to put up test versions of all three pages on the Web. Different groups of users would see different versions, and their clicking behavior, or the amount of time they spent on a page, would help pick a winner.

This kind of user-input into the design process is what many think of when they think of working with their customers on new product development and design. They think of presenting a number of options to customers (or indeed to potential customers) and then asking them to evaluate each one and choose the one they prefer (or in this case to take their use of a particular design as a proxy for this choice). Of course, this is not necessarily the best way of co-creating with your customers.

Rather than asking people what they think about a particular set of designs they prefer (or which they use most), you can often get a more useful level of insight by engaging with them. Don’t ask them about solutions to a problem but observe what they discuss and say about the problems themselves.

Imagine you are a company designing kitchen equipment. You could involve your customers in the design and innovation process in one of three ways:

  1. Ask them what they want - ask what new equipment, tools or gadgets would make their life in the kitchen easier or allow them to do new things
  2. Ask them to choose between a set of prototypes - present a set of potential new products to them and ask them to choose which they want.
  3. Ask them to talk about what they do in the kitchen, what equipment they use and what problems they have

The last of these is most likely to produce the most insightful outcomes. Rather than asking people to get involved in the actual prototype products themselves, or to tell you what they want, get them involved further up the innovation funnel. Engage them and talk to them about what they use in the kitchen - what makes their lives easier, what would they like to be able to prepare and cook but can’t. Don’t talk to them about the equipment that, you hope, will solve their problems. Talk to them about their problems themselves.

By watching what people do you can then interpret this and begin a design process based on this information and this engagement. Then, rather than just presenting three options to people of potential new designs, you can approach them based on what they have discussed before: “there was a lot of discussion about x, here are some ways we think we could help with that. What do you think?”

This kind of engagement is where online communities really come to their fore. They let you engage your customer in a sustainable way. You can get to know them, their lives and the problems and challenges they face. It isn’t just a short-term process to “do some co-creation”, rather it is long-term engagement that fundamentally changes the way you innovate and develop new products.

Customers sometimes do not know what they want. It’s a fact. They do, however, know how they use what they have, the problems they face and the things they would like to be simplified. Understand what they do know rather than forcing themselves to make choices about things they don’t.

  • Design: it’s not all about you. (designmind.frogdesign.com)
  • Design Or Data? Ex-Googler Spills All After Landing At Twitter [Design] (gizmodo.com)
  • Google designer leaves, blaming data-centrism (news.cnet.com)