In 2011, Twitter users accounted for nearly 33 billion tweets a day. During the same year, Facebook more than doubled their community size, by growing to 850 million members worldwide. With no signs of slowing down, the brands that get the most out of user interactions will be the ones who are able to distinguish relevance from noise.
From a marketing and business perspective, a shift in focus has begun. Perhaps a product of necessity, evolution, or even both, brands are moving from building communities toward identifying users who are relevant to their brand.
Amazon: Intelligent Data Analysis
To understand relevance, it’s first important to understand the value and importance of data.
In 2006, Amazon reported that 35 percent of product sales resulted from recommendations on their site, putting it second only to search in regards to revenue generated. While the end result was showing relevant items to consumers, the process of knowing exactly what to show a user started from the first time a user arrived on the site. Recording everything from what a consumer purchased to what items were viewed, Amazon’s recommendation engine analyzes massive amounts of data to intelligently suggest items to consumers. As a result of these targeted actions, Amazon is able to direct users to items with a high conversion opportunity, leading to higher net revenue.
From a marketing standpoint, brands should consider approaching social networks and the digital space in the same manner that Amazon approaches consumers who visit their site. Rather than viewing a Facebook fan or Twitter follower as just a faceless number (1 out of 1MM fans), brands should consider each individual as an opportunity to learn and cultivate an understanding of the user. By constantly learning and gathering more data about a consumer/fan, brands can learn to become smarter in the way that they market and approach them. From what type of content a user is engaging with to the frequency in which they engage with the brand, data such as these can be used to build stronger ties with users long-term.
While not every brand may operate like a retailer like Amazon, the basic principles of serving relevant content to lead users to a conversion point spans across most if not all industries. How efficient and adept a brand is in applying this principle will correlate to how they not only collect data, but how they analyze it.
Relevance and ROI
Findings from a study conducted in January and February of this year by the Columbia Business School Center on Global Leadership and the New York American Marketing Association found the following:
A survey of 243 CMOs and other marketing executives found that 57% don’t establish their budgets according to ROI measures. 68% of respondents said they base their budget decisions on historical spending levels, while 28% said they go with gut instinct. And 7% said most of or all their spending decisions aren’t based on any metrics at all.
In what could be described as a sort of laissez-faire environment, marketing teams have become overly comfortable to the model of measuring the success of their campaigns through ‘brand awareness’ and public sentiment. While important, they have no standard measurement by which to compare against nor is standardized across industries. Until we get to that point, marketers and brands need to consider what they can measure and how they can use that in their favor.
By understanding what categories ($ spent in 12 month period, visits per month, etc.) by which individuals should be segmented, brands can shift through and find those that help move the needle forward. Additionally, by establishing benchmarks for metrics and milestones, brands will be accurately appropriate resources and budgets toward attaining them.
The Many Degrees of Relevancy
Once an individual has been identified as being relevant to ones brand, the next step will be to answer the question of to what degree. The varying degrees of relevancy is what helps marketers determine who to give the most attention to.
In relation to degree of relevancy, a word that we hear most often in the business industry is brand evangelist or influencer. As the name suggests, these individuals are those that promote and stay ‘loyal’ to the brand. These are the individuals who will buy a product or watch a movie just because it is associated with your brand. While these individuals may account for a small percentage of ones target market, they are ones that help a brand succeed and grow. Because of this, brand should consider these individuals on the high-end of the value chart when it comes to relevant users. O
Just how you wouldn’t play a carnival game without knowing the rules or how to win, nor should you pour resources into a community you know little about. Through data collection and analysis, as well as strategic planning, brands can shift from a mass communication approach to intelligent, micro-level marketing.