How Social Media Marketing Is Changing the Way Big Brands Advertise

"Generation Like" is changing the way business sells.

Apr 11, 2014 at 7:18AM

In the 1998 film The Big Lebowski, when The Dude uttered the line, "Yeah, well, you know, that's just, like, your opinion, man," the movie-making Coen brothers tied into an emerging and powerful oral trend. According to The American Scholar "80% of college students use the quotative "like" in typical face-to-face conversations with other college students."  

Given this linguistic tradition, it is no coincidence the very slang word embraced by Millennials had also been adopted by PBS in a recent Frontline documentary titled "Generation Like." The roughly 18-34 year-old Millenials demographic will possess an estimated $170 billion in spending power in the next five years, the largest spending power of any demographic group. However, the Frontline tag does not refer to Millennial-speak, but rather the "like" moniker refers to the manner in which Millenials are reinventing how companies market and sell products. 

Dunk in the dark

For example, consider Kraft Foods (NASDAQ:KRFT) and its 100th anniversary marketing campaign for Oreo cookies in 2012 titled the "Oreo Daily Twist Campaign." Kraft launched the campaign because of its concern that Oreo did not "own top of mind awareness for men and women age 18-24." The two top goals of the Oreo campaign were to increase traffic to the Oreo Facebook page and to create word-of-mouth awareness through social media shares.

The campaign posted pictures of Oreos with unusual treatments or topical messages on social media sites such as Facebook (Nasdaq: FB). This included a high-impact free Tweet on Twitter advising, "You can still dunk in the dark" as a comment on the infamous 2013 Super Bowl power loss; most other companies paid up to $4 million for an ad in the Super Bowl without nearly the same impact.

Dunk In The Dark

The results of the year-long Oreo campaign were 231 million media impressions and almost a 200% increase on its Facebook page. So the campaign achieved its goals although Kraft has been quiet about any sales increase. Such is the case for most companies invested in the medium.

However, based on the experience of CIL, a Canadian paint company, Kraft's social media accomplishment most likely had a bottom-line payoff. During roughly the same time period CIL increased its sales by 10% from a small-budget campaign that garnered more than $1 million in earned media exposure and resulted in 100 million online impressions.

Millennial online use is marketing gold mine

A just-released survey found that 76% of marketers now use such real-time tactics. Yet while 88% of marketers consider real-time marketing essential, only 44% of marketers have included real-time in their 2014 budgets. Even smaller is the 20% of marketers who track return-on-investment, or ROI, although the 75% return they claim is impressive. This data indicates the use of social media for marketing is still in the early stages.

The "attention economy" drives Millennials. This refers to both the demand on our focus from multiple social networking sites as well as the basic human need to be validated through acknowledgment. As Generation Like reported, Millennials more and more define their worth through the number of "likes," "follows," and "re-tweets" they achieve.  Many Millennials spend much of their discretionary time on building their own social media brands.

For companies, this can amount to a free virtual sales force. Frontline documented one high school teenager who built a huge social media campaign that obsessively promoted the Lions Gate (NYSE:LGF) billion-dollar "Hunger Games" franchise.

Teens and young adults who now publicize and publicly state their likes online are essentially doing what earlier generations did with posters and T-shirts. The difference is that all this online self-promotion creates databases that companies are just now figuring out how to use, hence the mostly vague information on ROI.   

Commercialization of online footprint under way

Social media and its accompanying electronic footprint concern many media and privacy experts. Mark Andrejevic , an associate professor at the University of Queensland in Australia, bluntly states: "We are all lab rats online." Electronic media, he asserts, is being commercialized at a rapid pace and social media "likes" are one of the basic building blocks. 

While he acknowledges that as a result we receive online ads that are more relevant to us, he worries this new relationship includes the capacity for exploitation. He said, "I don't think they've [Internet users] got a well-developed understanding of what the potential implications are down the road."

While the train may not have yet left the station on social media data collection and commercialization, the boiler is fired up and the engine is hissing. Honda (NYSE:HMC), for example, launched a social media campaign two years in advance of the 2015 roll-out of the redesigned Civic, although Honda's Europe social media manager seems conflicted about the ROI of social media. He recently said in an interview: "Social media has great return on investment. There are some aspects that are difficult to measure, though others you can measure..."

He cited the public relations value of the 300,000 online views and retweets. He speculated, for example, those social media users who watched the Honda YouTube clip can be targeted with follow-up ads.

The 'ignored side' of social media

According to the Wharton School of Business at the University of Pennsylvania's marketing program website, more and more companies rely on social media to address customer service issues. The site calls customer service "the ignored side" of social media. It cites American Airlines, which has employed 17 people since 2011 who are dedicated to social media; 12 of this staff work full-time just to address customer complaints and service issues posted through social media.  

Still, Wharton noted a recent study that found that 70% of customer complaints on social media go unanswered. The good news for business is that 82% of Millennials say they would put more faith in a company or institution that was involved in social media. Therein lies the future. After all, an old business adage from the days before the Internet advises: find out what customers want and then give it to them.

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John Mitchell has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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