To coincide with IAB Engage for shopping, WAA’s Chris Tomlinson outlines how digital can help brands achieve sought after peer referral. Online ad spend achieves three times more return on investment for soft drinks than average online budget allocations would suggest.
Depending on whose version of internet history you believe, online retail is now entering its second decade.
Ten years ago, if I had told you that in 2000 a computer bug would almost wipe out humanity, or that by 2008 most of us would be spending over a grand a year shopping online, you would have more likely believed the former than the latter!
Conventional thought is that the web is purely a fulfillment channel, where people looking for specific products find the cheapest place to buy them using search engines.
That attitude has taken annual UK online sales to £47 billion. But where is the next £100 billion coming from?
Online brand marketing is a little younger than online retail but it is set to be the driving force in this second decade.
Now we have 'Web 2.0', an online world of social networking and user generated content, inhabited by a new generation of consumers.
Known as the 'recommendation generation', these net natives have a healthy scepticism of conventional marketing and don't necessarily believe what brands say about their products. However they implicitly trust their online friends, particularly those from their peer or niche interest groups.
This generation wouldn't dream of buying anything without checking consumer product reviews on independent price comparison websites or forums.
Peer referral has always been the most sought-after prize in brand marketing, but now it's essential for a brand to succeed.
To tap into this 'tell a friend' culture, brands need to spread their messages via 'word of mouse'. Online brand marketing will soon solely be about stimulating online conversation in the hope that satisfied customers will become brand advocates.
Of course, if your products are rubbish, you're not going to stand a chance. But for the purposes of this article let's assume they have some merit.
Some brands try setting up their own appreciation societies in Facebook but often find them either littered with sarcasm or left as an empty virtual wasteland, testament to consumers' indifference to the brand.
Some try a technique known as 'astroturfing' and fake positive conversations between bogus consumers in an attempt to mimic grass-roots discussions. But these are as easy to spot as the fake readers letters to tabloid agony aunts that are clearly written by the editorial staff.
Others facilitate conversations by creating their own branded social networking sites, which can be successful if editorial control is completely relinquished.
Recent market research suggests that the recommendation generation will use a brands own social networking site if there is a lot of information on the products that they use regularly.
The trick here is to reward contributors with special offers and status even if their contributions aren't necessarily favorable to your brand!
Thanks to projects like the Google sponsored 'Open Social' and the now ubiquitous social book marking links, connecting your site with the recommendation generation is becoming increasingly easy.
Currently, marketers have to choose a social network and develop their campaign specifically for it. In Facebook’s case, this involves building an ‘app’ in Facebook’s own language (FBML) – a potentially significant investment knowing how notoriously swift the migration of subscribers from one network to another can be.
If you develop your apps in the OpenSocial language, your marketing investment can be reused no matter where your target audience ends up (assuming it is somewhere that supports OpenSocial of course).
Better still your social networking campaigns can theoretically span multiple networks, expanding its demographic reach.
Getting the thumbs up from the recommendation generation can be as simple as adding links to social book marking sites such as de.icio.us, Digg, Reddit and StumbleUpon to your own website to allow visitors to vote for its content.
High scores on these sites will not only give human validation to your marketing message but also boost the search engine rankings of your own site.
Online retailers need to wake up to the commercial power of social networking and the recommendation generation that inhabit them if they are to get a lion's share of the future growth in online sales.
Chris Tomlinson is Head of Digital at WAA.
