social media 2012 etb final
TRANSCRIPT
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Reminders
Complete the Futureview Experience by Tonight at 7pm
Period 5 decisions due Tomorrow by 9am
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Period 6 decisions due by Sunday at 6pm
Final SABRE strategy paper due next Tuesday in class
Based on results through period 5.
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Todays Outline
What we know about optimizing the use of social media as
an element of a firms marketing mix; What causes things to take off: the role of social influence
in consumer choice
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Using this knowledge to predict product sales and diffusionover social networks
Important Topics on Social Media
[1] Why Should You Care?
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Why is this an important topic?
Firms are placing big bets on it.
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Fr iends and fami ly are the m ostt rust ed sources for dec is ion-making
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Traditional Consumer Decision Model
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Consumer DecisionModel with Social Effects
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In the Social Media Driven World.
Consumer tastes are far more transient and harder to
forecast than one might hope Driven by social influences (I like what everyone else
likes)
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Awareness is driven by social media, the course of whichfirms may have limited direct control over
The modern spin:SM as the great accelerator
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[1] Why Should You Care?
[2] Dont confuse what you know with what you know
Important Topics on Social Media
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[2] Dont confuse what you know with what you know
Does this kind of knowledge translate into a more effectiveuse of Social Media as a Strategic Marketing Tool?
Important Topics on Social Media
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WELL, IT DOESNT HURT BECAUSE IT REALLY IS A NEWMARKETING LANGUAGE
SOCIAL MEDIA
APPLICATION
BRAND
AWARENESS
BRAND
ENGAGEMENTWORD OF MOUTH
Blogs # of unique visits# of return visits
# of timesbookmarked
search ranking
# of members# of RSS feed
subscribers# of comments# of user-generated
content
average length of timeon site
# of references to blog inother media (online/offline)
# of reblogs# of times badge displayed on
other sites# of likes
The New Language
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o responses o po s,contests, surveys
Microblogging(Twitter)
# of tweets aboutthe brand
valence of tweets(+/-)
# of followers
# of followers# of @replies
# of retweets
Co-Creation (Nike ID) # of vi si ts # of cr ea ti on at te mpt s # of ref er enc es to pro je ct inother media (online/offline)
Social Bookmarking(Delicious , Digg,
StumbleUpon)
# of tags # of followers # of additional taggers
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[1] Why Should You Care?
[2] Dont confuse what you know with what you know
[3] Why is Social Media Marketing just plain harder thanregular ole Marketing?
Important Topics on Social Media
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SABRE analogies
Imagine if 1k of investment in a new Social Media channelcould create 80% awareness AND shift ideal points towarda new product.but such shocks occur randomly
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What makes the answer hard:
Unlike other media,
The depth and reach of messages is not under directcontrol of the firm; one can seed social media, but
spread relies on users
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The message itselfis also not under full control; themessage that is seeded may not be the one that isspread among consumers.
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[1] Why Should You Care?
[2] Dont confuse what you know with what you know
[3] Why is Social Media Marketing just plain harder thanregular ole Marketing?
Important Topics on Social Media
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a ma es ngs popuar n e soc a me a space, .e.go viral?
What Made this So Popular?
The Dollar Shave Club has raised $1 million in
"seed" funding from venture-capital firms
including Facebook investor Andreessen Horowitz
and Kleiner Perkins Caufield & Byers, which has
put money into companies such as Groupon Inc.
GRPN-3.43%
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Consumer gripes about price are pushing Gillette to prove to customers
that they don't need to swap blades as often as imagined. In February, it
began running television ads saying its Fusion ProGlide blades only need
to be switched every five weeks.
Mr. Dubin said the proliferation of fancy blades has only confused men.
"Keeping it simple is the name of the game," he said. "This was an easy
premise for people to understand, and we don't want to complicate it."
OR THIS?
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Evian
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Maybe it is as simple as setting upa Twitter account and FacebookMarketing 622s
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page and waiting for followers.Facebook Page
Possible Reasons
It has nothing to offer that I want or need
SABRE is not inherently cool
I dont see an bod I know han in out there
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Content is relatively static
Walmarts Facebook Page has 10.57Million Followers. How do they do it?
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Give Benefits. Lots of them. Example: Pampers Facebook page is the go-to site for
coupons.
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Heinz Ketchup: go-to place forhard-to-get innovations
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Be cool, or promise a network of
cool people/ideas
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What Makes Content Viral?
Simple
Unexpected
Concrete
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re e
Emotional
Stories
[1] Why Should You Care?
[2] Dont confuse what you know with what you know
[3] Why is Social Media Marketing just plain harder thanregular ole Marketing?
Important Topics on Social Media
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,i.e. go viral?
[5] Why does the popularity of some objects seeminconsistent with their true value?
* Bubbles
* Cascades
Ever wonder why consumers wouldwant to buy rocks?
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Or why this kid is so popular?
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Or why this kid STOPPED being popular?
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What unites all of these examples?
Each is a case where value is difficult to assess withcertainty, and individuals differ in their privateassessments of value.
People draw inferences about value more from what
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saying than their own private assessments.
The result: cases where aggregate demand is notnecessarily reflective of individual private assessmentsof value.
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Classic Example of Cascades:
Product Evaluation
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What makes this social influenceso powerful and prevalent?
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It is rationaland information like this isincreasingly available!
As a related aside.Downstream business impact of cascades
Ever wonder why a restaurants reviews end with a fewnegative ones?
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forums and blogs with positive postings?
Ever wonder why almost all company sites are moderated?Catch it before it tips!
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But the explanation is incomplete
Examples: in the early 2000s LOTS of people were calling
housing a bubblebut firms (and people) kept investing.
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And the data were there for all to see
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To create bubbles two other factorsmust exist
Strong incentives to conform to the behavior of a otherswithin a network
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information that would reveal fundamental quality, or distortthe interpretation of truth-revealing knowledge
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Example :Cards in a Deck
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Think of one of the cards from this deck.When you have it in your mind, be sure to
remember it, but do not tell me. I will thenshow you the deck again with your card
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removed
Did I remove the right card?
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The avoidance of knowledge
Once a set of beliefs are in place (e.g., that housing is agood investment), people are inclined to search for
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beliefs
The Ostrich Effect: People are more likely to look to see how their
portfolios are doing when they hear there has been a positive change in
the stock market
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Source: Karlsson, Loewenstein, and Seppi 2009
The Recipe for Bubbles and Cascades
Quality is imperfectlyobservable
An incentive to Conform
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A cascade starts An incentive to avoid seekingdisconfirming k nowledge
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[6] Can you predict Social Diffusion?
Important Topics on Social Media
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Starting point
The fact that demand for social goods may often bedecoupled from fundamental value does notmean thatdemand cannot be predicted or influenced.
All cascades require a favorable starting point (there
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has to be somereal value).
The social diffusion process is far from random, and canpotentially be influenced given sufficient knowledge ofthe information networkbut it will require a new kind ofmodel!
Estimate a Model (the Bass Model) thatDescribes a Blending of the Two Processes
))(()( 11
1
t
ttt CSM
M
CSqCSMpS
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S= sales
CS= cumulative sales
M= maximum cumulative sales
p= coefficient of innovation
q= coefficient of imitation
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Bass Model Assumptions
Fixed Market Potential
Reality is adopters bring new people to the network.
Fixed Parameters (no changes over time)
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Population that consists of innovators and imitatorswhere innovators drive the diffusion process
It is not that clear cut.
All past adopters are created equal
Not true, network adoption location
But the real world is more complexdiffusion arises over networks
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Social Hubs and Diffusion
George is
centrall
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located, but
not necessarily
an innovator or
an imitator.
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Social Hubs and Diffusion
Ed is an
innovator
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Who will
likely adopt
first?
Social Hubs speed the rate ofadoption
Ed may adopt
first, but George
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s ar more e y
to be the one
who triggers
widespread
adoption
Example: Ford Fiesta Movement
Traditional media car introduction:
We would show the vehicle at an auto show a few monthsbefore it went life and we started production. At that point, we
would have a huge, massive media buya traditional media
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uy a wou as - mon s an en wou en . yBecause we needed to build awareness very quickly beforethe vehicles arrived at the dealership. Then wed hope thatthe awareness field was high enough that it would last.
New media car introduction (2009): 100 people received cars totest drive for six months and shared their experiences online.
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Ford Fiesta Movement Impact
6.5M YouTube views
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50,000 requests for info in first 6 days car was on sale
10,000 cars sold in the first 6 days
One implication: adoption rates may not display s imple S-shapedcurves
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Up-take is non-monotonic, as adoption arises in concentrated waves
over the network
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Reminder -- Medicines Case:WOM Can Move S -> C -> Double C
SalesSales
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Time Time
Time
Sales
An Alternative to AggregateDiffusion Models: ABMs
Agent based models mimic the aggregate behavior thatarises when individual elements (here people) modifytheir behavior to conform to other individuals in the
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vicinity
While used widely in physics, increasingly used to modelbehavior in complex human systems
ABM Models in Practice: the simplecase of strong and weak ties
Each agent is assumed to be part of two networks---onedescribed by strong ties and one with weak ties.
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Each period there is a chance that he or she will becomeinformed either through external forces (e.g., advertising)or chance encounters with people who are aware withinhis or her network
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Formally,
)()( )1()1)(1(1)( tjtr swtp
w=probability of exposure from someone with weak ties
=probability of exposure by advertising
prob(t)=Probability of becoming aware at time t
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Implication: the stronger the relative influence of sover w the less
homogeneous the adoption process will appear (i.e., display spatialclusters)
s=probability of exposure from someone with strong ties
r(t)=# of weak ties, j(t)=# of strong ties
)()( )1()1)(1(1)( tjtr swtp
w=probability of exposure from someone with weak ties
=probability of exposure by advertising
prob(t)=Probability of becoming aware at time t
Role of Social Networks
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s=probability of exposure from someone with strong ties
r(t)=# of weak ties, j(t)=# of strong ties
How would social networks impact , w, s,
r(t), j(t)?
Another implication: one might be able topredict product success from the early spatial
atterns of ado tion
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Heres How
Below are the spatial adoption patterns of 2 products
measured 1 month after their release.
Product A
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Which is more likely to be successful?
=adopted
ro uc
Long-term product sales and month 1adoption concentration measures
0.25
0.3
0.35
0.4
Supermarket Products Home Furniture
Sets
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0
0.05
0.1
0.15
0.2
Success Failure Success Failure
Garber, Goldenberg, Libai, and Muller,Marketing Science, 2004
[6] Can you predict Social Diffusion?
[7] Can firms make money over Social Networks?
Important Topics on Social Media
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Monetization of Social Networks
Play Games with your FriendsGet Targeted Recommendations
From your Network
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et oca ecommen at ons
Will this company ever make any money?
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Pinterest on Wikipedia
In December 2011, the site became one of the top 10 largest social network services,
according to Hitwise data, with 11 million total visits per week. [11] The next month, it
drove more referral traffic to retailers than LinkedIn, YouTube, and Google+.
In January 2012 comScore reported the site had 11.7 million unique users, making it[15]
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.
Pinterest's wide reach helped it achieve an average of 11 million visits each week in
December 2011. Most of the site's users are female, with 97% of the site's Facebook
"likes"being made by women.
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Is Too MuchCustomization/Monetization Possible?
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+74% +54%
Salient P op-up bann er ad Imbedded ad matched to contex t
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+48%
Pop-up ad matched to context
Value of Ad Type
compared to baseline
sales
[6] Can you predict Social Diffusion?
[7] Can firms make money over Social Networks?
[8] And it only is happening for digital firms, right?
Important Topics on Social Media
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Social Media - Retail
.
BENTONVILLE, Ark. April 18th 2011
Wal-Mart signs agreement to acquire Kosmix,
developers of a social media technology platform
Filters & organizes content to connect real-time
information.
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Integrates shopping experience between bricks-and-
mortar & e-commerce businesses in nine countries.
Newly formed @WalmartLabs, creating technologies
and businesses around social & mobile commerce to
support global multi-channel strategy.
Consumers Voting for Product Assortment
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Social Media - Retail
Innovation: internal & external initiatives
Twelpforce Ideax - shoppers suggest ideas other shoppers vote up/down
Sho erex e rience :M Sears.com and M Kmart.com
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. . Launched in March 2009, over 400,000 registered users.
64% online buyers find user reviews important when purchasing. 47% online users - consumers trust consumers > marketers.
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Social Media - Food
Competitive Promotions: has a new social media marketing campaign where any time 2 people individuallyuse the phrase mac & cheese in a tweet, each receives a link pointing out Mac & Jinx. The first one to click
the link and give Kraft their address receives 5 free boxes of Krafts mac and cheese and a T-shirt.
New Product Launch Promotions: Heinz Ketchup UK opens up a pop-up tryvertisingF-store on Facebook
(tryvertising = advertising by sampling .designed to create word of mouth, pop-up = temporary), making an
initial 3,000 bottles of its latest tomato ketchup (with Balsamic Vinegar) exclusively available to serious ketchupfans only before the new product was launched in traditional stores.
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Drive traffic to retailers: Offer Groupon subscribers a first-of-a-kind home delivery grocery Sample Packfeaturing $40 worth of General Mills products including coupon book, breakfast, lunch and dinner fare for
$20. General Mills hoping deal will turn Groupon samplers into grocery-store name brand buyers.
Community Culinary Experiences: Blogger-hosted virtual cooking school called Cooking Connections-an 8-
week series of live blogging classes and conversations that take place on TheMotherhood.com and are cross-
posted live on Twitter and Facebook. Participants are encouraged to share their culinary experience via Twitter,Flickr and Facebook in an effort to connect others to the Cooking Connections community and experience.
Social Media - Food
.
April 21st 2011 General Mills
First deal offer on Groupon.
Posted on Internet at midnight in the Twin Cities,
sold out at 10:42 a.m.
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We are not looking to make money on this.
Rather, by mailing out samples, the company is
trying to direct more traffic to grocery retailers for
its products - Karl Schmidt, company's director of
promotional marketing.
Social Media - Personal Care
Tailored Segmentation: multiple Facebook pages geared to unique audiences, consumer products a nd
conditions. corporate blog at JNJBTW.com .presence on YouTube (527 Videos) and Twitter.
Consumer Intimacy: 28 brands on its Facebook Store that enable them to: reward a nd build loyalty,
learn about brand usage & habits, stimulate WOM and sell products. Last year P&G launched a social
media initiative for Prilosec to maintain its leadership. Also P&G ended its 77 years of advertising on
soap operas in favor of social media.
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Community intimacy: social media campaign for Kotex created a safe place for women and girls to go
to talk about personal subject. In less than 6 months it has reached an 8.3% market share in a mature
market. At heart of the Kotex Campaign is Listening and real conversation. The big idea was to take a
taboo subject a nd offer support and a safe place where women and girls could help each other withadvice and support.
Emerging Markets: success with social media marketing of Axe and to generate interest in the Indianmarket, created a Facebook page. Allowing users to interact with Axe Angels, male oriented marketing
designed to get men clicking back for more. In January 2011, 10 months after the page went live, 1+
million Facebook users had liked this page, and numbers growing since, now with over 1,247,800
likes.
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[6] Can you predict Social Diffusion?
[7] Can firms make money over Social Networks?
[8] And it only is happening for digital firms, right?
[9] Social Media: Just US-Centric?
Important Topics on Social Media
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Social Media According to Renren
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Donna Li from Renren
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I n teg ra t i ng s ocia l med ia andt rad i t i ona l adv er t i s ing
Build a brand page on a major social media platform
Traditional advertising should drive users to your brandpage
Vehicle for brand stories, promotions, etc.
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Encourage regular participation and interaction on page
Users to become brand advocates
Rele v a n ce f o r n e w a n d m a t u re p ro d u c t s
Appropriate for both
Mature Brand awareness and product experiencesalready establishedEasier to leverage WOM power
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New Social media platform must be largeMaximize awareness through reach andfrequency (Go where the consumers are!)
The Future of Social Media3 5 year horizon
Not a trend, but a part of our lives
Companies should integrate social media with overallstrategy it is not confined to PR or marketing
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Support marketing team with social media expertise andresources
Encourage social media innovation and allow mistakes
Mobile is the next big thing. Start thinking now.
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Doesnt Sound Too Different than
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,
Conclusions
Social influences can be a major driver of consumerdemand---but care must be taken before assuming thathigh current demand implies an enduring preference worthinvesting in (bubbles are everywhere)
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Emerging trends canbe spottedand new families ofdiffusion models are emerging as tools
Social media investments will be a central part ofmarketing measurement and selling tactics goingforwardbut we are just beginning to learn its capabilitiesand limits
Next time: the marketing of products toconsumers who have yet to be born
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