Executive Interviews: Interview with Andrew T Stephen on Social Networking
May 2010 - By Dr. Nagendra V Chowdary

Andrew T Stephen
Assistant Professor of Marketing, INSEAD and a winner of Google-WPP Marketing Research Award (2010)

A recent blogworks survey indicates that the blog and Social Media (SM) environment is evolving rapidly and India is no exception to this. The survey reveals that the SM credibility is on the increase: 90% believe that blogs and SM platforms have an impact on business and marketing; 90% believe that buzz and word of mouth are top deliverables from SM activities; 65% think SM can deliver insights and over 46% hope to create better products and services through SM activities. What’s your assessment of such social media environments in emerging markets’ potential to innovate?
One of the keys to innovation is listening to what the market wants, and then listening to what the market thinks of your innovative new product/ brand/service offering. Social media is very useful for this ‘listening’ function. For example, you can search what people are saying on Twitter in real time through search.twitter.com. So I’d say that a critical function of social media in driving innovation, particularly in emerging markets, is enabling companies and entrepreneurs to listen to what the market wants.

• How should companies look at social networking sites – as complementary or competitive threats?
  Depends on what your line of business is. If you are a newspaper or magazine publisher, then social networking websites are more of a threat than a complement. Other than the ‘old media’ companies I think social networking sites – in general – represent opportunities as media channels for, not only reaching customers in new and innovative ways, but also for engaging with them in meaningful conversations and interactions that can help retain customers, attract new ones, and get valuable feedback and insights from them.

• US users spent nearly six-and ahalf hours on Facebook, compared with fewer than two-and-a-half hours on Google, according to some reports. What does the rising popularity of social networking mean for business? How should companies convert all such users’ time to their advantage?
  This time difference is a bit misleading because people do different things on Facebook than on Google. The typical ‘transaction’ with Google is obviously faster: type a search query, get some results, click on a link, and move on. This difference aside, for business the rising popularity of social media and online social networking means, primarily, new ways to reach current and future customers, ways to engage with them, interact with them, and build meaningful and long-lasting relationships. Social networking sites, like Facebook, are new media (or marketing communications) channels. Google (with respect to search advertising or ‘AdWords’) is another marketing communication channel but the difference is that it is a one-way communication from a company to consumers who see a search advertisement. Search ads are also not very engaging or content-rich (unlike what some companies are doing with branded Facebook micro-sites or ‘Pages’). So the user experience is different. Facebook allows companies to create more content-rich, media-rich, and interesting online experiences. That said, businesses still need to drive traffic to those experiences – ‘discovery’ of content is still a major challenge and should not be forgotten. Search advertising (eg., on Google) is one way to drive that traffic. So these things are not substitutes; they are complements and work as part of an integrated digital marketing ‘ecosystem’ in some sense.

• Experts advocate that the companies must articulate and adopt a unique social media strategy to tap into the growing popularity of social media. How should companies go about chalking out social media strategy? What are the critical success factors for getting the power and potential of social media platform right?
  First of all, companies have to ask themselves what their objectives are. This is the same for any marketing strategy or specific campaign. What do you hope to achieve? Why are you doing this? Who are you targeting? What message do you want to communicate? Once you know your objective (or objectives), then you should start to think about the types of social media channels or platforms to use. Twitter is great for communicating rapidly with customers on a regular basis and for delivering messages that send them, say, to your website or to a particular promotion (Dell is a great example: they use Twitter to send discount codes to their followers, and through this channel achieved about US$6.5 mn in sales in 2009). Facebook is also great for sending messages out but it is also useful for having branded pages and microsites where consumers can interact with each other and with the brand/ company. It can be quite rich in a multimedia sense (videos, photos, etc). Branded YouTube channels can also be used to deliver video content. If you want to have a conversation with customers or use social media for relationship management and customer service, then online discussion forums could be the way to go. So it depends on what your objectives are. But whatever you do, you have to drive traffic to your online content and get customers to, for example, be your ‘Fans’ on Facebook or ‘follow’ you on Twitter. So building the audience is important as an early-stage step, also.

• After all is said and done, to be successful you have to deliver some kind of value to your customers or online social media followers/fans in all these communications and interactions. If the users/customers aren’t getting anything of value to them out of it, they will leave. So, whatever the objective is and whichever platforms are used, companies have to deliver value through these interactions. That value could be explicit, like discounts or special offers, or could be implicit, like a feeling that a customer is part of a community or is being listened to by the company when they share comments or feedback in an online forum, for example.
  Which kind of companies – B2B, B2C, C2C or P2P – do you think would be the most benefitted using these social media platforms?
  All of them! The major use about the moment is B2C trying to use social media for C2C interactions and C2B communications as well as B2C. But B2B companies are using social media a lot and expecting to spend a lot more in social media marketing over the coming years. At the moment, B2B are focusing on using it to energize sales forces, downstream vendors and channel partners (as well as for client relationship management), but as social media evolves and matures, new uses will undoubtedly emerge.