However, social media is transforming paid and owned media too so the complete picture regarding how social media is changing marketing is much more bone rattling than most think.

Social media impact on owned media activity. Beyond direct traffic the largest source of traffic to your website or Facebook fan page is usually search. According to Google adwords, there are 4MM monthly US searches for Starbucks and 16 million searches for “coffee”, driving a portion of the 2-3MM visits per month to Starbucks.com (according to Compete, Quantcast, Alexa). However, you will not be able to optimize search unless you master social activity as Google and Bing have each changed their organic search algorithms to include social media activity. Try it. I searched for “path to purchase” and a blog I wrote on this topic showed up fourth. On my daughter’s computer it showed up lower down. I am connected in social media to someone whose blog shows up highly in my results but doesn’t show up at all in the first two pages on my daughter’s computer. Implication: create sharable content (e.g. lifestyle pieces that reinforce brand values), offers, etc. and use sharing widgets to facilitate sharing.

Social impact on shopping choices. Yelp and Foursquare are mixtures of social and owned media. Check-ins and reviews are social activities that can persuade at the key decision-making moment. When I check in on my Droid at a location via Foursquare, I also check for offers at that retailer. If I am considering what restaurant to go to in a certain part of Manhattan, I always check reviews on Yelp. Not just what people say, but how many say it. The sheer number of reviews affects my choice of restaurants to dine at but the restaurant’s site must seal the deal.

Social media impact on paid advertising. This could be the biggest impact of all on marketing practice. What a minute, “paid advertising”? I thought social media was about getting people to talk about your brand so you didn’t have to pay for impressions. What am I missing?

Social media allows marketers to begin targeting advertising impressions based on behaviors and interests rather than just using demographics (the bluntest of targeting instruments). This is one of my suggested 6 big marketing mandates for 2012-2015. For example, Facebook offers a user’s profile of interests to serve up more relevant display advertising. You can also advertise your page to friends of those who have liked you, under the reasonable assumption that birds of a feather flock together. ShareThis classifies hundreds of millions of users each month based on their content consumption and sharing behavior across the web. This behavior is clearly indicative of both shopping intent and persistent life style interests and can be used very effectively for advertising. Social media boosts ad effectiveness as Ads can be liked, and offers can be shared as it has been shown that when a friend of yours likes an ad on Facebook, it is displayed for you and it creates additional lift to that ad’s impact.

As a proofpoint, Facebook is already a leading publisher in terms of display advertising revenues but this might only be the beginning.

I speculate it is possible that your liking and sharing behavior via Facebook Connect and plug-ins across many sites would allow them to more precisely model an individual’s interests and then using that to better address advertising across an ad network that extends beyond the walls of Facebook (hey, that’s a pun!). For example, if you sign into Huffington post using your Facebook or Google+ account the articles you read can become part of the profile of interests you hold (it already shows up publicly on the HuffPo page) and Facebook or Google+ could potentially serve advertising into inventory they have across the web. I predict that social log-in will become increasingly prevalent (Facebook, Twitter, Google+) because people prefer the simplicity of not having to remember a gazillion log-in passwords. More speculation. Imagine if Facebook becomes the way you “log-in” to view TV listings based on stored preferences when TV becomes completely digital. Facebook could get a piece of the 800 pound advertising gorilla. Google might even be ahead here with Google TV and Google +.

Social media not only creates the opportunity for owned media, it will profoundly affect paid and owned media as well, changing how marketers spend their ad budgets, away from demographics and toward interests, behaviors, and self-directed seeking.

It has been a great year of learning and accomplishment for Rubinson Partners and I wanted to thank my clients, academic sponsors at NYU, network of resources and thought partners such as Judah Phillips web analytics guru at Monster, Erwin Ephron, Dave Lundahl founder at InsightsNow, Pat Hanlon (author of Primal Branding), and Frank Cotignola at Kraft. I hope it has been a fabulous year for you and a prelude to being “touched by” an even better 2012. That’s a pun, because what has had more of an effect on daily living than touch screens on our phones, tablets, in the car or cab, ATM, etc.? And it is just starting…apps have not yet hit the tipping point.

I wanted to give something to all of you as a gift (other than a fruitcake!). Thanks to your sharing behavior (as high as 600 shares), page views (over 6,000 for one presentation), and search terms that refer traffic (“path to purchase” is the biggie), I am able to see which of my blogs or presentations generate the most interest, obviously addressing what keeps you up at night or stimulating your thinking by challenging mythology with evidence.
The leaderboard:

#1—How do people spend time with your brand? Owned media usually dominates Facebook and Twitter regarding the engagement power of “time with brand” as few go back to the fan page or spend time with updates. 600 or so shares suggest that others must have discovered this…in conversations, I know they have.

#2—Shopper path to purchase; a new approach to media planning? This blog keeps getting page views because it is found via organic search. A shopper perspective is an action perspective and increasingly, media is becoming an action environment

#3—Sharing is more than fans, friends, and followers. The truth about sharing behavior analyzed from ShareThis data across hundreds of millions of users in partnership with SMG. The truth? The way people share depends on content. E-mail and bookmarking are still powerful for certain content types. More truth? There is little multigenerational virality. For marketers, sharing is more about scale so put sharing into everything you do.

#4—Effectiveness of TV advertising over time. Turns out as of 2009, when I analyzed 388 cases over time, TV advertising effectiveness had actually increased contrary to what I was hearing in the echo chamber. Poltrack (CBS Chief Research Officer) publicly called a leading analysts’ statements BS (Ad Age captured the audio) about the impending decline of TV based on this analysis.

#5—How to increase marketing ROI in a digital age. Based on conversations with Erwin Ephron, we realized that digital is inherently a recency medium. It delivers messages when it counts based on self-directed consumer action.

#6—What marketing research needs to learn from behavioral economics. Another term that refers a lot of traffic via search is behavioral economics…the “predicably irrational” stuff. Research needs to start studying how consumers decide, and align the survey to these processes, not just conducting purchase intentions in some monadic concept test tube environment

#7—It’s about mobile! Three key documents here: Tablets, Rise of the Planet of the Apps, The US App-Economy 2011-2015 (conducted on behalf of Appnation)
Thank you for allowing me to have a transformational impact on the industry this year.

Thank you for allowing me to have a transformational impact on the industry this year and I hope to serve you next year as well!

Happy holidays,

Joel

Then it struck me: the tablet is the first device that can actually travel with the shopper through the complete path to purchase and if the prices come down enough, retailers might lease them for free to their frequent shoppers and club members to lock in their loyalty.  The lifetime value of a shopper would more than pay for this.  Imagine the incredible marketing value to a manufacturer who can deliver the exact right message to the right person, exactly at the right moment…the point of purchase.

Research I have amassed indicates that tablet owners already spend more time accessing the internet via their tablets than their computers. Tablets are becoming preferred devices among their owners for online shopping according to Forrester.  Today that is from the living room, but why should it be restricted so?  The tablet is inherently a mobile device.  Imagine a store completely wired for wifi so you can use your tablet as you shop. Imagine you have planned your trip at home, on your tablet by scanning what you are about to run out of and by searching on your tablet for coupons and interesting dinner ideas.  While you are doing this, smart marketers and retailers are advertising their products and offers using an interactive sight, sound, motion experience. Now, you have created a shopping list on your tablet, which also contains all of your frequent shopper information for the store you are about to visit.  When you enter the store with your tablet, it recognizes your presence and greets you with a video message from the store manager.  You place the tablet in your shopping cart so you can watch it as you go and your shopping list automatically gets reorganized so you can see which items that are on your list are in the aisle you are currently in.  This will encourage a shopper to completely navigate the store which any retailer would love. While you are walking down the aisle, windows awake on your tablet delivering messages that are relevant to you based on shopping history and interactively offering you deals.

Checkout is a breeze as you have all of the offers stored paperlessly, along with your frequent shopper data and mobile payment info.  As you leave, the tablet awakes to wish you a nice day and thank you for shopping at that retailer.  Of course, this shopping trip becomes part of the stored information so planning the next trip becomes easier.

When I discussed this topic with my friend Doug Stephens (@retailprophet), he advised me to think about the trend that consumers are using the best screen for the purpose at hand. While a number of apps are being developed for smart phones, I think the tablet might be the best screen for shopping.  A number of initiatives reflect this thinking as well, most recently in the US, mediacart.  Now there is a significant initiative in China that is similar.  While such efforts have yet to succeed, the big difference I am proposing is that rather than using a foreign device attached to a shopper cart, use the same tablet you use in your living room, on the train, in the bathroom, etc. that you then bring to the store and mount on the cart.

There is still much work to build the needed in-store and cloud-based technology infrastructure to support this vision.  However, as the Institute for the Future preaches, develop foresight about possible futures to provoke strategies that need to start in the here and now.

If you could, you would drop impressions selectively for each consumer closer to the next purchase than the last one. Now in the digital age, you can do exactly that.

The principle of recency implies that the sales response to ad spending (called ad elasticity in economics-speak) can be thought of as an average of no effect from the ad that is unfortunate enough to air right after a given consumer’s purchase, averaged in with twice the effect for an ad that is lucky enough to air right BEFORE the next purchase.

Why does this math matter?  Because if you could find advertising vehicles that were “recency-tilted” by their nature, that is, they are more likely to deliver impressions closer to the purchase, you will get greater ad response…practically guaranteed.

“The acceptance of Recency, (or closeness to purchase), as a key variable in advertising inspired sales makes the point.  The digital…messages reach the ‘readier’ to purchase consumer.” Erwin Ephron, 2011

So how do we reach the “readier” to purchase consumer? How do we recency-tilt? Digital activities that are self-directed, e.g. search or visiting a brand’s website or a site like coupons.com are mostly done with shopping purpose in mind.  In other words, such digital brand communications give you recency because the consumer is controlling the timing of the impression not the marketer.

Digital display advertising can also be recency tilted if marketers change their prevailing approaches to display.  Remarketing has been proven to provide greater lift and that is certainly recency tilted.  Advertising served by ShareThis has been shown to provide greater conversion and it is also recency tilted because advertising is selectively served to people who share content that is relevant to them at the time, implying for many that they are about to make a purchase decision. Digital media’s ability to deliver recency will get magnified as smart mobility becomes a constant part of the shopping process.

But digital isn’t the only way to tilt the odds in your favor. Obviously, all shopper marketing is recency tilted. Another option for recency is special interest magazines in print or digital form.   Especially for magazines like Car and Driver, many are buying the magazine almost as much for the ads to help a purchasing process along.

Finally, let’s think about how media and marketers calculate reach.  Now, that should be adjusted also. If impressions unfortunate enough to be delivered right after the last purchase aren’t worth much, then their contribution to reach isn’t worth much either. Marketers should measure reach from those impressions delivered closer to the NEXT purchase than those closer to the LAST purchase. I want to know “recency reach”.  Once you start calculating recency reach, you will find that the touchpoints that deliver this are different and it will help to guide marketers’ strategic media investment decisions in ways that will improve sales response.

With some straightforward experimentation, I believe the logical conclusions here will be confirmed. And then, the way we plan media will be profoundly affected.

There are three big points I want to make about the effective use of media in a digital age for brand building.

1. In our digital world, everything amplifies everything else.

Many shopper journeys now start with digital search.  However, the top 30 or so search terms are invariably versions of the trademark. In other words, search doesn’t come before brand; brand comes before search.  In many cases, mass advertising made the brand interesting in the first place. But ultimately, if your owned media doesn’t deliver, and is not mobile optimized, you wind up with, well…bad lasagna.

2. The focus of brand communications should be to amplify digital activities that lead to successful business outcomes

Here’s what a brand team should hope consumers do.  They want them to search for their brand, talk about it, like and follow it in social media, visit the owned media website, sign up for something, and download something (e.g. a coupon). To get geeky for a minute, you can think of a Bayesian net that graphically maps activities, facts, events based on conditional probabilities. Presumably, these activities all add strong conditional probability to something we want to move, such as sales. The purpose of push media, such as TV, or digital display can be thought as amplifying these self-directed activities that the Bayesian model shows are highly predictive of a successful outcome.  These activities form the basis for tracking what we can call brand conversions.  You want media to make these conversions go up consistently over time.

3. Marketing research needs to update its approach to digital measurement

Ironically, while digital media should be the most measurable of all media, we do the worst job of measuring it. I bet that few marketers who sell products in physical stores have a metrics system set up to measure digital brand conversion activities as described above.  If you aren’t tracking conversions, you can’t effectively track digital brand communication impact or determine its ROI. You simply are not positioned to succeed in a digital age.

Social media is particularly complicated.  People talk about brands that are interesting to them but the conversation itself then amplifies the brand as it helps to make the brand more available, even omnipresent, and hopefully drives traffic to the owned media properties.

It is an advertising input, a behavioral output, and a source of marketing insights via what is called “listening”.  Except for listening, we are really far behind when it comes to measuring social media as a source of (earned) impressions.

Suppliers who offer listening platforms tend to treat all comments as equal when that can’t be true. A tweet from someone with 100 followers or a  Facebook update that might or might not be seen could not be equal to a blog posting by an influential mommy blogger whose post might be read of hundreds of thousands.

And then, here comes mobile.  Parts of the world are way ahead of the US on adoption of mobile phones as the primary form factor for accessing the internet but it is coming here as well.  By 2015, mobile (smart phone and tablets) will pass the computer in the US as a means of accessing the internet but for a different purpose.  Smart mobility will revolutionize shopper marketing.  Are we really ready to measure this?

We need a new mental model for how media creates and nurtures relationships between brands and consumers.  Media is no longer a force exerted against a passive audience.  In a digital age, brand communication lives in an action environment and its purpose should be to amplify and shape consumer activities along the digital path to purchase.

Acknowledgment: My teaching fellow for my NYU course, Social Media for Brand Managers gave me the “lasagna” metaphor and I love it!  Thanks, Daniella!