Opportunities in Social Media: Profiting From Digital Conversation

Introduction

Online social networks have continued to grow impressively in terms of membership. Interactive networks have given people more control over their media experience. This creates both new opportunities and challenges in marketing. This report will help CPG players understand when and how to utilize social media as part of a successful marketing strategy.

Scope

*Detailed insights and analysis documenting the drivers behind the continued popularity of online social media

*Key country-by-country data outlining social network memberships, internet access, broadband access and mobile phone ownership

*Strategic conclusions and actionable recommendations on time use trends for all areas of consumer packaged goods

*Covers France, Germany, Italy, NL, Russia, Spain, Sweden, UK, US, Canada, Brazil, Australia, Japan, ROK, China, India, Saudi Arabia, UAE, S Africa

Highlights

Online social networks have become an established method of communication. For some consumers, online communication is now more likely through social media than through email. The commercial potential of this trend has long been touted and CPG companies must take advantage of these opportunities

The meteoric rise of online networking has been catalyzed by younger age groups, but social media are no longer just the preserve of this demographic. Consumers from a broad range of demographics are now regular users of social media, although preferred sites will show some variation in their audience

Social media represent a relatively cheap method of marketing. However, not all campaigns achieve success and many marketers are still struggling with these relatively new formats. Companies will be better served by listening to customer contributions rather than using social media as another channel to dictate established brand values

Reasons to Purchase

*Obtain a detailed understanding of consumers' need to connect online and how this can be effectively leveraged commercially

*Use the latest evidence based insights to structure effective marketing campaigns through social media

*Access a compelling blend of quantitative and qualitative data illustrating consumer attitudes and best-practice marketing across the globe


Report Highlights

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Overview 1
Catalyst 1
Summary 1
Table of Contents 2
Table of figures 3
THE FUTURE DECODED 4
INTRODUCTION: The social media landscape continues to evolve rapidly, challenging the CPG industry to keep pace and adapt 4
Social media sites can be defined in terms of four distinct categories 5
TREND: The expansion of the global internet audience provides a fertile environment for social media enlargement 7
Broadband penetration continues to increase in all featured regions 7
Mobile phone penetration is showing growth although the market seems close to saturation in some developed regions 9
Advertising through mobile networks is on the increase 11
Consumers are spending more time online 12
Consumers are looking for more participation in their own media experience 14
Participatory media may be thought of as a broader category that encompasses social media 15
Key takeouts and implications: connectivity is still a hugely important trend continuing to grow among many consumers 16
TREND: Social networking has solidified its position as one of the most popular online activities 17
Social networking memberships continue to demonstrate explosive growth 17
Consumers are accessing social media more frequently 19
The popularity of certain key social media forms is fluctuating, but consumers remain committed to online communication 21
The continued strong performance of Facebook makes it very important to social media marketers 25
The rapid growth of Twitter represents a new dimension to social networking 25
Social networking has become more popular than personal email 26
Consumers are spending more time on social networks in general, although certain sites are suffering from desertion 27
Key takeouts and implications: social networking is an established trend, but the choice of networks continues to vary considerably 28
INSIGHT: Social networking is still more popular with younger age groups but this is showing signs of change 29
Younger age groups are still more active in social media, but older consumers also show some enthusiasm for networking 29
Both men and women are regular users of social media 31
Consumers can be categorized in three groups when investigating social media usage 33
Different demographics will use different social networks 34
Key takeouts and implications: the demographics of social networking are gradually settling down with a retained bias towards younger age groups 35
INSIGHT: Social network uptake is being shaped by consumers' ever growing desire for convenience and connectivity 35
Interpersonal factors beyond technology account for the huge popularity of social media 35
The connectivity mega-trend is a big influence on the success of social media 36
Social media offer the convenience of interaction with friends from within the home or on-the-go 38
Online expression and customization are important facets of the individualism mega-trend 38
Catalyzed by the recession, the evolution of cocooning to hiving is continuing apace 39
Key takeouts and implications: growth in social media is driven by a range of consumer needs 39
INSIGHT: Social media has become a more widely used conduit for advertising but consumer resistance is still a barrier 40
Success stories from the world of social media provide differing best-practice criteria 41
The branded approach to Twitter has been used successfully by Whole Foods 42
Companies from outside the CPG arena have adopted a 'prosumer' approach on Twitter 43
Failed campaigns can have far-reaching consequences for a brand 44
Key takeouts and implications: many companies, big and small, are using social media more commonly in their advertising strategies, but results are still mixed 46
INSIGHT: Social networking faces continued consumer cynicism over trust and the commercialization of the medium 47
Reports of decline and boredom with social networks contradict the stories of growth 47
Privacy fears continue to proliferate, making some consumers uneasy with the concept of sharing information online 48
Acceptance of advertising may grow as consumers accept marketing to preserve the free nature of networks 49
Levels of trust in social media advertising are not high and this will need to be addressed 49
The history of online advertising has a negative effect on consumer perceptions 49
Measuring success from social media advertising is difficult but the situation is improving 50
The decline of MySpace is often attributed to excessive advertising 50
Key takeouts and implications: despite the monumental growth seen in social networking, a number of entrenched factors remain that could inhibit future growth 51
ACTION POINTS 52
ACTION: Actively monitor and research social media 52
Perseverance with social media campaigns can be rewarding even if initial results are indifferent 53
Social media content must be regularly updated to maintain interest 53
Continue to monitor the demographics of existing social media sites 54
Remain vigilant for new social media websites and technologies that could prove beneficial in the future 54
Mobile technology advances are particularly important in the Indian market 55
ACTION: Improve branding strategies by incorporating social media in advertising campaigns 55
Use social media to combat the threat of private label products 55
Simple fan pages can help to combat the private label threat for well-known brands 55
Increasing fan count is not enough 56
ACTION: Continue to encourage user generated content to drive marketing campaigns 56
Promote consumer individualism by encouraging contributions 56
The Facebook Coca Cola fan page sets a good example of a site that increases brand engagement 57
ACTION: Use social media advertising in conjunction with campaigns through traditional media 58
Link social media campaigns with other advertising to maximize consumer engagement 59
ACTION: Maintain transparency and credibility in social media communications 59
Make it clear who is writing blogs and Twitter feeds 60
Fake blogs have already received much publicity and consumers are wise to this tactic 60
ACTION: Use social media to gather and act on valuable feedback from consumers 60
Encourage and act upon feedback from consumers through dedicated online channels 60
Monitoring dedicated blogging sites can also provide valuable feedback 61
Do not ignore negative comments from consumers through online channels 62
Monitor social networks for fan pages of discontinued brands 64
APPENDIX 65
Definitions 65
Methodology 65
Further reading and references 66
Ask the analyst 67
Datamonitor consulting 67
Disclaimer 67
List of Figures
Figure 1: The social networking trend is shaped by many drivers and inhibitors 5
Figure 2: Online Social Networks can be divided into four categories 6
Figure 3: Broadband penetration in 19 countries across Europe, the Americas, the Middle East, Asia Pacific and South Africa, 2004-2014 8
Figure 4: Number of broadband subscribers, millions, in 19 countries across Europe, the Americas, the Middle East, Asia Pacific and South Africa, 2004-2014 9
Figure 5: Mobile phone penetration in 19 countries across Europe, the Americas, the Middle East, Asia Pacific and South Africa, 2004-2014 11
Figure 6: The amount of time spent online per day, minutes, by the average consumer in 19 countries across Europe, the Americas, the Middle East, Asia Pacific and South Africa 13
Figure 7: Television is still the dominant medium for the average global consumer 14
Figure 8: Media forms are becoming more personalized and participative 16
Figure 9: Number of social networking memberships, millions, in 19 countries across Europe, the Americas, Asia Pacific, the Middle East and Africa, 2009-2014 19
Figure 10: Number of social networking occasions, millions, in 19 countries across Europe, the Americas, Asia Pacific, the Middle East and Africa, 2009-2014 21
Figure 11: The top 10 websites globally as ranked by Alexa.com 22
Figure 12: The most popular social networks as ranked by Compete in January 2009 by unique visitors and monthly visits 23
Figure 13: Most popular social networking sites in 19 countries across Europe, the Americas, Asia Pacific, the Middle East and Africa 24
Figure 14: The size of a company has some bearing on success through Twitter 26
Figure 15: The number of unique visitors and the time spent per person for social networks in nine countries across the globe, December 2009 27
Figure 16: Total time spent by all users on selected social media websites, April 2008-April 2009 28
Figure 17: Segmentation of social networking memberships by age, 2009, in 19 countries across Europe, the Americas, Asia Pacific, the Middle East and Africa 30
Figure 18: Segmentation of social networking memberships by age, 2014, in 19 countries across Europe, the Americas, Asia Pacific, the Middle East and Africa 31
Figure 19: Share of social networking memberships by age in 19 countries across Europe, the Americas, the Middle East, Asia Pacific and South Africa 33
Figure 20: Levels of trust have improved in the last year in some developed markets 37
Figure 21: Consumers are skeptical about the longer term plans of businesses 38
Figure 22: Kellogg has gained a significant following through a dedicated fan page on Facebook 42
Figure 23: Whole Foods has used a branded Twitter feed to its advantage 43
Figure 24: The Zappos approach to using Twitter has proved successful and this is something that could be applied by marketers in the world of CPG 44
Figure 25: Nestlé's Facebook fan page is the target of many protestors, but this does give the company a platform from which to respond to allegations 45
Figure 26: Websites such as PleaseRobMe.com serve to heighten privacy fears on social networks and could lead to a reduction in activity, albeit temporarily 48
Figure 27: Blippy, a site launched in late 2009, demonstrates the scale of information that could be available over social networks in the future 54
Figure 28: Oxo allowed its customers to contribute to the brand's advertising 57
Figure 29: Coca Cola's fan page has proved very popular with existing fans of the brand 58
Figure 30: A successful Evian advertising campaign could be even more useful to the brand through social media 59
Figure 31: Starbucks listens to and acts on customer suggestions through its My Starbucks Idea website 61
Figure 32: Cadbury was able to limit the damage caused by a negative social media group, but a slow response meant that the situation could not be regarded as a success 63
Figure 33: The Chicken Curry Crispy Pancake was restored by Findus after interest from customers 64

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