Building a Communityof Brand Enthusiasts aka No Free Lunch

Nigel HollisChief Global Analyst

Millward Brown

2*eMarketer, ** Conference Board , ^Facebook

Consumer Confidence Index**

49.5

87.3

US Television Ad Spending* $67.8B

$66.9B

US Blog Readers* 94.1M

116.1M

Dow Jones Index

10,344

13,371

Facebook Users^ 50M

350M

Twitter Users* 0

18M

- 2007 - - 2009 -

What a difference a couple of years can make

3

After the financial bubble we are enjoying…

The social media bubble!

4

TV is not the only medium to be fragmented

Pure Plays Blogging Syndication

Peer 2 Peer Wikis & Collab

Tagging & RatingOpen Source Consumer Review

How social media changed the U.K. music industryData from the U.K.'s Official Charts Company

The power of social media

6

Simon Cowell's X-Factor winner topped the U.K. Christmas music charts from 2005 to 2008

So what went wrong this year?

7

After four years of X-Factor number ones, Jon and Tracy Morter felt enough was enough

Over750,000

fans

8

A coordinated effort meant that RATM's "In The Name" took the Number 1 slot in spite of the X-Factor hype

ChristmasWeek

Source: The U.K.'s Official Charts Company

9

The Facebook RATM campaign generated a far better conversion rate

12%c. 6,000,000 votes

78%

c. 750,000 fans

10

Why was the RATM campaign so successful?

The campaign possessed authenticity• Started by a real person with a real cause

It tapped into an underlying societal tension• The suspicion that "big business" is manipulating the public psyche for their own ends

The choice of song resonated with a wide audience• Anti-establishment sentiment of the lyrics• Positive associations for people who remembered it from the 90s

These ingredients are similar to those of an iconic brand

Do the same factors enable social media success for brands?

12

These brands are often praised for their effective use of social media

13

The average number of fans per brand differs dramatically by product category

Source: Facebook Fan Pages

14

And one or two brands tend to dominate each category

Source: Facebook

15

People who Bond with a brand are more likely to buy it

Individuals who Bond with a brand are more than ten times more likely to buy it than those who just know the name

High shareof wallet

Low shareof wallet

16

Successful Other brands

Bonding

Advantage

Performance

Relevance

Presence

Successful social media brands tend to be stronger brands

17

A strong brand, a distinctive identity, global scale, and an active presence on Facebook drive the number of fans

% BONDED COMPARED TO NUMBER OF FANS (100,000S)

18

Red Bull: Simply an engaging brand

19

People bond to Coca-Cola and Red Bull for very different reasons

20

The same drivers create brand and social media success(Strong brands defined as growing equity over a 3 year time period)

ProjectedLeadership

Brand Success

Great Brand Experience

Strong Business

Model

Clarity of Associations

But what about viral?

What does it take to be a success?

22

Viral success depends on strong creative and good distribution

Creative

Other support/ PR

Contributionto overallnumber of ad viewson YouTube

23

Viral success depends on both the propagation rate (creative appeal) and the size of the initial audience

Evolution• Ellen• The View• Entertainment Tonight• Geraldo• Blogger buzz: one of the Top 15 most-

linked-to videos among bloggers (Technorati)

Daughters

Edelman's PR blitz behind "Evolution" led toa much stronger in-market performance

Over 10 million views

500,000 views

24

Marketers should consider integrating marketing campaigns across social media sites

Sites Visited Membership by # of Sites

Source: Dynamic Logic AdReaction 2009 study

25

Viral success depends on strong creative and good distribution

Creative

Other support/ PR

Placement/ease of finding

Part of a viral campaign

Contributionto overallnumber of ad viewson YouTube

26

An example of a viral campaign with multiple executions driving ongoing engagement

27

Mass media coverage helped drive awareness of the RATM campaign

0

20

40

60

80

100

120

12/1/

2009

12/3/

2009

12/5/

2009

12/7/

2009

12/9/

2009

12/11

/2009

12/13

/2009

12/15

/2009

12/17

/2009

12/19

/2009

12/21

/2009

12/23

/2009

12/25

/2009

12/27

/2009

12/29

/2009

12/31

/2009

Source: Factiva, number of print articles per week

Why are people using social media?It's about people, stupid!

29

Facebook is about connecting with specific people, while Twitter is used as an information access platform

Am able to keep in touch with distant family members

Feel more connected to old acquaintances

Feel more informed about current events

Feel more informedabout pop culture

% % % %

Source: Dynamic Logic AdReaction 2009 study

30

Twitter: First in the know about celebrities and events

You fo l low someone on Twi t te r because you want to hear what they have to say .

31

Only 13 percent of social media users follow brands, but they participate in an average of three categories

Q23. What types of companies or brands do you follow or keep up with via social networks? (Check all that apply)

Retail

CPG

Technology

Sports

Restaurants

Travel

Banks/Finance

Quick Service Restaurants

Auto

Source: Dynamic Logic AdReaction 2009 study

12%

13%

Follow Do not

32

People follow brands largely for what they can get out of it: Information, discounts and giveaways

Q24. Please select any of the following reasons you choose to follow brands or companies on social networking sites. (Check all that apply)

8374

6156

484746

Info about new products

Sales/Discounts

Contests and giveaways

Sharing thoughts/ideas

Like the brand

Reading people’s responses

Company news

CPG%

Retail%

Technology%

6871

564851

4333

8076

6255

485561

Source: Dynamic Logic AdReaction 2009 study

ConclusionNo free lunch with social media

34

It's a chicken-and-egg dilemma: Success breeds success

Pre-existing brand equity is the best predictor of a brand's social media success

• Fans are more "end" than "means"

Social and viral success relies on creativity and scale

• Aim to seed creative execution with mass-media for maximum impact

People use social media to connect with people and brands they know (or to find a good deal)

• Figure out what value your brand brings to the social scene

• Test the idea, listen, and engage

• If it is a success, publicize it

35

The best social media brands tend to be the best brands

Tap into universal human values

Hold true to what the brand stands for

Anticipate the consumer

Act big

Invite consumers in

Thank you for listeningFor more commentary on brands, media and marketing please visit: mb-blog.com