Online communities : A Sizzling Anthill for the Companies

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Now it is the time to surf on the waves: marketing via online communities is the most successful approach to target your range of consumers. How to improve from your current stand? How to penetrate in an advantage?

The trend of online marketing


Why marketing online (or marketing of products or services over the Internet) is the centre of discussion? Individual now uses internet almost for everything, hence the companies could use a part of their budgets for online marketing.


Maud Bocquet, Maeva Levy, Patricia TaiWhy marketing online (or marketing of products or services over the Internet) is the centre of discussion? Individual now uses internet almost for everything, hence the companies could use a part of their budgets for online marketing. There are different ways of developing online marketing:

  • Website
  • Emailing
  • Press release
  • Promotional banners
  • Sponsoring
  • Viral marketing

10 reasons to invest in Online Marketing:

  1. Reach a huge market without geographical limits contrary to with the traditional ways.
  2. Direct contacts through mailing gives the possibility to join directly with the decision-maker.
  3. Better targeting: the companies websites would be able to know if it is a good potential client or not.
  4. Save costs and time: the online marketing reaches a lot of potential clients with minimal costs in a brief time.
  5. Sending of information becomes efficient.
  6. Efficiency of the mail thanks to the possibility to read again and to possibility to write a lot.
  7. Create a fast notoriety with forum, chat etc.
  8. Equity: There will be no discrimination, people have equal chances.
  9. Possibility to contact customers, suggest the projects and see the reaction.
  10. Permanent relation: With the use of internet we are able to manage business not only in the office but everywhere.

    To append some statistics, according to the study of Forrester Research, we know that the spending on online marketing in Europe will double in around five years time. In 2006, it was 7, 5 billion of Euro and the expert evaluate that it will be 16 billion in 2012. Online marketing will represent 18% of the total media budget. Are you convinced? Please be aware, the methods mentioned overheads are considered to be traditional. There’s a need to be different from others to stand out, which is online communities.

    dollars.jpg Online communities, a gold mine

    The virtual world bristles of mysterious dark networks are often difficult to understand: you may be questioning, “How does it work?”, “What’s the reason of this gathering?” Nevertheless the online communities represent a huge potential market for the companies. That is why it’s vital that you decode the behaviours of this parallels worlds and we will give you several keys for that.

    Little reminder: what is an online community? For Jeremiah Owyang, a web strategist, “an online community is a community of people with similar goals or interests connect and exchange information using web tools.”

    The mechanism: The online communities function as a beehive: The members recognize themselves and develop a feeling of ownership almost immediately. Moreover the implication of the members creates flows and stocks. Theses flows and stocks spawn a real worth for the members and spark off a lot of ulterior visits. These successive visits favour the creation of micro network. The activity of the members implements a role for each and reaches of the distribution of status for the members. We assist to the creation of online networks as in the real life as we assist to the creation of a beehive.

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    Why: Nowadays, the internet is a common tool for almost everything and it became yet the favourite tool in sharing ideas or goals. The most feasible reason for the booming of communities is that people have nature for the need to exchange, to communicate, to give or obtain opinions about a product, a problem, a brand. With the generalization of the technologies, everyone can interact together via internet.

    The best and a more recent example of online communities is Facebook. It is a website of social networks destined to regroup high school students and university students. Facebook give their opportunity to create or to be a member of a group in accordance with the goals or interests of each. Facebook is an interactive platform where people can share for example photos or meet people via the counts of friends. For the company standpoint, an online community regroups a huge targeted market.

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    Companies in the market

    Online communities in the Internet are really attractive nowadays. The number of individuals participating in online communities becomes more and more important. According to an analysis of Forrester Research, 70% of adults go online at least a time daily on these sites.

    These online communities become an interesting target for companies. That is why more and more companies invest on this sector; we even speak on exponential publicity expenditure on online communities such as Facebook or My space.

    For displaying that this model is successful and useful for the brands, here is some example of famous brand which are already present on this segment.

    Newspapers:

    If we take the example of newspaper such as The New York Times, the news has federate more than 9,000 members around the world. These present several advantages: Firstly, The New Work Times could reach a new target, younger people because some of articles adjust to the way of demands. Then, viral marketing plays a major role because the internet users could download some effectuations on his own page such as Quiz or articles which are popular and share within his network.

    Here, we have an example of the National Geographic magazine. This application could be downloading on Facebook, My space and Friendster for having the last news, pictures or videos.

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    Other Brands:

    11.800-flowers.com is an online florist which use Facebook for acquire customers and make them loyal. The aim is of course to get famous in the community, in fact with the application created by the florist you could send virtual flowers or you could directly buy in the website of 1800-flowers. Then, you received some points in the loyalty program. Here, Facebook is a real tool of CRM (Customer Relationship Management) and canvassing of new customers.

    Victoria’s secret is a lingerie brand, to attract more customers and to value them, this brand have sponsor Facebook in exchange to have their own pages on Facebook.

    We know that there are around 150 companies which sponsor Facebook, we have seen some example just before but we can mention more: Pepsi, Nike, Jeep…To have their presence on the online communities, companies have to spend 300,000 Dollars for three months. What is the effect for spending such amount? If we take the example of Victoria’s Secret, there are 347.387 members in the community. On the homepage, we can have some discounts for special article (“Get 5 off any pink bag”). Of course, these huge communities bring more customers to the brand. An important fact is also that these customers follow the brand, they go very often to see the updates on new discounts.

    To take another example, Target Stores has invests 500,000 dollars for sponsors pages on Online community banners. The result is efficient, 6% increase in sales. It is really an interesting way to make your customers loyal. Marketing online and particularly with online communities is definitely a new marketing approach that you have to take in consideration.

    Have you asked yourself on how and why to invest in online marketing communities?

    Why invest?

    You can create your own profile in online communities for better visibility. A fact which is also really interesting in using online marketing communities is “the buzz” effect; it means the word of mouth. Indeed, friends can speak within themselves and exchange their favourite sites so you can gain recognition and acquire more notoriety. We can add that this phenomenon is famous within teenagers. This way of marketing will create a personal relationship or bonding with you and your customers.

    Moreover younger people are attracted by bonus that you can offer to them such as Victoria’s Secret like what we have mentioned before. To gain their attention, you could also have some free downloads such as games like Pepsi.

    Another way is to invite them to exclusives events via emails for example. Victoria’s Secret did that with its “friends” of MySpace and Facebook to win invitation for a “DJParty” (pyjama party) exclusive.

    What are the different options?

    Facebook allows software engineers to create pages and they could keep all the benefits general by these pages.

    You have several options:

    • Sponsors
    • Promotion on other pages
    • To sell publicity space
    • To sell online services
    • To sell products

    Concerning Facebook, we can speak on the development of “Facebook economy”.

    What is the impact for the companies?

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    The companies have seen “Facebook” as a tool for communication. The firm could send some personalized advert and create “buzz” effect around a product or a brand. Thanks to online communities, you would have no problems in acquiring a detailed data based. We can find all the criteria and the demand of the customers, the way of their thinking and their network of friends. It is an eldorado for the advertiser and marketing specialist. It is also a new way of communication and the aim is that firm could have an answer. For example, a travelling company could create a page for booking train or plane ticket. Finally, it is a “low cost way” to make advertising, less expensive than the TV and become more efficient when we know that the turnover of Facebook is around 150 billions of dollars, while as the firm make a benefit of 30 million dollars.

    According to Microsoft Digital Advertising Solutions in 2007, we can quote some appealing figures:

    • 23% of the online communities users add some commentary to the advert
    • 25% of them diffuse the advert to friends
    • 43% of them visit a pages of brand

    We can say that online communities such as Facebook are advert drivers which reach potential customers of the brands.

    Limits on online communities for the company

    • It is significant to have a good and fast connection. Low speed Internet connections acts as a barrier.
    • Due to the incapacity of touching, taste, smell or try. It takes time for an internet marketer to gain trust of online users.
    • Online marketing attracts many business oriented people resulting in an overload of information.
    • Hence the only way to make the information stand out is to keep up with other tough competitors.
    • Some companies have received some negative critics on facebook, Wal-Mart or Mac Donald’s concerning the way of hiring.

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    Today, online communities are supported by strong sponsors but we will assist to a decline stage because of the worldwide competition despite some possibilities of evolution. We can implement a future way of advertising online for an online mall. It could be a new opportunity in investing on online marketing.

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