Important Trends

Here are a few important trends and key takeaways to keep in mind as you build out your Facebook marketing program:

1. Be where the customers are—Especially if you are struggling with SEO and SEM efforts to drive traffic to your website, try going where your customers already are (that is, Facebook). Facebook Pages are the new website.

2. Get local—Facebook autocreating Place Pages aside, local business profiles are inevitable replacements for the Yellow Pages. People have a natural affinity for the local shops and restaurants where they spend time and will continue to “check in” to these local establishments. Brick-and-mortars can capitalize on the advantage of their physical locations to deepen customer connection and word-of-mouth impressions on friends’ News Feeds.

3. Personalize experiences across the Web—Facebook for Websites and hypertargeting capabilities are enabling
highly social and personalized experiences across the Web. When people visit your website, they will increasingly
expect the option to login with their Facebook credentials and to be able to bring their Facebook profile identity and
friends with them as they search, shop, or interact otherwise with your site.

4. Grow your company’s network—Social networks are growing. Studies suggest that although the average number of close connections is not deviating much from Dunbar’s number of 150, most people’s social networks are growing as a result of staying in touch with weak ties via Facebook. In fact, by inventing “fan relationships,” Facebook is extending the notion of weak ties to include not only people but also brands and businesses. For businesses, having a
bigger social network of fans is akin to having a bigger funnel of people to market to.

5. Recognize that customer loyalty has never been more valuable—In the Facebook Era, suddenly every customer has a voice, and what they say matters to their friends. Increasingly, friends are becoming more prominent filters and recommenders for news, information, and products, heavily influencing how decisions are made. When you win over (or lose) a customer, you could be winning over (or losing) an entire friend group.

Along the same vein, beware too of these common pitfalls:

1. Getting swindled by social media “experts”—It feels like everyone is a social media expert these days. Beware of fake opportunistic “experts” who have no track record of execution.

2. Outsourcing too much—Ben Smith, a marketing manager at Dunkin’ Brands, always warns companies against
outsourcing social media to their digital agency (probably for the same reason that most of us wouldn’t outsource the
company website). Facebook is a critical channel for keeping a pulse on the customer voice, and managing social
media well needs to become part of your corporate DNA. No one knows your business and your customers better than
you, and keeping Facebook efforts close allows you to adapt and respond quickly to real-time feedback. Exactly how much you outsource versus keep in-house will vary by organization, but many business leaders are choosing to own the overall social strategy themselves and delegate certain pieces, such as media buys and creative.

3. Hiring people to do what can be automated—Nor should you over-hire. Social media archiving and brand compliance work in particular can be extremely timeconsuming to do manually. Don’t make the mistake of turning social media into manual labor when there are plenty of ways to automate these tasks through off-the-shelf or custom-developed technology solutions.

4. Focusing only on technology—Technology is often part of the solution, but never the full solution. The hardest part about making Facebook work for business is the organizational change required. Successful programs require winning executive buy-in, properly training employees, and fostering a culture that is receptive to transparency and change.

5. Resting on your laurels—Facebook is rapidly evolving and shows no signs of slowing down. New features are
released every week, with major product changes almost every quarter. This is why companies can’t afford to drag
out RFP’s or wait for long decision cycles. By the time a decision is made, Facebook’s technology has changed. Partner with a vendor you know can keep up. Focusing too much on today’s features and requirements is dangerous because they may soon become obsolete.

How Facebook Is Changing the Online Marketing Discipline

Thanks to Facebook, the Internet is evolving from a contentcentric Information Web to a relationship-centric Social Web. A decade ago, information was at a premium. Today, it is relationships that are king.

Last decade, search marketing taught us to focus on maximizing each transaction, measured by click-through rates and conversions. Today, Facebook fan relationships encourage us to take a longer-term view. Rather than maximize for a single transaction, companies need to optimize for the lifetime of a customer relationship. It’s not about how much a customer buys today, but rather what she buys over a lifetime, together with how she influences others to (or not to) buy.

As marketers, we need to move up the marketing funnel and engage audiences sooner in the buying cycle because this
gives us an opportunity to build trust and help influence the purchase decision. In contrast, search marketing doesn’t
provide much opportunity to influence. By the time someone is searching on Google for “digital camera,” chances are high he is already pretty far along in the purchase decision. There is not much opportunity to influence beyond price, and that is not a game most of us want to be in.

Online marketing still needs to be performance-based, but instead of measuring click-through rates for a single
campaign, we can invest and analyze with a longer-term view.

In many ways, the Facebook Era is a throwback to the days before the Internet. This is especially true for brick-andmortar businesses, which have long mastered the art of instore customer connection. 1-800-FLOWERS.COM founder and CEO Jim McCann sums it up nicely in his foreword to my book, The Facebook Era:

“Past technologies helped drive down costs, improve reach, and grow the business, but in the process we lost something very important: customer connection. I have missed the direct customer dialog I had in our retail flower shops. The digital age has felt largely transactional in comparison. This is why I feel even more excited about the Facebook Era than I did about toll-free numbers or the Internet. The Social Web is about connecting with customers again, hearing their stories, sharing in their joys and sorrows and the most important moments of their lives. It’s about reopening the dialog so that businesses can put customers back in the driver’s seat and keep getting better.”

The challenge to all of us is how to replicate this customer connection through the online medium. Fortunately for us,
there is no better tool for this task than Facebook.

What exactly the future holds is anyone’s guess, but what we do know is that, thanks to Facebook, your business will never again be the same—whatever your industry, wherever you work, and whether you are in marketing, IT, or another corporate function.

Five Steps to Hitting a Facebook Home Run

1. Assign an owner and educate your organization. Hire or assign a social media director, a companywide
owner who sits on the executive team (or in marketing) who coordinates social media efforts across the organization.
Some companies, such as DeVry Inc., have had success with convening a social media task force consisting of representatives from various departments.

People are most afraid of the unknown, so educating employees on how to achieve their personal and department
goals using Facebook mitigates their natural resistance to change. Organizations like Coldwell Banker and the State
of Utah now incorporate Facebook training as part of ongoing training for employees. Other companies have encouraged “reverse mentorship” on social media topics where Gen-Y hires help teach older employees the ins and
outs of Facebook. There are also a number of popular conferences now that provide an immersive experience for
key employees to quickly learn and absorb best practices to bring back to the company

2. Start monitoring and managing existing social media brand assets. The first place to start is to search for any existing brand conversations taking place on Facebook. Start tracking and responding to those first to build experience and context to inform your overall Facebook strategy. Understanding what is being said about your company and who is saying it provides valuable context for setting your business objectives and subsequently developing your plan. For example, if there is a lot of negative sentiment about your company on Facebook, then one of your top social media goals should be to address negative comments and elevate your brand. On the other hand, if people overwhelmingly love your brand and are creating viral videos, writing glowing reviews, and posting photos of themselves in your stores, your social media goals might be to recognize and promote these individuals across your Facebook and Web properties. Plan from day one to measure and monitor over time, as trends are generally more important and telling than raw numbers.

A common situation that many large brands find themselves in is that by the time they get serious about engaging on
Facebook, fans have already beat them to the punch and have created unofficial Facebook Pages or Groups. Take Ferrero, the European chocolate maker whose products are popular and loved around the world. In 2008, Ferrero
executives discovered a zealous fan had created a Facebook Page for Ferrero Rocher, one of their most popular
products. But not only had a Page been created—it had actually become one of the most popular Pages on Facebook, with more than two and a half million fans! Instead of reinventing the wheel and losing the community momentum, executives decided to collaborate with this fan and co-opt the page.

Without taking the time to research and listen first, brands might accidentally create redundant efforts or compete
against their own fans. Instead, brands at minimum should be monitoring and complementing, or in some cases even
working directly with grassroots efforts to best engage their community of fans.

3. Map business goals to Facebook’s capabilities. Review high-priority business goals to see which might be
addressed well using Facebook. For example, if your company priority is to appeal to new audience segments,
you may want to consider creating highly tailored Facebook Pages for those audiences and running Facebook Ad
campaigns hypertargeting those audience profiles. If, on the other hand, your organization’s top business goal is
improved customer service, you may wish instead to reorient your Facebook Page around customer questions,
issues, complaints, and case resolution.

4. Invest in corporate governance and compliance. Throughout this process, have the discipline to periodically check in with your legal and compliance teams to see if any existing or potential future activities may be in violation of company policy or industry regulation. Seeing how regulatory bodies from the FTC and SEC to FINRA and
FDA are starting to clamp down on Facebook, the inconvenience will be well worth being able to avoid costly lawsuits and hefty fines.

The following case study profiles how Farmers Insurance Group tackled the issue of corporate governance in a highly
regulated industry and is reaping the benefits of social media across its 15,000 agents across the country.

Case Study: Empowering Field Reps with Corporate-Approved Content and Compliance

Farmers Insurance agents

On the heels of a highly successful corporate Facebook Page initiative by corporate marketing last year, a number of
Farmers Insurance agents began creating their own Facebook Pages to connect with their customers and local
communities.

The challenge for corporate marketing quickly became how to ensure FINRA compliance and corporate governance on
these locally driven Facebook Pages while empowering each of their 15,000 agents to have an authentic personality and voice on social media. It is a tricky balance because, although agents are not Farmers employees (each agency is
independently owned and operated), they represent the brand.

Another challenge was what happened after agents created a Facebook Page for their agency. Agents and their staff did
not necessarily have the proper systems or training to consistently post timely, relevant, and interesting content, nor
were these communications being filtered and archived for compliance.

Farmers Insurance Group looked to Hearsay Social to help address these important challenges:

► Archive social network communications per FINRA 10-06 regulatory guidelines (using Hearsay’s built-in integration to the LinkedIn messaging API)

► Provide agents with social media best practices and compliance training

► Help seed agent conversations on Facebook with articles, videos, and other educational content, as well as
promotional messaging such as contests and sweepstakes

► Provide one-click distribution of branded tabs to all or a subset of agents (see Figure 8)

The results? FINRA compliance, increased agent and customer engagement, and strong and consistent Farmers
branding across all agent Facebook Pages. Each agent was up and running on Hearsay within a matter of minutes, and
more than 90% quadrupled their number of Facebook fans in the first 60 days. A recent Rose Bowl sweepstakes campaign run through Hearsay’s branded tab distribution system (see Figure 8) was one of the most popular and successful in the marketing team’s history.

Farmers uses Hearsay Social’s Facebook

Farmers uses Hearsay Social’s Facebook tab distribution platform to push branded tabs (such as its recent Rose Bowl sweepstakes campaign) to local agents’ Facebook Pages. Certain aspects of the tab like the logo are fixed for brand consistency, with customization opportunities for agents who wish to add a personal message or touch.

“Our 15,000 agents are our most valuable brand representatives. For eighty years, we have empowered our agents with offline tools and training. It was imperative we start thinking about how to empower them with social media
tools and training, so we looked to Hearsay Social. Their technology platform is powerful, effective, and simply outstanding.”
—Marc Zeitlin, Vice President of Marketing, Farmers Insurance Group

5. Measure, learn, and iterate. After you’ve decided on goals, it is useful to define metrics around these goals to help define what success means, determine the appropriate level of investment, and measure direct value to the business. For example, “identify X new trends in the market” or “increase our Net Promoter Score by Y.” Over time, comparing results from one Facebook campaign to another, as well as across different marketing mediums, will enable you to determine how best to allocate resources across your various marketing channels.

In addition to these more traditional measures, it’s likely we will need to develop new measurement techniques. This is
not unlike a decade ago when the notion of “cost per click” was developed for measuring online ad performance. The
Facebook Era introduces a concept of “social customer lifetime value,” which I simplify and summarize in the following sidebar.

Social Customer Lifetime Value (sCLV)

Customer lifetime value (CLV) is a popular marketing metric that approximates the business “value” from a customer.
Traditionally, it has been calculated as the net present value of future cash flows from a customer relationship—in other
words, how much someone will spend on your products or services across his or her lifetime as a customer. As a business, you wouldn’t want to spend more on marketing and selling to someone than her CLV minus the cost of goods sold, because then you would be losing money.

CLV has been instrumental to the marketing discipline, but perhaps it is outdated. Seeking to incorporate the social
word-of-mouth effects of customer engagement on Facebook, I developed a new way of thinking about CLV, which I call social customer lifetime value (sCLV):

sCLV = CLV
+ Sales from word of mouth on Facebook
+ Customer support savings
+ Product revenue from crowdsourced ideas

This example accounts for 1) incremental word-of-mouth News Feed referrals from a customer engaging with a
Facebook Page, 2) support savings from community questions being answered by another customer instead of a company’s own support staff, and 3) revenue generated from a product or feature suggestion posted by a customer on
Facebook. sCLV will be calculated differently for each company based on the business goals defined and initiatives
pursued. Charlene Li, founder of Altimeter Group, recently developed a number of helpful tools and calculators relating to this concept

Balancing Corporate and Local Initiatives

Distributed, “corporate/local” companies, such as brick-and-mortar chains and franchises, insurance companies,  banks, and directselling organizations have a unique set of challenges on Facebook. How do you align field reps, franchisees, store managers, agents, and affiliates with corporate brand guidelines while empowering them to have their own voice? Many corporate executives initially feel frustrated when they realize social network profiles such as
Facebook Places and Yelp profiles are being autocreated for each agent and store location (behind the scenes, Facebook and Yelp are importing public business directory listings), or that local agents and stores themselves are creating their own Facebook profiles. Rightly so, they worry about lack of visibility, loss of control, damage to the brand, and even legal liability for what local brand agents post.

Given that there is little corporate can do to prevent or ban these local profiles, many corporate/local executives are learning to embrace them. When properly managed, local-originated content is actually resulting in substantially higher consumer engagement, which can be tremendously beneficial for the brand. While consumers identify with national or global brands, the actual customer experience happens at the local level through the physical locations they frequent and now check-in to via Foursquare or Facebook Places.

It then becomes a question of how corporate can empower agents and stores with the right tools, training, and messages. As you have likely experienced first-hand, franchisees and local establishments are eager to get involved with social media, but they often don’t know what to say after they’ve created a Facebook Page or Twitter account. Worse yet, some locations say all the wrong things—for example, they are too salesy, they fail to delete profane  language, or their posts contain misspellings—all of which can damage your brand. Other locations hit the ground running, pushing out top-notch content for a few weeks, but then it ends abruptly. A local page gone stagnant quickly fills with spam and reflects poorly on the brand.

What is the solution? Distributed organizations have to balance corporate with local Facebook initiatives, but with a little extra effort, they can harness invaluable local market knowledge, reach, and customer connection. The following sidebar illustrates how global fitness company 24 Hour Fitness is successfully tapping into the Facebook marketing opportunity at both the brand and local levels through a combination of policies, tools, and training.

Case Study: Balancing Corporate and Local Initiatives on Facebook

24 Hour FitnessLast winter, 24 Hour Fitness had developed a rapidly growing corporate Facebook Page with 100,000 fans but needed to figure out a Facebook strategy for its 400-plus fitness clubs across the country. Especially following the launch of Facebook Places, the corporate marketing team realized that local Facebook Pages for each club would be the perfect way to replicate and extend the fitness dialogue and experience between visits.

The challenge was how to balance protecting the brand with encouraging each location to cater to its unique market, such as local preferences, habits, and even weather. High-priority goals included the following:

► Monitor and analyze corporate as well as local efforts on Facebook and Twitter

► Utilize a content workflow system to approve, reject, or suggest content (including Wall posts, branded tabs, and promotions) to all or a subset of locations

► Encourage localization to increase consumer engagement and check-ins while enforcing brand compliance

24 Hour Fitness sought the help of Hearsay Corporation, a Facebook Preferred Partner that has developed a social
media–management tool for distributed organizations. The 24 Hour Fitness marketing team works with local club
managers to create a Facebook Page for each location and then uses Hearsay’s administration tool to centrally monitor, analyze, and provide Facebook content suggestions to the various locations across the country (see Figure 7). Club managers can view the suggestions, personalize and localize, then one-click publish to their Facebook Wall and
Twitter account.

The results have been higher engagement both by consumers and local club staff, a consistent brand experience across these local efforts, and hours of work saved by the corporate marketing team and local staff each day. In addition, 24 Hour Fitness uses Hearsay’s compliance module to filter profanity and personally identifiable information which may appear in Wall posts.

“There is a tremendous opportunity for us to engage with our members using Facebook during and in-between their visits to our fitness clubs, but managing the social media activity of our over four hundred clubs was a daunting task. Hearsay Social helps us organize, empower, and measure all of these disparate local club initiatives from a central dashboard and is helping our brand reach and connect with larger audiences while saving valuable time for my team.”

—Tony Wells, Chief Marketing Officer, 24 Hour Fitness

Hearsay CorporationHearsay Corporation, a Facebook Preferred Partner, helps distributed organizations centrally manage content, compliance, and workflow across corporate and local social media presences (such as Facebook Pages, LinkedIn profiles, and Twitter accounts).

Five Pillars of Facebook Marketing

There are five ways companies are engaging audiences with Facebook (generally in this order): Pages, Places/Deals, Ads, Apps, and Facebook for Websites (also known as Facebook Connect):

1. Facebook Pages—Facebook Pages are essentially Facebook profiles representing a company, brand, or other business entity—they are like business websites on Facebook. Instead of friends, Facebook Pages have fans. When someone “likes” (becomes a fan of) your Page, she is both opting in to receive your Page updates in her News Feed as well as publicly declaring an affinity for your brand. When fans “like,” post, or comment on your Page, it is published to their friends’ News Feeds, generating free, word-of-mouth impressions for your business. In addition, Facebook provides Page administrators with aggregate demographic data, page views, click-throughs, and other valuable analytics. Facebook Pages provide an opportunity to learn about and truly engage your audience while building customer relationships and loyalty.

Creating a Facebook Page establishes your company’s home base on Facebook. Instead of asking customers to
visit your website, you are going to them on Facebook where you know they already spend time. A growing number of businesses, in particular small businesses, are even foregoing websites in favor of a Facebook Page because it is far cheaper and less time-consuming to create, drive traffic to, and maintain. For bigger brands with an existing website strategy, Facebook Pages can play an important complementary role to test new campaigns or for reaching new audiences. (Without going into too much detail, Facebook Groups are generally not recommended for business because they are associated with the personal profile of whoever is posting and do not provide the same level of analytics.) Create a Facebook Page.

Of course, setting up a Facebook Page is the easy part. The challenge is how to keep the Page interesting by periodically posting timely and relevant content and how to attract and retain fans. For more on this, check out Chapter 11 in The Facebook Era (click here for an excerpt on my blog).

Facebook Page for The FacebookFacebook Page for The Facebook

2. Facebook Places and Deals. Facebook Places is Facebook’s response to popular location-based services such as Foursquare, Yelp, and Gowalla. Facebook users “check in” to share their physical location (such as a restaurant, airport, gym, and so on), see where their friends are, and receive location-based deals. As with Facebook Pages, your business benefits from free word-of-mouth impressions every time someone checks in at your establishment and this gets published to his or her friends’ News Feed. In addition, Facebook Deals allows local merchants to offer special location-based promotions to any user who checks in to their Place Page.

When Facebook Places launched in August 2010, approximately 14 million local business Place Pages were automatically created from business directory information. Facebook users who search for but do not find a business on Places are also given an option to create a new Place Page. To claim a Place Page, click on the link that says, “Is this
your business?” You will be asked to enter an address and phone number and provide one of the following proofs of
ownership: articles of incorporation, business license, or BBB accreditation.

Note that Facebook Place Pages may be created for certain businesses that already have a traditional Facebook Page.
Facebook now offers the option for business owners to merge their Pages and Place Pages (though be warned there are some bugs!) and are working toward being able to provide a single Page object that fully integrates the two. Visit Facebook Places.

3. Facebook Ads. Facebook Ads are similar to Google AdWords, except instead of targeting search terms, Facebook Ad campaigns target specific audience profiles (known as “hypertargeting”). Facebook’s sophisticated platform allows advertisers to choose which users on Facebook get shown an ad. Advertisers can target profiles based on filters like location, gender, age, education, workplace, relationship status, relationship interests, and interest keywords.

Case Study: Elle Jae

Award-winning photojournalists Elle Jae wanted to focus on shooting weddings that have a cultural or artistic element
(their specialty). They created a Facebook ad campaign hypertargeting Facebook users whose relationship status is
set to “Engaged” and who listed “art” as a profile interest (see Figure 5). Recognizing the highly referral-driven nature of their business, they also used Connection Targeting to specifically reach people who are friends with their existing
Page fans.

The result? Fewer but much more highly qualified leads at a lower cost than from Google AdWords ($0.33 instead of
$1.48 per click, with higher conversion). Instead of bidding up the same keywords as every other wedding vendor, Elle
Jae is able to focus on the exact profile of brides- and grooms-to-be with whom they enjoy working most.

Facebook Ad from award-winningFacebook Ad from award-winning wedding photographers Elle Jae. They use
hypertargeting techniques on Facebook to focus their campaign on reaching
engaged couples only.

Facebook Ads are powerful because they allow advertisers for the first time to reach very precise audience segments.
Hypertargeting techniques can improve ad conversions and reduce costs because they allow companies to buy and show ads only to those most likely to buy. It is valuable even for brand advertisers who might wish to reach much larger audiences because it enables them to tailor messages to specific audiences as well as bid different amounts for more or less valuable audience segments.

Like AdWords, Facebook Ads can be purchased in either a CPC (cost per click) or CPM (cost per thousand impressions) model. Ads generally have four components: destination URL (which could be an external landing page or Facebook Page, Application, Group, or Event), title (25 characters), text (135 characters), and image (110 x 80 pixels). Create a Facebook Ad.

4. Facebook for Websites (originally Facebook Connect). One of the most interesting things Facebook has done is open up their technology so that any external website can integrate Facebook’s functionality. Facebook for Websites
lets Facebook users authenticate to your website using their Facebook login. Instead of asking site visitors to register for a new username and password on your site (high barrier to adoption), you can implement Facebook for Websites’s
single sign-on feature. Generally this results in more logins and therefore more data about who is coming to your site.

Once you have implemented Facebook single sign-on, you can tailor the content and experience for each site visitor
based on his or her friends and what their activity has been on your site. You can also embed Facebook’s “Like” button
and other social plugins with one line of HTML added to your web page. When site visitors interact with any of these
plugins, the activity is shown to their friends via the News Feed, which again provides free word-of-mouth impressions
back to your business.

Facebook for Websites's social discussionFacebook for Websites’s social discussion widget embedded

5. Facebook Apps. Warning: This is for advanced users only and will require deep involvement from your IT group or
external developers. Facebook Apps provide businesses with an opportunity to integrate in the core Facebook user
experience. The most popular Facebook Apps are games such as Mafia Wars, Farmville, and Bejeweled. However, the most common Facebook Apps created for business usually appear as a custom tab on your Facebook Page.

Why build an app? Less well-known brands with fewer Page views and fans typically find it is not worth their while
to invest in building a Facebook App because of the higher barriers to adoption. However, for those with the resources
and a big audience, Facebook Apps allow for greater customization and deeper user engagement than Pages and Ads alone.

There is currently a big push toward social commerce on Facebook. Retailers are finding that people do not like to
leave Facebook, so shopping experiences that originate on a Facebook Page but take people off Facebook face much
higher rates of cart abandonment. For this reason, a small but growing number of companies are building apps to
provide end-to-end shopping experiences on Facebook. For example, Facebook users can order pizza for delivery from
Pizza Hut without ever leaving Facebook. Similarly, JC Penney shoppers can access the entire catalog and place their orders through the app on JC Penney’s Facebook Page.

It would be very aggressive (and likely redundant) to try to tackle all five options Facebook has provided for  businesses. Usually, companies start with one or two of these and expand naturally as they grow more sophisticated and learn about what their audiences respond to best.