Email, Facebook, And Twitter: Retention Or Acquisition?

by Morgan Stewart, Email Insider, 15th September 2010

Email, Facebook, and Twitter each provide marketers with the ability to compile a database full of customers and prospects. This ability to gather consumers into a visible list certainly looks like the familiar paradigm of database marketing. And given the fact these consumers are now part of "our databases," it seems logical that these would meet the criterion for retention marketing. After all, they are in our databases, so the job of acquisition is done, right?

Based on the Subscribers, Fans, and Followers research I have been engaged in over the past several months, looking at the differences in how consumers want to engage with brands through these three channels, I believe this is a potentially serious mistake.

First, consider newly released data on the impact one-to-one communications through these channels have on increased purchase intent.

• After becoming an email subscriber, 27% of consumers say they are more likely to purchase from a brand and another 41% are neutral, which I've interpreted as they may or may not be willing to purchase more. Giving the benefit of the doubt, let's say 68% may be influenced to purchase MORE after becoming a subscriber.
• After becoming a Facebook Fan, 17% are more likely to purchase, with another 34% on the fence. In total, 51% may be influenced to purchase MORE after becoming a Fan on Facebook.
• After following a brand on Twitter, 37% say they are more likely to purchase, with another 31% on the fence. Like email, 68% may be MORE likely to purchase after becoming a follower.

Facebook: It may seem bizarre given the incredible success of Facebook in general that it trails both email and Twitter in terms of its ability to influence increased purchase intent. Add in the recent study by Syncapse, that showed Facebook Fans spend more, are more loyal, more likely to recommend, and have more affinity for the brands they Fan (or "like") than those who don't.

But think about it. Consumers are generally fans in real life before they "like" companies on Facebook. As such, they already purchase from and endorse your brand frequently. Ever had a friend with a Coca-Cola room in his house? Clocks, barstools, soda fountains -- all Coke. It is possible that level of fan could purchase MORE Coke products? Not likely, but they sure spend a lot of time advocating for the brand. Don't they?

Twitter: Consumers who follow brands on Twitter are actually the most likely to purchase more often after following a brand. The challenge for marketers is that this is still a fairly small segment of the online population. Only 5% of online consumers are daily Twitter users that follow brands on Twitter. Do the math, and you'll see only 3% of online consumers are likely to be influenced to purchase more frequently through Twitter.

So, are these retention-marketing channels?

To some degree, of course they are. However, I believe it is more exciting to think of Facebook and Twitter as acquisition channels.

Facebook is all about connecting with friends and being entertained. Those are the primary reasons people go to Facebook in the first place. Moreover, when people "like" brands, they generally do so to tell others about themselves. If I like Nike, that tells you something about my personality. Some call it social badging, others call it a social resume. Either way, it's about them. It's not an open invitation to receive marketing messages.

Even so, they have liked your brand enough (in real life) to consider this an expression of their personality. They have already advocated for you to their friends. Question is, could they endorse you more? Absolutely. In fact, every time they "like" something you post on your Facebook page, they are endorsing you. Each time they comment on one of your posts, they invite their friends to join in and engage with your brand also. Facebook allow marketers to see word-of-mouth happening. It allows marketers to fuel word-of-mouth. And, to me, word-of-mouth is an acquisition strategy, not a retention strategy.

The same goes for Twitter. It's great that this 3% of consumers may purchase more often, but even greater significance should be placed on the ability of this segment to carry your message beyond Twitter through blogs, private forums, and product reviews. In this same study, we discovered that daily Twitter users are an average of five times more likely to write blogs, and three times more likely to post comments and product reviews than other online consumers. They are VOCAL! The trick is to keep this group happy so that they will generate content that influences others to try your products. Again, it's about acquisition.

Email stands alone as the channel that is squarely in the retention marketing camp. Nine-three percent of U.S. online consumers receive at least one permission-based email message per day, making it by far the most broadly used of these channels for consumers looking to engage brands online. As such, it is likely to drive increased purchase intent among the largest number of online consumers. Combined with the high value consumers place on trust and privacy, and their expectations for relevant and exclusive content, email should serve as the cornerstone for brands' retention marketing strategy.

Expansion of your brand's reach online happens when these channels are integrated into a cohesive strategy. Thinking beyond the database and driving consumers to interact across multiple channels offers marketers the opportunity to leverage these channels for both retention and acquisition.

Social Networks, Blogs and Games Dominate US as Email Declines.

August 2, 2010 Dean Takahashi, SocialBeat

CommentIn a big shift from just a few years ago, Americans spend nearly a quarter of their time on social networking sites and blogs, according to released today by The Nielsen Company.

A year ago, only 15.8 percent of time spent online was devoted to social networks. Online games came in second in terms of time spent online, accounting for 10.2 percent of time spent on the internet, compared to 9.3 percent a year ago.

One of the big losers in the survey was email, which now accounts for only 8.3 percent of time spent online, compared to 11.5 percent a year ago. Another loser was portals, 4.4 percent now compared to 5.5 percent a year ago. Instant messaging was also down at 4.0 percent, compared to 4.7 percent a year ago.

Americans spend about a third of their online time communicating and networking across social networks, blogs, personal email and instant messaging.

“Despite the almost unlimited nature of what you can do on the web, 40 percent of U.S. online time is spent on just three activities – social networking, playing games and emailing, leaving a whole lot of other sectors fighting for a declining share of the online pie,” said Nielsen analyst Dave Martin.

It’s worth nothing that online games overtook personal email in the past year, moving into second place behind social networks. Online video and movies also saw significant growth, now at 3.9 percent compared to 3.5 percent a year ago. During June, more than 10 billion videos were streamed to web users in the U.S. On average, Americans spend 3 hours and 15 minutes per month watching online video.

All of this news is great for social network companies such as Facebook and Twitter. It’s also good for social gaming firms such as Zynga and online game companies such as Activision Blizzard, maker of World of Warcraft. But it explains why email and portal companies such as MSN and Yahoo are having a tough time.

On mobile phones, email is still king, accounting for 41.6 percent of mobile internet time, up from 37.4 percent a year ago. Social networking time on mobile phones was up this year. But portals are the second-heaviest activity on the mobile internet, accounting for 11.6 percent of time, down from 14.3 percent a year ago. Social networking is at 10.5 percent, up from 8.3 percent a year ago.

Music and video/movies saw 20 percent increases on mobile during the year. But news/current events and sports sites saw more than 20 percent drops. Oddly enough, there was no separate section for games, and entertainment was a fairly small part of the overall pie.

Social Networks Overtaking Email?

I'm not sure if the data is really accurate, but there's no denying there's a huge trend towards people using social media more often. Social media is becoming an integrated part of many's people's lives but whether it can overtake email as the most popular activity in the digital world? I'm not so sure. It's a great thought provoking piece of research from Nielsen though. Check out this article by Brian Morrissey at AdWeek.

Nielsen: Social Nets Overtake E-mail
As online paradigm shifts, advertisers must find a way to add value, rather than follow the 'push' model

March 9, 2009, By Brian Morrissey, AdWeek.com

NEW YORK Social networking has overtaken e-mail as the most popular Internet activity, according to a new study released by Nielsen.

Active reach in what Nielsen defines as "member communities" now exceeds e-mail participation by 67 percent to 65 percent. What's more, the reach of social networking and blogging venues is growing at twice the rate of other large drivers of Internet use such as portals, e-mail and search.

Nielsen, which is the parent company of Adweek, concluded that the shift to social activity online would have profound effects on marketers and publishers. For publishers, social networks are eating into time spent with other online activities, according to Nielsen. For advertisers, the phenomenon at this stage represents mostly unfulfilled promise for a deeper connection with consumers who are more difficult to reach in social environments.

The rise of social media coincides with the decline of portals. Social networking appears to be snatching away users' online time formerly spent with e-mail, traditionally a large draw to portals. Such fragmentation is decreasing portals' importance to advertisers. In a separate report, top digital shop Razorfish said its spending at portals declined from 24 percent in 2006 to 16 percent in 2008.

Nielsen found that two-thirds of the world's Internet users visited a social networking site in 2008. All told, social media now accounts for almost 10 percent of Internet time. Facebook is leading the pack worldwide, with monthly visits by three out of 10 Internet users in nine global markets, per Nielsen.

The growth in social media is not confined to the U.S. Nielsen charted comparable or higher growth for Australia, Spain, Italy and the United Kingdom.

Yet for now, user growth at social sites is outpacing advertising increases, per Nielsen. This will likely change, Nielsen said, as models shift to value engagement over exposure.

"As the online industry matures and the value of online real estate is increasingly measured by time spent, rather than pages viewed, a significant shift in advertising revenue from 'traditional' online media towards social media could be realized -- if the successful ad model can be found," the report stated.

The search for a workable ad model is even more urgent now that social media has broken out of the youth demographic, Nielsen found. For example, Facebook's greatest growth has come from 35-49-year-olds, and it has added twice as many 50-64-year-olds as those under 18.

Yet advertising and social media to date have mixed like oil and water. Part of that is a function of social media's communications role -- advertising has typically performed poorly in chat and e-mail. The larger challenge for advertising is to move from an interruptive role to joining conversations. That means advertisers need to find ways to add value to users' experiences, Nielsen found.

"Whatever the successful ad model turns out to be, the messaging will have to be authentic and humble, and built on the principle of two-way conversation -- not a push model -- that adds value to the consumer," the report said.