Social Media Sites Add Buy Now OptionIt has been over eleven years since our Marketing Stories section first posted a news item related to social media impact on marketing. That story from E-Commerce Times wondered about the future marketing opportunities social sites offered, though the only social media outlets mentioned at the time were LinkedIn and, two sites that are now gone, Friendster and Orkut. By 2009, when we first discussed social media in one of our first Marketing Blog postings, the effects social media was having on marketing was becoming a little clearer though there were still many who wondered whether Facebook, Twitter, and other sites would ever grow to become the power players they are now.

One of the problems in seeing the future of social media back then is that, from a marketing perspective, social media does not fall easily into just one Marketing category. Instead, it offers benefits across many marketing areas including customer service, public relations, advertising, sales promotion, marketing research, and the list goes on.

Because of the benefits it offers marketers, social media is akin, to say, using Excel. How? Well, spreadsheet calculations help marketers with many marketing decisions, from defining markets to estimating product demand to assessing the best price to charge and many more. Social media is also quickly becoming a tool for nearly all marketing areas. Of course, the big difference is that customers do not interact with a marketer’s spreadsheets, while interaction is required for social media to be effective. But just as all marketers need to be skilled in using spreadsheets, the day is quickly coming when those involved in research or product development or promotion or distribution or pricing or customer service or most other marketing tasks will need to be well-schooled in using social media.

And just to drive this point home a little more, the influence of social media continues to expand, as companies are finding new ways to obtain value. As discussed in this Re/code story, the leading social media sites are actively moving to offering social “Buy Now” buttons in an effort to expand retail sales. These buttons would not only be tied to sponsor-supported promotional postings, but may also be displayed when someone comments favorably about a product or service. While the story notes there are still challenges ahead before “social commerce” can take hold, given how social media has overcome naysayers in the past, don’t be surprised if social “Buy Now” buttons are the next big thing.

One topic we regularly discuss in our postings is how marketers often are confronted with difficult decisions. For instance, a few weeks ago we looked at how market conditions forced Restoration Hardware to make the hard choice to re-position their brand in a way that targets an entirely different market. And last October, we discussed how Target made the tough decision to alter its overall marketing strategy to appeal to changing customer demographics.

Another difficult situation that may require tough decisions be made occurs when companies are faced with determining if a popular trend within their target market is something they need to pursue. What makes these decisions hard is trying to estimate whether customers will continue to react favorably over the long run to the emerging trend. For instance, over the last few years we have experienced many fads that created excitement only to run out of steam. While in hindsight it is pretty easy to see why the interest in these fads has now diminished, for the marketer the tough decision is whether or not to take advantage of opportunities long before it is evident what will eventually happen. Even more, if a trend is not a fad but something that will create a real market, being late to the market may present problems if others have built strong positions.

We now have another example of a trending idea that will have some marketers asking the “is-it-a-fad-or-is-it-for-real” question. As discussed in this Fortune story, a craft brewer in Illinois, Small Town Brewery, is generating interest with a new type of beverage – Root Beer. Of course, the emphasis on this product is the beer, as it is an alcoholic beverage and not a carbonated soft drink. What is interesting is this product now ranks within the top 30 of all craft beers in the U.S.  As the story notes, other brewers are jumping in with their own Root Beer, including Boston Beer, maker of the Sam Adams brand.

Even if alcoholic Root Beer is more than a fad, it likely will be perceived as a seasonal beverage and not something with consistent year-round sales. But then again, it could tap into an unrecognized need and find a niche market in the same way Mike’s Hard Lemonade has done. Certainly something to watch and, for those of legal drinking age, something to taste!

When deciding where to direct promotional funds for Internet marketing, marketers often focus on options that will offer a clear view of the return it will provide on their investment. For instance, when it comes to online advertising, a popular metric for estimating success is the percentage of clicks for each time an advertisement is presented to site visitors. Additionally, marketers will also consider whether a potential advertising placement is on a website that is of interest to their target market. For example, a company that manufactures rock-climbing equipment is likely not spending money to advertise on a food magazine website.

Another factor marketers may consider is the perceived reputation of the Internet site where an ad may run and whether it matches what the marketer believes is appropriate to its organizational values. If it does not, the marketer may not consider advertising on the site even if the target market provides high traffic to the outlet.

A good example of an Internet site, whose reputation may be causing advertisers to turn away, can be seen in this Los Angeles Times story. It reports on how companies seem to be avoiding advertising on Reddit, a popular website that may best be classified as a social interaction website. The site, which some ranking services list as one of the top 50 global websites, is struggling to attract advertisers. The big reason is the reputation that surrounds Reddit. Over that last few years, Reddit has been impacted by a number of controversial issues.

Given their business model, which gives the impression that nearly anyone can create an interest area, the site appears to be at the mercy of their users, which may not be such a good model for generating advertiser revenue.

Successful consumer luxury brands hold a unique position in marketing. As high-end specialty products, luxury brands are often viewed by consumers as offering benefits that are several levels above mass-market brands. These brands obtain this position not only because of the qualities of the product itself but through other marketing elements, such as unique promotions and premium pricing. As we note in our Product Decision tutorial, specialty products also follow an exclusive product distribution strategy. Of course, one reason distribution is exclusive is because the number of potential customers is quite small compared to products targeted to a wider market. But another reason distribution is limited is that many buyers of luxury products need personalized attention when considering a purchase. For example, luxury car dealers, such as Maserati, have very few outlets but the ones they do have are staffed by salespeople, who are experienced in dealing with high-end customers.

While there may not be many people who will purchase a car online, other product categories that are easily purchased over the Internet, such as jewelry, clothing and fashion accessories, also are lacking in luxury sellers. Some luxury brands choose not to sell online because they are concerned a product, which built a reputation for being unique and exclusive, will lose this perception given the openness of the Internet. Additionally, some marketers of luxury products believe it is necessary to build close personal relationships with customers, something that is much easier to do face-to-face than through social media or online chat.

But with consumers now becoming much more comfortable shopping online, the days of limiting sales of luxury products to in-person purchasing may be coming to an end. As discussed in this Washington Post story, a leading marketing research group, McKinsey & Co., has released a report that takes aim at luxury brands’ reluctance to sell online. They suggest the target market for these brands is becoming more accepting of online purchasing of expensive products. Additionally, they say luxury brands need to become more aggressive in promoting their products online as today’s customers are much more interested in learning about products by spending time on their computer or mobile device, rather than through personal contact with salespeople.

Almost every e-commerce website, from sites run by local mom-and-pop retailers to those of massive online sellers, offers some amount of search functionality. Providing customers with an easy way to locate information among all the products an online retailer sells has become a necessity. In fact, having a strong search feature is so expected that customers may perceive a website without a useful search option as being difficult to navigate and overall unfriendly to shoppers.

Fortunately, thanks to Google and other technology visionaries, the evolution of search, particularly in terms of speed and accuracy, makes it an indispensable website feature no matter how a customer searches. For instance, one customer looking for Hawaiian shirts may search by entering just a single word in a search box (e.g., Hawaiian) and then enjoys spend time browsing a large number of results. Another customer may take a more narrow approach by entering multiple terms (e.g., Hawaiian shirt men’s medium coconut) hoping to save browsing time by narrowing the search results compared to using a single word. While a third customer may get even more specific and look for results that match a specific phrase (e.g., “all silk Hawaiian shirts”). In all cases, the results are often what customers would expect to see.

But what happens if what the customer is entering is the name of a product the website does not carry? For example, let’s say they enter the trademarked product name, Brand X Hawaiian Shirt, in the search box. What should the online retailer display for the results of this search? Well, on some websites, especially those with a search feature that is not considered top-of-the-line technology, the results may say something like: No results for your search for Brand X Hawaiian Shirt.  However, more sophisticated search tools may return links to products it carries that are similar to Brand X Hawaiian Shirt, including possibly showing competitors’ products. This type of result would appear to meet customers’ needs, particularly if they aren’t familiar with other Hawaiian shirt brands. They can just enter a name they know in the search box to see who else sells Hawaiian shirts. In fact, who wouldn’t like a search feature to offer this type of result? Well, the makers of Brand X Hawaiian Shirt may not.

As noted in this Fortune story, high-end watchmaker Multi Time Machine has received the support of a U.S. court claiming the search results of one of the world’s biggest of e-commerce site, Amazon, violated their trademark. They claim Amazon displayed competitors’ products when someone typed the trademarked name into the Amazon search engine and people who then made a purchase did so without knowing it is not a product Multi Time Machine manufactures. This argument would seem to be a little different than, say, a customer walking into a jewelry store and asking for a certain watch brand only to have the salesperson say: “We don’t carry that brand, but we do have similar watches.”

This case has been going on for several years so don’t expect this to be the final word on the matter. However, if future decisions continue to go Multi Time Machine’s way, it could have a significant impact on how search engines display results.