Why Do Affluent Consumers Connect with Brands on Social Networks?

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Luxury marketers take note, according to a February 2011 Affluence Collaborative survey, wealthy internet users connect with brands on social networks for significantly different reasons than the general population. The social networks they use to do so are different, too.

Among the general population, the main reason cited for connecting with brands on social networks was to receive deals and discounts. This result from the Affluence Collaborative survey backs up earlier research from several sources on why consumers follow brands on social sites.

But according to Affluence Collaborative, this was a much lower priority for the wealthy. Their top reasons for following brands were due to a preexisting affinity for and a desire to be kept informed about the brand. The least-cited reason mentioned by all groups surveyed was to be entertained, suggesting that social media marketers still need to provide fans with value, even if it isn’t directly in the form of a coupon or sale.

These findings coincide with earlier research from ExactTarget, which showed that a huge component of liking a brand on Facebook was due not just to an affinity, but as a means of self-expression for others to see. This promotional desire was more pronounced in Facebook users than Twitter followers or email subscribers. Affluents then, in their “love of the brands” they connect with, are largely acting as brand ambassadors.

On the surface, a November 2010 L2 Think Tank survey might appear to contradict these findings. Affluent members of Gen Y (ages 19 to 33) cited promotions and offers as the main reason for engaging with brands on social media. Women were more likely than men to engage with brands in general and to want to receive offers. However, the survey included those who were “projected to earn $100,000 in the next two years”—meaning the respondents were more aspiring than actually affluent. The second biggest motivator was still an affinity for the brand.

Data from the Affluence Collaborative study also reveals that the affluent aren’t using the same social networks as the general population. Facebook was the No. 1 social network used by all groups surveyed, but LinkedIn and Twitter attracted affluent internet users at nearly double the rate of the general population.

Any marketer targeting affluent consumers needs to know not only where to reach that audience, but what appeals to them. For wealthy internet users, connecting with a brand is largely about the brand itself, not gimmicks and offers. Affluents need to see a consistent message that makes following a brand meaningful for self-expression, just like when buying a brand in real life. Watering down the brand in order to gain a large social following may drive away the very people trying to be reached.

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5 Factors Push Email Past SocNets

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Five key factors make email a more popular means of brand interaction than social networks, according to [pdf] a new study from digital marketing firms ExactTarget and CoTweet.

Familiarity
Because email isn’t new, consumers are familiar with the technology, are comfortable using it, and know exactly what to expect, according to “Email X-Factors.” Consumers have also grown accustomed to using email as a way of engaging with brands, making it top-of-mind when it comes to interacting with a company. Consumers most frequently use email for two types of brand interaction: obtaining promotions and deals and customer communications.

1. Obtaining Promotions and Deals. The internet has simplified price and promotion shopping, and 82% of consumers will search a variety of online channels to obtain deals and promotions. For the majority of consumers, they begin their search by checking a particular brand’s corporate website. Seventy-six percent of consumers will initially seek deals and promotions on a brand’s website, and from there, 62% will sign up to receive email, while 54% will use a search engine.

Meanwhile, 17% of consumers will also include Facebook as part of their search for ongoing deals, and 3% will search for deals on Twitter.
Women are more likely than men to sign up for emails (67% compared to 57%), and older consumers are also more likely to sign up for emails to get ongoing deals.

However, the difference based on age is far less than may be expected. In fact, Millennials (aged 15-24) are twice as likely to subscribe to email in their search for ongoing deals (56%) as they are to search for deals on Facebook (28%).

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2. Customer Communications. The internet has also changed how organizations approach customer service. In the age of immediate gratification, the importance of customer service has been magnified. And although social media has given customers a way to publicly air their grievances against a brand, the majority of customers still prefer to deal with customer service issues in private—over the phone, through a company’s website, or through email. When faced with a customer service issue, 41% of customers will communicate via phone, 33% via company websites, and 20% via email. 37% of customers will send an email after an unsuccessful first attempt, making it the most common second step in the process of dealing with a customer service issue.

Consumers often turn to email for customer service requests because an immediate response is not always necessary. Email is seen as an efficient way of dealing with issues without having to wait on the phone for help, or turn to social media where privacy is lost.

Manageability
More than nine in 10 (93%) of U.S. online consumers are subscribers, meaning they receive at least one permission-based commercial email message on a typical day. The average consumer receives 44 daily emails (including commercial and personal), and half of consumers receive fewer than 25 per day. While these numbers aren’t small, most consumers consider the size of their inboxes manageable. So while marketers may be overwhelmed by overflowing inboxes, most of their customers aren’t.

Of those 44 daily emails, about 25% are permission-based commercial messages, with the remaining 75% comprised of personal messages, transactional messages, and spam that’s quickly deleted.

The average teen (aged 15-17) receives less than half the email of the average consumer, and receives only four commercial emails per day. And while marketers often interpret these statistics to mean a large generational shift away from email is occuring, ExactTarget analysis indicates this is a misinterpretation. The amount of email teens receive increases significantly when they graduate from high school, suggesting life stage—not age—is a more important factor when considering how much consumers rely on email.

However, ExactTarget advises email marketers to focus on only sending relevant emails to consumers, as a recent CMO Council study indicates 41% of US internet users threatened to stop buying from brands that sent irrelevant emails. (For more details see “Relevancy” below.)

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Trust and Privacy
Consumers have two major concerns regarding trust and privacy of promotional emails: whether personal data will be shared and the ease of unsubscribing. ExactTarget advises that established brands have a distinct advantage when it comes to earning the trust of their consumers. Consumers tend to give the benefit of the doubt to big brands, and assume their email addresses will be safe, secure, and unshared.

In contrast, consumers will do additional research on unknown brands before offering their email addresses. They will Google company names, and review complaint history and comments on Facebook and Twitter.

Relevancy
Consumers know it’s possible for companies to send targeted and personalized messages, meaning relevancy is no longer an option for marketers. And when it comes to email, consumers quickly decide which companies they like to receive messages from, opposed those they don’t, based on whether the email message is relevent or not. ExactTarget research found that half (49%) of consumers “always” open emails from their “favorite” companies, compared to only 16% who say they never open email.

Exclusivity
While only one-third of consumers said they were motivated by the promise of exclusive content when choosing to become a subscriber, email’s exclusivity factor extends beyond content. ExactTarget advises that becoming a subscriber is like becoming a member of an exclusive club. As mentioned earlier, subscribers demonstrate their trust in a brand when they provide a company with their email address. And in return, they expect to be a part of an exclusive club.

More Consumers Use Email than SocNets for Brand Interaction
More online consumers use email than social networks for brand interaction, according to another recent study from ExactTarget and CoTweet. Data from the “Daily Morning” report indicates that 93% of online consumers aged 15 and older receive at least one permission-based email per day, putting them into the category of“subscribers. Broken down by age demographic, 15-to-17-year-olds are subscribers at a significantly lower rate (68%). All other age brackets of online consumers aged 18 and older are subscribers at rates between 93% and 96%.

Meanwhile, 38% of consumers are fans of at least one brand on Facebook, while only 5% are followers of at least one company or brand on Twitter.

5 Degrees of Twitter Separation

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Almost all users on Twitter are within five steps of each other, according to recent data from social media consulting firm Sysomos.

Eight in 10 Twitter Users Within 5 Steps or Less
On average, Twitter users have five degrees of separation between each other – meaning nearly everyone within Twitter is only five steps away. Of all friendship distances, five steps is the most common (41%), while a friendship distance of four steps is the second-most common (37%). Much smaller percentages are three and two steps away, leading to a total of 85% of all users being within five steps of separation.

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Of users beyond five steps away from each other, the most common distance is six steps (13%), with 2% being seven steps away.

Reachability Nears 100% Within 6 Steps
One way to measure the connectedness of Twitter is by looking at the percentage of Twitter users that can be touched by reaching out a certain distance. Using the Twitter network graph, Sysomos analysts determined that, on average, a Twitter user will encounter 83% of all other Twitter users by visiting everyone’s friends up to a distance of five steps.

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If the user visits all friends of friends up to six steps, 96% of all Twitter users will be covered. This means, the Twitter network has good social connectivity, and that, in theory, a re-tweet does not have to propagate that much to reach a potentially large number of people.

Twitter is Highly Local
On average, it only takes 3.32 steps for a user to find someone who is following them (with a standard deviation of 1.25 friendship distances). This means, if a user traces their friends, and their friends and so on, in 3.32 steps on average they will discover a follower of their own. This means there are many small, circular connections on Twitter.

Celeb Twitter Followers Have Low Authority
Celebrities seem to have large amounts of followers with low Twitter authority levels (based on factors such as a user’s number of followers, following, updates and retweets), according to other recent Twitter-related data from Sysomos. Of five celebrities examined, the average follower of President Barack Obama had the highest authority rating on a scale of 0 to 10, 2.4. The most common authority score among Obama’s roughly 4.2 million followers is 1, held by 20%.

Celebrities seem to have large amounts of followers with low Twitter authority levels. This could be because they attract everyone from all walks of life. Some people may only be on Twitter to see what their favorite stars have to tweet about. In addition, most celebrity followers tracked by Sysomos had few followers themselves, pushing down their authority scores.

Two-Thirds of Web Users to Visit Soc Nets in 2014

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Social network usage explodes

Usage of social networking sites rose sharply in 2009, thanks to the ever-increasing popularity of Facebook. eMarketer estimates that 57.5% of Internet users, or 127 million people, will use a social network at least once a month in 2010.

“There is no doubt anymore that social networks, reaching more than 50% of the total US Internet audience, are an essential part of the Internet experience,” said Debra Aho Williamson, eMarketer senior analyst and author of the new report “Social Network Demographics and Usage.”

By 2014, nearly two-thirds of all Internet users, or 164.9 million people, will be regular users of social networks.

US Social Media usage growth

Last year, the social network audience widened sharply beyond the base of teens and young adults who popularized the activity. This year, 59.2% of adult Internet users will visit social networks monthly, up from 52.4% in 2009.

“Teens and young adults are old news,” said Ms. Williamson. “This year, 60% of Internet users ages 35 to 44 and one-half of those in the 45-to-54 age group will use social networks at least once a month. Women, especially moms, are still driving much of the growth.”

By 2014, these changes will become more pronounced. More than one-half (56.8%) of 55-to-64-year-old Internet users will visit social networks regularly that year, up from 34.3% in 2009. Even seniors 65 and up, only 14.1% of whom used social networks in 2009, will get in on the act, reaching 37.9% penetration in 2014.

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“The connections and interactions that social networking makes possible didn’t even exist a few short years ago,” said Ms. Williamson. “Status updating, commenting and sharing openly are all activities that will not go away.”

Majority of Top Media Destinations Are Social

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According to the BlogHer and iVillage “2010 Social Media Matters Study,” co-sponsored by The Nielsen Company and Ketchum, social sites are now a frequent destination for nearly three-quarters of Internet users. The study found similar rates of usage among men and women, and pegged the percentage of weekly social media users at 73% of the online population.

Respondents’ top daily media activities were social as well. Watching television is still on top, but Facebook was the next most common media destination visited every day. Among survey respondents, social media games were as popular as reading print newspapers.

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Among BlogHer Network users only, usage was significantly higher. For example, 77% read blogs every day and 35% used Twitter.

Social destinations become more important when these especially social-savvy users are looking for information about a potential purchase. Search engines are the No. 1 starting point for information about products and services, but blogs, user-generated content and social networks were more likely to be used frequently for purchase advice than traditional sources such as magazines, television and newspapers.

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Among all US Internet users, about one-fifth said blogs and social networks were a good place to find out about new products. One-quarter liked to visit social networks for advice and recommendations and more than one-third considered social networks a good media destination for general information.

“The days of relying on one source for information are over,” said Jodi Kahn, executive vice president of iVillage, in a statement. “Online peer-to-peer advice on message boards has increasingly become one of the most valuable sources for product recommendations. Marketers cannot afford to overlook this captive audience.”

Consumers Follow Social Brand Referrals

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Not only are social fans more likely to buy and recommend brands, but their friends are also listening.

More than two-thirds of US Facebook users said a Facebook friend referral would increase their chances of purchasing a product or visiting a retailer, according to research and consulting firm Morpace.

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Fan pages, used by 41% of respondents to show their friends what products they support, are one way to spur such positive referrals. In line with other researchers, Morpace found that coupons and discounts were also key reasons to join a fan page, cited by 37% of Facebook users. On average, users were fans of nine pages.

The racial and ethnic background of users influenced their fan page activity. White Facebook users were generally least likely to become a fan of brands and retailers.

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Hispanics in the US had the greatest propensity to become fans in all the categories studied by Morpace. One-half of Hispanic respondents said Facebook was a good tool for researching new products, compared with 46% of Asians, 44% of African-Americans and only 31% of whites.