As Chairman and CEO of Buddy Media, a preferred platform for Facebook management by eight of the ten top global advertisers, Michael Lazerow is a widely recognized thought leader on digital media and marketing trends. We caught up with him to discuss the growth of social media, social commerce, and social media attribution, as well as the role tag management plays in helping marketers better understand customer’s path to conversion.
Q: In a recent study your company did with Booz & Company, ”Campaigns to Capabilities: Social Media and Marketing 2011,” you guys revealed that while marketing dollars are increasingly shifting toward social media efforts there are still many marketers who don’t understand ROI. Why is that?
A: There are a couple of factors at play here. Many brands don’t know what they should be measuring or even what they are able to measure. If you don’t decide upon attainable objectives, then it is nearly impossible to gauge any sort of return on investment. There is definitely a lack of knowledge regarding available metrics, or more specifically relevant available metrics. For a long time, and even still today in some circles, brands focused heavily on Facebook fan count or Twitter followers. Yes, it’s important to build an audience, but now marketers understand they need to show the value of their community. That’s the main reason we launched ConversionBuddy, our social commerce and analytics product. It helps brands and agencies move beyond basic engagement metrics – which are still important – but to also focus on closing the loop and showing how engagement and sharing directly drive sales and conversions.
Q: How important is social media becoming to businesses in its impact on the purchase funnel and the customer journey, and where is it all headed?
A: Research shows that 90% of purchases are subject to social influence, which is remarkable. So when one of my friends ‘likes’ the Bonobos Facebook Page, I might see an ad that says “Jeff Likes Bonobos,” which provides me with more of an incentive to click through to the Page and connect. It at least piques my interest, because I trust Jeff. Beyond Facebook, we’re seeing everywhere that businesses are re-organizing around people. Putting people first sounds like a very simple thing, but businesses got away from that. We speak with brands every day that are using social to inform product decisions, staffing decisions, marketing decisions. Social is a layer, not it’s own function. At some point we won’t even be talking about social media, it will just be media, because everything will have a social element.
Q: While social commerce is taking off, we recently learned that only a 31% minimum of the IR500 is using social plugins on their retail websites. What’s your take on social commerce where it is now and where it’s headed over the next year or so?
A: According to comScore, e-commerce sales in the third quarter of 2011 reached $36.3 billion. That’s a 13 percent increase over last year. There are some e-commerce sites that are very advanced in social commerce, and there are some that are just beginning. When someone goes to your website to browse products, you need to make it as simple as possible for them to share the product information. When someone reads consumer reviews for your products, they should be able to share out those reviews. When someone makes a purchase, they should be able to share the news to all of their friends.
I was just at LeWeb in Paris, and I heard Karl Lagerfeld speak. He is an amazing creative force, and I was excited to see him launch his new label exclusively online. “Shopping is social, online shopping is a social activity, you share your experience through the social web,” he said. From Karl Lagerfeld to retailers of all stripes, people are much further along when it comes to social commerce than they were even a year ago.
Q: Social media is playing a greater role in the marketing mix and social media attribution has become more critical because of it. Can you explain a little about social media attribution and its importance?
A: We realized the importance of social media attribution early on, which is why we acquired Spinback, which is now ConversionBuddy, our social commerce and analytics product. It literally tells you exactly how many conversions and sales are a result of social sharing.
Social media attribution is all about connecting the marketing strategies and resources spent on social media to business objectives. It’s been hard for brands to place a dollar sign on things like shares and link clicks, and to determine how often those shares lead to actual purchases and conversions. Many digital marketers are familiar with the phrase “last click attribution” in terms of search. Social is higher on our hierarchy of needs. Search is a blunt instrument. It serves basic needs. Social is about how we want to project ourselves to the world. Our identity.
Q: Buddy Media was recently selected as one of a few third-party developers to participate in the launch for Google+ brand pages. Is Google+ the future of social media or is it still too early too tell?
A: I remember a day when the only way for me to find a restaurant in Palm Springs was to pick up the phone, a herculean task for many dudes, or search on Google? Now I can ask my 2000 “friends” on Facebook or my 8000 Twitter followers and get answers immediately from people I trust.
The good news for Google is that it has seemed to stop its search slide. It’s too early to pinpoint its social efforts as the cause, but it’s hard to imagine it’s a mere coincidence that its search business is as strong as ever at a time when the #1 stated goal for the company is social. Last month, its share of searches rose to 67.7 percent, while Bing-powered searches fell.
Facebook will continue to dominate the social networking game. The company owns a network 850 million consumers strong — four times the size of the Super Bowl each day and still growing like a weed globally. But Facebook doesn’t have Google’s nuclear bomb of one-to-one marketing – intent. Add Google+ Pages, its new weapon to layer social data onto the wedding cake that is intent, and Google has a powerful tool to protect its turf as we move into a post-search, people-centered world.
Q: As social media continues to grow, ROI becomes more important, and more technologies emerge that can track all the data. Why is a Tag Management System beneficial to site publishers and etailers at this juncture?
A: As I mentioned earlier, it’s clear that brands need to better understand social media attribution, and with the proliferation of emerging technologies for them to do so, tag management becomes extremely important. Any management system that can help publishes and online retailers better organize their tags, improve performance, and better understand each customer’s path to conversion is a no-brainer.