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Companies have dramatically increased their spending on social media and online marketing in the last couple of years.  eMarketer reports that “Outsell estimates that marketing on social networks will grow 43.3% in 2010. Forrester Research predicts that B2B firms will spend $54 million on social media marketing in 2014, up from just $11 million in 2009.”

But all that increased spending doesn’t mean that revenue has automatically followed. Having a good quality product with a simple message trumps volume and noise any day of the week. For example, poor quality control within the car industry ruined years of carefully executed and expensive advertisements, as Jack Neff points out in the article “Are Marketers Hiking Ad Spend at Expense of Product Quality?”,

“BP, whose five-year “Beyond Petroleum” campaign sought to position the brand as the greener alternative among oil companies, finds itself tarred for years as the firm behind the biggest oil spill ever. Toyota, a brand built on quality and reliability, has recalled 9 million vehicles since October.”

Especially in the case of a small business, most companies don’t have that much money to throw around, or the time to invest in sending out massive amounts of advertisement. The social din is also hard to be heard above with so many social media venues and constant back and forth among blogs, tweets, and other companies trying to make a splash. So how do you spend your marketing dollars, and more importantly your time, where they count?

1. Know your audience

It is important that companies figure out who they want to sell their product too. In the the Advertising Age blog AdageStat, Matt Carmichael agrees that demographics are important, but they often are delivered as broad and generalized reports; it is up to individual companies to sift through that data and determine which numbers matter to them. As Noelle Weaver writes in the article The Old Demographic Rules Aren’t Enough Anymore, “Grouping consumers by age or demographic is no longer enough when they are grouping themselves by shared interests and beliefs.”

If you don’t know who your audience is, find out fast! Send out surveys to your current customers, or look at feedback on Amazon or other rating websites on your products or similar companies’ products, to find out who is buying or might be interested in buying from you.

In the article “Five Steps to Social Currency” in the May issue of Fast Company, Ben Paynter points out that while Dunkin’ Donuts has 80% fewer Facebook and Twitter followers than Starbucks, those fans are 35% more likely to recommend the brand. Researchers at HP also demonstrated that just being popular or widespread online does not necessarily make you influential to customers, as reported on the Technology Review blog Mim’s Bits. Who are your brand advocates? Along with knowing who your audience is, it is important to look at where your audience is at and where they are consuming content, so you can deliver your message to them.

2. Know your goals and message

What do you want your customers to understand about your product; what is the perceived value? What is the message you want to get across about your company? By knowing exactly what your main objective is, and being able to state it in a sentence or two, you can focus your resources on getting that point across to your customers.

Kira Wampler, former Group Marketing Manager of Online Engagement at accounting software manufacturer Intuit, discussed this point during the Social Media Breakfast Seattle event this week at RealNetwork’s headquarters here in Seattle. In the case of Intuit, their entire message was focused on one thing: Intuit equals small business success. “Everything we did connected back with [Intuit creator] Scott Cook’s wife sitting at the kitchen table struggling with her checkbook,” said Wampler. Wampler discussed how by selecting a single goal, they were able to keep their message clear and drive home the message in various yet effective ways.

3. Focus, focus, focus

Once you understand who your audience is, and what message you are trying to convey, it is time to hone in on that group, focusing on engaging this audience and delivering your message. As reported in ClickZ, Skintimate created a virtual world and video contest specifically aimed at teen girls – not their mothers, not their older sisters in college, but teens. Huggies created a grant competition specifically for entrepreneurial moms, as discussed on the C-Tweet blog. Intuit engaged with small business owners and accountants primarily through Twitter and Amazon, rather than spreading their energy across various social networks and vendors.

Kira Wampler also suggested starting out with a small test launch of a product and sharing it with a small audience. This is a situation where knowing who your audience is can be especially important. These die-hard fans will tell you what you’re doing right or wrong, and often you can go back and tweak your message (or product) and expand it to a larger audience. Using social channels like Facebook or Twitter to do so help reach your audience quickly and broadly, supporting the feeling of community and allowing your brand advocates to feel invested in the product, and giving them more incentive to promote your product.

Bonus tip: Follow your intuition, not the trends

Numbers and statistics don’t tell the whole story. As exemplified by Dunkin’ Donuts, just because lots of people are Facebook fans of a product does not automatically mean more sales. If you truly know your audience and the message you want to get across to them, then taking that intuitive leap is often better than following what the numbers say. In the article “Our Biggest Brands Can No Longer Be Managed By Nerds,” Tom Hinkes, principal consultant at OutBranding, writes

“Every once in a while, even when the numbers don’t quite line up, we can promise to trust our gut and intuition. Be like Luke Skywalker. At the end of the original “Star Wars” movie, in order to make the “impossible shot” and destroy the Death Star, Luke shuts off his computer and chooses to trust his intuition. The nerds at headquarters are horrified. But the Death Star explodes, the audience cheers and we learn a life lesson we all promptly forget. Let’s resolve to ‘use the force.’ Or something nerdy like that.”

To extrapolate on the Star Wars theme, think of your brand advocates as the rebel forces; find them, give them the information they need about your product, and they will help you conquer the empire of social media marketing.

As a follow-up to my recent post regarding creating revenue around social games, I wanted to share an article that Shawn Foust, video game industry team lead at the law firm Sheppard Mullin Richter & Hampton LLP and friend of Plexipixel, wrote for Venture Beat, “How to Stop Worrying and Love Facebook Credits.” In the article, Foust discusses direct revenue from games via social media outlets and applications. Specifically he is looking at Facebook’s new venture of “Facebook Credits.”

Facebook Credits are sort of like digital Disney Dollars®: good only on Facebook and only on what Facebook says you can spend them on. According to Facebook’s website, “Facebook Credits are a virtual currency you can use to buy gifts, and virtual goods in many games and applications on the Facebook platform.”

Facebook is initially offering credits free to users, alerting them that they’ve just earned credits for playing a particular game, while also allowing users to earn credits through Facebook-sponsored promotions. Game development company Playdom, the largest game producer on MySpace and the third largest on Facebook, has already signed a five year contract with Facebook to exclusively use its credits in its games.

While Facebook is making it easy for customers to earn and use credits, game producers and other businesses have some pretty strict restrictions on what they can and can’t do with Facebook Credits. As Foust explains:

You will not (and you will not enable or allow any third party to) sell Credits to, or trade or otherwise exchange Credits with, any third party.

You may not accept Credits as payment for tangible goods, except in the Facebook Gift Shop.

You may not accept Credits as payment for a currency or other stored value item that can be used outside of the application.

Facebook controls the generation and distribution of Facebook Credits, not you.

You cannot lock in value.  Facebook Credits are a fungible good that can be used in any application that accepts credits.  If a person purchases $100 in Facebook Credits with the intention of purchasing things in your application, if they only spend $80, the remaining $20 is free to go elsewhere.

Credits can abandon you.  Facebook retains the right to “revoke your eligibility to accept Credits at any time in [its] sole discretion.”  That means your economy can get up and walk away in an instant.

Rather than trying to figure out all the cans and can’ts of Facebook’s Credit system, Foust suggests businesses instead set up a third currency system specific to your game or games. Setting up a third currency that you control acts as a buffer between your company’s interests and Facebook Credits’ interests.

Foust’s bottom line is “direct implementation of Facebook Credits without a buffer currency effectively shifts control of a critical aspect of your game (which is often the main source of monetization) to a third party with potentially different incentives. Not good.”

It is interesting that Facebook is implementing Credits while at the same time  the majority of online game players, 480 million of the 500 million users, are non-paying. And adding your own currency means players must be willing to do one more step before they play your game. Are most players willing to take that extra hop?

In the end, though, with social networks and gaming becoming a major chunk of people’s total online time – a recent Nielsen poll found time spent social networking increased by 43% in the past year, and online gaming by 10% – taking and keeping control of how you market and monetize your online games will become all the more important.

Read the original article on Venture Beat, “How to Stop Worrying and Love Facebook Credits.”

Companies usually think of games as a product that needs to be sold or a lure to get audiences to visit their website. However, when used as a marketing tool, games provide all sorts of benefits, such as growing your audience base, increasing user satisfaction, and increasing revenue. By integrating advertising with gaming, you create a more immersive and enjoyable experience for the user, and hopefully make them a return customer.

From NPD’s Changing Games Landscape talk at Casual Connect last year (March 2009), playing video games was the 5^th rank leisure activity for the US population aged 13+ with 63% positive response.  In addition, NPD reported that video games dominate the share of monthly spend on content among the entertainment categories, with 1/3 of the wallet share.  Based on a recent eMarketer study, social gaming is the fifth most popular social networking activity, ahead of watching videos or searching for new contacts.  With an audience of that magnitude, gaming is a huge eyeball opportunity for marketers.

Last week Plexipixel’s Executive Producer Vicky Tamaru and Sales and Marketing Liaison Justin Nix attended the Casual Connect conference, and heard a lot of discussion around how effective games are in marketing. Shannon Callies, Group Planning Manager of Microsoft Games Advertising was a huge proponent of combining marketing and your game into one package. Integrating advertisement with gaming creates an immersive experience for the user and increases brand recognition, Callies said.

The main room at Casual Connect 2010 at Benaroya Hall. Courtesy Marcus Eikenberry of MarkeeDragon.

Marketers should note not only the sheer number of gamers but also the receptive state of the gamer to advertising.  Because of the immersive and interactive nature of games, the gamer is much more likely to be openly receptive to brand awareness.  A 2009 study from NeoEdge Network found an increase of 500% in unaided brand awareness in viewers compared to T.V. Audiences also had a 56% more favorable view of a brand when it was tied to a game. Brands are becoming more and more aware of this, and have shown they are interested in sponsoring game content.

Brands like Toy Story, Nickelodeon, Zappos and others have used games to great success. The convenience store chain 7-Eleven had a very successful tie-in with the Facebook favorites Farmville and Mafia Wars during June and July. Zynga, the company behind Farmville and Mafia Wars, also partnered this summer with food companies Green Giant and Cascadian Farm. As Advertising Age reported in a May article:

“Recently H&M ran the first-ever brand integration on MyTown, a mobile game like Monopoly set in the real world, created by developer Booyah. During the campaign, H&M was the most searched location within the game, 700,000 users checked in to its retail stores, and 8 million saw its virtual goods. The game, which has 2.3 million users since launch in December, has since worked with brands such as Travel Channel, Olay and Microsoft Windows.”

Plexipixel has seen this kind of success ourselves. We developed the Adidas Penalty Shootout game to promote Microsoft’s Predator FC vs. F50 contest. The game garnered 13 million plays in two months, although it was only released in five European countries; a Microsoft Advertising case study called it “one of the most successful online games in the world.” What’s even more exciting is when the game players become evangelists of the content, spreading it to their own social graph and beyond.  Check out  a YouTube video of an English kid playing the game on our blog.

Although still in its infancy, there is a growing interest in geocaching (treasure hunts using GPS coordinates) or location-based service promotions. Companies like SCVNGR, Foursquare, Loopt and Gowalla are starting to work with retailers to offer discounts to gamers who complete certain challenges or just show up at a specific time.

Games are a great way to grow brand awareness and allegiance, creating a better overall experience for your audience. Who’s up for a game night?

By now most companies have established a social media presence. However, they often don’t know whose attention they’re getting, and if it’s the kind of attention they want. There is a lot of chatter right now about how NOT to use social marketing, (see 10 Ways to Screw Up Your SEO by David McAnally, and Top 6 Social Media Mistakes and How to Fix Them, by Kristi Hines). However most analysts have skipped over the most important element: the social element, the customers you hope to attract by engaging in social media in the first place! Who are they, where are they, and how do you reach them?

After reading several different top-ten or top -six lists, it seems to us like there are three key and all-too-common pitfalls in social media that need to be fixed to make sure that the social media element of your company’s marketing is getting to the audience you want:

1. Your social media is disconnected from your company’s message. Many companies simply start a Facebook page or Twitter account and assume that will be enough to keep the conversation alive between them and their customers. Well, SETI (Search for Extra-Terrestrial Intelligence) has been blindly sending out radio signals for 50 years, and we’ve seen the results: so far, no one’s responded.

But more importantly, what are you saying on those social networks? Are you promoting your new product, or are you tweeting about that new gizmo (worse, someone else’s product!) that you just have to have! Not connecting your message online with the rest of your marketing sends a mixed signal to your audience and makes them less likely to engage in your brand.Having a social media strategy is key to make sure that what you are saying in the social media sphere is coherent with what you’re saying in the rest of your marketing message. See the article on 7 Steps for a Successful Social Media Strategy (More Top-Ten style lists!), or read our own take on it in a blog post from April.

2. Not connecting with the right audiences. Who is your audience? Who do you want them to be?  It is important to make sure that your content is reaching the correct people. The audience that you want to connect with via search engine is usually the same people you want to connect with using social media. Both these can be accomplished with good SEO (search engine optimization). Using Activity Streams or tracking the user data from RSS Feeds can give you a better idea of who’s already engaging in your brand. In an article for Association Media & Publishing, Jacqui Cook suggests deciding who you want to impress. Then go to Google, use keywords you think they might use, and see what comes up. And don’t confuse terminology and keywords with industry jargon.

3. No value-add for social media users. Good customer service is good marketing. Think of social media as a customer service. How does your social media serve your customers?

As Harris Diamond wrote in a column for Forbes Magazine, “Brands today are actively harnessing social media platforms to create content and communities to find their brand loyalists or advocates… The new model of targeting brand ambassadors is about two-way, open, social engagement and not just top-down and inside-out pushing of products.”

What’s in it for your customers to engage in social media with your company? What do they get out of it? By offering insider information, early releases, and other perks, customers will engage and remain loyal to your brand. Company CEOs (or their assistants) often tweet previews of a speech right before a conference or event. Diamond points out “Once identified and engaged with, brand advocates do the marketing campaigns for them.” It can’t get much easier than that!

So there you have it, three pitfalls that many companies make when trying to find their social media audience, and how your company can avoid them.

The Northwest’s premier food festival, Bite of Seattle, kicked off today at Seattle Center. Lucky for us that is only a block from our office and with all that great food being at our finger tips we undoubtedly had to check it out. So the Plexi team took a lunch time excursion to try our best to eat our way through the Bite. Here are some pics highlighting some of the culinary excellence we enjoyed:

Some of the team enjoying the most anticipated culinary concoction, deep-fried mac and cheese. General consensus: although it seemed to be made from boxed mac and cheese it was still delicious.

Seriously, I am at a loss for words. The food is so good Tina and Steph are that excited.

Andy lost in the explosion of flavor from the deep-fried mac and cheese, while Jared and Tina show of the free samples waiting in line for 15 minutes will get you.

Easily the highlight of this lunch time adventure, Steph fist pumps to her airbrushed, bedazzled “Girl Power” tattoo.

What a great way to spend a lunch hour. Here is what I learned at the Bite:

• Deep-fried = delicious;
• You will be heckled by vendors especially teenage girls selling crab cakes
• People dressed as Foster-Farm’s chickens are frightening   
• Police love food and firearms are not allowed at this event
• Watching your co-worker get an airbrush tattoo, priceless    

The Bite of Seattle will be going on all weekend with live music and great food, so if you are in the area stop by to experience some local Seattle flavor.