Making money out of social media
At a panel discussion on making money from social media at the India Social Summit 2010 held in Delhi, industry heads discussed the problems facing growth for the industry, where the opportunities lay for growth and how any serious player in the digital sector needed to focus on building communities to drive value to online transactions.
Monetisation and e-commerce might be the two issues that everyone in India needs to address at the moment, but as Chief Business Officer of Smile Interactive, Manish Vij, pointed out at the India Social Summit 2010 in Delhi recently, the entire industry online accounts for a fraction of a per cent of the total retail industry of India, which is very small to start with. He said, “The largest e-commerce stores might do only as much business as two shops in Green Park! We can’t drive growth without the offline sector today.”
Vij was speaking at a panel moderated by Chairman and Editor-in-Chief, exchange4media Group, Anurag Batra, who pointed out that the role of enterprise in social media today had to be to focus on community building. He said, “In my own experience, we need to create a lot of content to build communities. Building communities will lead to commerce. The key questions that need to be addressed today are what are the segments of the audience and what are the obstacles towards monetising a community. Anyone who answers these questions will be able to grow through social media.”
Vij, however, felt that the medium had a big issue before it, which was to separate the signal from the noise. He remarked, “Aggregating a huge number of fans, a huge number of likes is not the most important thing anymore. Quality of interactions is far more important. Paid fans, paid clicks will not drive the eventual growth, but rather, working with offline partners holds the key to building a successful business.”
He further said, “Facebook, Twitter, LinkedIn, blogs are all relevant channels of communication, but these are all components, and so if you focus on just one, you will lose out hugely. And most important, you need to take social beyond digital. A phone call is also a social interaction. A conversation is the key here, it’s not about a single message, but a continuing conversation between a brand and a buyer.”
According to Jaspreet Bindra, Regional Director for Entertainment and Devices, Microsoft India, “Social creates a context to offline buying. Brick and mortar stores are not going to become big online players, but social influences people’s buying choices well beyond the click that makes the purchase. When you buy a brand in a store, you’re being influenced by what you read about it online, by the number of friends who already bought it.”
Citing the example of Microsoft, he talked about the Xbox 360 India fan page. Although the page has a relatively small fan base of just 50,000 users, they are all deeply involved with the company and the brand, and so, for example, when the newest hardware from Microsoft was launched, these fans were amongst the first to buy the Kinect. As Bindra added. “Thanks to this fan base, I’ve been able to dial back my customer support spend as well. When people have questions, I direct them to the fans because they are very active, and answer questions and provide even better support than we can. Communities are clearly going to drive growth, whether it's a new player or someone established like Facebook, who have the reach and network to deliver a powerful experience.”
The key lies outside of directly monetising social media. Instead, brands need to use social media to create value, and leverage social media to influence both offline and online buying. To that end, aggregation is the key. There is, according to Darpan Munjal, CTO of Kaplan Higher Education, great value in creating experts acknowledged by the community, a fact also mentioned by Sanjay Sahay, Global Head of Digital Marketing for Infosys. Munjal said, “Most of all though, the brands need to create a consistently good experience for the users. Amazon is not a leader simply because of their inventory, but also because they offer a consistent experience for the users.”
The final result of things though, agreed almost every expert and industry leader present at the India Social Summit, was that the product itself needed to be good. Good marketing will not sell a bad product, while a good product can work with even minimum marketing. This was highlighted by Mmitry Shevelenko, Online Sales Launch Head for Facebook India, who brought up two Microsoft products as an example.
He said, “Microsoft had a product called the Kin. Most people here would never have heard of it because it was a phone which died within three months of its launch. The company had a few problems with the planning and the phone was a huge disaster. At the same time, Microsoft created one of the best, most far reaching, and wonderfully creative campaigns for social and traditional marketing for the Kin in the US. But the phone was a disaster. Now, they have released the Kinect. And the product is so good that even the most simple mentions on social media are enough to drive sales. At the end of the day, you need a great product.”
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