A spectre is haunting the marketing community – the spectre of social networking sites. And if it isn’t haunting your brand yet, it soon will be.
The capacity of these sites to backfire on their many users is by now a well-rehearsed tale. Just what impels so many of them to post compromising episodes of their private life, from sexual indiscretions to outright hooliganism, must remain one of life’s mysteries. Far less mysterious is that those in authority – the police, the intelligence agencies, university administrators and employers among them – have found the sites provide a rich, easily harvested field for carrying out their ‘due diligence’ activities. And the worse thing about it is that these indiscretions are ineradicable – should anyone wish to mine them, for vindictive political or other reasons, in the future.
Ah you may say, these are for the most part young ingénues who are laying up a store of trouble for themselves in their later career. But what have their ‘personal brand’ troubles got to do with the mature commercial one that I manage? The answer, sadly, is quite a lot.
What some major brands and pie-eyed students share is an untroubled naivety. Understandably, brand managers find social networking sites a source of considerable frustration. In the rapidly changing media climate, nothing could be more mercurial and yet so brimful of communication potential. Take Facebook, for example: the current cult site.
Started in 2004 on the Harvard campus by a soon-to-be drop-out, Mark Zuckerberg (still only 23), it was at first restricted to people with a university or high-school email account. Only last September, it opened its doors to the general public. Result: an explosion of membership; 12 million by Christmas and, according to Zuckerberg, 50 million this year. Even US presidential candidates are posting their profile pages on it. A second quantum leap came in May this year, with Facebook throwing open its platform to outside programmers. A third is that its members are now searchable on Google. Oh, and let’s not forget you can now target your display advertising on Facebook.
Some are now hyping these opportunities as the equivalent to the surge in Microsoft’s fortunes during the early eighties, when Bill Gates seized control of the PC market through its operating system.
Whether the comparison is apt or not, Facebook is an opportunity – however flaky or mercurial – that marketers cannot afford to ignore. But their perception looks dangerously one-eyed. They are seeing the issue as “clients” rather than strategists, and that means trouble ahead. On this matter, I cannot do better than quote my colleague Alan Mitchell in a recent column for the magazine:
“As far as most marketers are concerned, the real issue is changing ‘media’, ‘entertainment’ (or) ‘communication channels’… the reality is that (social networking sites) are symptoms of the economics of personal decision-making, a revolution as profound as the one triggered by Henry Ford and mass production.”
The rout of HSBC
A good example of these unforeseen possibilities may be seen in the humiliating reversal of policy forced on HSBC by a Facebook revolt. The global bank had rather cavalierly decided to close the interest-free facility on loans to UK students as soon as they quit the campus, causing considerable financial discomfort to the thousands summarily affected. However, HSBC executives had reckoned without Wes Streeting, a vice-president of the National Union of Students, who articulated the outrage by creating a “Stop the Great HSBC Graduate Rip Off” on the social networking site. As Streeting said, the popularity of Facebook enabled him to contact affected students not to mention affected graduates during the incommunicado period of the summer holidays (no doubt what HSBC had been counting on). End game: HSBC had to admit it was not “too big” to listen and reversed its policy.
Not too big indeed. There was a time when outraged of Leeds University would have foamed impotently when he said: “ I don’t trust HSBC at all any more, and won’t bank with them in future.” HSBC would, in effect, have shrugged its shoulders and said, “ Well, if you can get better service in any of the other banks, good luck to you,” indicating the cartel nature of retail banking. Another way of putting it is that much traditional banking relies not upon product or service excellence but inertia. Marketing is in effect so much flower-arrangement in a world where you bank where your parents did, and if you do choose to defect, it’s usually the result of a short-term price promotion (like student loans) which holds no long-term promise of superior service. Financial services are not the only category that trades on inertia (with a bit of ignorance thrown in) – newspapers are another fine example. Utilities, too, show much of the same characteristic – except that utilities (with broadband thrown in) have already been forced much further down the Web 2.0 learning curve thanks to the wonders of price comparison services.
Banks had better learn the lesson fast, or they are going to receive a very unpleasant series of pokes.
Stuart Smith, Editor