Social Computing is Changing the Face of Marketing and Advertising: What the Forrester Research Report Really Tells Us

By Kellyann Davis
June 2006

Social computing is based on creating or recreating social conventions and social contexts online through the use of software and technology. Social Computing happens because people everywhere have access to other people everywhere online, over the phone, whenever and wherever. Think Wikipedia, think teleconferencing, think satellite phones, IM, and email when you think of the Social Computing phenomena. It means we can interact with all of our personal connections/community pretty much at will, and by all accounts, data indicate that we take advantage of our new connectivity. Forrester Research predicts that this new connectivity between people will lead to consumers learning more from each other rather than through marketing channels. More than a billion people are accessing the web across the globe right now, more than half of all North Americans, a third of all Europeans, half of Australia, and more than ten percent [and growing rapidly] of Asia log on to the Internet.

Remember the dark ages? Some of us like to call them “the 80’s,” the time before we all knew what an operating system was, when cell phones looked like masonry bricks with straps on the back, when the Sony Walkman was high tech., when you had to buy the whole CD, when radio was free but they played the same ten songs over and over [sorry Depeche Mode and U2], and MTV was actually broadcasting music videos? Today, I know people who won’t leave home without their PDA, who can text message and download content while they’re driving [not recommended], who want to see reviews of every restaurant before they decide, who talk about their eBay reputation score. It shouldn’t come as any surprise that we choose our stuff in different ways today and are less vulnerable to the kind of influence corporate marketing and advertising can wield.

To really understand how fast things are changing, consider all the things you can do today that would have been difficult or impossible just a few years ago: you can query Google via text message from your phone, get a map and directions on your mobile phone, download podcasts and listen to them when it’s convenient for you, send your photos to friends and family instantly with your mobile camera/video phone and email, store gigabytes of personal e-mail online, carry your entire CD collection with you in a business card size MP3 player, and “fly” anywhere in the world from your computer on Google Earth. Most of these applications are free—and the ones coming close behind them will be even more powerful. With more and more phones carrying Global Positioning System (GPS) chips, for example, it’s likely that companies will offer a cornucopia of new location-based information services; you’ll soon be able to find an online review instantly as you drive past a restaurant, or visit a landmark and download photos and comments left by others. More than a billion people are connecting to the Internet across the globe tonight, they are talking with each other about everything and their new behavior is changing the face of marketing and advertising forever.

Social computing means that, as consumers, we don’t receive or perceive marketing and advertising like we did in the eighties. Then, we were told by mass media what food, music, cars, sodas, and clothes were the “in thing,” were high quality, solved a problem for us, etc. Now, we ask our community consisting of our friends, colleagues, family, and online acquaintances with similar interests and experience what they like or dislike about particular products or services. We can even see what others have said about something over time, and we can see how the seller responded. How can marketers and advertisers reach an audience in this new paradigm? How can products be targeted to leaders of these networks who can disseminate a positive opinion about your good or service? Does it matter? People still watch TV and listen to the radio don’t they? Why do we need to change just because a bunch of brats bought iPods? How else does social computing impact our world?



Lucky for us, Forrester Research recently published a report on Social Computing and marketing. Forrester's key conclusions in this Report emphasize that companies should:

· Discard top-down management and communication strategies
· Use employees and partners as marketers
· Incorporate communities into products and services

Why is Social Computing significant for marketers? According to Forrester, the three tenets of Social Computing make collaboration relevant to marketers. The three tenets are:

· Communities driving innovation
· Institutions facilitating experiences shaped and owned by communities
· Communities taking power from institutions

According to Forrester Research data, Marketing and Ad persons are paying attention to these changes and creating new paradigms in marketing and advertising. Note that 47 percent of marketers use or plan to use RSS feeds, 51 percent of marketers use or plan to use blogs, and almost 80 percent use or plan to use Search tools in their arsenal of marketing tactics. Even though the number of users of social networking tools is relatively small today, Forrester reports that, "as more sites attract a worldwide audience, global networks will be common." These results suggest that Social Computing is on the verge of completely reshaping the way we communicate socially and professionally. The social computing trend means that we will be communicating with peers about products, services, ideas, and each other more than ever before, and what others say will be more important than ever in these new online communities.
Forrester's findings also indicate that more and more “socially-connected” buyers are less brand-loyal, less trusting, and more independent. The change may be attributed to higher expectations among buyers of a particular brands and also because they prefer to customize products or services for their own use. Forrester also characterizes peer to peer networks as a reason for declining brand loyalty due to the exchange of information between groups of buyers. .Forrester recommends flexibility in marketing and advertising paradigms to maintain relationships with new and existing customers. Businesses and marketers will need to evolve with their changing audience of consumers by translating their current strategies into strategies that embrace Social Computing.

Social Computing requires a new Marketing Tool Kit with New Channels, Technology and Metrics to replace the old Marketing Tool Kit of Channels, Tactics, and Metrics. Figure 9, from the Forrester Report, featured below, illustrates the contrast between the two Marketing Tool Kits: [image]

Forrester suggests that businesses move from the top-down traditional approach to the bottom-up customer-driven innovation approach by ceding control and by offering communities a platform through these strategies:

· Use customers as the source of inspiration
· Observe customer needs in-depth as key drivers
· Encourage spontaneous customer involvement
· Implement a controlled chaos process
· Assess customer's explicit and latent needs

Companies can create this bottom-up approach by inviting the customer to use social computing tools such as communities of practice, intranets, search, email, blogs, and smart point of sale. Forrester says that this will result in customer driven content, sometimes created by the customer at POS and in peer to peer networks where people buzz about products, suggest changes, and truly drive innovation. "Increased adoption of online forums -- such as eService suites and Emotive Networks -- shows that consumers are also eager to share their expertise of products and services with each other," says Forrester. Forrester views Social Computing as a continual learning process where marketers and strategists are advised to talk less and listen more when engaging in the following activities:

· Become part of the community by offering customers the opportunity to express themselves and communicate with peers
· Use peer relations to raise loyalty and stickiness by keeping in constant touch with consumers and immediately responding to changes in their preferences
· Avoid an exploitation-only approach to foster positive consumer opinion
· Focus on Social Computing as a strategic asset of value not on its risks
· Employ flexible corporate oversight and use it as a recruiting differentiator
· Track younger employees and Social Computing needs and tools in the workplace
· Provide the tools to facilitate successful Social Computing

"Marketers have to listen to the buzz online and tap into new distribution channels for their products to track positive and negative feedback about their brands in real time," says Chris Charron, vice president and research director of Forrester Research.
Social Computing impacts business whether companies choose to adopt Social Computing or not because users give communications a new context. Micro Persuasion's Steve Rubel says that, "the change or die mantra is the anthem of the internet age, like it or not."
Marketers, advertisers and strategists need to be prepared for this new paradigm. They should learn as much as they can about available technology, become early adopters and users of that technology, and remain very flexible in this new paradigm. Marketers, advertisers and strategists should prepare to:

· Communicate the impacts of Social Computing to the worldwide audience of users-- buyers and sellers
· Research, monitor, and report findings in Social Computing
· Search for solutions to the risks and problems associated with Social Computing
· Facilitate successful communications and buy/sell interactions within the Social Computing setting
· Act ethically and responsibly within the Social Computing environment

According to Forrester, the industries most affected by Social Computing include media, retail, telecom, high-tech, finance, travel, consumer packaged goods (CPG), healthcare and automotive. "Gradually, Social Computing will impact almost every role, at every kind of company, in all parts of the world," reports Forrester. Bottom line, get ready for the impacts of social computing in all aspects of your daily personal and professional life.