Andrew Carrier

Have you ever noticed how people above a certian age tend to continue doing that thing that the rest of us gave up long ago: forarding jokes and curiorisities via email to their entire address book? The rest of us tend to take to ‘opt-in’ social networks for that sort of thing.

I mention it because the pictures that follow were forwarded to me by just such a gentleman. They’re old adverts that, let’s just say, you’re not likely to see again. How apt that the chap who sent them to me is old enough to remember some of them when they first appeared.

It’s hard not to look through these and be incredulous that they were ever deemed not only appropriate but likely to persuade anyone to buy anything. Still, looking back a few decades with the benefit of hindsight and then mocking or criticising is all too easy . I won’t do so. Instead, I invite you to browse the ads and I challenge you not to raise a smile at most of them…

Oh, and while you’re browsing, you might notice that only two brands here are still in use: Motorola and Camel. The former of course is now part of Google. The latter? Well, you’re not likely to see it advertising much in the future.

Gideon Spanier had an interesting piece in the Evening Standard yesterday about the growing importance of social media for marketers and the brands that employ them. I recommend you head on over to read the full article.

For me, the key takeaways were:

Among firms surveyed by the Incorporated Society of British Advertisers and ad agency group Havas, 72% said they are now “monitoring conversations about their brand.”

Brand managers recognise social media has become not only too big to ignore but also integral to the marketing mix.

I would suspect that the percentage of B2B financial services firms doing so is much lower. And I fear that many in our sector don’t yet appreciate the value that social channels can bring to the marketing mix. It’s time our sector caught up.

68% of chief marketing officers (CMOs) say they feel under-prepared when it comes to social media, according to IBM’s authoritative survey of 1700 CMOs worldwide.

There’s no doubt that social media is catching many marketers off-guard and that’s particularly true in the conservative world of finance. Like most communications channels though, the reality is that it’s fairly simple when you know how. My advice? Ask an agency or partner you trust to show you the basics and start with small steps.

 The challenge for CMOs is to decide the purpose of their social media strategy. The temptation for brands has been to accumulate lots of friends and followers and to jump into the online conversation.

At Cognito, we see this time and time again. In their eagerness to throw themselves into social media because they feel the pressure to be seen to be doing something, firms forget the basics of good communications strategy. Social media is like any other communications effort: the key to success is being clear about objectives from the outset and setting metrics accordingly. In the world of B2B financial services, the number of friends or followers you have is very rarely a useful measure of success. On the other hand, the number of qualified leads generated or an increase in your share of voice on important industry topics may well be.

“Every time you talk to a client, they say there’s a conversation and they want to join it,” says Christian Gladwell, founder of Human Digital, M&C Saatchi’s social media agency. “But why do you want to join it? What are you going to say?” He believes the starting-point should be: “Don’t join, listen.”

I couldn’t agree more. When we’re discussing social media with clients, our advice is always to spend time listening before engaging or trying to influence. In many cases, listening is just as valuable. In some cases, it’s the only thing a firm should be doing.

Gladwell argues that brands should think of Twitter less as a communication channel and more as market-research and customer relationship tools. “Social media is an opportunity to see your customer through a totally different and cost-effective lens,” he says.

This is an excellent point and it’s the very reason Cognito developed Social Media Analytics, to allow firms in the financial sector not just to know what is being said about them but also to listen to the thought-leaders – the journalists, the analysts but also your competitors and prospects – and to understand what matters to them, what their hot topics are. Armed with this information, relationships can be built on solid footing and in short order. That, to me, is the real value of listening.

American Banker released the list of top 100 FinTech companies last week and it makes for an interesting read. Head on over to AB’s site to view the full list.

As I perused the list, I couldn’t help wondering how different it would look if the companies were ranked by Twitter followers instead of revenue. I’m not suggesting that your number of followers is a direct indication of how well you are executing your social media strategy – far from it – but it is a nice simple way to gauge a firm’s reach. Is there a corrolation between size and following?

Well, a few clicks in Cognito’s Social Media Analytics later and we have our answer.

The first surprise was that not all of the 100 companies have a presence on Twitter. In fact, I found only about 70 of them actively using the service.

The second surprise was how different the top 20 looks if you replace revenue for Twitter followers.

According to American Banker, here are the top 20 FinTech companies by revenue:

1. FIS: $4,426 million CY2010 financial services revenue
2. Fiserv: 3,926
3. Tata Consultancy Services Limited: 3,456
4. SunGard: 3,102
5. NCR: 2,651
6. Diebold: 2,552
7. Lender Processing Services: 2,334
8. First Data: 2,281
9. Nomura Research Institute: 2,181
10. Infosys Limited: 2,031
11. Wincor Nixdorf: 2,029
12. Cognizant Technology Solutions: 1,945
13. Total System Services (TSYS): 1,716
14. CA Technologies: 1,634
15. DST Systems: 1,201
16. CoreLogic: 1,081
17. SAS Institute: 1,021
18. Jack Henry & Associates: 921
19. Equifax: 744
20. Oberthur Card Systems: 719

Now, shall we have a look at that list reordered by Twitter followers? It makes quite a difference:

1. Infosys: 18,683 followers on Twitter (ranked #10 by revenue)
2. Cognizant Technology Solutions: 8,520 (#12 by revenue)
3. NCR: 4,108 (#5 by revenue)
4. Experian: 3,964 (#24 by revenue)
5. Itautec: 3,549 (#29 by revenue)
6. CA Technologies: 3,315 (#14 by revenue)
7. First Data: 3,096 (#8 by revenue)
8. SunGard: 2,686 (#4 by revenue)
9. Fiserv: 2,640 (#2 by revenue)
10. Hexaware Technologies: 2,018 (#84 by revenue)
11. Wolters Kluwer Financial Services: 1,821 (#48 by revenue)
12. CPM Braxis: 1,765 (#39 by revenue)
13. Pegasystems: 1,624 (#67 by revenue)
14. L&T Infotech: 1,334 (#54 by revenue)
15. Virtusa: 1,243 (#79 by revenue)
16. Ingenico: 1,191 (#36 by revenue)
17. Patni Computer Systems: 1,168 (#40 by revenue)
18. Tata Consultancy Services Limited (TCS): 1,050 (#3 by revenue)
19. CoreLogic: 796 (#16 by revenue)
20. iGATE Global Solutions: 759 (#66 by revenue)

The eagle-eyed amongst you will notice that some of the firms in the top 20 by revenue are nowhere to been seen in the Twitter Top 20. Most notably: FIS, the number one firm by revenue, doesn’t have a Twitter presence at all.

Perhaps even more interesting are those firms that are very much punching above their weight on Twitter. Companies like iGATE Global Solutions, Patni Computer Systems, Virtuosa, L&T Infotech, Pegasystems and – most impressively - Hexaware Technologies (which appears at number 10 on our Twitter list, despite being only 84 on the list by revenue) – appear much lower down the Top 100 by revenue yet claim a place in the Top 20 by followers.

I’ve always thought that it was the smaller firms that stood to gain the most from social media. The reason for that is simple: social media is a great leveller. It doesn’t require a huge investment (it’s time rather than money you’ll need to devote to it) and the nature of the medium is such that good content, helpfulness and a willingness to engage are rewarded above all else. On social media, it’s not how loud you shout that counts but what you say. And you certainly don’t need to be big to be clever.

As a quick follow-up to my post about how to convince your executive team to reconsider social media, there’s a good piece in today’s FT about the trends emerging in social media as it relates to financial services – and particularly the fund managament world.

Emma Boyde concludes her piece by saying that:

even if asset managers are doubtful over the use of social media as a trading tool, its value in the public relations space cannot be ignored.

Some of the key points in the article:

• Reputation is one of the most valuable asset a company possesses but controlling it amid the rise of social media is a growing challenge.
• When it comes to financial promotions, the Financial Services Authority regards new media as no different to any other medium. It defines new media as “social networking websites such as Facebook and Twitter, forums, blogs and iPhone applications.”
• In 2008, Corporate Insight, an independent financial services research group, found that none of the mutual fund companies it tracks were using Twitter. By 2010, half of them were doing so.
• Similarly, in 2008, no financial services company that Corporate Insight tracked had a Twitter profile to address comments from Twitter users about their firm. By 2010, several leading firms, including asset managers such as Vanguard and Fidelity, were offering customer service and answers questions from Twitter via their company profiles.

I was asked recently by a client to “explain why social media is critical to marketing and PR – and indeed to the organization as a whole.” The person in question worked for an organisation in which YouTube, Twitter and Facebook were all banned and they were looking for a compelling argument to persuade their senior management team to reconsider.

I’m always amazed and saddened when – all too often – I come across companies that are taking the view that social media should be avoided and that it will eventually go away. Believe me, it won’t.

Here’s what I sent my client:

Summary

Social media is not a fad. It’s a new way of communicating that has the potential to have a huge impact on your corporate reputation and bottom line. It can benefit almost every part of your organisation and has very tangible advantages over traditional media – not least the fact that it’s cheap, measurable and inclusive.

 Specific proof-points

• Social media is not a fad.
• It’s any channel that allows interaction: Social media is the group of new online channels – like Twitter, LinkedIn or other discussion forums – that have exploded in terms of use in the last few years.
• Interaction entails reputational impact: While the channels and technology may be new, the principles are not. Social media is ultimately about reputation. It’s about what key stakeholders in your business – your customers, your employees, your competitors, regulators, press and the analyst community – think of you. And reputation, as the world’s most successful investor will tell you, is all. “Lose money and I will forgive you,” Warren Buffet once said “but lose even a shred of reputation and I will be ruthless… We will not trade reputation for money.”
• Wall Street is sitting up and taking notice: Earlier this year, JP Morgan Chase raised $1.22 billion for a new fund to invest in the social media sector. The revered Wall Street firm and its clients clearly take social media very seriously indeed. It’s easy to see why.
• The importance of social media is going to continue to grow exponentially.
• Your customers will use it: If your customers and prospective customers are not using social media today, you can be sure that they will be tomorrow.
• The press and analysts already are: In the meantime, other key influencers – press, analysts, investors – have already embraced it and, every minute of every day, are publishing opinion-shaping content, content that you could act on, content that could affect your reputation.
• The network effect has significant impact: The numbers behind opinion-shaping word of mouth are compelling. In 2005, the London School of Economics famously produced its study on “The economics of buzz”. It revealed that:
• A 7 per cent increase in word of mouth advocacy unlocks 1 per cent additional company growth;
• A 2 per cent reduction in negative word of mouth boosts sales growth by 1 per cent.
• Social media can be beneficial to almost every part of your business. It allows you to
• Track your competitors: Your competition is filling the void you’ve left if you’re not on social media. They promoting themselves and might be talking about you too.
• Understand your clients: By listening to and engaging with your customers directly, you’ll better understand what drives them towards buying decisions. It’s the most effective way to conduct customer consultation.
• Evaluate your suppliers: Listening to what potential suppliers are saying on social media will give you an important additional data point when making buying decisions yourself.
• Drive sales: Paul Dunay of Avaya closed a $250,000 sale by responding to a tweet that said “Time for a new phone system very soon.” In this case, monitoring the phrase “new phone system” resulted in an opportunity.
• Improve your media relations: Journalists and analysts have been quick to embrace social media and it’s therefore an excellent way to build relationships with them and – when appropriate and relevant to them – share your corporate news.
• Hire new talent: People are spending more and more time on social media channels. They’re also relying increasingly on recommendations from their social networks. As a result, a positive presence in social media is becoming essential in order to reach and attract the best talent.
• Social media has distinct advantages over traditional media. It’s
• Cheap: Getting started with social media doesn’t have to cost a penny. Most social media channels and many of the software tools are free to use.
• Measurable: Social is probably the most measurable form of media out there. Every view, every click, every transaction is captured, and that data provides better insight into the wants and needs of your customers than ever before.
• Inclusive: In sharp contrast to traditional channels, social media gives your stakeholders a voice. Rather than pushing out information to them, you’re including them and enabling a conversation. As Chris Brogan says: “Your community is a gift. Loyal connectivity between whatever you represent and the people who are drawn to it is a huge boon that you must nurture and feed. [...] Twitter is a chance to understand your buyers’ moods in between purchases, to support their goals, to listen to their concerns. It’s fascinating how many businesses pay for customer opinion surveys but don’t listen to the free opinions given via the social web.”
• Easy to build into your existing corporate culture: If you want to maintain strict oversight, social marketing can be channeled through marketing or PR. If you’re more exploratory and curious, you can develop a social media policy and increase social media literacy throughout the ranks of your organisation.

Further reading:

Convince and convert: B2B Social Media – 4 Ways to Sell the Value to Management

MRM: Why social media is even more useful for B2B businesses

Social Media B2B: 93% of B2B Marketers Use Social Media Marketing

SocialMedia.biz: Why Big Companies Should Be Using Social Media

Headhunters Ellwood and Atfield recently published the results of a survey they undertook with chairmen and chief executives designed to see how the role of communications director is evolving. The report is interesting reading as much for the people who responded – they include Sir Win Bischoff of Lloyds, Sir Christopher Gent of GSK, Dennis Holt of the Bank of Ireland and Hector Sants of the FSA – as what they said.

In summary, chief executives and chairmen clearly recognise the value the communication function provides, whether through managing investor, media, government, employee or other stakeholder relations. However, when it comes to rating the relative importance of the individual disciplines within the function, views vary considerably depending on the organisation’s particular circumstances.

Chief executives typically take their own role as the face of the company very seriously, and a surprisingly high number spend more than half of their time communicating with stakeholders in one form or another. They greatly value the role their communications director plays as a sounding board, and in providing stakeholder feedback, but their views differ starkly when it comes to the level and type of input that they expect their communications director to have to business strategy.

Views on the growth of new media also differ widely. Most participants agree that it is more difficult to manage or control communication about their organisation in such a broad and fragmented environment, but a few see the proliferation and fragmentation of the media as an opportunity for greater stakeholder interaction and more immediate feedback.

Here are my key takeaways from the report.

On working relationships:

• In general, media relations no longer appears to have the eminence it once had in many communication functions, and in the majority of cases, equal, if not greater, importance is placed on other stakeholders including government, investors and employees.
• Several chief executives regard internal communication as a personal priority and take an active role in engaging with staff, whether through face to face meetings, online or in print,.
• Communications directors who can draw on broadly-based experience, and flex resources according to changing business needs, will clearly be in demand.
• While functional experience and good practical communication skills tend to be taken “as read” within the communications director’s job description, many participants speak of the importance they place on trustworthiness, integrity and judgement.
• The ability to provide a line to the outside world and feed back on how the business is viewed both internally and externally is greatly valued, and participants commonly speak of the vital role their communications director plays as a “sounding board” or “sanity check” on business activities and strategies.

On the CEO’s own role in communications:

• About two thirds of those interviewed estimate they spend 30 per cent or more of their time communicating with their various constituents, and many of them believe they spend at least half of their time on communication-related activities.

On the rise of ‘new media’:

• Many of those interviewed see the need for more proactive media monitoring and brand management than in the past, although not all have a clear idea of what this will look like.
• The alignment of internal and external communication is seen as a key issue in an environment where messages can reach both audiences instantaneously.
• Several of those interviewed saw media expansion and the advent of social networks as a positive development, citing benefits such as the ability to target customers better, and to get faster and more frequent feedback.

Media relations is neither more nor less important as a result of the changes – just more difficult. - Sir Christopher Gent, Chairman, GlaxoSmithKline

Download a copy of the full report.

If you’re interested in marketing in the luxury industry then Luxury Daily is a must-read. They’ve just released their Luxury Marketing Outlook 2011 report and it’s full of interesting insights. What’s clear is that the future of luxury is digital. As editor Mickey Alam Khan says as he introduces the report: “savvy understanding of how the Internet and mobile influence all channels will make the difference between a successful luxury brand and one that sticks to an old formula for a different era.” I agree.

You can click here to download the report in its entirety but here are some highlights from Alam Khan’s introduction:

It is understandable for luxury brands to proceed with caution. After all, luxury’s coin is exclusivity, rarity, quality and high-perceived value – and none of these attributes should be tarnished by marketing or retail efforts that don’t mesh with the brand’s values.

That said, the luxury consumer is evolving. Truly high-net worth individuals possess the best computers and mobile phones, ranking these possessions up with great cars, homes, art and a penchant for unique entertainment experiences.

Interact, not distract

Indeed, most luxury consumers access news and information the way the rest of the world does: through the Internet on a computer or via a smartphone, along with print and broadcast media.

While they continue to read magazines and watch television, these luxury consumers are quite influenced by what drops in their email inbox or what their kid texts to their phone.

So, for those brands charting their marketing and retail strategy this year, making digital the centerpiece of their efforts will be a smart move.

Harnessing digital media’s ability to interact more than distract is something that needs to gain wider circulation among luxury marketers concerned about diluting the brand’s value.

The time is now to combine the use of digital media with offline marketing channels to build a database of loyal consumers who opt in to receive offers and updates via email, text or mail.

Now, more than ever, brands should deliver smart offers and consistent experiences online, offline and in-store to make the switching costs high for consumers to move their business to a rival.

Word on print

Singing paeans to online and mobile doesn’t mean that traditional luxury marketing will not be effective.

On the contrary, luxury brands should press ahead with smart print ad campaigns in the pertinent magazines and newspapers, supported by regular drops of catalogs and seasonal out-of-home campaigns.

Where print – be it an ad, luscious mailer or catalog – scores over digital is the ability to capture and frame the romance and mystique of the brand. In this era of economic hardship, retaining the mystique is key to maintaining brand allure and customer loyalty.

So overall, what can the luxury industry expect this year? More print advertising, increased online videos, fewer mail drops, continued outdoor advertising and a barrage of emails touting discounts and sales.

Expect to see more brands launch mobile applications and extend their ecommerce presence to mobile Web sites – to great success. Yes, eventually, someone will buy a jet on the mobile site.