BarnRaisers

Before starting BarnRaisers, I worked at well-known advertising agencies.  I was fortunate to have worked on major brands, some at times of profound change, and with very talented people.  It was a lot fun for a lot of years.

A former client, Brian Perkins, Vice President of Corporate Affairs at J&J, said at Cannes this year, ”holding companies for ad agencies should consider taking themselves private.  Advertising is a labor-intensive, not capital-intensive, business and it’s inevitable digital agencies are going to gravitate toward brand stewardship.”

You may or may not agree, but Brian’s comments indicate a shift is taking place.  To help explain why, here are 7 reasons social media agencies are like ad agencies and 8 reasons they’re not.

7 REASONS THEY ARE

1. Both have to demonstrate a deep understanding of consumer attitudes and buying behaviors
2. Both have to find insights into unmet consumer needs
3. Both have to know how to create and build brands
4. Both have to be able to take the brand idea and translate it across all media platforms
5. Both have to be on top of media usage and trends
6. Both have to find unique tactics and executions that accelerate sales and have people talking
7. Both are accountable for results, return on investment and sustainable sales growth

8 REASONS THEY’RE NOT

1. Ad agencies communicate through a monologue.  Social media agencies through a conversation
2. Ad agencies work with product benefits.  Social media agencies with shared interests
3. Ad agencies target heavy users of brands who they encourage to buy more.  Social media agencies find advocates who they encourage to spread the word
4. Only 14% of people trust advertising.  80% of people trust the recommendations of other people
5. Ad agencies use multiple mediums and are ”media neutral.”  Social media agencies work mostly on the internet where 90% of all purchase decisions begin.
6. Ad agencies are labor intensive.  Social media agencies are even more labor intensive because, once the campaign is launched, the work has just begun (e.g. content refreshment, community management, measurements and analytics).
7. Only 18% of ad campaigns ever generate a positive ROI.  While people kick the tires on the ROI of social media, brands, like Blendtec blenders, have proven an ROI of 500-to-1 with much less investment.
8. Ad agencies tend to be secretive about their “proprietary” and “trademarked” process for creating ads.  Social media agencies tend to share their work and publish for all in places like SlideShare.

I’ve found social media promotes a culture of givers, not takers.  People like Joe Sorge, Toby Bloomberg, Tom Anderson, David Berkowitz, Kelley Connors and Mike Rogers (to name just a few) have routinely offered to help or participate in speaking engagements, workshops and presentations with no mention of “where’s my cut” or “what are you getting.”  It something that’s a little different and a whole lot more fun.

Do you have an opinion on the difference between the two?

The Wall Street Journal reported last week, in looking at the glass as half full or half empty, most of us see the economy as half empty.

Is it time for a Social Media Stimulus Plan?   Here are the facts why.

CONSUMERS AREN”T SPENDING AND BRAND LOYALTY HAS ERODED

• 59% of consumer still rate the economy as “poor;” 73% describe their sentiments as pessimistic
• Under $50K, 79% of consumers are cutting back on spending
• Between $50K-$100K, 73% are cutting back
• Over $100K, 66% are cutting back
• Less than 50% now buy “the brand I want most” when they shop
• 42% cite “unemployment/job security” as a primary concern followed by “rising prices” at 33%

ONLINE SPENDING IS GROWING FASTER THAN OFFLINE

• 8.1% of retail sales now occur online – double what is was 7 years ago
• Online sales are growing +80% faster than offline sales
• 60% of consumers say the internet is more important in making buying decisions; up +56% from a year ago
• Sales at all major retailers, even brick and mortar companies, are growing online:  Amazon (+19%), Apple (+25%), Best Buy (+7%), Home Depot (+3%), Lowe’s (+5%), Macy (+4%), Sears (+6%), Staples (+5%), Wal-Mart (+3%)

PEOPLE WHO USE SOCIAL MEDIA SPEND MORE MONEY AND TIME ONLINE

• Facebook and Twitter users spend 1.5X more time online than average internet users
• People who spend time on Facebook and Twitter spend 2X more money online than people who don’t use these networks
• Heavy online buyers spent $592 on average in Q1 2010
• More people are spending more time on Facebook; it accounts for 8.0% of the time consumers are online
• 23% of Twitter users use the service for retail purposes
• Cost per thousand impressions on social media are $0.55 versus $2.55 for paid online advertising

COMPANIES WHO USE SOCIAL MEDIA INCREASE THEIR PROFILES AND SALES

• 97% of companies report a blog improves their search ranking
• 55% say a blog increases site visitations
• 45% have gotten revenue from their blog
• 36% of companies see an increase in positive perceptions fom their blog
• Companies from Dell, Best Buy, Procter & Gamble, Starbucks, Blendtec and AJ Bombers now have great social media case studies, particularly in the area of innovation, customer service and sales

Sources: comScore, U.S. Department of Commerce, Nielsen, Harris Interactive

A rising tide lifts all boats.  If spending continues to move online and people who use social media spend more, shouldn’t our administration take a hard look at the segment likely to lift us out of a bad economy the fastest; the one with the greatest likelihood to impact positive change?

Our administration has the experience too.  Let’s not forget, when Barrack Obama was campaigning, he used social media and it raised 87% of the funds he put to work to help get elected.

Wouldn’t you like to see the glass as half full again?

If you happen to be in the vicinity of Stamford CT Tuesday night (4/27) from 6pm to 9 pm, we’d welcome you to an “advanced” social media workshop at UCONN.  Here are the directions  http://www.stamford.uconn.edu/visitors.htm

When we were asked by US Small Business Administration to do an ”advanced” social media workshop, we thought:  What is “advanced” social media anyway?  Someone who has built up thousands of fans and followers on Facebook and Twitter? A brand with a You Tube video viewed by millions? A business using proprietary social networking technology, widgets and apps?

This didn’t do it.  We defined it as:  A business or brand that has used social media to the benefit of their bottom line; saw clear business growth, proved an ROI, communicated consistently with their customers and, as a result, has the know how, insights and understanding to do it again and again.

When we thought about in these terms, a lot of case studies came to mind.  Some from business owners who happened to be our friends, colleagues and clients.  We thought it would be more interesting for them to tell you what social media did for their brands.  Here’s the list of brands that will be discussed:

1. AJ Bombers – A  burger joint in Milwaukee WI
2. Vitamin Water – I guess you know this one
3. Forever Verdant – A services company for environmentally friendly living
4. Bloomberg Marketing/Diva Marketing – A top social media and marketing consultancy and top 20 blog according to Forbes
5. Real Women on Health – A health and wellness community for Baby Boomer women
6. HubSpot - An inbound marketing solutions company to grow traffic, leads and sales

For AJ Bombers and Diva Marketing, owners Joe Sorge and Toby Bloomberg will be live (courtesy of Skype) from Milwaukee WI and Atlanta GA.  After all, it’s called social media for a reason.

If it’s nearby for you, we’d love to have you.  There is a $25 fee; $35 for two.  It doesn’t go to us (or the presenters) but back to the US Small Business Administration.  We and they believe social media is a competitive advantage for small businesses who play a vital role in our economic recovery.  And we’d rather see our administration spend money on small businesses, not big banks.

It’s our 2nd of 2 workshops at UCONN this spring.  The 1st was a “beginners” workshop.  What is social media for “beginners?”  That’s a much easier question and that presentation is below.

I’m seeing a business principle take shape in social media called the ”Goldilocks Rule.”

What happens is a business starts using a number of social networks (Twitter, Facebook, etc.). Maybe they use video or an app too. Pretty soon, one social networks starts working better than all the others. It’s the one that’s “just right” because it:

• Attracts more people (fans, followers, viewers)
• Increases sales most directly

While it’s not apparent at the outset what social network it will be, it is apparent, once it starts to happen, it’s the one that best reflects the uniqueness of the brand. Let’s look at a few examples.

1. BLENDTEC (BLENDERS):  On YouTube, the blending of an iPhone has been watched by 8,002,192 viewers. Videos of CEO Tom Dickson blending golf balls and hockey pucks have over 1,000,000 viewers each. By contrast, Blendtec has 17,145 fans on Facebook and 2,266 followers on Twitter. For a product whose benefit needs to be seen to be believed, videos and YouTube are the medium for the message.  For an investment of around $1,000, company sales increased +500%. And they still grow in direct proportion to YouTube viewership.

2. AJ BOMBERS (RESTAURANTS): Ask owner, Joe Sorge, what took his Milwaukee burger joint from $12,000/week to $17,000/week in sales and he’ll tell you Twitter, a video from Chris Brogan and great burgers. Numbers support this because the video on YouTube has 3,047 viewers and AJ Bomber’s Twitter page, which Joe uses like a virtual host, has 3,107 followers.  By contrast, AJ Bomber’s Facebook page has 1,028 fans.  Maybe that’s why Joe now has a book called #Twitterworks (http://twitterworks.tv) to go with the great food.

Both Tom and Joe’s videos are in previous blog.

3. COLGATE (CONSUMER GOODS):  We put social media into Colgate’s marketing mix by creating a social media app for their promotions and events so friends could share Colgate news with  friends. We put the app on their web site. It gives greater details on specific promotions and events and allows for sharing on over 20 social networks. We find 80% of response comes from Facebook. We also find the response rate is 4X industry norms and people spend 3X more time on the app than the web site. Since the average Facebook users has 130 friends, that’s a lot of people and involvement.

Facebook proved to be the best vehicles for conversations about Colgate brands. All of us like to talk about brands. Did you know we talk about brands on average a dozen times a day?  Now, social media makes it easier for those conversations to occur and for us to learn from them.

So that’s the “Goldilocks Rule.” We see it for brands we observe. Do you see in your industry or brand?

The U.S. Small Business Administration is giving social media workshops at UCONN campuses this March and April.

52% of people in the U.S. work at businesses with 20 people or less.  Small businesses have led the country out of every recession.  Many believe, including comScore, social media will be a big asset this time around.

Since I’m one of them, I’m grateful to contribute along with Mike Rogers of Brainloaf,  http://www.brainloaf.com and other small business owners (featured below) that have used social media successfully.  Here are 7 social media tips to build brands.

1. Strategy trumps technology: A business strategy and social media strategy are the same thing.  In using Twitter, Facebook, YouTube, apps etc., ask yourself how these amplify the business strategy and increase customer engagement and trust in your brand?
2. Set measurements and expectations first: Don’t believe anyone who says you can’t measure social media.  You can know more about buying behaviors on the internet (e.g. where customers come from, how long they spend with you, what they do and where they go) than in your store.  Plus Google Analytics and bit.ly links are free.  If you’re not convinced, David Berkowitz has a great presentation on 100 measurements at: http://bit.ly/pmadb
3. Social media takes time: Small business owners, understandably, have lots of priorities.  Manage what you can handle.  Customers come first.  Social media is going to be around for a while.
4. Live with the ups and downs: What you want is a following and fans.  It doesn’t happen overnight.  It doesn’t happen the way you thought it would, but, stick with it, and it does happen.  Enjoy the journey.
5. Not all social networks are equal: In every case I’ve seen, some social networks do better than others depending on the unique nature of every business.  For AJ Bombers, a burger joint, it was Twitter, acting as a virtual host, and a video from Chris Brogan.  For a utilitarian product like Blendtec blenders, it was unconventional product demos from Founder/CEO, Tom Dickson.  You can learn from their experiences below and expect it will happen for you.
6. Have your online house in order: If you follow tips 1-5, you will experience increased traffic.  It will go to your web site, the most important asset in any social media program.  There’s an old saying:  Nothing kills a bad product faster than good advertising.  Today, nothing kills a good social media program faster than a bad web site.
7. Believe in your product: Joe Sorge, owner of AJ Bombers, who now has a book, #Twitterworks (http://twitterworks.tv),   spoke in a video call from Milwaukee.  Joe says his Twitter page, AJBombers, has increased weekly sales +25%.  What was most important to his success?  “If I didn’t believe AJ Bombers made the best cheeseburger on the planet, social media wouldn’t have accomplished a thing.”

If you’re in the area, the next workshop is April 27th at UCONN in Stamford from 6pm to 9 pm.  Details will be at:  http://bit.ly/bW22Ml

In November, Warren Buffet bought Texas-based Burlington Northern Santa Fe for $26.3 billion dollars.  His analysis shows in our lifetimes trains are going to be the most effective, fuel-efficient and green means available to transport cargo from point A to point B.  For anyone investing in railroads, trains are going to be a source of “steady and certain” growth.

“Steady and certain” is more than an economic valuation for trains.  Their familiar sound is one of purpose and flow.

I’ve always lived in towns where trains pass through.  In Croton-on-Hudson NY, where I once lived, their sound was particularly melodious.  Trains travelled right alongside the Hudson River and the hills on both sides brought out a deep, rich sound.

If you search YouTube for Croton-0n-Hudson, what appears is an entire page of videos devoted to trains.  Apparently, from the comments, I’m not the only one to find something comforting and reassuring in their sight and sound.  Here’s one of those videos.  See if it has the same effect on you it has for many of us.

Thank you Warren Buffet and YouTube for something steady and certain.

I’ve had clients tell me they’re from Missouri – you know, the “show me” state.  I must  work with people who’ve spent some time there because I hear the phrase, ”show me,” a lot.

Here’s a recent experience of ours we’re glad to have done for a worthwhile cause.  It shows us social media:

• Works
• Works even better when it’s integrated into the marketing mix
• Is highly accountable
• Builds brands

But that’s our opinion.  What does this case study show you?

SOCIAL MEDIA BRINGS OUT ADVOCATES AND ROI FOR COLGATE/STARLIGHT FOUNDATION

SITUATION: Every February, Colgate Palmolive helps the Starlight Foundation, an organization dedicated to improving life for terminally ill children.  They donate a Wii Fun Center every day to a deserving children’s hospital.  Consumers vote at the Colgate website for their favorite children’s hospital to be recipients.

Awareness occurs through radio, major magazines, online advertising, PR and events, with the challenge to increase outreach, voting and participation every year.

SOLUTION: In 2010, social media is integrated in the marketing mix.  A social media “app” is developed for the voting at http://colgate.com/showthelove.  Through the “app,” consumers are able to: 1) Locate their favorite children’s hospital,  2) see who the daily winners are and 3) encourage their friends on social networks and relevant blogs to get involved.  Recommendations are delivered with a branded “Show the Love” digital mnemonic (visual in the center above).

RESULTS: Social media outperforms outreach expectations, shows significant return on investment and plays an integral part in the program.

• 20% of consumers who vote also share on their social networks and blogs.  For perspective, typical response rates for promotions on consumer packaged goods brands are less than 5%
• They are on the social media “app” 3X longer than the web site
• 25% of total traffic comes from social media; mostly from Facebook
• Total social media impressions compare favorably to mass media because the average Facebook user has 130 friends
• Text analysis shows learning and offers direction for next year’s efforts
• Lead acquisition occurs and a database is built; it’s now an activation source for future brand building programs

The investment in social media, relative to total program costs, is a small, single-digit percentage.   It delivers double-digit results.

Six months after starting BarnRaisers, a friend offered some sage advice.  He said,   “you’ve made it to the middle of a rope bridge, too far to look back and you definitely don’t want to look down.”

The next day my business partner gave me The Dip, by Seth Godin, a quick 80 page read that would take most people less than an hour.  I read and reread it many times.  Remembering the rope bridge, I knew we were in the middle of the dip.

The Dip is about your talents, your goals and being the best, especially when your efforts are at their maximum and results are at a minimum (see the graph above).

According to Seth’s law that you decide the life you want to lead, when you’re giving much more than you’re getting, conditions are ideal for producing the best results.  That’s because expectations are highest you’ll quit.  So, since less people continue, those who stick deserve greater rewards.

The alternative to going through the dip is to find yourself circling in a cul-de-sac.  Regardless of the path you choose, you still have to decide whether to quit or stick.

There are great quotes to help with the dip.  Dale Carnegie said, “Most of the important things in the world have been accomplished by people who kept on trying when there seemed to be no hope at all.”  Winston Churchill said, “Success is the ability to go from one failure to another with no loss of enthusiasm.”

These are great motivations.  So are the writings in The Dip.  And, because The Dip is about a journey and progress, you look toward the periphery, instead of down.

the view outside

We’re taking a pounding today in the Northeast from the snow.  It’s good weather for blog writing, especially on the topic - you don’t need a social media strategy; you need a business strategy.

AJ Bombers is a bar and grill in Milwaukee WI and a good example because:

1. BACKGROUND –  Everything you need to know is in YouTube video from Chris Brogan 2 blogs down
2. SOCIAL MEDIA SUCCESS – 75% of their customers are from Twitter
3. BUSINESS STRATEGY – Social media comes out of the business strategy
4. RELEVANCE - The principles apply to all businesses and haven’t we all dreamed of owning a successful restaurant?

BRAND POSITION.  It starts here, a promise a brand makes with its customers distinguishing itself from the competition.  I’ve never been to AJ Bombers but I know enough to write their brand position.

AJ Bombers is a place with great atmosphere where you always feel welcome and never find better beer, burgers and bar fare at a better value, anywhere.

BUSINESS STRATEGY.  How to put that promise into practice and make a profit.  From studying their web site, videos, social networks and PR, AJ Bombers’ business strategy is:

1. Mi Casa es tu Casa.  Welcome customers encouraging them to write their name or Twitter addresses on the wall.  It adds to the atmosphere, shows we want to get to know you and keeps relationships alive.
2. Put money into the product, not the marketing. Serve single, double and triple patty burgers at very reasonable prices and sides like Gi-Normous Fries.  Need I say more.  By contrast, keep the web site very simple with 5 pages (a personal “best practice” of mine since 95% of people never read more than 5 pages) and the ability to order food and buy merchandise online.
3. Show care with exceptional e-manners. Thank, keep informed and fix a problem, if one occurs, through consistent e-outreach and quick responsiveness.  Twitter is a natural.  It’s interactive, fun and extends the great atmosphere in the restaurant online.

And the people at AJ’s don’t miss a beat.  I’ve tested them and they respond to every e-mail, Tweet, Facebook post and blog entry, almost instantly.  This is very important in the caring and social media department.

AJ Bombers’ owner, Joe Sorge, spends a lot of time on Twitter and has learned to play it like a fiddle.  But, first, he had a business strategy.  Now, if I could only figure out where the name came from.