Is it bad news for social media advertisers?

A Gallup report - The Myth of Social Media -  shows social media advertising has scant influence on buying decisions.

Undoubtably social media is changing what many marketers do and where the advertising dollars are placed, but new figures produced by respected pollsters, Gallup suggest it might be money badly spent. The Gallup report cites some pretty spectacular figures which are tempting advertisers to put their brand message in front of this huge demographic. Just look at the numbers.

On a daily basis:-

• Facebook users post 4.75 billion items of content
• Twitter users send 400 million tweets
• Instagram users 'like' 1.2 billion photos
• YouTube users watch 4 billion videos

Compelling numbers indeed. According to Gallup "72% of U.S. adults use these channels, with the majority using them several times a day." But when asked about the influence of social media on their buying decisions "62% said they had no influence at all. Even among millennials (those born after 1980), whom companies think of as the core social media audience, 48% said these sites were not a factor in their decision-making."

The Myth of Social Media report goes on to say, "And while many companies correlate the number of fans and followers with their social media success, Gallup also finds thees metrics can be misleading. Of the consumers reported "liking" or following a company 34% still said that social media had no influence on their purchase behaviour, while 53% said they only had some influence."

Worse still is the the punch line, " When compared with more traditional forms of social networking, social media initiatives may actually be the least effective method for influencing consumers' buying intentions,"

.. there's more, take a look.

New product development

New products are at the heart of any integrated marketing strategy. Even the best executed marketing campaign will not compensate for poor products or products that the market does not want.

So the first stage of any new product programme is research. Initially there may be dozens, perhaps even hundreds of ideas to sift and evaluate, but new products will most likely arise from one of three key drivers:-

• ·      Technology
• ·      Market Need
• ·      Price

 Whilst market input is important, it’s not likely to result in any real progress in understanding what to develop. As one commentator remarked, ‘you don’t know, what you don’t know’.

The lack of imagination conditioned by the existing supply chain through to the end user, will deliver a verdict which can be summarised as ‘more of the same, plus a few ‘bells and whistles’ that the competitors offer on their product - and all delivered at a lower price’.

Technology, not surprisingly is a critical driver, either applied to the product itself or to the process of manufacture, or a combination of both. But basing new product development on a new technology platform can be a high-risk strategy unless relevant to the target audience. New technology for its own sake will not succeed unless it also fulfills a market need that the customers are willingly to pay for. But failure to recognise the value of new technology or adopt too late can be equally disastrous. Sometimes the technology is a good idea in search of a genuine user application. The key factor is an ability to bridge the gap between the possibilities afforded by adoption of the technology and the implementation and acceptance by the market.

Finally price can be the driver for a successful new product, but to achieve this will generally require having a lower cost-manufacturing base than any of your competitors. This may be achieved through entry barriers to the market such as high level of investment in plant, or patent controls that are beyond the reach of your competitors and will usually also need to be accompanied by high volumes and a dominant market share.

New product development - getting the product idea

New products need investment

Some of the best product ideas are not inspired by focus groups.

When it comes to new product development, engineers who turned to marketing hold a strong card, particularly in the technology and engineering industries. Today much of what is discussed about marketing is only marketing communications, but without new products and another overlooked area - intellectual property such as patents and trademarks - the scope of the marketing role is incomplete.

Typically the driving force behind new products is a product manager who champions the product from concept to launch and then manages it within a portfolio of products. The role of the product manager is unusual in that the people who carry out the work at key stages are not direct reports so enthusiasm, persuasion and good communication skills are necessary  characteristics of a successful product manager.

Often the concept for a new product is prompted by the need to replace ageing products, advances in technology, new manufacturing techniques and changing needs of customers.  The 'game-changing' products that Apple have created are a different matter, some creating new markets as the iPod and iTunes, or the iPhone turning the mobile phone market on its head. More often new products are more modestly pitched to give customers a better way of doing what they need the product to do.  Whether the product manager provides the vision for the new product, or someone else encapsulates the idea in a flash of inspiration, it is likely to be more viable than the output of a committee, or worse still a focus group of users.

Viewers of the Dragon's Den on television will be familiar with the procession of hopeful inventors and would be entrepreneurs who troop their new product ideas in front of potential investors. Amongst the crackpot, ill thought out ideas, every now and then a genuine and investable product pops up. Large companies I  have worked for get a constant stream of wild ideas proposed to them. One example comes to mind of an Australian would be inventor who claimed to have developed a high frequency electronic ballast the size of a matchbox for the control of fluorescent lamps . This of course when that product category was still new. A demonstration was set up in the board room with the product development committee at one end of the room and the inventor and his matchbox which we were not allowed to examine at the other. Or the American who in a first class piece of personal PR managed to be first to step off the inaugural Concorde flight from America to Heathrow. I  recently saw his interview re-run on the Discovery channel. He announced he was here to sign this great deal, in fact it was to try to sell us polarised diffusers for office lighting all backed up by weird science. Then there was the non-exec board member who had taken a tungsten halogen floodlight, mounted this on a length of conduit and stuck this into the centre of a car wheel as a base. I was summoned to the chairman's office to examine this great idea!

So getting a viable product concept is just the start. Getting backing for its development is just the first hurdle on the road to a product launch.