Challenges of using social media in target marketing

I wrote before about the findings from research conducted by myself, Moira Clark and Paul Fennemore on how social media enables organisations to obtain very detailed insight about markets and target customers, and to deliver tailored propositions. However, at the moment, there are still a number of challenges preventing organisations from achieving the potential value of social media for targeted marketing.

 

• Obtaining a single view of the customer

With so much private data – about customers, their social networks and consumption habits – publicly available, we are surely within reach of obtaining a single view of the customer, right? Not really.

The broad range of platforms in use means that there are many outlets to monitor, which stretches already limited resources.

Social media users share content in a multitude of formats: text, hyperlinks, images and, increasingly, videos. Most data mining tools are at its best with numerical data. Some systems can handle text, but fail to deal with irony, humour and abbreviations. And all companies struggle with the mining of images and videos.

Data is in proprietary format making it difficult to access, download and integrate into existing databases. So, while we may share increasing amounts of information for free but that does not mean that it is easy or cost effective for organisations to collect that data. It is possible to obtain deep insight about individual customers, but less so about general ‘buzz’.

Also, customers may adopt different identities in various channels. This limits the ability of achieving the desired single view of the customer.

 

• Interacting with the customer online

Customers are openly talking about their aspirations and consumptions experiences. They may even mention your product or brand. Certainly, this presents a unique, and valuable, opportunity to interact with the customers. Yet…

 

There is no single platform suitable for all stages and aspects of segmentation. Rather, organisations need to be present over a variety of platforms, using each one for specific purposes (for instance, data collection vs. customer service) according to the platform’s characteristics and customer preferences.

 

Also, the relative novelty of using social media for organisational purposes means that some rules are still unclear and not well established. This lack of clarity and this fluidity concern both formal rules such as those concerning data protection, and informal ones such as how to join discussions.

 

• Balancing the costs and the benefits

Social media does present a unique opportunity for targeted marketing, particularly at the level of customisation of propositions. But it all comes at a cost.

 

There is a trade-off between the benefits and costs of granularity. On the one hand, social media allows organisations to observe or interact with customers at an individual level. On the other hand, such granularity is resource intensive. Some question the benefit of highly focused observation and highly tailored propositions. As with traditional segmentation, managers settle for what is manageable, rather than what is ideal.

 

Influencers may help to rationalise limited resources and add credibility to the marketing message. However, here too there is a trade-off between volume and influence, and in some industries there are no clearly dominant influencers to target.

 

How organisations are starting to overcome these challenges

• To cope with the need to monitor different platforms, some organisations adopt a hub and spoke model, monitoring some platforms centrally and others locally via agencies or branches with specific skills (for instance, language). And, to improve data integration, organisations are finding innovative ways to reconcile the different databases, such as the creation of customer insight teams to overcome silos or the offer of incentives to customers in order to obtain information that allows them to marry social media log-ins with offline identities.

 

• To accommodate the relative novelty of using social media in marketing initiatives and the legal and practical issues arising from the lack of established standards of behaviour, organisations adopt a very cautious approach. They trial initiatives on a small scale, seek express permission to collect and share data, and focus on content relevance to avoid possible backlashes.

 

• As for the trade-off between granularity and cost, firms are compromising on the level of detail of analysis and interaction. They act at a far deeper level of granularity than allowed by traditional practices, but still far from individualised interaction.

 

The results of our research were published on the Journal of Strategic Marketing and can be accessed here.