Social networking  sites such as Facebook and MySpace may work best not as advertising vehicles, but rather word-of-mouth tools. 

Use social networking tools
to boost word-of-mouth sales
Alternative ‘buzz’ schemes unethical; perhaps illegal

Two seemingly different marketing tools – online social networking and word-of-mouth – may well work best when used together.

Despite hype to the contrary, data indicate advertising on such sites as Facebook and Twitter don’t give marketers much of a boost. Additionally, word-of-mouth schemes – where people are planted in person or online to “talk-up” products – are unethical. In fact, the Federal Trade Commission (FTC) requires those pushing your offerings to disclose their relationship to your business.

“While 83% of the Internet population (ages 13 to 54) participates in social media – 47% on a weekly basis – less than 5% of social media users regularly turn to these sites for guidance on purchase decisions in any of nine product/service categories. (See list.) In addition, only 16% of social media users say they are more likely to buy from companies that advertise on social sites,” reported a May, 2009 study by Knowledge Networks.

Sixty-three percent of those polled say that while they don’t mind viewing advertising on social networking sites, their first priority is to interact with friends. About the same number use these services only at home. This may reduce the effectiveness of social media for business-to-business promotion. Of the small number of consumers who do react to advertising on social media sites, travel services and banking were the chief beneficiaries, the survey reported.

“Combining the best elements of social networking and word-of-mouth is the best approach, but there are rules to follow and risks to avoid,” says Tim Coco, president and chief executive officer of COCO+CO. “The best sources of new business are kind words spread by satisfied customers. These referrals work because they have inherent testimonial value,” Coco says. More people, however, are conducting their social lives online and going out less. With multiple conversations going on, distracting banner ads being displayed and other diversions, will your reliable lead sources remember to help you?

The alternative of planting positive comments – known as “buzz” marketing –  will, at best, make you look pathetic if people find out. At worst, you may run afoul of FTC rules requiring endorsement disclosures.

Online tactics not so different from real world

Solutions include adding key bloggers to your press release distribution list just as though they were any other media. With print media in decline, this may prove even more effective than the traditional media relations campaign, says Coco. Continue to be sure press releases have a strong “news hook” and conform to generally accepted journalism standards.

Creating “fan” and similar pages on Facebook, MySpace and other online sites may help remind people to raise the level of chatter about your service or product, he adds. Suggest consumers become fans by placing appropriate icons and links on your Web site. Be sure to follow rules set down by these companies regarding proper use of logos and allowed text.

Finally, the online world mirrors the real world. If consumers don’t like your business, they’re just as apt to tell their friends online. Consider studying the reputation of your business and making any needed improvements before embarking on any kind of marketing effort. Services such as COCO+CO.’s Beneficial Benchmarks help discover disconnects between what marketing departments offer and what operations departments provide.

Submit your comments to creative@cocoboston.com.