Marketing Strategy: Dangers of Profiling in Social Networks

Social networks have become ubiquitous in our lives — especially if you’re under about 30. This growth has fueled business attempts to capitalize on social networks as a tool for marketing their brands. To the extent use of social networks as part of their marketing strategy has created engagement with consumers, the utilization of social network marketing strategy has been a good thing.

Consumer profiling is an important part of marketing strategy. Profiling allows companies to identify the most likely prospects for their products. For instance, if a consumer visits university websites, they are likely candidates for all kinds of products aimed at college students including moving vans, used textbooks, and credit cards. Profiling also allows you to know more about your target market so you can craft advertising messages for maximum impact. Although it will disappear soon, cookies help implement this type of profiling based on clickstream data to go beyond traditional market segmentation using behavioral data.

Unfortunately, like all good tools of marketing strategy, social networks are ripe for abuse by firms who don’t realize how to use them correctly.  As social network technology has evolved, so has the potential for abuse.

Profiling

One profiling option to is the use of clickstream data to build a profile of an individual consumer or even groups of consumers to help improve your marketing strategy. As I mentioned, cookies will disappear later this year from Chrome and other browsers are likely to follow. Here are some options to use instead.

1. For instance, Forrester Research has a tool (Empowered) that companies can embed in its blog, etc to help determine what kind of social relationship your target audience is ready for. Empowered is free and is based on survey results. It categorizes a target market based on age, country (or countries), and gender into one of 6 overlapping categories: creators, critics, collectors, joiners, spectators, and inactives.
2. eXelate Media also has a product in collaboration with Nielsen that uses Nielsen’s databases along with eXelate’s data on consumers’ online behavior to generate better consumer profiling that helps build the right marketing strategy.
3. Journals such as American Demographics and Ad Age contain profiles of consumers for various industries in the US market.
4. In addition to these tools, a number of consumer profiles are available through trade publications.

Profiling on social networks

A new marketing strategy tool is the ability to track consumers using social networks. For instance, you can track consumers and profile them using the Like button on Facebook. The thinking is that if you like a company, its brand, or related products, you are a good prospect, and marketing to you can lead to sales or increased sales.  Other tools are linked to posts on Facebook, LinkedIn updates, and tweets. By trolling this data, companies believe they can construct detailed, accurate data to guide them in marketing to their target market.

The Dangers of profiling in building marketing strategy

The problem occurs when companies put too much faith in the profiles they develop. Because profiling uses historical data, there are several reasons the data might not be accurate.

1. Historical data only incompletely predict future behavior. Lots of factors change over time and historical data don’t reflect any one of them.
   1. For instance, you may no longer need particular product types — a newborn will eventually grow up and no longer needs diapers.
   2. You may decide you no longer like a particular brand.  Since there really isn’t a don’t like button, this information can’t be used to update your preferences.
2. Online behavior might not reflect YOU.
   1. Someone else may be using your online persona. For instance, a faculty colleague posted on his Facebook wall today that his son had been using his Facebook and he was now associated with the gaming sites and Likes his son’s input while logged in as him. This can happen inadvertently.  For instance, the other day my daughter used my laptop.  I then made some friend requests, sent some messages, and posted comments on several blogs thinking I was using my Facebook profile. Since she was the last one to log in, however, all these online activities were attributed to her Facebook. She was a little miffed later in the day when she got emails from some of the folks I had interacted with using her persona.
   2. Your behavior may reflect favors you’re doing for someone else. For instance, my daughter is looking for a nursing job. I’ve been helping her in her job search.  However, I have no desire to buy the scrubs or subscribe to the nursing journals I’m getting email offers from.

The take-home message from this is that profiling MAY be an effective tool in your marketing strategy arsenal. However, don’t put too much faith in its predictions of the behavior of an individual consumer. Profiling is MUCH more effective when employed to understand groups of consumers rather than individuals.

Building segments based on product type

Building a successful marketing strategy is hard because it combines quantitative knowledge and skills with experience and intuition — a blend of art and science.

Developing your marketing strategy based on what your competitors are doing means you’re competing in the red ocean (full of blood from the dead bodies of those who didn’t survive swimming with sharks).  Developing a marketing strategy by the seat of your pants means you make a lot of bad decisions that lack cohesiveness.   Developing a marketing strategy leading to long-term success requires swimming in the blue oceans, where competition allows fish to live and grow while bounding that strategy with sound scientific marketing principles.

As mentioned above, profiling consumers help you target those most likely to want or need your products and offers a way to swim in a blue ocean that’s not teaming with competitors using traditional segmentation methods.

Segmenting consumer goods

One way to think about options when building your marketing strategy is to segment products into groups. The reason this works is that consumers inherently use different processes when making consumption decisions for different types of goods.

Marketers generally divide consumer goods into 4 groups — convenience goods, shopping goods, specialty goods, and unsought products. An important aspect of planning a marketing strategy based on the type of consumer good is to recognize that not all consumers classify the same product the same way. Hence, you still need to figure out how YOUR target market classifies your product.

Let’s take a look at how you might form a strategy around each type of consumer good. Today we’ll talk about convenience goods.

Convenience goods

Convenience goods are purchased frequently, often without conscious decision-making.  Examples include products such as toothpaste, gum, canned beans, bread, etc. These products are generally inexpensive and widely available.  Convenience goods involve little risk since they’re not tied to our definition of self or represent a potential danger. Consumers aren’t really involved with convenience brands.

Strategy for convenience goods – make them available anywhere consumers might look for them. Consumers don’t have a lot of loyalty to convenience brands so if they’re not readily available, consumers substitute pretty readily.

Coke’s strategy relies on being available in the most “points of thirst” possible – vending machines everywhere, fountains, cans, bottles …. in grocery stores, convenience stores, in gyms, in hotels, on streets … You get the idea.

Your advertising goal should involve creating awareness and creating good feelings about your product. Cute jingles, colorful packaging, and product placement on store shelves, all these strategies likely impact success. Developing arguments for your brand won’t work very well since consumers don’t think about buying these products.

Taste testing works well with convenience goods — again because consumers are easily convinced to switch brands.

Social media for convenience goods

Social media is an effective way to market many goods and services. However, a different social media strategy is necessary with convenience goods because consumers don’t really want to engage with convenience goods brands. That doesn’t mean you can’t use social media to market convenient goods.

Instead, build engagement with the people who manage the brand. Or create engagement with the marketing — with contests, discounts, and sponsorships the brand uses. Or link the brand with a cause important to the target market.

This marketing strategy worked well for Dove. Consumers don’t get excited about drugstore lotions. Instead, they built engagement using “the campaign for real beauty”, celebrating the real shapes of women and building self-esteem for girls and women. This cause is something their target market could embrace and wanted to share with their social network.

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