4 Social Media Marketing Predictions for 2011

Posted By: Jared Cook

2010, often referred to as “the year of social media,” has come and gone. As we move forward into 2011, we will continue to see social media evolve and grow.

Below is an article from Mashable.com, written by Tim Ferriss, providing his insight into-

4 Social Media Marketing Predictions for 2011

Ah, social media marketing. Fewer things are so lavishly spent on, yet so poorly measured. Here are a few predictions for 2011 related to where the smart money and dumb money will go. Special thanks to a number of high-volume retail experts for their insights, including Ryan Holiday, director of marketing at American Apparel. Read on for our predictions and let us know in the comments what you think social media marketing will look like in the year to come.

1. YouTube Beats Yahoo — Video Will Convert

YouTubeYouTube is the second largest search engine in the English-speaking world. That’s right: YouTube is bigger than Yahoo. Zappos, as one example, added simple videos of people holding shoes and moving them around to its sales pages and increased conversion rate from 6% to 30%. When I look at the traffic sources for my book trailer on YouTube, the biggest referrer isn’t my own blog. It’s The Huffington Post. I customized the video and text content to a niche (but sizeable) outlet that didn’t exist two years ago: Huffington Post Books. With proper targeting and syndication, this 50 second video almost immediately propelled my book from an Amazon rank of approximately number 150 to 30, now stabilizing at number four in all books. We usedRankForest to track this sudden change.

2. The Full Resurrection of E-mail

Groupon has an e-mail list of at least 15 million strong in the U.S. (the company says it’s 30+ million if you include international), which goes to show that a true permission asset can be worth nearly $6 billion on the bidding table. E-mail addresses are a safer long-term investment than social media features. Think about all the money companies spent advertising their MySpaceMySpace pages in 2007. Even on FacebookFacebook, your direct messages to fans are relegated to a second tier inbox no one reads. This is something you don’t have to worry about happening in e-mail marketing. Among 20- to 35-year olds, at least, their physical addresses change more frequently than their e-mail addresses. The smarter marketers will budget “social media” acquisitions based on lifetime value (or a set duration, like 6 months’ retail purchases) of e-mail addresses. One major retailer did the math and learned that an e-mail subscriber is worth roughly $20 a year in annual online revenue. Knowing this number allowed the retailer to:

  • Calculate the value of the real estate it gives the e-mail signup box at the register in stores. It turns out to be one of the most lucrative converters in an already competitive area.
  • Easily say “Yes” or “No” to requests to participate in contests/sweepstakes by judging return on new e-mails acquired.
  • Calculate what the company can spend to build its list.

There are companies like Opt-Intelligence that can be paid a CPA (cost per action) for what are called “co-regs.” Co-reg example: If you’re signing up for an account at NYTimes.com, and it says “Get 4 issues of Golf Magazine FREE!” someone paid for that because they knew it will make money based on lifetime value. After the above-mentioned retailer quantified what an e-mail subscriber was worth, the company was able to double its subscriber base in less than eight months. The majority of that growth came not through spending money upfront, but from the redirection of already existing resources in ways that weren’t possible before calculating that number. Let’s say that added 500,000 e-mail addresses, each worth $20 in 2011; that means an additional $10 million in revenue with no significant capital outlay. Aaron Ray uses the same tactics for the “free agent bands” (major acts who’ve left a label) at The Collective. He figures out how many tickets you sell through your fan club, how many downloads come from your e-mail list, and how much traffic you can drive through Facebook and TwitterTwitter. It’s critical for two reasons: 1) For accurate revenue/sales/attendance predictions, and 2) As ROI metrics to justify investments for growth. This also allows loss-leader campaigns. Even if the math on a Groupon deal is razor thin, a smart retailer (online or offline) can acquire e-mails through a special form they set up and add an extra $20+ per transaction, per our hypothetical example. Many companies can afford to give product away for “free” if they have the right metrics. Most companies don’t, which leads us to number three.

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