However, social media is transforming paid and owned media too so the complete picture regarding how social media is changing marketing is much more bone rattling than most think.

Social media impact on owned media activity. Beyond direct traffic the largest source of traffic to your website or Facebook fan page is usually search. According to Google adwords, there are 4MM monthly US searches for Starbucks and 16 million searches for “coffee”, driving a portion of the 2-3MM visits per month to Starbucks.com (according to Compete, Quantcast, Alexa). However, you will not be able to optimize search unless you master social activity as Google and Bing have each changed their organic search algorithms to include social media activity. Try it. I searched for “path to purchase” and a blog I wrote on this topic showed up fourth. On my daughter’s computer it showed up lower down. I am connected in social media to someone whose blog shows up highly in my results but doesn’t show up at all in the first two pages on my daughter’s computer. Implication: create sharable content (e.g. lifestyle pieces that reinforce brand values), offers, etc. and use sharing widgets to facilitate sharing.

Social impact on shopping choices. Yelp and Foursquare are mixtures of social and owned media. Check-ins and reviews are social activities that can persuade at the key decision-making moment. When I check in on my Droid at a location via Foursquare, I also check for offers at that retailer. If I am considering what restaurant to go to in a certain part of Manhattan, I always check reviews on Yelp. Not just what people say, but how many say it. The sheer number of reviews affects my choice of restaurants to dine at but the restaurant’s site must seal the deal.

Social media impact on paid advertising. This could be the biggest impact of all on marketing practice. What a minute, “paid advertising”? I thought social media was about getting people to talk about your brand so you didn’t have to pay for impressions. What am I missing?

Social media allows marketers to begin targeting advertising impressions based on behaviors and interests rather than just using demographics (the bluntest of targeting instruments). This is one of my suggested 6 big marketing mandates for 2012-2015. For example, Facebook offers a user’s profile of interests to serve up more relevant display advertising. You can also advertise your page to friends of those who have liked you, under the reasonable assumption that birds of a feather flock together. ShareThis classifies hundreds of millions of users each month based on their content consumption and sharing behavior across the web. This behavior is clearly indicative of both shopping intent and persistent life style interests and can be used very effectively for advertising. Social media boosts ad effectiveness as Ads can be liked, and offers can be shared as it has been shown that when a friend of yours likes an ad on Facebook, it is displayed for you and it creates additional lift to that ad’s impact.

As a proofpoint, Facebook is already a leading publisher in terms of display advertising revenues but this might only be the beginning.

I speculate it is possible that your liking and sharing behavior via Facebook Connect and plug-ins across many sites would allow them to more precisely model an individual’s interests and then using that to better address advertising across an ad network that extends beyond the walls of Facebook (hey, that’s a pun!). For example, if you sign into Huffington post using your Facebook or Google+ account the articles you read can become part of the profile of interests you hold (it already shows up publicly on the HuffPo page) and Facebook or Google+ could potentially serve advertising into inventory they have across the web. I predict that social log-in will become increasingly prevalent (Facebook, Twitter, Google+) because people prefer the simplicity of not having to remember a gazillion log-in passwords. More speculation. Imagine if Facebook becomes the way you “log-in” to view TV listings based on stored preferences when TV becomes completely digital. Facebook could get a piece of the 800 pound advertising gorilla. Google might even be ahead here with Google TV and Google +.

Social media not only creates the opportunity for owned media, it will profoundly affect paid and owned media as well, changing how marketers spend their ad budgets, away from demographics and toward interests, behaviors, and self-directed seeking.

With 80% of new products failing and with most of the breakthroughs according to the IRI pacesetters report actually being line extensions, we have to admit it.  The CPG approach to innovation is broken and must be reinvented.

There are five principles I propose, around which we can reinvent the innovation process itself:

1. It is more important to segment moments than consumers.  What is the landscape of consumption situations and what drives choice in each respective moment? To do this, you must have a discovery process.  Social media and immersive research are great.  With social media, remember that people are talking about their lives in an unscripted way.  Social media is not only rich for insight extraction, it is behavior itself.
2. Go beyond discovery to quantification.  So many in the innovation business stay with qualitative research to springboard into new ideas.  Who knows the size of the prize from qualitative alone?  You must have a valid way of quantifying this. Cluster moments into segments then profile consumers, not the other way around (which is traditional).  Develop behavior markets rather than product category defined markets.  This will also give you much more powerful media placement as moments will reveal themselves in digital life, especially via smart phones.
3. Uncover the cues that signal a product would be exactly what someone is looking for in a given situation. More than half of brand purchase decisions are made at point of purchase, and the leading source of awareness for a new product is in-store exposure.  Isn’t that a sign that the behavioral economists and other choice scientists are right about the impact of cues on instantaneous choice behavior? Shouldn’t marketing make it a top priority to crack the code on cues?
4. How do we test new product ideas with the same specificity with which they were created? If we are looking to address the choices people make in a given behavioral situation, why ask purchase intent which is not choice based and why ask it of everyone with a mouth? Get specific to the behavior market and study the choices people make when in those situations.  Understand the drivers of choice specific to those situations.
5. Evolve the measure of uniqueness into a measure of disruption. What a marketer really wants to do is to disrupt the habitual behavior that people have so their new product gets noticed and considered. Seeing it this way, the traditional uniqueness question in concept research is incomplete and inadequate.

I have been working with an inventive Oregon-based firm called InsightsNow to create a very contemporary approach to innovation that follows these principles. The process is called BehaviorLens ™. It uncovers innovation opportunities and then tests them in ways that are aligned to how those ideas were created in the first place. InsightsNow conducted a study at their own expense to understand the meal replacement market and there were some very big a-has from that research.  For example, it is clear that lines are blurring between what is a meal occasion and what is a snack occasion. It was also interesting to see products such as pizza being defined by some consumers as meal replacement products. From this research we identified seven behavior markets where the drivers of choice were similar within market and distinct across markets.  Most remarkably, when we extracted just meal replacement products, we found that they constituted a small portion of the true potential but also, that our estimates of market size tied out almost perfectly to reported sales for such products, so this is really the first discovery process that is validated to get at size of prize. (Study is available upon request if you send me an e-mail or by visiting their web site).

Don’t settle for tweaking traditional innovation research methods.  This is a different era of self-directed consumers who can pull any information they want digitally and who are instant sense-makers as they shop.  New era, new solutions.

I just bought a digital camera and here was my path to purchase.

1. On December 30^th, I realized I needed one for New Year’s Eve.
2. While in the car, I checked for deals on my foursquare and shopsavvy apps for electronics retailers near my location.
3. I chose a retailer to call and made sure they had cameras in the price range I was considering
4. I went to the store, chose a camera from an acceptable brand and got a memory card.
5. I then used Red Laser to image the UPC code of each and found lower prices at nearby stores
6. Rather than go to another store, I showed the results to the salesman who got manager approval to match both prices for a total savings of about $35.
7. I left the store feeling smart and successful and more likely to shop there again the next time as I know I will always get the best price there with the same shopping steps.

Marketers are training us to become system beaters. We all see a continuous flood of e-mails offering deep discounts and free shipping. Increasingly, marketers are making it easy for us by going paperless as we download the offers into our smart phones and loyalty cards.  Remember when we had to wait until Dec 26^th for big sales?  Now they start at midnight of Thanksgiving. And social media is a dream come true for system beaters; not only do we find the deals we want for ourselves but now we get to share them with all of our fans, friends, and followers.  We retweet the deals we find, and we like them via Facebook so all our friends see them too.  And by the way, looking for deals is a main motivator to like a brand page in Facebook in the first place.  Also, digital and mobile have compressed the timeline.  I now know I can wait until the last minute to start my research.

So, is this the end of branding? What should marketers and retailers do if shoppers are forever transformed into system beaters?  All is not lost as System beater behavior is itself habitual and selective in how a particular shopper goes about finding deals, just like we only use about 10% of the apps on our smart phones, and watch only 10% of the channels on our TV.  Study how consumers are seeking out deals…their system beating behavior…and then make sure you are ahead of competition at knowing how to use those promotional touchpoints to build habits.

Here are six marketing ideas to get loyalty lift from system beaters in return for hot deals:

1. Like-gate your promotion offers on Facebook
2. Use paid search to drive traffic to your owned media, where the landing page offers a relevant discount in exchange for some lasting marketing benefit;  people sign up for your e-mails, become members, download your app, or at the least, receive a cookie for subsequent promotional ad targeting
3. Make all of your offers shareable by including a sharing widget in the offer.  Reward the fan who shares the most.
4. For retailers, price matching should include matching Amazon online prices (as long as the item is new) so your store doesn’t become a showroom and you convert the trip into a sale.
5. Retailers should attach promotions to check-ins (like $5 off your purchase of $50 or more) to win the trip and build loyalty. (Check out Levelup which David Berkowitz from 360i made me aware of.)
6. Mastery of mobile is a must. Build apps that offer useful information as well as discounts so they turn your brand into a mobile portal. Also, please optimize your website for mobile.

Shopper behavior has forever changed and is forever changing and with it, the rules for branding.

It has been a great year of learning and accomplishment for Rubinson Partners and I wanted to thank my clients, academic sponsors at NYU, network of resources and thought partners such as Judah Phillips web analytics guru at Monster, Erwin Ephron, Dave Lundahl founder at InsightsNow, Pat Hanlon (author of Primal Branding), and Frank Cotignola at Kraft. I hope it has been a fabulous year for you and a prelude to being “touched by” an even better 2012. That’s a pun, because what has had more of an effect on daily living than touch screens on our phones, tablets, in the car or cab, ATM, etc.? And it is just starting…apps have not yet hit the tipping point.

I wanted to give something to all of you as a gift (other than a fruitcake!). Thanks to your sharing behavior (as high as 600 shares), page views (over 6,000 for one presentation), and search terms that refer traffic (“path to purchase” is the biggie), I am able to see which of my blogs or presentations generate the most interest, obviously addressing what keeps you up at night or stimulating your thinking by challenging mythology with evidence.
The leaderboard:

#1—How do people spend time with your brand? Owned media usually dominates Facebook and Twitter regarding the engagement power of “time with brand” as few go back to the fan page or spend time with updates. 600 or so shares suggest that others must have discovered this…in conversations, I know they have.

#2—Shopper path to purchase; a new approach to media planning? This blog keeps getting page views because it is found via organic search. A shopper perspective is an action perspective and increasingly, media is becoming an action environment

#3—Sharing is more than fans, friends, and followers. The truth about sharing behavior analyzed from ShareThis data across hundreds of millions of users in partnership with SMG. The truth? The way people share depends on content. E-mail and bookmarking are still powerful for certain content types. More truth? There is little multigenerational virality. For marketers, sharing is more about scale so put sharing into everything you do.

#4—Effectiveness of TV advertising over time. Turns out as of 2009, when I analyzed 388 cases over time, TV advertising effectiveness had actually increased contrary to what I was hearing in the echo chamber. Poltrack (CBS Chief Research Officer) publicly called a leading analysts’ statements BS (Ad Age captured the audio) about the impending decline of TV based on this analysis.

#5—How to increase marketing ROI in a digital age. Based on conversations with Erwin Ephron, we realized that digital is inherently a recency medium. It delivers messages when it counts based on self-directed consumer action.

#6—What marketing research needs to learn from behavioral economics. Another term that refers a lot of traffic via search is behavioral economics…the “predicably irrational” stuff. Research needs to start studying how consumers decide, and align the survey to these processes, not just conducting purchase intentions in some monadic concept test tube environment

#7—It’s about mobile! Three key documents here: Tablets, Rise of the Planet of the Apps, The US App-Economy 2011-2015 (conducted on behalf of Appnation)
Thank you for allowing me to have a transformational impact on the industry this year.

Thank you for allowing me to have a transformational impact on the industry this year and I hope to serve you next year as well!

Happy holidays,

Joel

Then it struck me: the tablet is the first device that can actually travel with the shopper through the complete path to purchase and if the prices come down enough, retailers might lease them for free to their frequent shoppers and club members to lock in their loyalty.  The lifetime value of a shopper would more than pay for this.  Imagine the incredible marketing value to a manufacturer who can deliver the exact right message to the right person, exactly at the right moment…the point of purchase.

Research I have amassed indicates that tablet owners already spend more time accessing the internet via their tablets than their computers. Tablets are becoming preferred devices among their owners for online shopping according to Forrester.  Today that is from the living room, but why should it be restricted so?  The tablet is inherently a mobile device.  Imagine a store completely wired for wifi so you can use your tablet as you shop. Imagine you have planned your trip at home, on your tablet by scanning what you are about to run out of and by searching on your tablet for coupons and interesting dinner ideas.  While you are doing this, smart marketers and retailers are advertising their products and offers using an interactive sight, sound, motion experience. Now, you have created a shopping list on your tablet, which also contains all of your frequent shopper information for the store you are about to visit.  When you enter the store with your tablet, it recognizes your presence and greets you with a video message from the store manager.  You place the tablet in your shopping cart so you can watch it as you go and your shopping list automatically gets reorganized so you can see which items that are on your list are in the aisle you are currently in.  This will encourage a shopper to completely navigate the store which any retailer would love. While you are walking down the aisle, windows awake on your tablet delivering messages that are relevant to you based on shopping history and interactively offering you deals.

Checkout is a breeze as you have all of the offers stored paperlessly, along with your frequent shopper data and mobile payment info.  As you leave, the tablet awakes to wish you a nice day and thank you for shopping at that retailer.  Of course, this shopping trip becomes part of the stored information so planning the next trip becomes easier.

When I discussed this topic with my friend Doug Stephens (@retailprophet), he advised me to think about the trend that consumers are using the best screen for the purpose at hand. While a number of apps are being developed for smart phones, I think the tablet might be the best screen for shopping.  A number of initiatives reflect this thinking as well, most recently in the US, mediacart.  Now there is a significant initiative in China that is similar.  While such efforts have yet to succeed, the big difference I am proposing is that rather than using a foreign device attached to a shopper cart, use the same tablet you use in your living room, on the train, in the bathroom, etc. that you then bring to the store and mount on the cart.

There is still much work to build the needed in-store and cloud-based technology infrastructure to support this vision.  However, as the Institute for the Future preaches, develop foresight about possible futures to provoke strategies that need to start in the here and now.