Forrester Research's Josh Bernoff on Social Media and Recession
Josh Bernoff, vice president and principal analyst at Cambridge, Mass.-based Forrester Research, wrote a report published in February called "Strategies For Interactive Marketing In A Recession."
In the report, Bernoff said many economists now believe we are in, or are approaching, an economic recession, and that in the last recession, online spending cratered along with the rest of the advertising industry. This time around, however, he said things might be different.
"Since interactive marketing programs are now fueled by measurable results, not dot-com madness, we believe that they can thrive in a recession," Bernoff said in the report. "Social applications in particular, such as communities and social networking sites, are cost-effective and have a measurable impact on prospects' decisions in the consideration stage, which will be important to companies under recessionary pressures. Interactive marketers should stop toe-dipping and invest only in programs that can deliver on measurable metrics."
eM+C spoke with Bernoff -- who also is co-author with Charlene Li of the upcoming book, "Groundswell: Winning in a World Transformed by Social Technologies," which will be published this month by Harvard Business School Press -- about the report.
eM+C: Why do you think social media is recession-proof?
Josh Bernoff: I don't think social media is recession-proof. What I believe is that social applications are a good investment in a recession, since they help people make decisions through word of mouth -- a source of recommendations that are more persuasive than awareness in a recession.
Social "media" -- for example, ordinary ads on social networking sites -- will be just as vulnerable as any other ads in a recession.
eM+C: Social media is not usually thought of as being measurable or trackable to sales -- at least in the same fashion as e-mail and search. Yet, you have mentioned that it can be. Can you explain how it can be measured, or how an ROI can be attached to it? Can you offer some examples?
JB: You know, if you create social applications and then don't measure them properly, they're worse than useless. We keep hammering this home to our clients -- that to be successful, you have to set out with a real objective, and measure progress toward it.
For example, you could measure the number of people touched, the number that signed up to include your brand messages on their profiles, or the conversion rate of consumers that you see in your community. You can ask people after they buy if they were influenced by your social applications.
Procter & Gamble told us that by their internal math -- which I'm sure uses surveys before and after -- that their community [at] Beinggirl.com is four times as effective as television per dollar spent. In addition, Blendtec's sales went up 20 percent after their viral video program began on YouTube. And Chevrolet was able to measure the millions of contacts that its "Livin' Large Campus Challenge" promoting the Chevy Aveo generated on Facebook, MySpace, YouTube, etc. The smart people are measuring these kinds of effects.
eM+C: If there is a recession -- or not -- can you offer our readers any tips as to how to best spend their money in the social media sphere?
JB: Yes. First, build applications, don't just advertise on social networking sites. Be sure you know your objective, and measure progress toward it. This is not a campaign you are launching, it's a relationship -- so plan to start involved and stay involved. And start now -- by the time the axe starts to swing, you want some results to show.