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Slide 1: s-commerce: An opportunity for marketers to reach beyond MySpace and YouTube October 12, 2006 1
Slide 2: What we’ll cover today  State of social networking  Marketing challenges  Social Commerce as a solution  Getting off to a smart start Confidential © 2006 Compete, Inc. All Rights Reserved. 2 2
Slide 3: The MySpace phenomenon s napsh ot:  Seventh largest site  56 million visitors  18 visits each month  1000+ page views per person  30 minutes per stay  Refers 35% of visits to Facebook and 13% to Google  myspace backgrounds, myspace layouts top searches on eBay Confidential © 2006 Compete, Inc. All Rights Reserved. 3 3
Slide 4: The web is becoming more social  Two out of three online consumers have visited a social networking site  Fastest growing online category: 109% growth in people, 414% growth in usage (pages viewed) since January 2004 Confidential © 2006 Compete, Inc. All Rights Reserved. 4 4
Slide 5: Social networking motivations Meet people Be entertained Learn something Influence others 78% join to communicate with existing colleagues or develop new acquaintances 47% join in order to find entertaining content such as photos, music or videos 38% join to get information from other people about topics that hold particular interest to them 23% join to express their opinions in a forum where their ideas could be discussed or acted upon Confidential © 2006 Compete, Inc. All Rights Reserved. 5 5
Slide 6: Characteristics of online socialites Attractive demographics    Younger: 37 years old Higher household income: $78,000 Greater discretionary income: $8,000 Media & buying habits    35% spend less time with traditional media 75% seek input from peers before buying 25% of total purchases made online Marketers’ equals    Early adopters: 40% are the first to buy Influential: 37% influence others’ opinions Credible: 63% trust reviews from other consumers as much as experts Confidential © 2006 Compete, Inc. All Rights Reserved. 6 6
Slide 7: Social saturation tempers growth  Average online socialite already frequents three sites, only has enough bandwidth to join one additional site  Marketers’ demand for new advertising outlets exceeds supply of consumers’ time How many social networking sites would you consider being a part of? 24% 20% 18% 14% 12% 7% average 3% 2% 7 1% 8 0% 9 10+ 1 2 3 4 5 6 Total number of social networks online socialites are willing to join Confidential © 2006 Compete, Inc. All Rights Reserved. 7 7
Slide 8: s-commerce offers marketers a new approach “s-commerce” goes beyond advertising on social networking sites  Links transactions and online communities  Broadens benefits of social networking  Thrives on consumer participation  Incorporates best practices from • e-commerce: online sales & marketing performance • social networking: fast growth, deep engagement Confidential © 2006 Compete, Inc. All Rights Reserved. 8 8
Slide 9: Emerging s-commerce models Corporate brands grow social    New brands create mash-ups    Branded micro-sites Customer Forums Ratings & Reviews Peer-to-Peer selling Community-created products Product blogs/forums Confidential © 2006 Compete, Inc. All Rights Reserved. 9 9
Slide 10: “When it comes to beer, sharing is caring.” Miller Lite becomes the voice of men In concert with a new television campaign, Miller Lite launched ManLaws.com to develop a new code of conduct by men for men. Customers that go to the site can view each ad as well as contribute and vote on new entries to the Manlawpedia – the official book of laws that governs all men.  Adoption: 50,000 visitors spend over 10 minutes interacting with the microsite each month  Engagement: Customers submit video auditions to appear alongside “men of the square table” 100,000 1,600 75,000 Accumulated minutes viewed (000’s)  Influence: Over 50,000 new laws have been submitted to the Manlawpedia by customers  Positioning: 750+ daily blog posts containing ManLaws enhances Miller Lite’s brand among male beer drinkers Other examples of microsites to study: Boldmoves; Seventeen & Aquafina MySpace profiles 1,200 50,000 800 25,000 400 0 May-06 Jun-06 Jul-06 Aug-06 Sep-06 0 Manlaws.com Unique Visitors Confidential © 2006 Compete, Inc. All Rights Reserved. 10 10
Slide 11: “What security software do I need?” Dell forum helps customers help each other Dell’s active community forum consists of threaded discussions among Dell employees and community members. Participants create profiles to personalize their posts and add credibility. Dell rewards participants with exclusive promotions & offers for community members.  Community: 52% of visitors surveyed said they feel like a part of a Dell community 300,000 250,000 200,000 150,000 100,000 50,000 0 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06  Service: 75% trust the content within the community and do not require support from Dell  Loyalty: 68% of members are likely to purchase their next computer through Dell  Advocacy: 90% of members will recommend the online forum to friends and/or family Other examples of online customer forums to study: Cingular, Samsung, Microsoft Dell Online Forum Unique Visitors Confidential © 2006 Compete, Inc. All Rights Reserved. 11 11
Slide 12: “Getting out of two mortgage payments after condo fire.” Borrowers bond with lenders at Prosper Inspired by eBay, Prosper is building a new socialfinancial marketplace. Borrowers use Prosper’s online platform to create loan listings; lenders then bid down the interest rate to compete for the loan. Borrower profiles, bid histories and “groups” make the process straightforward, transparent and safe.  Adoption: 145,000 visitors each month, 50% are registered Prosper users 250,000  Engagement: Users visit the site 3.6 times each month and view nearly over 65 pages per visit  Community: Approximately 3,800 active loans totaling $18.1 million (loans in default: 4)  Affinity: 3,250 borrower groups have formed to pool like people, mitigate risk and lower the interest rates offered by lenders Other examples of peer-to-peer sites to study: Zopa, Lala, Peerflix Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 200,000 150,000 100,000 50,000 0 Prosper Unique Visitors Confidential © 2006 Compete, Inc. All Rights Reserved. 12 12
Slide 13: “California-style burger joints in Boston?” Local businesses & opinionated reviews at Yelp Yelp is quickly becoming the definitive city guide by offering community-generated reviews on local businesses from restaurants to dentists. Consumers post reviews to Yelp, and can collect and organize recommendations from peers. Advertisers participate via email ads, enhanced business listings and sponsored search results.  Adoption: 500,000 monthly users: 15% submit at least one review each month 800,000 600,000  Community: Yelp members are very active contributors; in San Francisco, the average Mexican restaurant has 50 reviews, and the average member has contributed over 100 posts  Influential: 80% of Yelp members consider community reviews as trustworthy as advice from family member or friend Other examples of product-focused forums to study: Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 400,000 200,000 0 Woot, Insiderpages, Judy’sBook Yelp Unique Visitors Confidential © 2006 Compete, Inc. All Rights Reserved. 13 13
Slide 14: Roadmap for launching s-commerce initiatives Research Research consumers, while they research you and your rivals. • Develop new online research program • Benchmark usage and adoption of social sites • Survey consumers to understand motivations Create a channel to connect consumers and your brand. • Design, launch and iterate s-commerce site • Focus on sales, service, or positioning brand • Seek customer input into site features Channel Engage Engage consumers in conversation: listen, learn & leverage. • Contribute to the dialog and reinforce your value • Participate via questions, discussions, offers • Apply learning throughout sales and marketing Confidential © 2006 Compete, Inc. All Rights Reserved. 14 14
Slide 15: Taking our own medicine – compete.com  Launching compete.com as a consumer service on November 1  Consumers benefit directly from sharing their clicks with each other, Compete and marketers compete.com – clickstreams as consumer-generated content Site profiles: Timely, accurate website analytics including visitors, rank, pageviews, time spent, etc. Trust: Detects dangerous phishing sites and spyware offenders Deals: Promotions and discount codes across more than 2,000 online retailers Confidential © 2006 Compete, Inc. All Rights Reserved. 15 15
Slide 16: Questions from registrants • • • • • • • • • • How does s-commerce relate to my market (travel, auto, financial services)? What are the issues around privacy and hosting consumer-generated content? What are cost effective ways to incorporate s-commerce into a consumer website? How viable an advertising channel are social sites for high-consideration products? How effective are profile and sponsored pages on social networking sites? What impact are communities having on sales, marketing and/or customer service? What specific tools or features impact conversion rates? What are online communities three most pressing issues? How should marketers partner with social networking sites? Do consumers really pay attention to ads on these social networking sites? For copies of both presentations, please email Max Freiert at mfreiert@compete.com Confidential © 2006 Compete, Inc. All Rights Reserved. 16 16
Slide 17: Confidential © 2006 Compete, Inc. All Rights Reserved. 17 17