Wendy Clark, Coca-Cola Senior Vice-President of Marketing, is using her role as an advisor and member of Facebook's council of ad clients to outline what she says is a top reason the social networking service needs to get mobile advertising right: reaching emerging markets.
Wendy Clark, Senior Vice-President of Marketing at Coca-Cola (Click Image To Enlarge)
Consumers in developing economies are more inclined to use handheld devices than traditional computers. So to reach customers in such regions as Africa and parts of Asia, Coca-Cola has to make mobile ads work on commonly used sites. Clark says.
“Facebook is the Internet for them. If you start to cut into emerging and developing markets, the mobile phone is the easiest and most direct medium that we can reach consumers with.”
Facebook said during the runup to its initial public offering that growth in ads is lagging behind gains in its number of users as more people socialize on mobile phones. Turning the tide will be crucial as the company seeks to step up growth, reverse a 19 percent share-price slide—and keep the loyalty of customers like Coca-Cola that aim to win business with social media ads. Clark says.
“We’re definitely looking at Facebook’s penetration and growth rate, and certainly for a global multinational like us, we’re very interested in them growing across the world.”
Mobile ads, which Facebook started earlier this year, can help annual revenue more than double to $8.68 billion by 2014, from $3.71 billion last year, estimates JPMorgan Chase. Much of that sales growth will probably come from developing nations.
In economies other than the U.S., Canada, Europe, and Asia, Facebook’s market penetration will be 64 percent by 2014, up from 48 percent last year, Doug Anmuth, an analyst at JPMorgan in New York, writes in a June 27 research report. Emerging-market sales, primarily from mobile ads, will more than quadruple to $1.36 billion over that period.
According to the International Telecommunicatiions Union here are some interesting worldwide mobile stats:
- 5.98 billion mobile phone subscriptions worldwide.
- 4.52 billion mobile phone subscriptions in developing countries.
- Mobile penetration rates are about 79 percent of the population in emerging markets, where only 25 percent of households have computers.
Here are a few Facebook stats:
- Facebook is available in more than 70 languages.
- Facebook sells ads to many of the world’s biggest brands, including Nestlé and Ford Motor
- Facebook had 488 million mobile users at the end of March, with 83 million accessing the site only on mobile devices.
Carolyn Everson, Facebook’s vice president of global marketing solutions, says global chief marketing officers very much want to talk about areas like Southeast Asia, India, and Africa. She says.
“They are seeing that their next hundred million or billion consumers are mostly coming from developing countries where mobile is not just the dominant, it is often the only way that people are accessing these companies.”
Facebook opened an office in Dubai in May and Buenos Aires in March. When Everson joined in February 2011, there was one salesperson in Latin America. Now the region has several dozen, and the team is growing, she says. To capture more consumers in the developing world, Facebook is expanding beyond smartphones to more basic devices. Last year it introduced an application for more than 2,500 more basic phones from such companies as Nokia, Sony Ericsson Mobile Communications, and LG Electronics. The app is available in markets including Romania, Tunisia, and the Dominican Republic.
The simpler phone models don’t yet have Facebook ads. Jay Altschuler, global media director for Unilever, says he sees the potential for using the devices to reach users. Altschuler says after observing the devices in widespread use in agrarian parts of India outside Delhi and Bangalore.
“We sit in villages and talk to consumers about media habits. They may not even have a roof over their house, but the one thing they do have is a mobile phone.”
Unilever, the maker of Lipton iced tea, Dove deodorant, and Vaseline skin lotion, gets more than half its business from developing countries, he says.
While Facebook generated $3.15 billion from advertising sales last year, none of it was from phones. Facebook announced plans for mobile ads in February, and the company hasn’t provided statistics on whether they work. Facebook has said revenue growth may slow because of a lack of mobile advertising and that its ability to profit from that source is unproven.
For now, Unilever and Coca-Cola are taking advantage of the only kind of mobile advertisement Facebook offers: a sponsored post on a user’s news feed, mixed in with the other updates from friends, like a relationship breakup or a set of graduation photos. With work to do, Everson says her job is “mobile-first.” She’s meeting with the company’s top marketing partners at least weekly, discussing ways to make advertising social. “In these countries, it’s literally Facebook,” she says.
COMMENTARY: The Coca-Cola Company is the leading brand in the soft drinks marketplace and is responsible for an array of brands including the MyCoke collection, Fanta, Sprite, 5 Alive, Schweppes, Powerade, Kia Ora, Dr Pepper, Lilt, Relentless, Oasis and Glaceau Vitaminwater.
Coca-Cola is one company who has seen tremendous success with its social media marketing strategy. In their view, content and media is paid, earned, owned and shared according to Wendy Clark, SVP for Integrated Marketing and Communication at Coca-Cola.
See this graphical representation to better understand the breakdown of media and content.
Paid, Owned and Earned Media (Click Image To Enlarge)
Another important fact regarding Coca-Cola’s marketing strategy – engagement is much more valuable than actual followers.
Engagement has been explored before vis-à-vis Twitter, but it’s a universal principle that Coke has really gone with. The numbers of followers isn’t so important – it’s the time people spent looking, sharing and commenting on your content.
Coca-Cola crowed the social media champion (Click Image To Enlarge)
In Coke’s mind, advocacy trumps loyalty as well. Many businesses in the past have viewed loyalty as the top of the ladder.
According to Coke’s Chief Marketing Officer Joe Tripodi –
“Awareness is fine, but advocacy will take your business to the next level. I used to think that loyalty was the highest rung on the consumer pyramid until I became the CMO of Allstate Insurance. There, I saw clearly that so much business was driven through personal referrals and advocacy by individuals for their agent.”
Click Image To Enlarge
Coca-Cola has spent much time considering how they can create an emotional relationship with their brand, which is referred to by Clark as ‘extrinsic’ or ‘brand love’ messaging. An example of this methodology can be found in Coke’s Happiness Machine video, which went viral on YouTube with no advertising and on to become a successful (…and economic) TV ad for the company.
‘Brand love’ though must be balanced with ‘brand value’ messaging, which basically refers to intrinsic value, or ‘functioning relationship.’ This concept is more closely aligned with traditional marketing and includes tangible things like coupons or some other means of driving a direct purchase.
Speaking at IAB Mobile Engage in London on May 17, 2012, Jude Brooks, Coca-Cola’s digital activation manager for Great Britain and Ireland, said:
“We are investing in apps, which is a huge opportunity for us, we’re optimising our websites and brand experiences and trying to put mobile as the starting point and desktop as a secondary channel [when it comes to digital advertising].”
Brooks admitted that investing so much in mobile is a “challenge” because the platform is so diverse, with many different handsets and operating systems, but this is outweighed by the opportunities to reach people in a new way.
She added:
“It’s definitely a challenge [working in] such an immature market. It’s easy to spend £5m on a TV campaign as it’s clear what you’re buying and the reach you will achieve as most companies will have years of data that shows it works. The challenge with mobile - and it’s the same in digital - is that it’s so diverse and there’s so many different ways you can do it. I kind of wish we were still in the days of Mad Men, where you could just buy a spot on Coronation Street and you would know the reach, now it’s so complicated that it’s hard for companies to grow that spend.”
To demonstrate its mobile first strategy, Coca-Cola showcased its Project Rebrief campaign at the event, which was produced in partnership with Google.
The campaign sees Coca-Cola’s famous “Hilltop” TV ad reimagined for the mobile age by allowing consumers to “buy the world a Coke” via a mobile app and receive a video thank you from the recipient.
Also speaking at the event, Simon Morgan, industry leader of technology and hardware at Google, praised Coca-Cola’s “mobile first” strategy and urged other businesses to adopt a similar approach.
He added:
“Getting mobile right will mean your business will have a better future; get it wrong and your business won’t be as bright.”
Courtesy of an article dated July 3, 2012 appearing in BloombergBusinessweek and an article dated July 11, 2011 appearing in SEO-E Blog and an article dated May 17, 2012 appearing in MarketingWeek
Comments