Facebook’s India user base is an attractive proposition for brands, although they’re still to figure how to get the best bang for every buck spent on the social network
MobiKwik, a Gurgaon-based start-up that offers mobile payment services, has been on Facebook for two years. About a year back MobiKwik started paid advertising on Facebook targeting Android phone users, the most popular operating system on smartphones. Besides, a lot of the new users of MobiKwik coming on Android devices were in the 25 to 30 age group, and MobiKwik found that Facebook enabled it to target ads at this group. Says Sachin Gupta, digital marketing specialist, MobiKwik: “Being on Facebook helped us drive traffic to our app and get new users.” From start-ups like MobiKwik to Pigtails and Ponys, a Bangalore-based hair accessory label, more and more brands are finding it difficult to resist the lure of the world’s largest social network in their bid to connect with customers. Facebook now boasts 100 million users, a base the likes of HDFC Bank, PepsiCo India, Lufthansa, Tata Docomo, Nokia, Vodafone, Idea Cellular and Pernod Ricard have woken up to. Around end of 2013, Samsung launched the Galaxy Note 3 on Facebook, using a different creative to target men and women. And last year, through Facebook, Nokia was able to target feature phone users for its Nokia 205 entry-level smartphone model. Last month the Nokia X (Android phone) campaign on Facebook resulted in two lakh conversations, not just creating awareness for the brand but also resulting in the Finnish handset maker getting some muchneeded consumer feedback.
Says Kirthiga Reddy, head, Facebook India: “There are over a million advertisers globally on Facebook. We are conscious that every dollar spent on Facebook is a dollar that advertisers can spend anywhere else. Our USP is the ability to do effective and efficient targeted ads.” While companies have multiple social media platforms to advertise on, including Twitter, YouTube, LinkedIn, Google+ besides banner ads across popular websites, what makes Facebook attractive is the 100 million milestone it reached on March 31.
Says Kartik Jain, head of marketing, HDFC Bank: “It [the user base] reflects Facebook’s increasing role in online social chatter.” Agrees Jitender Miglani, social media analyst at Forrester Research: “100 million Facebook users are valuable for any marketer. It will attract a lot of share of internet market spending.” It is particularly valuable for those brands that are following, what Rishi Dogra, head of digital marketing at PepsiCo India calls, a “consumerled strategy”.
Facebook for Feedback While for start-ups the Facebook user base is a quick access to customers and, hence business growth, for large companies it’s a multi-step platform, starting with using Facebook as a listening board before any business can be transacted. Says Jain: “We use Facebook to listen to our customers, build our image and crosslink across social media platforms.” For example HDFC Bank has 90 videos on YouTube that talk about aspects of banking in simple terms (simplifying fixed deposits, mortgages and the like), which it promotes on Facebook.
Wines and spirits maker Pernod Ricard has Facebook pages to do surrogate messaging like promoting the Blenders Pride Fashion Tour. At the other end of the spectrum, the National Skill Development Corporation (NSDC), which has a mandate to skill 150 million people by 2022, uses Facebook as a communication platform. And Pepsi has been on Facebook since 2009 and uses it to engage with brands and fans. Says Dogra: “It’s a continuous engagement model. We have created and executed campaigns including Pepsi T20 and launched our ‘Oh Yes Abhi’ positioning. The Pepsi brand page has 31 million users.”
Adds Ronita Mitra, senior vice-president, brand communication and insights, Vodafone India, which has brought back the Zoozoos for the Indian Premier League (IPL) that began on Wednesday: “We have 17.8 million fans on the Vodafone Zoozoos page. Facebook allows us high measurability and targeting and we aim to use the medium in line with its strengths.”
Facebook Knows The User
The USP of social media and Facebook lie in their ability to know the user — age, city location, what device she is using, what she likes and so on. For instance Nokia targets the 18-24 year olds routinely with its new launches. Says Viral Oza, marketing director, Nokia India: “From a creative and engagement perspective this is our target audience. Social media and Facebook are high-involvement platforms, where youth converge. Ability to target helps get the message to right people, while scale creates the impact.” That ability to know the user enables Facebook to customize ads. For instance, Facebook has a custom audience feature, where a company’s data base of emails can be matched with those of Facebook users and messages can be sent out on the social network to the targeted user base. Another tool, generate a ‘look alike audience’, helps companies on Facebook find people with a similar profile to its existing customers.
Explains Gupta of MobiKwik: “If I want to target 25-30 year olds in Pune who drink vodka and use an Android phone, I can get such a user base from Facebook.” About 40% of MobiKwik’s ad spend is on Facebook, 10% on Twitter, 20% on banner ads across websites, and the rest on traditional media.
Online marketplaces are also using Facebook to drive traffic to their sites. For example, online fashion retailer Myntra uses Facebook logout ads — the ad that a user sees on logging out from Facebook. Says Vikas Ahuja, chief marketing officer, Myntra: “Facebook can help do age segmentation — we target 18-27 year olds, as that’s the internet-savvy population and key contributor to our business. We can do gender-specific targeting and by location as well. Around 35% of our business comes from women.”
Facebook controls the algorithm and hence has the power to target users. Says Senthil Anand, head of account management at KRDS, a Paris-headquartered social media agency: “Half of the Facebook user base comprises 18-24 year-olds and 30% are 25-34 year-olds. On Facebook, companies can target people who have their birthdays on a particular day. And videos go viral via Facebook. It gives more visibility to brands.” KRDS started operations in India three years back, in Chennai.
A young user base is attractive not just to internet startups and brands like Nokia and Pepsi, but for brands in more traditional categories, too. Like banking, for instance. Says HDFC Bank’s Jain: “Our follower profile on Facebook is similar to the user base of Facebook — a large number are below 25 and may have just started banking. The idea is to engage with them. We use Facebook to listen to customers and build our image.”
For a brand like HDFC, being on Facebook helps in listening to customer issues, complaints and resolving them. However if the strategy is to only target fans, then companies are really missing the point, insists Facebook. Says Reddy: “We have studies that show fans buy 1.9 times more than non-fans. But fans are a small percentage of the target audience. Fan engagement is valuable in itself, but brands can do a lot more than that.”
Start-ups see a great return on investment (RoI) on Facebook — like MobiKwik has seen cost of customer acquisition reduce and new user sign up increase via Facebook. For the bigger companies returns are slower to come by. Says Mitra of Vodafone: “A lot of the best practices for Facebook are still evolving and that makes it challenging to put a definite RoI on our spends.” KRDS believes its early days and at present its more about engagement than RoI.
From Users to Buyers Engaging with the user base is what attracted companies to Facebook, but now they are keen to know RoI as well. Says Jain of HDFC, “RoI on social media is tough. It started as a listening board and the next step is lead generation. Our objective this year is to look at RoI from social media.”
RoI essentially involves converting Facebook subscribers into buyers. Say for instance a bank launches a home loan product, can it sell it to users of the social network? With no easy answers on that front yet, despite their presence on social media, most brands still dedicate a bulk of their advertising budgets to traditional media. Says Jain: “As of now, 1-2% of our total marketing spend is on social media. Bulk of the spend goes into direct marketing, onground efforts and digital campaigns.”
For Pepsi, RoI is an ongoing calculation. Says Dogra: “If you create an engaged community RoI will continue to accrue over the years whereas the investment on customer [or follower] acquisition is a one-time spend.”
”RoI on social media is tough. It started as a listening board and the next step is lead generation. Our
objective this year is to look at RoI from social media”
Kartik Jain,
Marketing head, HDFC Bank
Facebook argues that the platform’s ability to target ads in itself creates better RoI than on any other platform. Says Reddy: “It’s the ability to drive a message in a particular way with zero-spillage that drives RoI. We are results-focussed. We are measured on business objectives and what we deliver fuels the next stage of growth.”
In the expanding world of internet — India has over 200 million users, expected to triple by 2016 to 600 million — Facebook dominates the social media play. Most of the online population (around 84 million) uses the Net via their handsets, and these mobile users may not find the ad intrusions on Facebook a pleasurable experience. Also, when it comes to mobile internet, advertisers have Twitter, YouTube and other social media platforms to pick from. Says KRDS’ Anand: “Brands want to invest in YouTube as well. Video content grabs better attention. That’s why Facebook now allows videos. At present YouTube is second most popular for advertisers after Facebook.”
Adds Dogra of Pepsi: “Organic reach [on Facebook] has been consistently dropping over the past three years. While this is a function of the larger network effect, it limits the ability to sustain a continuous engagement model as reliance on paid reach increases.” Organic reach is the number of people who would see anything you post without any paid media push.
Facebook’s 100 million users will have the brands following it, as that’s where the young consumers are. Even as companies search for RoI, Facebook will look to monetise that user base fast given that the social media platform gets just $40-50 million (according to Forrester Research) of its $7.87 billion global business from its second largest user market after the US.
Ref: An ET Article By Shelley Singh
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