“In America, you have the watches yet no time. In Nairobi, we have the time but no watches. ” This is a familiar quote I heard recently from “Evans, ” an international college student from Kenya who is currently enrolled at the Tuck School of Business at Dartmouth College. He got me thinking about the economics of advertising in the U. S., and how the proliferation of social networks has affected media consumption and business consumer engagement. Although it is rarely considered in this context, the rise associated with social marketing is rooted in basic economic principles. When the price is definitely “zero, ” the laws associated with supply and demand often are ignored, but they still are related. Don’t forget another familiar quote: “There is no free lunch! ”
Returning to Basics-The Economics of ‘Free’
Remember those undergraduate days, waking up from an afternoon nap seated in a lecture hall, dazed and confused with a myriad of supply and demand figure compounded by explanations of elasticity and marginal utility? Well, all of that stuff is still the foundation for company behavior today and will continue to be the underlying principles of the free market economic climate. While there may have been hype regarding the “chocolate rainmaker” (YouTube celebrity) plus “twitters being quitters” (retention price concerns), the basic economic principles stay essential to understanding current social marketing styles in business today. A couple of modifications in order to traditional variables can help explain the logic supporting the rise of marketing “freeconomics. ” Here’s how it works in a free market.
Conventional laws of supply and demand state that increased prices are the result of decreased supply and/or increased requirement; the inverse also is true. For instance , with all other factors remaining constant, you can generally expect to negotiate lower mailing list prices when there is a greater supply of listings on the market and/or a decrease in the demand for list rental. This macroeconomic principle is based on perfect competition, so don’t jump the gun and expect to negotiate a 50-percent net-name set up on a highly targeted, niche reaction list of 5, 000 names.
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Placing the traditional list industry model aside, how does macroeconomic theory relate to marketing when the price of those services is definitely “zero”? First remember, there is no totally free lunch. The variable for cost simply needs to be replaced with the opportunity cost of time, which in itself can have a wide range depending on who is most engaged in the process. Within the macroeconomic context of “price, ” the opportunity cost of time generally will be lower as the supply of time is increased due to factors like unemployment or idle capacity. This makes the relative labor “price” more attractive and increases the demand for services that enable businesses to leverage those resources; it goes without mentioning that there are a lot of independent consultants out there trying to rule the blogosphere.
Explicitly stated, the economic downturn resulted in a rise in the supply of labor and a reduction in the average marketing budget. Therefore , businesses and individuals are challenged once again with delivering more for less. Social networks, book-marking services, free business listings and affiliate programs become more attractive when we have got fewer “watches” and more time. The particular suppliers of these services, mostly by means of online application service providers, benefit from the totally free labor and leverage the producing assets (content) as a platform for contextually targeted advertising solutions along with other innovative message delivery systems used to stimulate demand and add income.
Furthermore, the implications for search engine optimization (SEO) expand the value proposition to include getting noticed from higher positions on search engine results pages (SERPs). Bookmarking services provide external links that could be scored by search algorithms to increase a particular Web site’s ranking by Google and other major search engines. It is a key benefit to marketing professionals who have embraced the digital trend, but it’s still not that simple to measure the ROI. Despite any claims that search rankings can be mastered by prioritizing domains for placing external links, an effective long-term technique must recognize that SEO is a shifting target-especially as personalized SERPs still evolve and take root. When that doesn’t leave you feeling out of control, adding in the fact that there are hundreds of social marketing sites, which are not all created equal.
This brings you back to the fundamentals of direct marketing and defining your target market. The following social media summary will help you filter what makes the most sense for your business. Keep in mind that the targeted groups within a social network (e. g., LinkedIn) may be just as important the network(s) you choose.
Take a targeted way of social media.
Would a gun safety instructor hand you a blindfold and take you to the Bronx Zoo? Of course not, but why are we so cavalier about social marketing just because it is free? Again, there is no free lunch, so evaluate the opportunity cost of your time and do not target the wrong audience or there might be negative implications to your brand. There’s nothing wrong with a shotgun approach when shooting skeet (moving targets like search algorithms), and the same is true for connecting with your target audience. Here’s a list of resources you may use to reach your market with social media marketing. It’s never too late to get started.
Free Social Media Resources for Business (Top 100)
Aggregation Tools (5): Bloglines, FriendFeed, Lifestream. fm, Lijit, YouBundle
Blogs (7): Blog. com, Blogger, Livejournal, Posterous, Tumblr, Typepad, WordPress
Blog Directories (10): Blogapedia, Blogarama, BlogCatalog, Blogdirs, Blog Flux, Bloghub, Blog Listing, Blogtoplist, BritBlog, Technorati
Bookmarks (12): Delicious, Digg, Diigo, Fark, Mixx, MyBlogLog, Newsvine, Propeller, Reddit, Slashdot, StumbleUpon, Yahoo! Buzz
Comment Systems (2): DISQUS, IntenseDebate
Free Directory Listings (25): Akama, Bateekh, BizHWY, Cardboard, CrunchBase, DMOZ, EVliving, GetFreeListing, Google Local, IllumiRate, Jayde, Jigsaw, Librarians’ Internet Index, Little Web Directory, Manta, MerchantCircle, NextMark, Simple Directory, Spoke, SuperPages, TurnPike, VentureBeat Profiles, WebBuyersGuide, Web World, Yahoo! Local
Name Checks (2): Namechk, Usernamecheck
Post Documents (3): eHow, Google Docs, Scribd
Post Presentations (3): AuthorSTREAM, Myplick, Slideshare
Post Videos (2): Vimeo, YouTube
Press Releases: (4): i-Newswire, PR. com, PressReleasePoint, PRLog. org
Publish Articles (5): ArticleDashboard, Articles FACTORY, Ezinearticles, IdeaMarketers, Yahoo Articles Group
Social Networks (8): Biznik, Crowdvine, Facebook, LinkedIn, Naymz, Ning, NowPublic, Plaxo
Twitter Tools (5): Grader, Ping, TweetDeck, TweetLater, Twitter
URL Shorteners (4): bit. ly, doiop, memurl, TinyURL
Wikis (3): Pbwiki, Wetpaint, Wikipedia
Here are three tips to help you with choosing the right services for the business.
Tip 1: Since PageRank is important to your exposure on the Google search engine results page (SERP), you may want to check out the page rank for each of these services as well. That can be done for free on the web by using the PageRank Checker (higher = better).
Tip 2: adding your site to the directories can boost your search rankings and exposure; the same is true for your web site and your business. This is why for including the 35 directory listings (25 free directory listings + 10 blog directories) in the most notable 100. You only need to do it once, so take advantage of them.
Tip 3: be careful which URL shortening service you use, as it may affect your future search engine rankings. Not all URL shorteners are created equal, and there are a surprising number of dilemmas to consider when choosing one of these services. You certainly could roll your own to have full control, but there are plenty of good commercial solutions available for free. Just be careful to avoid those services that point for their Web site with your site in their wrapper, as they rob your site of the fuel from external links, devalue your analytics and generally undermine your business.
A best practice is to choose a service that uses a 301 redirect, indicating that the short URL referring link be moved to the long URL as the permanent address for your Web site. In contrast, a new 302 redirect tells the search engine that your destination is temporary, and the supplier can subsequently take credit (SEO results) for the link-that’s bad.