Companies listen online, tap into marketing opportunities

CHICAGO — You may never hear a word from a conversation analyst, but there's a very good chance one is paying close attention to what you're saying on blogs, in Web forums or in product reviews on sites that sell books or blenders.

Somewhere, someone is reading and analyzing your words.

"I pay attention to what people say online," said Leah Jones, one of these so-called conversation analysts, who works for a recently formed division of public-relations giant Edelman called Me2revolution.

She is part of a growing practice at such companies as Kraft Foods and Procter & Gamble that listens closely to what people say as the Web continues to morph from a medium of static sites to a place where dialogue and interactivity dominate.

The companies are adding positions like community manager, new-media strategist or blog strategist, and are actively engaging on the Web.

"If you have a social-media strategy, you need the right people," said Jeremiah Owyang, the recently hired senior analyst for social computing at Forrester Research.

He and Jones are typical of the types of people paying attention to how people interact online. Both are active bloggers and social networkers (Owyang counts more than 1,500 friends on Facebook, for instance) and well connected to an assortment of communities online.

"My job is research and education," Jones said. "I do a lot of small-group training on social media."

Behind this tidal wave of new positions in companies and consultancies is the explosion in popularity of social-networking sites and online conversations opening new potential marketing opportunities to companies looking to interact with consumers.

One example is that Facebook and MySpace, two of the Web's top destinations, have introduced new advertising platforms to reach the millions of users at each social site.

According to a survey last month from eMarketer, advertisers are expected to spend $900 million on social-networking sites this year, but by 2011 that is expected to reach $2.5 billion.

Kraft, based in Northfield, Ill., is engaged in social networking.

This year it opened a grocery store in the virtual world of Second Life (www.secondlife.com), and it is conducting a contest on MySpace asking people to submit a short video on why they love Kraft Singles.

MySpace users can vote for the winning video, which will be announced at the end of this month.

For consumers, social media "gives them an opportunity to tell us exactly what they want and what's important to them in an uninhibited environment," Andy Markowitz, Kraft's director of digital media, said in an e-mail. "We're listening and learning as we go."

Next year is key

Owyang said 2008 will be a key year.

"For the first time, you will start to see budgets set aside for social-media strategies and processes," he said.

But companies have to tread carefully. Unlike traditional advertising messages, Web ads and social-networking strategies that try to covertly blend into the mix often backfire, leading to severe consequences.

"To get a true sense of what people are saying on blogs or in forums, we don't get involved in the conversations," Jones said.

But if she or someone else from a company she counsels insert themselves into a conversation, there should be "full disclosure. If I e-mail a blogger, I tell them I'm Leah, I work at Edelman and I'm writing you because ... ," she said.

In the past, there have been so-called fake blogs set up by companies that were exposed as frauds, including one by Sony last year to promote its PlayStation Portable handheld game player. Such tactics have the potential to damage a brand.

And not all social media is being used to pitch products.

"It can be used for building better products or used to support products," said Owyang, who was hired at Forester after serving as Hitachi's first community manager. "As customers get more involved, expect their feedback to shape new products."

Deborah Schultz, who consults on social-media strategies for Procter & Gamble, calls the emerging social practice "conversational marketing."

"I'm actually thinking of calling myself a 'digital anthropologist,' but there's more money in being a 'social-media strategist,' " she said. "It's absolutely a good time to be doing this, because how companies need to relate to the customer is completely changing."

That can be tricky to manage, Schultz said, and partly explains why companies want to tap into people who have experience interacting online.

"Relationships take time, and they are messy," she said. "There is a give-and-take, and companies have to realize it can take a long time. You wouldn't show up at dinner party you weren't invited to and suddenly start selling Tupperware."

Jones said Me2revolution's clients include Microsoft, Nissan, Unilever and Wal-Mart, all of which are trying to tap into conversations about their products that are happening online.

"Everybody knows social media is important, and they want to move the conversation forward," she said.

Intregal part of program

Next year, she said, most of her clients will have a social-media strategy "as part of their program, not as an add-on."

"When we look at 2008, we're asking, 'What's our news? What's our online strategy? What are our conversation strategies?' " Jones said.

But Schultz cautions that tapping into social marketing is so new that measuring things like brand equity and customer engagement is hard to determine.

"That's what we don't know yet," she said.

That thought was echoed by Debra Aho Williamson, a senior analyst for eMarketer.

The group's forecast that ad spending will nearly triple by 2011 is based "on the idea that the proof will come, and that marketers will see solid [return on investment] from delivering a brand message to one person and having that person pass along the message to friends," she wrote in a report last month.