Social Media: The Search For An Effective Brand-Marketing Formula

As consumers communicate more using social-media networks, credit card companies see the sites as new vehicles to tout their products and services.

Indeed, though social networks simply may represent new marketing channels, their presence is gaining in significance, analysts say.

“To ignore social media is a mistake,” Megan Bramlette, director of knowledge management at Auriemma Consulting Group in New York, said in an interview. “Everyone is on it in one form or another, and it can be incredibly influential as it is increasingly becoming a primary communications channel for both consumers and businesses.”

Social-media websites can help to identify consumers’ interests, such as which businesses and brands they follow. When consumers “like” a brand, product or company on Facebook, for example, it can generate significant brand presence and strength. And that gives marketers an inside track to target those consumers.

But there is no perfect formula yet, Bramlette said. “I don’t think anyone has cracked the code of how to market using social media,” she said. “Right now, where we are is that social media is a brand play, and you’ve got to be there because everyone else is there.”

The major card brands are using social media to drive interest in their products and services, but the concept is still in its infancy. Recent efforts include a Visa Inc. travel campaign on Facebook, American Express Co.’s foray into Foursquare merchant discounts, MasterCard Worldwide’s Facebook and Twitter postings and Discover Financial Services’ use of Facebook to promote several contests.

Visa, which hosts several Facebook pages touting its products and services, in May launched a Facebook marketing campaign to promote travel (see story). The effort is part of a larger marketing campaign that uses television ads and social media, including a new photo and video application for Facebook called Memory Mapper, and a $100,000 “Trip of a Lifetime” sweepstakes.

Memory Mapper uses Google Maps satellite technology and consumers’ photos, videos and captions to enable consumers to create a visual story of their travels, something many consumers are already doing via Twitter and Facebook pages.

The campaign includes national TV and digital advertising that features the real-life Igloi family as it travels from California to Tahiti on a surfing adventure. The commercial highlights the Memory Mapper application by using satellite map views of each location the family visits in combination with photos and videos from the trip.

The digital advertising also is featured on such social-media sites as Facebook, Flickr and Photobucket and on travel sites such as Orbitz.com. Other online-media channels include DailyCandy and Yahoo.com.

The next six months represent a peak travel time in the U.S., and this prompted Visa’s desire to tie social media with a travel-themed campaign. “Inherently, travel is becoming an increasingly social experience, not just by consumers going online to research and book travel but to read reviews from other consumers,” Alex Craddock, Visa head of North American marketing, told PaymentsSource in an interview.

And using social media taps into the notion that many consumers share travel information via social-media networks. Often consumers post questions on Facebook or other social-media sites asking friends for recommendations on where to travel, and Visa was exploring how it could harness that inherent social-media experience, Craddock noted.

“It’s interesting as marketers to figure out how to harness the power of the comments going back and forth in social media,” Craddock said. “What’s wonderful about social media is that consumers only share what they want to share, and that has value, not like TV where you interrupt the consumer [viewing experience].”

With social media, the consumer is choosing to engage with the marketing message, and that is a much more valued engagement, Craddock said. “We work to engage the consumer the way they want to be engaged, and it feels like the right thing to do,” he said.

And connecting consumers with the travel theme helps Visa lead consumers to use their Visa cards while they travel, said Craddock. “What’s important for us is really to understand the consumers’ path to transactions and how it’s linked to a purchase occasion,” he said. “In terms of marketing, we look at what we need to do to engage our message and encourage consumers to use their Visa card for their travel transactions.”

Trying to find a return on investment for social media is going to be difficult, but Auriemma’s Bramlette is confident the card market will find success as more consumers adopt social media, particularly among older folks.

Connecting with consumers, especially via mobile phones, is a key strategy for card marketers. And American Express already working to connect its effort to drive card use through social media.

AmEx in March, for example, announced an agreement to test payment deals through a mobile initiative with Foursquare Labs Inc. at the South By Southwest music and technology conference (see story).

Consumers signed up for the Foursquare location-based social-media tool so they could “check in” to locations, which then were posted on the consumer’s Facebook or Twitter account. For the trial, AmEx cardholders who signed up for the service received $5 statement credits for spending more than $5 at 60 merchants around the festival in Austin, Texas.

Foursquare enables users to bookmark information about venues they want to visit and relevant suggestions about nearby venues, according to the company’s website. Merchants and brands leverage the Foursquare platform by using tools to obtain, engage and retain customers and audiences, it says.

The Foursquare deal was a “powerful combination of digital behavior and spending behavior,” David Wolf, AmEx vice president of global marketing capabilities, told PaymentsSource in March (sees story).

“At AmEx, we need to go where our cardmembers and merchants are, and more and more are using social-media apps like Foursquare,” he said. “We are uniquely positioned for this space because of our closed-loop information on our cardholders, merchants and transactions. We built the [application interface] for Foursquare to create a unique, customized American Express experience with the application.

Meanwhile, Discover has used Facebook to promote four contests so far this year (see story).

In its latest contest, consumers may submit designs for a new patriotic credit card through July 4. Starting July 5, fans may vote for their favorite design on Facebook, and for every 10 votes Discover will donate $1 to Operation Homefront, a charity organization that provides assistance to families of service members and wounded warriors. Discover cardmembers and fans also may donate to Operation Homefront if they choose. Discover will announce the winning design July 25.

“Our social-media effort is very important to us,” a spokesperson said in an interview. “We use it to engage our cardmembers and get them involved with a good cause, and we can potentially attract new cardmembers.”

Earlier this year, Discover held Facebook-based contests that featured a school giveaway in which it donated $25,000 to a Chicago public school; a day with the National Hockey League’s Stanley Cup; and “Feel the Earn,” which enabled cardmembers to win gift cards for sharing their best stories on how they used their cash-back rewards.

In a more organic effort, Discover started promoting its TV commercial character “Peggy” on Facebook and Twitter (see story). http://www.paymentssource.com/news/discover-peggy-ad-characgter-social-media-3006692-1.html “When we launched the Peggy TV ad campaign in the fall of 2010 we talked about doing social media, but we did not do it right away,” she said, noting a fan of the character beat Discover to it and started a Peggy page on Facebook.

Discover in mid-September launched its own Peggy page. The brand’s lead advertising agency since 2006, Richmond, Va.-based The Martin Agency, initially suggested promoting Peggy on social media, Drake said.

Peggy also started tweeting on Twitter under the name @MyNameIs_Peggy about four weeks ago, according to Discover. Discover tracks how often Peggy is tweeted by consumers, and he posts his own tweets, Drake says.

The key to using Peggy in social media is getting customers interested in what Discover has to offer credit card customers, Drake emphasized.

“We’re really pleased with how much engagement we get from the [Facebook] site,” he said, noting Peggy even helped out with a marriage proposal online. Peggy received a request from a Brooklyn man who asked if Peggy could hold up a proposal sign asking his girlfriend to marry him on Peggy’s page. Discover did one better and had the Peggy character do a proposal video it posted on Peggy’s Facebook page. Peggy was even invited to the wedding.

The burgeoning interest in Peggy also spurred Discover to do a promotion with the character in conjunction with its sponsorship relationship as the official credit card of Six Flags amusement parks.

The Martin Agency came up with the concept of having Peggy win a trip to Six Flags for providing the lowest amount of rewards for the fictitious USA Prime Credit card program, Drake explained. Peggy then posted photos and status updates on his Facebook page (see photo) during June to keep fans up to date on his trip. Along the way, Peggy finds out about the benefits of the Discover Card, including the 5% cash-back bonus and its “better” customer service.

MasterCard, which says it has had a global social-media presence for about a year on YouTube, Twitter and Facebook, said it is just starting to make its move into more social-media marketing, with undisclosed plans to roll out more efforts starting around July (see story).

“We really are just at the beginning [of using social media in marketing], and we’re defining what we’re going to do from being a presence to having a more robust consumer engagement model,” Elizabeth Birenbaum, vice president global digital marketing, told PaymentsSource in an interview. “To get a digital-branded connection is the heart of our mission with social media.”

MasterCard uses its Facebook page to promote its products and services, including an applications tab to such MasterCard services as Priceless Picks, which provides recommendations on restaurants, retailers and travel locations. Its posts also promote contests, such as a ticket giveaway to see the Vancouver Canucks National Hockey League team for Vancouver cardholders and an Audi TT Coupe car to Sovereign Bank debit cardholders.

MasterCard uses social media to create a dialog with consumers who follow the card brand, Birenbaum said. For example, when MasterCard revamped its World Elite card (see story),  it used Facebook and Twitter connections to disseminate information on the perks of the card, much the same way consumers themselves share information with each other through those channels.

But each medium has its own nuances, Birenbaum explained. For example, its World Elite promotion, MasterCard posted from three to five Facebook posts over several days but “tweeted” three to five times per day, she said.

“We have to make sure we have the proper cadence and sequence on Facebook so we don’t bang consumers over the head if MasterCard posts keep showing up in their news feed,” Birenbaum said, noting it is more appropriate to post more often via Twitter because it is “more fluid and frenetic and is more action-oriented than Facebook.”

Using social-media networks such as Facebook and Twitter is an important new marketing channel, analysts agree. But which efforts produce the best results in terms of creating brand awareness and effectiveness remain unknown.

“When Internet marketing first started over 10 years ago, people weren’t applying for credit cards online from day one,” Bramlette said. “Initially it was used for research and general marketing.”

But sites got more sophisticated as more consumers adapted to electronic channels, she said. “So these cultural changes evolve, and I expect it to evolve with social media,” says Bramlette.

Card brands are testing the waters with social media to determine how best to market their products and services to consumers. Harnessing the power of this vast and viral communication channel will be the prime platform for future marketing efforts.

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