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Bocconi: "Doing business with social networks". Cases of success and the Italian potential

The Internet of Things phenomenon will become a business estimated by Cisco at 15 trillion dollars (currently only 1% of things are connected) – In the front row are Facebook and social networks, which have changed the approach to brand marketing : no longer hierarchical but participatory – In 2014 the web will surpass the press for advertising investments.

Bocconi: "Doing business with social networks". Cases of success and the Italian potential

The cases are now different: from Cadbury Creme Eggs (a sort of English Kinder egg), which by advertising the product more on Facebook than on television made it cooler and more sold; to Jimmy Choo who organized a treasure hunt in London via Facebook and Twitter which yielded a 35% increase in sales in the following six months. From the virtual fashion show of Louis Vuitton always on FB a Marc Jacobs who gave away badges to those who located in the shop on FourSquare; or again to the active involvement of consumers by Fanta, Pringles, Vitamin Water and Tesco, who let the users themselves choose the product design and the advertising campaign.

Or at the same Facebook, progenitor of social networks and co-organizer at Bocconi of the conference on the theme of "Doing business with social networks", which with its 1,19 billion monthly active users worldwide has led this revolution and is now at the forefront (also through the launch of its own smartphone) in the further conversion to mobile. Since, as he said Nicola Mendelsohn, vice president of EMEA at Facebook, at the opening of works at the Milanese university, “furniture has surpassed TV and radio in terms of penetration, but not only. There are now more cell phones in the world than toothbrushes: out of almost 7 billion inhabitants, over 5 have a mobile phone, while only 4,2 have a toothbrush!”. To be exact, about 1 citizen out of 5 (1,4 billion) has a real smartphone, while 1 out of 15 (500 million) owns a tablet, the diffusion of which, however, is growing 5 times faster than that of "mobile intelligent".

But like all this, defined "Internet of things", is becoming a business valued by Cisco at $15 trillion at full capacity (currently only 1% of things are connected)? First of all because the approach has changed: no more legal actions for the improper use of the brand on the internet, but rather the involvement of the user and the consumer in the packaging and diffusion of the brand itself. Let's call it crowdsourcing or co-development, the fact is that the customer, in the era of social networks, is more than ever right: his marketing power is growing more and more because, as noted Roberto Pedretti, country manager Italy Nielsen, "we have moved from a one-way approach (seller/buyer) to a participatory one, so now to choose a product you look first at the comments of other customers than at the company's official website".

“The hierarchical approach is a boomerang – he confirms Emanuela Prandelli of SDA Bocconi -: it is now established that word of mouth is decisive in the choice of purchase, therefore more and more brands focus on customer commitment and on viralization because what matters is not only reaching the potential buyer but also the opinion leader of the moment in the respective social network, who can influence the choice of others”. Viralization which then also tends to translate into effective results, through the phenomenon of social shopping: fans of a Facebook page in 2010 spent an average of $136 each for one or more products on the fan page, now instead they they spend 174 each, 43% more than non-fans and above all 75% of them share the positive experience with that brand online.

For once, Italy is excellently positioned in this phenomenon: of the over one billion active users on Facebook every month, 10 million a day come from Italy, where smartphone penetration according to Nielsen data is on par with the best countries, reaching 62% of the population (in the USA it is 64%). Not only that: from September 2012 to this year there has been a +35% of connections via smartphone, and even +160% via tablet, which also explains the enormous potential and the approach of iPads and the like in the share of e-commerce, which rose to 3 million against 4,1 million online buyers via mobile phone and 6,2 million via PC.

In short, connectivity is growing: always according to Nielsen, almost 40 million Italians connect to the internet at least once a quarter, of which 21 million from smartphones and 6 million from tablets, with access to the network that has improved across the board since 2010, with for example 40% more in the South and Islands area, 50% more among the working class, 64% more among pensioners. By now everyone is connected, for more and more time and more and more within the vast ecosystem of social networks, which ranges from pure networking such as that of Facebook, Google Plus and LinkedIn, to sharing via Youtube and Pinterest, to simple shared publishing through for example Twitter and Instagram. After all, a study conducted by Nielsen on the United Kingdom public, but easily applicable to Italy as well, found that the average daily use of the smartphone is 83,5 minutes, of which only 7 in phone calls against the 24 spent on Facebook or other social networks and 52 in other applications, often games.

Apps are less of interest to corporate business, but they are certainly contributing to the next big overtaking, indicative of the ever-increasing importance of the internet and mobile in the economic circuit: in 2014, according to estimates by the Nielsen institute, the Internet will overtake the press and will be the second media to attract advertising investments. In first place is the timeless TV (although in the USA more than half of the interviewees declare that they fiddle with their smartphone while watching it) with 51% of the market share, then the web with 19% and the press, which will also return to grow, with 18%. Bringing up the rear is radio with 4%. The future of advertising, corporate communication, e-commerce and marketing is therefore increasingly among the keys of a smartphone. Or even more on the touch screen of a tablet.

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