When consumers flock to social media

Social media is not a new phenomenon. The concept dates back to the Romans. When the Romans wrote letters, they didn’t address it to a person; they wrote, “Please read out to so and so.”

The Romans had another social media innovation as well — the graffiti wall. Roman houses looked inwards into the courtyard and the wall was a place for people to write their views and opinions on issues that mattered.

An Arab invention, coffee, found its way into Europe in the 1640s, and with it started the Coffee House. Each coffee house had its own areas of specialisation.

For instance, the one near Westminster in the UK was about politics, and another near the sea was about ships and navigation. People would go from one coffee shop to another to collect information.

The Lloyd’s coffee shop in London where people from the shipping industry gathered to talk about insurance deals later morphed into the largest insurer. It is said that Adam Smith, the Scottish economist, wrote his masterpiece — The Wealth of Nations — in a coffee shop and circulated the manuscript for comment among the coffee shop regulars. The telegraph was the first online community where all operators could listen to the code and participate with responses.

So, social media has been around, but in different formats in the past thousand years. That said, Social media has got a new meaning with the arrival of mobility. Today, there are six billion SIM cards, five billion phones the world over, of which two billion are smartphones.

Year 2013 has seen two significant digital data points: A billion smart phones will be sold this year and mobile Internet will be bigger than fixed Internet globally. A smartphone in a citizen’s hand makes him a powerful catalyst for change, positive and negative. Smartphones and the Internet are transparency vehicles in countries that aren’t free. Today, 48 countries are not free and another 57 countries are partly-free. So, in sum, half the countries in the world are not fully free. Social media is the revolution in closed countries.

The father of social media ‘freedom’ is the Tunisian fruit seller, Tarek Tayeb Mohamed Bouazizi. His act of defying the commissioner who confiscated his goods led to the Arab Spring and the fall of the 23-year-old authoritarian Ben Ali regime. Bouazizi died aged 27, but started a revolution in the Arab world.

What’s in it for brands? Social media gives voice to consumers/citizens and the end result is a demand for more transparency, and accountability from leaders and society. Social media can be used effectively in companies. For instance, in a company, blogs can be used to collect feedback on strategy. Social media can be a huge culture auditor in a company. Social media and the image cultivated can help companies attract talent.

How can brands use social media? To answer that, we need to go back and see how brands communicated in the past.

The first level of communication was via packaging, which differentiated the brand from commodity. Early branding was in ‘labels’— Green label Tea, Yellow Label tea, Red Label Tea, Blue Label whisky, Black Label whisky, Red Label whisky — where the brand owner used the colour label as a price-quality marker.

After packaging, brands used posters to communicate the values and differentiators of a brand. One of my early advertising teachers, Michael Bronsten in Unilever, taught me the ‘T-shirt test’ — he would challenge me to put down the brand essence in two words on a T-shirt. It was tough!

Buying retail shelf space was another way for brands to talk to consumers at point of sale. Then came print advertising and the advent of two-way communication. Early print ads had coupons to stimulate immediate purchase.

Television advertising truly made brands build scale by reaching millions of consumers. In emerging markets, television advertising turned illiterate women and children into consumers through audiovisual magic.

Social connect Social media started as a vehicle to connect socially. Today, consumers trust their peer view more than they trust media or brand views. Social media is the future trust vehicle.

Celebrities needed brand endorsement to reach a wider audience. In a social world, the celebrity has to be smart enough to generate news and the fans will follow. Celebrities do not need brands in a future social world.

Marketing has been about needs, wants and desires. In a social world, the need will be to be heard, the want to be resolved, and the desire to see change in a brand or a company. For this, brands need to be responsive. In today’s world, the fast beat the slow; the big do not beat the small!

Consumers expect a twitter response in 15 minutes and a Facebook update response in an hour. So, if brands are not responding in 59 minutes, consumers will poke them. In a social media world, brands will be expected to show responsibility.

Black media That said, not everything with social media is rosy and positive. The hate mail is astounding. Consumers and readers who do not understand the totality, comment negatively and viciously about authors. Consumers using fake identities pull down celebrities with vulgar language.

Fake digital identities can be mustered and passed off as public opinion. The dividing line between gossip and truth can be thin and can lead to riots, misinformation. Blackmail is another by-product.

The benefits of social media are obvious. The downsides depend on the responsibility shown by consumers. The tables have turned. Consumers always expected responsibility from those who served them; maybe now they need to show restraint and responsibility.

( The author is Chairman and CEO, PepsiCo India )