Singapore, a country with an electorate of no bigger than 3 million, is heading towards polling day on 7 May 2011. While the last general election in 2006 saw little use of social media (with the exception of blogs), the general election this year is heavily influenced by social media, in particular Facebook. Voters and candidates alike are using Facebook for political campaigning in unimaginable ways, including using business cards with Facebook skin and creating fake profiles to give the impression of a more balanced distribution of support for the two sides.

One notable phenomenon on Facebook is the rise of Nicole Seah, a 24-year-old candidate from a non-leading opposition party with little work experience whatsoever, who has won more than 42,000 fans in a span of less than two weeks. These numbers may not sound impressive, but consider that Lee Kuan Yew, Singapore’s George Washington, Abraham Lincoln, and John F. Kennedy all baked into one super-strongman, has a Facebook page that garners about 55,000 fans over several years. Nicole is currently the second most-Liked politician in Singapore:

Facebook may be the very reason that this year’s general election may turn out to be very different – it already is very different in terms of its build-up. More voters are using Facebook to write political Notes that are shared publicly, and real-time data and communication allow for a scalable way of spreading information through Pages and status updates. Information spreads like wildfire, and, in a city-state with high IT-literacy, the state-backed mainstream media might find itself increasingly irrelevant.

Ultimately, Facebook seriously increases political awareness and engagement among voters. It inspires emboldenment, by allowing like-minded people to gain idea validation, it brings to light issues of concern (e.g. alternative policies, voting secrecy, political scandals), and it fuels activism, something that the generally-passive Singaporean population is often accused of being incapable of. In a way, Facebook is also a leveler of the political battlefield, given that the incumbent government would find it very hard to regulate the flow of information on a third-party platform hosted in the US.

Will some votes swing because of Facebook? No doubt. The question is, as with online marketing, to what extent online metrics, such as shares, Likes, number of comments, etc., are correlated with results (be it the number votes or online purchases).

We do not have statistics, but we suspect that the average Twitter corporate/business user follows a few hundred other Twitter users, and not necessarily out of interest. People follow others for a myriad of reasons: common courtesy (i.e. following back), to increase follower count (i.e. by making others obliged to follow you back), marketing reasons (i.e. to be on a potential customer’s radar), etc. In fact, we ourselves are guilty of using Twitterin the same way. Ergo, the Twitter Timeline is not a real aggregation of content shared by the people or companies in which we are truly interested. The possibly-enormous follower count that we have is a mere by-product of our other goals.

If that is the case, then the number of followers we have is inaccurate in reflecting how many impressions our Tweets get or how widely our message is spread, since engagement is likely to be very low. Impressions, after all, are only useful if people even read our message or click on our links. The fact is that, even if our customers solely follow people or companies in which they are interested, anyone following more than, say, 300 Twitter users would find her Timeline to be overwhelming and thus unappealing.

We propose a known yet frequently-overlooked way of marketing on Twitter: utilize the Mention tag (@) more often. There are several advantages of doing so. First, you are only competing for the attention of the user you mentioned with other users who used the Mention tag. Second, it adds a personal touch to your message, and your audience is likely to respond in some way. Third, it gives us the opportunity to be searched by our audience’s fans, customers, competitors, stakeholders, etc., which may very well lead to other benefits, e.g. partnership opportunities and new customers.

Mentioning specific people is undoubtedly less scalable, but, since it is a more targeted approach, the engagement rate is also likely to be higher overall. This hypothesis has been consistent with our experience using the Mention tag, at least on the receiving end. What has your experience been with the Mention tag?

Trust is often perceived as the primary driving force of social commerce. Consumers make shopping recommendations on Twitter or solicit shopping advice on Facebook, because they want to share or get information from people with whom they have a personal relationship. Therefore, social media platforms are seen as trust-based marketing channels, where brands and merchants can leverage on the personal network and goodwill of their customers to drive further sales. Brands and merchants thus increasingly move away from traditional advertising (which, experts say, consumers no longer trust) and invest more in social media marketing.

This strategy is fair, but some sellers go one step further and measure the relative “trustworthiness” of different social media platforms in order to make strategic decisions. A recent study revealed that consumers trust shopping advice and recommendations from Facebook more than from Twitter or Groupon (source). Prima facie, it seems to imply that the Facebook environment inherently inspires or creates more trust than Twitter and Groupon, since we at least know that there is a correlation between Facebook and trust.

The truth is that there is nothing magical about Facebook and its features, interface, etc. that results in more trust; it is the people that we trust or not, not the platform. Facebook just happens to house our real-life friends and family, while we generally follow people more liberally on Twitter. The difference is subtle yet important, because, if it is the people who are the true source of trust, we should discover how people primarily connect to their friends and family online and then invest in those channels.

There are two main benefits of following this route. First, by working with first principles, we discover and can tap on other less-hyped, under-utilized channels that we would have otherwise unwittingly overlooked. For instance, Dropbox’s referral system leverages on its users’ email networks, an increasingly-forgotten marketing channel. Second, measuring trust based on what consumers claim or say is dubious in itself; there is no measurable or verifiable action (e.g. a purchase after seeing a product recommendation) that accompanies said claim, making said claim less credible. It is, however, less dubious that people generally trust people whom they know personally more than people whom they do not know. More than one thing can cause Facebook to look or feel more trustworthy, such as its support for multimedia or even clean interface, and those things do not even necessarily result in more sales, which is what really matters.

The point is that trust cannot and should be measured not only by what people say but also by what they do. Actions speak louder than words, and, in online marketing, action is king.

Online marketing is an increasingly tough nut to crack. It is gradually becoming a business operation that cannot simply be solved by cash alone. In the online space, competition is becoming stiffer, while barriers-to-entry are getting lower, with cheaper bandwidth and server space as well as the emergence of numerous scalable turn-key solutions causing saturation. This phenomenon is especially pronounced in the online retail market; while ten years ago online retailers would be able to solely rely on banner/display advertising and wait for sales to roll in, today’s online retailers would find such a strategy unworkable. Search engine optimization, social media marketing, and even A/B testing are increasingly necessary for successful online marketing.

There exists a misconception that these newer marketing strategies are cheap or free, a claim that could not be further from the truth. Although one could probably 1) learn the skills necessary to pursue these strategies and 2) actively spend time applying said skills, all without spending a single cent, one should not neglect the economic cost of employing such a tactic, not to mention its impracticability. On the other hand, employing marketing executives for this purpose or outsourcing to service providers would incur real expenses (and get the job done). Still, the outsourcing or delegation approach is much less obvious when it comes to social media marketing – after all, how hard can it be to peddle offers and engage the community? Contrast this to search engine optimization where considerable technical skill is required.

The fact is that social media marketing is neither cheap nor easy, and it should be treated as such. Social media marketing has always been tricky, because it mixes social and economic norms. Any business that sees real value in social media marketing should thus give it the attention and tact that it requires, since having a poor social media presence is infinitely more expensive than no social media presence.

The simple answer to the perennial question of social media ROI is, like traditional marketing, to tie social media activities to sales. The amount of sales resulting directly from social media activities, which can be tracked via referral indicators like traffic sources and redemption codes, can give an idea of how well your social media marketing efforts are faring. This method of calculating social media ROI, however, merely represents the minimum ROI obtained from your social media activities, because there are other numerous indirect benefits that result from cultivating a thriving community and engaging customers on a regular basis (e.g. sales resulting from non-attributable word-of-mouth marketing, customer service cost reduction, customer feedback acquisition cost reduction, etc.).

Fixation on the ROI of social media (as with any other business endeavor) is important; nobody likes wasting time and/or money. The important thing to determine from the outset is the core objective of any social media activity, which would then help determine the relevant metric to track to produce the minimum ROI. If management wants to explore the potential of using social media to automate or scale customer service, the relevant metric to track is cost reduction in customer service expenses, not sales. Tracking sales may produce a positive ROI, but that number would not confirm or debunk the effectiveness of using social media in aiding customer service.

The whole purpose of tracking ROI is to determine the amount of value a specific activity creates in order to give a picture of the likely future returns, should the business decide to invest further in said activity. Unfortunately, the uses of social media are so broad and encompass a wide range of applications (e.g. broadcast-style marketing, customer service, product development, etc.) that are essentially different activities altogether. Lumping all social media activities together as one activity to obtain one average, mashed-up ROI is unlikely to be useful in guiding future decisions, because it involves too many variables. Track your social media activities separately, and it will quickly become clear which application of social media is most fruitful for your business.

While some brands are overly optimistic about the value of social media, others fear the effects of negative word-of-mouth so much that they try to minimize involvement in social media. As is well-known by now, conversations about brands and products go on with or without the brands themselves, and ignoring said conversations can be very costly. The crucial choice to make for brands is not whether to participate in social media but how to participate and harness social media activity effectively to their advantage.

At this point, it is crucial to draw the line between social media marketing and word-of-mouth marketing. Social media marketing fundamentally works on a B2C model, while word-of-mouth marketing works on a C2C model. The former has a striking resemblance to direct/traditional marketing, in that businesses retain considerable control over the content being marketed, and the only material difference lies in the platform of communication. The latter represents a far more democratized and self-sustaining marketing model that, while can be influenced or facilitated by businesses, is essentially driven and controlled by consumers. It is the latter form of “social” marketing that brands often fear for its potential negative impact (and similarly welcome for its potential positive impact).

Many businesses tend to confuse the two, thinking that common social media marketing tactics can achieve word-of-mouth marketing levels of success. There is often an expectation that bland, non-shareworthy marketing content would somehow become infectiously viral once kick-started by the business or content creator (after all, everyone dreams of being Blendtec). In other words, it is secretly hoped that consumers on social media would work their magic and turn a mediocre offering into a great offering. This paradigm, of course, is a severe misunderstanding of the nature of social media and word-of-mouth marketing.

Word-of-mouth marketing is essentially an amplifier. A good product would travel far and fast given the convenience and connectedness afforded to us by social media; a bad product would similarly be publicized as such. Social media is primarily a technological revolution, not a fundamental shift in consumer behavior. Poor offerings will spawn poor user experiences, which will very often be broadcasted on social media outlets. This phenomenon is basically what is often described as social commerce: consumers helping one another to make better buying decisions.

What are brands to do then, in the face of negative conversations? I believe that reputation management is vital, but beyond controlling the spread of fire, brands should see negative word-of-mouth as a great source of customer feedback and market insight and engage the community openly to build trust and rapport. Despite recent claims that consumers do not want to engage with businesses, I believe that social media provides brands a highly valuable opportunity to be more personable, accessible, and transparent to consumers. That, in itself, is one sensible and effective way to exploit social media to grow your business.