The Face-to-Face Book: Why Real Relationships Rule in a Digital Marketplace

Emails, texts, tweets, Facebook posts, and IMs — who among us doesn’t communicate with some or all of the above? Ed Keller and Brad Fay, highly regarded marketing research executives, assert in their new book that despite our message-a-minute culture, communication and influence are far more effective in face-to-face conversations at home, the office, clubs, social gatherings, and the like. They support their assertions with case studies revealing how marketing strategists are successful by creating ad campaigns designed to be conversation starters. The research in this book is impressive — and it’s certain that readers will gain a refreshed view of how to best communicate. The Face-to-Face Book: Why Real Relationships Rule in a Digital Marketplace (Free Press) will be published in May.
 — Lance Elko, Editor

Introduction: The Social Media Gold Rush

When the history of the early twenty-first century is written, will textbooks observe that Internet users spent billions of dollars on “virtual” animated online farm creatures during the worst economic slump since the Great Depression?

Much of history has been built on a series of gold rushes, not only for precious metals, but also for stocks, real estate, even tulips during the Dutch “tulip mania” of 1637. Could social media be the next big bubble? Is the rush to do business with Facebook, Twitter, and Zynga — the creators of the online farm game FarmVille — overheated?

During the American Gold Rush of 1848–1853, more than a quarter-million people flocked to California to exploit the new state’s golden bounty. That migration built proud cities like San Francisco and Sacramento and helped to fuel the great westward expansion of a young nation, with enormously important consequences for America. In today’s dollars, tens of billions’ worth of gold were discovered. But the vast majority of those Forty-niners, as they were called, became no richer for their journey and hard work.

We believe that social media today represents the latest gold rush, with too many businesses and marketers in search of Facebook and Twitter gold dust that they hope will rub off on them, chasing an immense social wave that is not yet fully understood. Missed in the frenzy is a far bigger opportunity with much greater impact to connect with people — consumers, voters, supporters — in important new ways. While the growth of social networking sites is impressive, the largest social gold mine is literally right beneath our noses: in the word-of-mouth conversations that happen in our kitchens and living rooms, in our churches and synagogues, next to the office water cooler, on the sidelines of youth soccer and baseball games, powered by the intimacy of face-to-face communications.

More than 90 percent of the conversations about products, services, and brands that take place every day in America happen offline, according to research that will be revealed in the chapters of this book. This adds up to billions of brand-related conversations and recommendations each and every week in America that take place face to face, or in real life (IRL), as it is known in Internet circles. Only a small percentage takes place online, whether through the multitude of social networking sites that we think of as social media, or through other online channels such as texting or email. Social media is big and growing, but it is still dwarfed by the analog world in which people live and interact.

That’s why this is The Face-to-Face Book. It is the story of how the decisions we make are based on true interpersonal influence: social influence, which happens most often, and most powerfully, face to face.

Make no mistake: there is a hugely important social wave rolling across the world of business today, based on the very belated insight that we humans are fundamentally social beings, for whom social influence determines nearly every decision we make. It’s an insight that was first observed and discussed decades ago, in the 1950s and 1960s. But with the rise of the golden age of television, it was largely ignored in favor of the glitz of that era’s revolutionary new medium. The opportunity was there, though almost entirely missed by the world’s marketers and entrepreneurs, until Mark Zuckerberg, the founder of Facebook, proved to everyone that there’s gold in them thar hills. Yet too many people are attempting to mine only one vein of social opportunity, following the path blazed by some who came before him but most successfully exploited by Zuckerberg. It’s as if those gold-seeking Forty-niners were crowding together in pursuit of gold only at the original site of Sutter’s Mill in Coloma, California, where James W. Marshall found those first nuggets of gold in 1848.

The opportunities of the Gold Rush were not limited to the Sutter’s Mill property, but spread across much of the Sierra Nevada mountain range. And the opportunity, ultimately, was not just to find gold. California turned out to be a place of many other bounties — agriculture, trade and commerce, tourism, and invention — all of which were helped by the explosion of population and discovery induced by the gold rush. It was that same spirit of invention and discovery that brought Zuckerberg to the Golden State from the ivory towers of Cambridge, Massachusetts, in the famous early days of Facebook.

This is neither a book against Facebook nor against social media in general. In certain respects, Mark Zuckerberg is the James W. Marshall of today’s social wave. The man and his company tapped into a mother lode that was there all along but ignored by many. He proved the power of social connections to the world. As of this writing, Facebook is approaching one billion users, one in seven of the world’s population, and the largest audience for a single media platform in the history of humanity. It is an awesome achievement, but the successes of Facebook — and its social media kin — are the result of a tremendous social opportunity, and not its cause or source. People flock to Facebook because it meets a social need that was previously underserved online. But people’s desire to be social manifests itself in many other places as well, creating multiple opportunities for businesses that wish to participate.

We believe in a marketplace that is highly social, but not because of particular platforms or technologies. The most successful businesses in the future will be the ones that embrace a model that puts people — rather than technology — at the center of products, campaigns, and market strategies. They will recognize that people have a far greater impact on each other than we previously realized, and that consumers are not just a collection of individuals. It’s an insight that applies as well to politics, which is increasingly impacted by socially driven movements such as the Tea Party, the “Occupy” protests, and peer-to-peer movements that are reshaping politics across the Middle East. New communications opportunities are being revealed by a rapidly growing “science of social” that is gathering momentum. Those who achieve the greatest success will recognize that there are many ways to tap into the power of today’s social consumer. Social media sites are just one way, and still a relatively limited one at that.

In the chapters of this book we will share with you our perspective on how you can think holistically about social influence in business, marketing, and politics. We rely heavily on insights from research about social influence by our firm, the Keller Fay Group, and others. So there is a solid, research-based foundation for everything we describe. But while the foundation is built on research, this is not a book that is dominated by numbers. We have interviewed top executives of companies that are going about things in smart, new ways — ways that are consistent with the facts and not just the hype — and we have endeavored to let their stories take the lead role, with the data in a largely supporting role. These companies include Audi, Best Buy, Dell, Domino’s, General Mills, Kimberly-Clark, Kraft, MillerCoors, Procter & Gamble, Toyota, and Zappos, among others.

But social marketing is not only the domain of large companies, so we also feature the stories of some small companies that are thinking creatively about how best to create social businesses offline and online. And outside of business altogether, we look at how recent presidential campaigns have tapped into social marketing strategies. We hope we have been able to strike the right balance for those readers who understand things best through stories, and those who take comfort in the facts that come from research.

As we describe the history, present, and future of social marketing, you’ll learn what motivates people to talk about brands and companies and about the influencers who are at the center of the conversation. We write about the important role of advertising and other forms of traditional marketing in sparking conversations, and how media can be planned more effectively to maximize consumer advocacy and word of mouth. We also recommend how to use social media in smart and meaningful ways, and give examples where brands have taken the bait and have been misled. We will share examples of how word of mouth can be not only a goal and a strategy that drives business forward, but also how it can be used as a primary channel unto itself. And we look at the mix of positive and negative word of mouth with some facts that will surprise you and help you to realize the good that can come from negative word of mouth when it’s properly managed. We conclude with a discussion of companies that have changed the way their organizations operate to deal successfully with the social era in which they operate today, and that will continue to define the marketplace in the decades ahead.

There are many pathways to tap the power of people’s social connections and their desire to share and learn from each other. Some businesses recognize this and are responding appropriately. We applaud and celebrate them. But those marketers who are mining only one vein — namely, social networking tools and technologies — are not seeing the full scope of an enormous social opportunity. And if history and research prove true, they will ultimately lose business because of it. The great social wave is an opportunity that no business can afford to ignore or look at myopically. It’s happening all around us, mostly face to face, and in the real world.

Chapter One: The Science of Social

The California Gold Rush was about putting everything on the line to chase a dream, find a new life, and have a chance for riches beyond imagination. Hundreds of thousands of ordinary Americans did just that in 1849 and for a year or two afterward — the Forty-niners, they were called. Some struck it rich, but most did not. The truth, though, is that most of the people who took the risk had little to lose. They lacked property and had few possessions and few economic prospects back east or in their home countries. So why not “go west, young man,” as the popular columnist Horace Greeley advised, in search of fame and fortune?

In this day and age, an established and successful $17.5 billion consumer products company would never take that sort of “all-in” risk. Or would it?

The beverage and snack giant PepsiCo provides the most dramatic example of a company that succumbed to the social media gold rush mentality. In 2010 the company sharply pulled back its spending on traditional media, especially on television, and most symbolically on its much anticipated commercials during the 2010 Super Bowl. Instead Pepsi placed a very large bet on social media as the smart, new way to engage its consumers and drive sales. Launching a campaign it called the Pepsi Refresh Project, the brand engaged 87 million consumers through Facebook and other social media in an effort to distribute $20 million in charitable contributions to local causes as an alternative to traditional advertising.

The campaign’s ambitions were impressive and aligned with the times — a transformative communications model that was based on creating community, engaging consumers, and, of course, leveraging a wide range of new online social networking tools. The advertising industry trade publication Advertising Age offered a prophetic headline in February 2010, announcing the Refresh campaign: “Pass or Fail, Pepsi’s Refresh Will Be a Case for Marketing Textbooks.”

Though ours is not a textbook, we use Pepsi’s Refresh as a case nonetheless. Pepsi’s big bet on social media did not come close to achieving the pay dirt it intended. While Pepsi’s Refresh Project deservedly won praise for being innovative and for the public good that it offered, the strategy did not meet the company’s core goal: selling soft drinks.

In March 2011 the trade publication Beverage Digest announced that for calendar year 2010 Diet Coke had surpassed Pepsi as the number-two soft drink, behind the Coca-Cola Classic brand. Pepsi sales in 2010 were down 6 percent in a category that declined 4.5 percent overall. In a tacit admission of error, Pepsi announced in early 2011 that it was raising traditional ad expenditures by 30 percent and returned to the 2011 Super Bowl after just a one-year absence. Several months later Pepsi executives were telling the Wall Street Journal about plans for a new ad campaign for the flagship Pepsi brand and about their decision to sign on as a lead sponsor for The X Factor, Simon Cowell’s TV music competition (in the mold of American Idol), which launched in the United States in the fall of 2011. The reported cost of Pepsi’s campaign was $60 million for the first season. Big-time advertising and sponsorship was back at Pepsi.

“We need television to make the big, bold statement,” Massimo d’Amore, CEO of PepsiCo Beverages North America, admitted to the Journal. Pepsi learned the hard way that traditional mass media is still a powerful weapon for driving social engagement and sales. The mistake Pepsi made when it withdrew advertising in favor of the Refresh campaign — whatever its social benefits — was thinking that it could replace rather than supplement a large and sophisticated media strategy that had been refined over decades. PepsiCo believed in the social media hype to its detriment.

Pepsi was right about the potential benefit of social interaction, but it was overly focused on online social networks. Our research at the Keller Fay Group shows that Pepsi does in fact sell soft drinks because of social interactions, but not necessarily because of online interactions. In virtually every decision we make, every one of us is influenced to a remarkable extent by other people, mostly the people we spend time with in the “real world.” Human beings are a fundamentally social species, and virtually all of our decision making, including consumer decisions, are based on the influence of the people around us — and most powerfully, the influence of those who are physically near and emotionally close to us. The discovery of how we influence each other in the offline world is the true breakthrough unfolding today. Scientists are finding the most important action is happening not online, but in our hearts, in our minds, and in our neural systems — in other words, in the real world.

Copyright © 2012 by Keller Fay Group LLC. From the book The Face-to-Face Book by Ed Keller and Brad Fay, to be published by Free Press, a Division of Simon & Schuster, Inc. Printed by permission.