Formal report on social media

ANALYSIS OF THE SOCIAL NETWORKS’ BENEFITS FOR THE COMPANY SAN FRANCISCO

Presented to Diana Foss

Senior Director of San Francisco

Prepared by Nhu Thao Ngo

Manager of San Francisco

April 8, 2013

MEMORANDUM

TO: Diana Foss, Senior Director of San Francisco

FROM: Nhu Thao Ngo, Manager of San Francisco

SUBJECT: Appraisal of Social Networks’ Benefits for San Francisco

DATE: April 8, 2013

Here is the report on the benefits that the company would gain from social networks, which you requested on February 8. In this case, this research takes aim at Pinterest, a social networking site that allows its members to put images and videos they find online to a virtual board and share them with others. It reveals the use of Pinterest being a cost saving opportunity on advertising, a new approach for attracting more customers, a good opportunity for an extended market research, a potential way of increasing online sales as well as improving internal communications and the prospective measures needed to improve both the internal and external environment of the company.

Even though the company has been performing quite well, and it has continued to attract more customers, the information gathered illustrates that in order to improve both the internal and external environment of the company; we should in future adapt the use of Pinterest to the company’s marketing campaign.

I appreciate the company for having given me the opportunity to carry out this research, it brought to light many ideas as well as new inspirations for the marketing strategy.

I hope this report will offer the company with the necessary information to evaluate the efficiency in the use of Pinterest, to comprehend its benefits and advantages, and to plan for the forthcoming years. If you have any questions about this research, or if you need other information, please do not hesitate to contact me. You may contact me through this number: (514) 898-0176 and by e-mail at: . I look forward to examining the report recommendations with you.

Enc.

TABLE OF CONTENTS

EXECUTIVE SUMMARY……………………………………………………………………….4

INTRODUCTION………………………………………………………………………………...5

Purpose of the Study…………………………………………………………………........5

Scope of the Study………………………………………………………………………...6

Sources and Methods……………………………………………………………………...6

BENEFITS FROM THE USE OF PINTEREST………………………………………………….7

Reducing Costs in Advertising……………………………………………………………7

Attracting More Customers………………………………………………………………..7

Expanding the Market Research……………………………………………………….….9

Increasing Online Sales……………………………………………………………………9

Improving Internal Communications…………………………………………………….10

CONCLUSIONS AND RECOMMENDATIONS………………………………………………11

Implement Pinterest within the Company………………………………………………..11

Apply a Social Network Policy…………………………………………………………..12

Analyse the Marketing Trends in Pinterest………………………………………………12

Put Forth a Marketing Strategy for Pinterest…………………………………………….13

REFERENCES…………………………………………………………………………………..14

EXECUTIVE SUMMARY

In order to bring forth an improvement toward both internal and external environment, this study has analyzed the benefits in engaging social networking mediums. The purpose of this report is to justify the advantages in using social networking mediums. For this matter, this research reflects a study on Pinterest, a social media site that allows users to put images and videos on a virtual board and to share them with others.

The results of this research show that the use of Pinterest would offer many benefits for this company regarding both the internal and external sides.

As a result of this assessment, the following recommendations involve changes to be made in the company:

· Establish Pinterest within the company by doing additional researches on how to use Pinterest and informing all the employees of its benefits.

· Setting a social network policy by implementing rules and regulations regarding behaviour standards, discipline in terms of online communication, and distinction between personal use of social media and work related social media.

· Analyze the marketing trends in Pinterest by doing further research on the company’s competitors and customers online.

· Implement a marketing strategy for Pinterest by exploring the strengths, weaknesses, threats and opportunities of the company.

INTRODUCTION

Social networks refer to web-based services that allow individuals to share as much or as little information with others. This new form of media generally provides a fluid transfer of text, photos, audio, video, and information. As a result, it creates a huge amount of information that can be easily shared, searched, promoted and discussed.

Pinterest is a well-known social network. It is actually ‘‘one of the fastest growing social networks online’’ (Goodrich, 2013). It enables users to ‘‘pin’’ images and videos they find online to a virtual pinboard and share them with others. Designed to be quite visual and social, the users can create as many pinboards as they wish, related to their interests, hobbies or events. Other users can follow individuals on their pinboard, and even repin the content that they like. Pinterest also provides a bookmarking tool called ‘‘Bookmarklet’’ that allows people to pin any image or video you find when browsing the Internet. In summary, Pinterest offers five options for actions to perform when visiting another person’s pinboard: to follow that person, follow a pinboard, like a specific pin, comment on a pin, or ‘‘repin’’ the pin.

Purpose of the Study

The purpose of this study is to justify the use of a social network medium for the company San Francisco and to determine the benefits that the company would gain from it. In this case, this study takes aim at Pinterest as the social network medium that would be profitable for the company. Recommendations on accommodating the use of Pinterest to the company’s marketing campaign will be given based on the results of this study.

Scope of the Study

This research particularly focuses on the following matters:

· Advantages and opportunities acquired from the use of Pinterest

· Accommodation of Pinterest to the company’s marketing campaign

Sources and Methods

This review involved

· Various secondary articles about Pinterest and its benefits

· Secondary articles from Small Business Canada, Tech News Daily, Fast Company, Business Insider, The Globe and Mail, Web Pro News, etc.

· Certain articles concentrates on the explanation of what Pinterest entails

· Other articles specifically focus on the benefits of Pinterest for fashion retail business

· Other articles focus more on the advantages and opportunities of Pinterest for business in general

BENEFITS FROM THE USE OF PINTEREST

The analysis of this study will be divided in five sections: (1) reducing costs in advertising, (2) attracting more customers; (3) expanding the market research; (4) increasing online sales; and (5) improving internal communication.

Reducing Costs in Advertising

According to the article from The Globe and Mail, Pinterest remains a ‘‘growing social network’’ (Pinsker and Lipka, 2013). This implicates that there is no actual direct advertising. As a matter of fact, Daniel Maloney, CEO of PinLeague which is a consultancy that tracks social media usage; affirmed that this results in Pinterest’s marketing cost to businesses being lower than other social networking sites. Actually, ‘‘the current cost of acquiring a Pinterest follower is a penny to 50 cents, depending on which type of business. That is low comparing to 50 cents to 2.50 on Facebook’’ (Pinsker and Lipka, 2013). This indicates that instead of advertising through expensive mediums such as radio, television or magazines; the company should explore the use of Pinterest as a new way to promote advertisement. Indeed, this is a profitable solution for the company to reduce high costs of marketing campaign.

Attracting More Customers

Figure 1 Affinity of each gender toward Pinterest

http://www.ignitesocialmedia.com/wp-content/uploads/2012/01/Pinterest-gender-data.png

In addition to being a cost saving opportunity in advertising for the company, Pinterest provides a new approach in attracting more customers. This figure illustrates that 80% of Pinterest users are women who definitely like Pinterest compared to men who only represent a small 20% of the members. This horizontal bar chart (Figure 1) has been taken from Ignite Social Media’s article (Ledbetter, 2012). Furthermore, this demographic data has been pulled from Google Ad Planner. This data reveals that the company can reach for new potential customers with the same target customer as before which involves women between 25 and 60 through Pinterest. In fact, most of Pinterest female users are between 25 and 54. This is shown in Figure 2.

Figure 2 Affinity of each female user to Pinterest according to their age

http://www.ignitesocialmedia.com/wp-content/uploads/2012/01/Pinterest-age-data4.png

This horizontal bar chart has been taken from the same source as the Figure 1. With Pinterest growing to nearly ‘‘25 million users’’ (Reuters, 2013), and having most of its females users between 25 and 54 from the United States of America; the company would certainly be able to reach new potential customers online. This represents a great opportunity for the company to increase its notoriety and fame by going online through Pinterest.

Expanding the Market Research

By increasing the number of customers, this will help expand the market research for the company. As a matter of fact, acquiring more clients increases the chance of obtaining more feedback from them. According to the Marketing News, Pinterest is a ‘‘useful tool for market research’’ (Lake, 2012). It is important for all business retails to perform a good market research in order to discover the new trends in society as well as inspirations for additional product development. This can be done within Pinterest by ‘‘keeping track of interests when seeing how many of the businesses’ pins are repined by other users. This can help in determining interests, marketability, and popularity’’ (Lake, 2012). This illustrates another advantage that the company would gain by improving their market research within Pinterest. Furthermore, Campalyst, a ‘‘social media marketing measurement firm’’ (Minato, 2012); released a report on social media use by the internet’s top online retailers. The data, which was ‘‘collected from mid-April through May 2’’ (Minato, 2012), indicates the dominance of fashion retailers on Pinterest. It also proves that ‘‘four of the top five most followed retailers’’ on Pinterest are actually fashion retailers (Minato, 2012). Fashion retailers are gaining more reputation and are getting more popular through Pinterest. We can relate this to the fact that Pinterest mainly attracts women as customers earlier. That would clearly explain why fashion retailers are vying for customers within Pinterest. Once more, Pinterest can expand the company’s market research toward new trends in consuming various products. In summary, the company should not miss out on such an opportunity.

Increasing Online Sales

With an improved market research, this would lead to an increase in sales or online sales. Getting more feedback from customers will gradually improve customer satisfaction and expectations which would bring forth a sales enhancement. In truth, Kyla Brennan, chief executive of HelloInsights, a company that provides analyses of Pinterest use; declared that Pinterest is similar to a ‘‘huge window-shopping platform’’ (Reuters, 2013). She explains this by saying that it helps people find what they like, and that it also encourages people to be a little impulsive. Moreover, e-commerce experts realized that Pinterest generates more money per user compared to other social networking sites. They affirmed this ‘‘according to a study by ‘‘RichRelevance’’ (Reuters 2013), an e-commerce consultant which tracked ‘‘700 million shopping sessions’’ (Reuters 2013). This study shows that on average, ‘‘Pinterest shoppers spend nearly 170$ per session compared to Facebook shoppers that spend 95$ per session and Twitter shoppers that spend 70$’’ (Reuters, 2013). This indicates that consumers on Pinterest are more willing to make big purchases online compared to other social media sites’ consumers. As they continue to make more purchases, Pinterest progressively produces more revenue than other social media sites for each shopping session. In summary, the company should take this opportunity to increase its reputation and sales with Pinterest.

Improving Internal Communication

As of now, the research has only shown an analysis on the external side of the company. The internal side of the company is as important as the external side. That is why improving internal communication within the company is a necessary step to take in order for the company to promote efficiency as well as performance. John Souza, the founder and chief strategist of Social Media Marketing University; acknowledged that companies should not only adapt to social networking on the outside, but also on the inside of the business. He clarifies in more details by saying that ‘‘companies should create their own internal social media networks like Pinterest to boost morale, share news, gain feedback and solicit ideas for improvement’’ (Souza, 2013). This implicates that in order for the company to perform well; it depends on both sides of the environment of the company. Connecting employees through a social media for the means of communication would increase efficiency and teamwork. Furthermore, the next generation of employees already welcomes this new kind of approach and would want their workplace to promote the workplace. According to the article in Word Press, Pinterest’s ‘‘collaborative approach’’ (Internal Marketing, 2012) encourages staff members to not only get to know each other, but also to convey their personalities and interests to the public. For example, the marketing and communications agency Red Door Interactive just released a Pinterest project that promotes staff members into ‘‘contributing ideas and inspiration for its new office’’ (Internal Marketing, 2012). This shows that there are businesses that value the opinions of all their employees and they enjoy witnessing their engagement in providing new ideas and inspirations for the company. In summary, the company should not overlook this matter. Pinterest can offer many benefits for both sides of the environment of the company. Bringing together all employees on Pinterest would greatly improve the company’s internal communication.

CONCLUSIONS AND RECOMMENDATIONS

In the interest of the company, this research conducts an analysis to justify the benefits gained from the use of social networking mediums. For this case, it is directed to Pinterest that can provide advertising with highly reduced costs. This led to another advantage that Pinterest can offer to the company which is the possibility of approaching new potential customers online. By doing so, Pinterest also provides the means to enhance the market research. Subsequently, an improved market research brings forth an increase in online sales due to improved customer services and expectations. To further information, this also leads to a study on the internal environment of the company which involves the internal communication among employees. Evidence from articles has shown that Pinterest can actually encourage employees to communicate with each other more, and to convey their personalities and interests to the wider public. In summary, the company should not underestimate these opportunities.

Supported by the data and conclusions of this research, the following recommendations are provided in the form of an action plan to adapt the use of Pinterest to the company’s marketing campaign.

Implement Pinterest within the Company

1. Inform all employees of the advantages and opportunities that Pinterest could offer to the company. This would help further processing the implementation of Pinterest.

2. A deeper research on how to use Pinterest would definitely be necessary for each staff member of the company. Although this may present challenges in terms of time consuming, it is really worthwhile and useful for everyone to understand the implications of a virtual pinboard and how Pinterest works.

3. An additional research on all the innovative tools that Pinterest has launched recently would help the staff members to comprehend them furthermore, and to have more inspirations for the company.

4. The final step would be to create a business account type on Pinterest, and to open the first virtual pinboard for the company. This allows the company to begin engaging in social networking marketing through Pinterest, and to explore it.

Apply a Social Network Policy

1. Establish the regulations regarding behaviour and discipline standards in online communication and the distinction between business and private use of social media in workplace. This would protect the company against liability for the actions of its staff members. This would also help monitor the employees’ behaviour and discipline when working.

2. Make sure that all staff members are aware of this new social network policy. Problems would always arise when some of the employees neglect the new procedures and regulations. Therefore, it is necessary to make them understand the importance of this new policy.

Analyse the Marketing Trends in Pinterest

1. Research on what kinds of trends attract female customers on Pinterest. This is beneficial for the company as the employees get to know what interests their customers, what kind of visuals do they prefer when it comes to fashion clothing.

2. An additional research on the methods used by other fashion retailers on Pinterest would help increase the sales online. This also brings forth other details about how the company’s competitors capture their consumers’ attention on Pinterest.

Put Forth a Marketing Strategy for Pinterest

1. After analyzing all information gathered on competitors and customers, assemble all staff members into contributing ideas to improve the company virtual pinboard on Pinterest.

2. Analyze the weaknesses and strengths of the company’s marketing campaign on Pinterest. This would specify what the company needs to improve or modify within its organization.

3. Another analysis on the threats and opportunities of the company would be profitable. This would clarify the status of the company on Pinterest.

4. The final step would be to determine the company’s marketing strategy for Pinterest. This would give an idea to the company on what it should exploit or modify later on.

REFERENCES

Souza, J. (2013, January 9). Social media trends that can’t be ignored in 2013. Fast Company. Retrieved from

Internal Marketing (2012, April 8). Nine ways to engage your employees on Pinterest. Word Pres . Retrieved from

Goodrich, R. (2013, January 28). What is Pinterest? Tech News Daily. Retrieved from

Ward, S. (2012, April 10). Social media definition. Small Business Canada. Retrieved from

Ledbetter, E. (2012, January 24). Pinterest demographic data: The marketers guide to people who pin. Ignite Social Media. Retrieved from

Reuters. (2013, February 28). Pinterest is worth 2 billion because its 25 million users are rich, female, and like to spend. Business Insider. Retrieved from

Pinsker, B. and Lipka, M. (2013, February 28). Retailers court Pinterest shoppers, but don’t expect discounts. The Globe and Mail. Retrieved from

Minato, C. (2012, May 17). This huge chart shows why all fashion retailers should be on Pinterest. Business Insider Marketing. Retrieved from

Chaney, D. (2012, September 5). Five benefits of utilizing Pinterest as part of your marketing plan. Business to Community. Retrieved from