Information Technology Reference
In-Depth Information
Coca Cola or McDonald's and may be next taken up by Colgate or Starbucks.
The approach of every luxury brand seeking to advertise on social websites
is first to identify the right community (not the largest) and then to ensure
that the website befits the brand (not because the competitors are advertising
on it). This should be followed by ensuring that the right approach to com-
pensation is adopted.
It has been the norm for luxury brands to adopt the cost per thousand
(CPM) advertisement model both offline and online. Some websites have also
created the cost per click (CPC) or cost per unique visitor approach. These
metrics have been used to justify the advertisement expenditure but do they
make any real sense as the metrics for luxury brands on the social web? I
don't think so. Luxury brands could approach social web marketing in a dif-
ferent way. For example, instead of depending on web traffic statistics (which
are sometimes too good to be true), luxury brands wishing to advertise on
online communities could take the customer lifetime value (CLV) approach.
This will enable the use of the qualitative information gathered on the cli-
ents in the community to measure the potential value that each client could
bring to the brand if they were to stay with the brand over a lifetime or in
the long term. Let's not forget that luxury clients have collective experiences
which they transfer from one channel to another, so evaluating the relationship
between the real-life and online behavioral patterns is essential in CLV-based
advertisement assessments.
Online communities can also be used to build a desire around a brand
through viral marketing, buzz marketing and word-of-mouth marketing.
Recently the social web has also provided the opportunity for stealth market-
ing, which involves a company hiring active people on online communities
to act as consumers in order to recommend a brand, its products or services
to others in online discussions. There are several brands on A Small World
which I suspect are the masters of this tactic as the names of these brands
come up in every conversation about luxury. This approach is, however,
not considered to be ethical and the users of online social communities are
becoming more cynical and expert in fishing out the culprits in the game of
deceit and manipulation - two characteristics that the social web opposes.
Online communities give luxury brands the opportunity to communicate on
their moral purpose and responsible practices in ethics and corporate respon-
sibility. This could also include educating the public on the adverse effects of
brand counterfeiting as well as aspects linked to the transparent way that the
company conducts its business, and its sustainable development practices.
Sustainability, of course, must be in the core values and genes of the company
otherwise it will come off as a PR-stunt. The moral purpose could include envi-
ronmental responsibility, diversity in employment, respect for human rights,
gender equality and appropriate working conditions. Luxury brands must act
responsibly on the social web and this includes being sincere and transpar-
ent in presentations and communications. I have been appalled to see several
