Facebook won’t master social commerce in 2012 and other trends

What are going to be the trends in 2012? You will be reading a lot of these lists, but I wanted to share some of the things I think are going to count in 2012.

We’ve talked so much about Facebook last year and this year with its IPO will be bigger than ever, but what I don’t think will happen is its mastery of social commerce.

Whatelse? I think  Bing/Yahoo!’s share of the search market will flatten out globally and that online marketing will be driven by smart multi-channel attribution.

Facebook won’t master social commerce

Throughout 2011, Facebook dominated headlines and, with a rumoured IPO on the cards for April 2012, it is likely to remain at the forefront of every marketers mind. However, I think brands that buy into the hype that Facebook will become a one-stop-shopping mall will be disappointed by the returns they receive.

The updates to Open Graph (announced at the F8 conference back in September) looked to be a real step towards social commerce, enabling users to be more specific in their posts, e.g. rather than purely “Liking” a brand they could tell their friends “I love this” or “I’ve just bought this.” However, Facebook hasn’t been so successful in its other forays into social commerce. For example, Facebook Deals closed just four months after it was launched.

For me, the mixed response to social commerce stems from the understanding of what Facebook is. When Facebook started its clear objective was to connect users. This has subsequently stretched into enabling brands and consumers to connect in creative ways. However, I don’t believe it will now evolve into a successful mass tool for direct shopping.

For brands looking to leverage Facebook my advice is simple; use Facebook for what it was designed to do, i.e. make the world more connected and enable easier communication, and leave it at that. Facebook should be used to build your brand and engage with your customers, not direct response.

Online will be used specifically to drive in-store retailing

The harsh economic climate and pressure from pure play retailers has created a huge headache for high street retailers in 2011. There is no sign of these pressures lifting in 2012 but in online, retailers may have found a saviour.

Technological advances, such as Google Wallet and NFC (near field communication) mean that brands can now track the impact of online activity on in-store sales. More importantly, technology is also allowing brands to drive relevant in-store traffic. For example, features within Google paid search for mobile such as hyper local ads and proximity bidding, now enable brands to serve relevant ads to consumers when they are in the vicinity of the store, along with directions to the store.

Brands looking to leverage online to drive in-store retailing should adopt a holistic approach to their marketing. By thinking outside of their traditional remit, be it online, offline or in-store, and having joined up thinking marketers will see the true potential available. This will enable them to develop a programme of testing that leverages social media, paid search & existing loyalty schemes to drive in-store traffic, delivering significant returns in 2012.

Online marketing will be driven by smart multi-channel attribution

In 2010, many predicted that brands would ensure they had a complete, single view of their customers in 2011. Better automation technologies and the mainstream adoption of products such as Google Funnel (an evolution of Google Analytics) have helped this become a reality.

The next logical step is for brands to seek meaningful insights from the data they have collated. In 2012, I believe we will see more brands using econometric modelling to get deeper insights about their customers from their data sets.

For brands that haven’t already invested in creating a single, complete view of their customers across all channels they operate in, this is the first step for 2012. For those that have invested in creating this multi-channel view, 2012 is the time to use a combination of experience and sophisticated analysis, such as econometric modelling, to gleam deeper insights that will improve overall marketing effectiveness.

Bing/Yahoo!’s share of the search market will flatten out globally

Owning 90% of the search market globally, Google is seen by consumers and advertisers alike as the unequivocal market leader. Google also owns 98% of the mobile search market globally.

Given that mobile and tablet usage, and therefore, search, is growing at a faster rate than desktop, more people are likely to turn to Google than to Yahoo! or Bing.

For brands looking to invest wisely, Google is the safe choice. And, with over 100 innovations from Google in the past year alone, it should be where brands prioritise their efforts, particularly when it comes to mobile advertising. However, if you’re looking to expand internationally, it is important to recognise that in two of the key markets – Russia and China – the key search engine isn’t Google but the local engine – Yandex and Baidu respectively, which have their own advertising platforms.

Brands will invest more in generating a deeper understanding of customer intent

Discounting is as important today as it was at the start of the recession in 2008. With the forecast for 2012 looking gloomy, demand for discounts is expected to increase again.

Against this backdrop, many brands are looking at their promotional strategy. However, the clever brands will be looking beyond promotion and discounting. Indeed, I believe that we will see an increase in the number of brands looking to get a deeper understanding of what it is that drives their customers to buy their products – be it a price promotion or an emotional connection with the brand.

To generate the deeper understanding that will ensure revenue potential is maximised, brands should look closely at industry level customer research and analyse their own CRM data. This will enable them to segment customers more effectively and target them more successfully. In search, once brands have an understanding of intent, they can start testing messaging through their paid search programme and iteratively tailor campaigns to prompt the best response.

By meeting customer expectations, brands can ensure that their equity is not diminished by excessive discounting. This will also improve loyalty levels.

Sri Sharma is managing director of Net Media Planet.