FreshNetworks Blog

Facebook accounts for 1 in every 6 page views in the UK. It is the most popular social network in the UK, with 55% of all visits to such sites, and contributes to social networks now accounting for 11.5% of all internet visits in the UK. This data from from a recent report from Hitwise looking at use of social media and social networking sites. It shows the growing importance of social media not just as a place to engage your audience, but also as a traffic driver.

With 11.5% of all internet visits, social media sites now account for more activity online than the combined visits to Google, Yahoo! and Bing. Social media continues to increase its lead over search engines and as it does so its roles as a source of traffic is taking ever-increasing prominence. Whilst Google remains, the largest driver of traffic to UK sites, now 1 in 10 visits originates from Facebook – making the social network the second biggest driver of traffic as well as the most visited social network. It lead the pack by considerable distance – with YouTube in a distant second place.

And this figure is growing. Taking just online retail sites as an example, the Hitwise report shows that traffic from social media sites has risen by 13% in the year to September 2010 with 9.1% of visits to all online retailers now coming from social media. This supports our own experience with Jimmy Choo, where we are seeing traffic from Facebook to the ecommerce site increasing at an astonishing rate month-on-month.

So social networks are not only taking an increasingly important part of our online experience, but also a real driver of traffic. Brands should acknowledge this and build a social media strategy that acknowledges social media as a place to engage and also to drive traffic to their ecommerce or other sites. Understanding where social media plays in the ecosystem of your brand online, how your outreach on social networks, blogs and other such sites sits alongside your main site, is critical. Build a real and clear understanding of who you are engaging, where. And make sure you are capitalising on this growing and increasingly important pattern of social media sites driving real traffic. Including a true social search strategy to compete with and compliment your existing SEO strategies.

Download the Hitwise report: Getting to grips with Social Media

We’ve already looked at two of the key topics  from our social media in financial services round table event (niche communities and customer driven markets) and now it’s time to move on to a topic that comes up time and again in relation to the financial services industry – the issue of transparency.

The current situation

Matt Colebrook, CEO of First Direct bank, defines transparency in 2 ways:

1. People need to feel secure and know that their money is protected – part of this is knowing what banks and other financial services institutions are doing with it.
2. Clear, simple fee structures  and products that are easy to understand and help people make sure they know what they are signing up for.

While the conversational, sharing mentality of social media has enabled this information to exist intrinsically, albeit on a small scale, very few financial institutions are hosting open discussion platforms for customers and investors because of data and security restrictions.

A recent survey from the Institute for Private Investors (IPI) has shown that high net worth investors are integrating social media into their lives more than ever before. The survey, conducted in May this year, found that 38% percent of respondents actively participate in social media, such as Facebook, LinkedIn, Twitter, forums and blogs.

Other recent studies indicate that wealth management clients are increasingly using social media to compare notes on advisors, funds, fees, strategies and deals.  And according to the findings from a report in the Harvard Business Review in June, private equity firms, venture capital and private investors are also using social networks to discuss industry related information.

Whether social media use of this kind actually exposes bad practices and forces better levels of transparency is debatable. However, the increased use of social media in the financial services industry certainly highlights the need for greater transparency online in order to stay ahead of the game.

What does the future hold?

The willingness to engage in open conversation through social media is vitally important for building trust in today’s world. In the future, customers will need an increased level of disclosure, peer review and transparency from their financial services providers, and social media offers the perfect medium by which to do this.

A recent article in Computer Weekly highlights that when new modes of social media interaction intersect with the regulatory demands for transparency, it will form essential part of how financial services function online. Failures in transparency (like the Madoff scandal) will be challenged more robustly and at an earlier stage as customer and investor decisions will be predicated on better practice, better communication and clearer fee and product structures.

Transparency through social media may even take the form of something similar to what  Saffron building society do. The Chief Executive, Andy Golding, writes his own blog offering his views on Saffron news and the industry as a whole, as we all communicating with Saffron’s members and staff, in order to develop a level of transparency.

Yes, Saffron is a relatively small institution but perhaps Golding’s activity is what’s needed in order for financial services brands to retain and acquire new customers and investors in the future.

Our next blog post will look at the risks and regulations surrounding the use of social media in the financial services industry and what the future holds for the sector.

Every time people share an event from Eventbrite with their friends and contacts in social media or by email, they generate $1.78 in ticket sales. This figure comes from a recent study by the event ticketing site which analysed their user data and how shares in social media and by email tracked back to ticket sales. This is a surprisingly powerful number and shows the growing importance of social shopping – using recommendations in social networks and online communities to influence purchase decisions.

Eventbrite is, undoubtedly, a prime candidate to be benefiting from social shopping before others. Events are, by their nature, things which connect people with similar interests – people like you. If you love jazz and connect with people like you in social media, then were you to share a jazz event with you then the chances of this appealing to them is quite high. Events are a prime candidate for social shopping and this study by Eventbrite highlights just how powerful it is.

How much is a social media share worth?

The study by Eventbrite found that, on average, every time an event was shared that resulted in $1.78 in ticket sales. Drilling down into this number shows how valuable different types of share are:

1. Facebook: $2.52. Facebook resulted in the highest average ticket sales per share with every ‘Like’ on the social network resulting in $2.52 in ticket sales. That this is the most valuable type of share is not surprising – Facebook has grown with events and users are accustomed to inviting people to or accepting events on the platform. Overall this is a very important driver of traffic and sales for Eventbrite – it is the sites biggest referrer of traffic and every ‘Like’ drives 11 visits back to the site.
2. Email: $2.34. The second most valuable sharing mechanism was not a social media tool at all, but email. This is not surprising – email is likely to be much more targeted as users need to select individual people with whom they want to share the event, rather than just publicising it to all people they connect with in a social network. That this is not the most valuable type of sharing is a surprise and shows the ever increasing power of Facebook and other social networks as a communications and sharing mechanism.
3. LinkedIn: $0.90. LinkedIn shares are the third most valuable with an average of $0.90 in ticket sales generated every time an event is shared on the social network. This is much less than for shares on Faccebook or via email but is still significant driver of sales.
4. Twitter: $0.43. Shares on Twitter are the least valuable of all four means, with each share worth $0.43 – almost a sixth the value of a Like on Facebook. This is, perhaps, a sign that connections on Twitter are less focused than on Facebook, or perhaps that on Twitter shares and messages are less engaged with – indeed recent research from Sysomos showed that over 70% of all Tweets get no response. So Twitter messages may be less engaging than those on Facebook, leading to fewer clicks and so fewer ticket sales.

These numbers are impressive and the data from Eventbrite is a great insight into social shopping and how, at least in the event ticketing market, recommendations and shares in social media can lead to significant ticket sales. People are using social media to connect with people who have similar interests and passions to them – this makes for a potentially valuable territory for social shopping. Recommendations from people like you carry a lot of weight – for Eventbrite, each recommendation leads to $1.78 in revenue from ticket sales.

As we’ve already looked at the increase in niche online communities and how this could impact the future role of social media in financial services, this blog post will look at another key topic from our senior level executive round table event: customer driven markets.

The current situation

With the rise of social media, financial service businesses have started to think less about controlling their brand and more about how they manage their presence on the social web.

Social media and online communities have given consumers the opportunity to easily discuss online what they want, and don’t want, from a product or service.  In this way, the consumer is slowly but surely influencing the market place.

In general, financial services brands have been somewhat slow on the uptake when it comes to letting their consumers dictate their offering. There is one area of the industry that has taken this on board, though it’s a relatively new emergent in the market – social lending.

Social lending sites like Zopa and Prosper are consumer focused online marketplaces. Members of these communities borrow and lend money to eachother, avoiding  traditional banks and ensuring that the consumers themselves have more control over the transaction, as well as giving competitive interest rates.

Zopa, for example,  also has a place for members to meet up and discuss all things Zopa – be it lending tactics, where they see Zopa going in the future, or even what they don’t like about the site. This allows Zopa to tap in directly to their customer’s needs, helping them shape their offering based around the demands of the customer.

What does the future hold?

More and more financial services brands will learn to embrace their customer’s opinions and realise that they are shaping the market place.

Reviews, blogs, forums, and tips and advice sections will appear more frequently on both branded and non-branded sites and the financial services industry will realise the value of not just listening to, but also acting on their customer’s conversations and suggestions.

Sites like Zopa are already challenging and reducing the market place of the more traditional lenders. As more and more social-based entrants emerge, this reduction is likely to continue unless financial service institutions get more creative in how they address the needs of their customers.

A good example, from another industry, of where things are heading for financial services could be the Patientslikeme site. Patients like me is an independent community for patients who are suffering from illnesses. It is a place to share information about their conditions and treatments, providing support for other patients. Traditionally this advice comes from hospitals, doctors or other traditional medical sites like the NHS, not an independent community of people.

What’s more, with  over 80,000 unique visitors a month and 65,000+ members, patientslike me is used by pharmaceutical companies as a source of reliable consumer insight; it is helping to shape the pharma marketplace.

Could something like patientslikeme be the future direction for financial services brands? Perhaps independent communities of people, where the site is built by the community itself, discussing, say, loan options, will influence the financial services market place by providing valuable, actionable consumer insight to financial services brands. It remains to be seen…

Our next blog post will look at the issue of transparency in relation to social media and the financial services industry.

A few weeks ago we held a senior executive round table event in order to debate the future role of social media in financial services.

One of the key topics that we discussed was the rise of niche online communities and how this will impact financial services brands in the future.

The current situation

Over the last few years there has been a rise in financial services communities that are on the long tail. In other words, there has been an increase in online communities that focus on a very specific audience rather than appealing to a wide range of clients and consumers.

Several banks have chosen to focus their social media strategy on one section of their customer target base. Royal Bank of Scotland, one of our clients, has developed a niche online community called Keep Britain Biking to appeal to  motorcyclists in order to encourage customer interaction with their Devitt insurance brand. Barclays bank is using a niche community called 100 voices to appeal directly to students with the promise of a community that contains information “written by students, for students”.

Young & Free Alberta, an online community powered by Servus Credit Union,  also utilises the “youth” niche community idea.The site aims to give 17 to 25 year olds  a head start with their finances by providing them with useful, relevant information about their financial requirements.

Not only is the site aimed at a specific demographic; it  is also aimed at  a specific region – Alberta, Canada. And with  ‘Young and Free’ initiatives in Alabama, Mississippi, Ontario, South Carolina, St Louis, Tennessee and Texas, all powered by local banks, these niche communities clearly aim to capture people at a time when they are selecting their first bank account. By building up a relationship with a young target audience, the Young and Free communities are engaging with customers in the early stages of their financial planning with the hope of then building up a life-long commitment to their bank or institution.

The Young and Free Alberta community uses blogs, forums, YouTube, Twitter and Facebook to encourage discussion. It also contains lots of relevant information and activities – like inviting people to an open-air movie -to attract its key audience.

The site also contains an “ask the experts” section to answer the financial concerns and queries of their target market in a timely and appropriate manner. The community manager has videos, blogs, comments and a very visible presence on the site, perhaps as way of further positioning the bank as a voice of authority.

What does the future hold?

Considering the rise of the niche community in financial services, indications for the future direction of social media in this area could include:

• An increase in targeting specific groups based on demographic. Social media could be used to uncover and engage more with micro communities, based on key demographic segmentation, that are enthusiastic, passionate and keen to become customers.

• An increase in targeting specific regions or areas. Social media could be used more to target regional rather than global areas. Local branches of banks and other financial services institutions could use niche communities, based on location, to attract new customers by appealing to people near to, or in, their own physical space or location.

• A decrease in corporate communities. As communities become less “corporate” in feel the will move away from using the direct branding, look and feel of the institution they represent. Instead the branding, tone and style of the community will be dictated by the needs and requirements of the people they wish to target rather than the bank or institution itself.

• Niche communities will become more social. They will utilise more user generated content and will form the hub of all social activity, from blogging, to Facebook, to Foursquare, as well as whatever other new tools arrive on the social media landscape. Niche communities will form the permanent base for social media activity – a space which can grow and develop in line with both market changes and new developments in social media technologies.

Our next blog post will look at how social media is helping to develop customer driven markets and what this means for the future role of social media in financial services.