Ways Facebook Is Changing Referral Marketing

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When someone you trust tells you to try a new cell phone provider, you’re much more likely to do it than when that same company blasts you with ads on TV. This, in essence, is why referral marketing works. People are much more likely to trust their friends than strangers—and that’s never been more true than in our age of advertising and skepticism. Facebook understands this. In fact, by embracing new forms of referral marketing so well, the ever-popular social network has essentially revolutionized the way referral marketing works.

So if you want to know where the future of referral marketing is headed, take a page from Facebook. Here are some ways the popular social site is setting the pace for all of us:

Focus on Connections

Facebook’s new feed is less about ads and more about connections—a trend that’s only growing in the realm of referral marketing. Rather than blasting users with constant advertising, the network displays content from friends—including everything from personal status updates to links that someone “likes” on the site. “In the next hundred years, information won’t be pushed out to people; it will be shared among the millions of connections people have,” said Mark Zuckerberg, CEO of Facebook. “Advertising will change. You will need to get into these connections.”

At first glance, a push against advertising may seem like bad news for businesses, but in fact, it’s good. When someone sees a brand’s post, it’s either because he or she follows that brand or because a friend does, which is essentially automatic referral marketing at work.

Online Referrals vs. Traditional Word of Mouth

With a total of 1.15 billion users according to the most recent stats, Facebook is one of the leading social networking sites pulling referral marketing online. Today, it’s just as (if not more) likely that you’ll hear about a new product or service from a friend online than it is that you’ll hear about it offline. What this means for brands is that sites like Facebook, Twitter, Pinterest, and blogs are worth taking seriously.

Targeted Advertising

Targeted advertising is powerful advertising—Putting your message in front of the right eyes is half the battle. Here’s how Facebook is doing this well: Because Facebook users are able to pick and choose what content appears in their feeds, the content that gets displayed is automatically targeted to them.

An Environment of Trust

Brands that stay in touch with fans via Facebook pages build trust over time. As followers read and respond to updates, they strengthen their connections with particular businesses. When the company launches a new product, they know. When the company has an announcement, they know. What’s more, they see when friends are liking and responding to content from that brand, too, and this creates an even stronger level of credibility and trust.

Are you already taking advantage of Facebook and its built-in referral-based marketing? What other ways do you think the network will influence marketing change in the months and years to come?

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Comments

  1. Jeff Epstein says

    Great post Shanna! You’re certainly on point regarding the ability for people to leverage their social channels to increase word of mouth referrals.

    In fact, my company Ambassador (http://marketing.getambassador.com) provides brands a way to track and manage those referrals. The beauty is we can deliver an additional layer of insight, determining which types of “Ambassadors” are most successful and which channels drive the most conversions.

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