ConsumerLoop #8, September 2000

New communities, new anchors

Yahoo!’s acquisition of eGroups in July 2000 is a clear indication of the interest that marketers are taking in the development of new communities. eGroups uses e-mail to target consumers, using permission marketing, or opt-in-email, that is constructed around different interest groups or communities. By Spring 2000, eGroups had 600,000 groups in 22 countries and 14 languages. eGroups and the rise of other companies that enable consumers to construct on-line communities such as GeoCities (also owned by Yahoo!), Tripod, Moonfruit and Sony’s Friend Factory are indicative of some of the new types of  community that are evolving and that are proving to be increasingly attractive to marketers.

The Swedish site Dobedo has been extensively advertised to encourage new members and hence advertisers. It even enables advertisers to attach real brands to virtual messages. Brands are often used by consumers as totemistic symbols to say something about who they are and what values they have. This applies in new communities as much if not more than before.

However, the new communities are not just places for consumers to meet. There are clear business to business opportunities too. Communities are evolving for different reasons. They may connect small business owners, teleworkers, working women or other interest groups. The venture capital industry, for example, has been represented by communities such as First Tuesday, a worldwide initiative made up of virtual and real-world meetings that was recently acquired by Yazam. First Tuesday has generated around $150 million in start-up funding.

First Tuesday is an example of a community that has developed further into a company. It may help to promote investment in Internet start-ups but it is the regular meetings in 100 cities around the world that form the backbone of its success. Similarly, FitnessJumpsite.com has evolved from e-mail communication and Internet discussion groups to a wider community based around quality fitness, health and nutrition-related education around the world.

Through the Loop has identified the development of new communities as one of the consumer drivers of the future. We recently commissioned a research study through EAP European School of Management to look at this issue and to identify the opportunities that may exist for marketers.

What is a community?

Traditional communities have been based mainly on geography. The community is the town or village, the church, the workplace or the café, bar or pub. However, consumer behavioural changes have meant that many of these communities are declining in importance. Mobility in geographic terms as well as between employment has meant that local and workplace communities do not play the role that they once did, membership of established churches is in rapid decline and even the traditional pub is undergoing a major overhaul in the UK.

This means a change in the nature of a community even if many of the traits displayed are similar. New communities are not so much linked by location but more by common interests. Many of the new communities arise through the ability of new communications media to reach people with similar interests around the globe. The media channels bring together people with the same interests and geography is no longer a limiting factor. As before, the community members share a common territory although this territory is no longer based on location. This allows members to belong to many communities based on work or leisure interests or beliefs. As such, the new communities have the potential to be more fluid than old communities as members opt in and out as they wish. Flexibility is important, not just for the community but also for the members.

New communities are frequently based on the Web or via e-mail discussion lists. Moonfruit.com, for example, invites you to “share your passion” and build your own Web site within the Moonfruit community.  

Consumers still reach out for anchors

Friends, family and community represent crucial anchors for consumers. At a time when the pace of life is accelerating for many, the sense of “belonging” becomes increasingly important.

“I participate therefore I am.”

John Seeley Brown, Xerox

The deconstruction of old communities through the breakdown of families, greater employment mobility, decline of traditional religion and other reasons remove this anchor. New communities provide new anchors. For some, football may be seen as the new religion. It has places of worship, ritual chants, icons and sacred clothing. Like the old religion, a lack of acceptance of others’ beliefs can sometimes cause friction! “Tribes” exist in both real and virtual worlds. Other anchors may be provided through communities such as support groups for single people, for sufferers of certain illnesses, enjoyment of specific leisure pursuits, etc.

What does it mean for marketers?

Many marketers are starting to view the new communities as ways in which they can reach like-minded people. Unilever, Johnson & Johnson and Tesco are all involved in the Web-based women’s community iVillage. Recently Tesco and iVillage announced a joint venture to develop a UK version of the community that has been running in the USA since 1995. This is iVillage’s first initiative outside the UK and represents a means for Tesco, the world’s largest on-line grocer to reach one of its key target markets. Women are rapidly growing as a proportion of the on-line market and are estimated to account for 60% by 2005. Unilever sees its involvement in iVillage and the teenage portal wowgo.com as an important way to reach its target audience. Coca-Cola is working with QXL to develop cashless auctions.

Word of mouth is arguably the most effective form of marketing communications and hence numerous companies have recently investigated viral marketing to help promote their brands. Community involvement is one way to further encourage this. Just as the adoption of products and brands by “leaders” of old communities can help spread consumption through the community members, the new communities also have opinion leaders.  The targeting of marketing communications through relevant communities can help a product or brand gain acceptance and even prestige. The mere presence of a brand within a specific community can provide a positive association if it is correctly managed and accepted by the community. Sony may target the on-line skating community through different initiatives as it may be seen to be supporting the community. For Sony it is possible to reach a similar demographic group to its Playstation target audience. Similarly, WH Smith provides the content for the literature community within Cycosmos.

Some of the larger communities represent huge potential markets. The US portal gay.com claimed some 8 million visitors during December 1999. Moreover, they tend to have incomes well over the national average! iVillage membership reached over 5 million in the second quarter of 2000 with year-on-year revenue growth over 200%! As such, they represent major marketing opportunities.

Summary

The understanding of communities is one way in which marketers can look to achieve greater recognition and acceptance for their brands. The way in which a marketer becomes involved is crucial to the level of success that may be achieved. It is important to work with the community, not simply to broadcast advertising messages at the community in the hope that some of them stick. Genuine involvement in the community helps to build trust and encourage acceptance.

It has also been suggested that community involvement adds a human element to what may sometimes be viewed as a cold e-commerce environment. It provides the necessary personal interaction that is missing. If the product or brand involvement is genuine and relevant to the community, there is a possibility to synchronise the e-commerce offering and community involvement.

This is an evolving environment for brands. One aspect enabling the new communities to be formed and develop quickly is the use of newer communications channels. As Through the Loop’s previous work on The Third Age of Internet shows, this channel evolution is continuing so these communities can be expected to utilise channels such as mobile phones, WAP, SMS messaging, Smart Home devices, etc. All of this means expanding opportunities for marketers. But it’s not all about new channels. More traditional forms of marketing communication such as event marketing or ongoing sponsorship represent an often effective way of demonstrating involvement with the community.