One of the primary reasons for a company to be on social media is to build relationships and engage customers in a dialogue. So why are a lot of big-time pharmaceutical companies about to walk away from their Facebook pages?

It seems that up to this point, Facebook gave pharma companies the ability to “turn off” commenting on their pages, a privilege they didn’t grant to other industries. This suited the risk-adverse pharma folks just fine as it gave them the ability to “block” comments they didn’t like.

But all that came to an end on Monday, August 15. You see, a few months ago Facebook sent an e-mail notifying all pharma page administrators that the social media site was changing the rules and that “pages that currently have commenting disabled will no longer have this entitlement after August 15th.”

As reported on ClickZ, this poses a major problem:

Pharma marketers are required to report adverse effects of their drugs, so if someone posts a comment about an adverse effect on a Facebook page, the company is responsible to report that to the Food and Drug Administration. Also, when they become aware of online conversations including incorrect or off-label information about their drugs and products, they need to notify the FDA.

Can anyone say big can of worms? It also means the pharma companies can no longer prevent those who have had adverse side effects from a drug from posting their comments online for all to see.

As pointed out in the Pharma Marketing Blog, all it takes is one disgruntled customer to cause havoc. The European drug company Sanofi-aventis chose to shut down its Facebook page after a string of negative comments from a cancer survivor who had permanent hair loss after taking the drug Taxotere.

So what’s next? As pointed out in the blog Pharma Exec, companies now have three choices:

1. Go dark and wait for the FDA to issue guidelines on how to report potential adverse events they may discover on their Facebook pages.
2. Go dark temporarily and build the infrastructure to cope with the real time flow of consumer commentary.
3. Continue on with Facebook, backed by the staff to monitor Facebook and other social networking sites.

A few major drug makers have already chosen options one and two. Over the weekend, the Washington Post reported that AstraZeneca and Johnson & Johnson, have decided to remove their Facebook pages as a consequence of the policy change. Other companies said they will monitor their pages more closely now that the changes have taken effect.

But my thinking is, as more and more consumers lean on the Web as their primary source for information, you’ve got to have the social media bases covered, including Facebook. After all, if someone has something bad to say about your product, if it doesn’t come out on Facebook, it’s bound to appear somewhere else. And it’s better to be in a venue where the playing field is level and you at least have the chance to respond.

What do you think?

One thing that I have learned about social media marketing over the past 4 years is that it is tough to become effective using the medium without being a participant.

Looking from the outside – in, the thought of how to use 140 characters to communicate with “followers” is perplexing. Posting your personal thoughts and informing the world of your daily doings on a Facebook page or other social network can seem like sleeping with your curtains open.

The Loyalty Marketing industry is steeped in tradition, meaning we have a generation of Boomers who have created rewards programs for Boomers within a reasonably tight range of options. Earning points or miles based on spend or stays and redeeming those points for cash, gift cards, merchandise, or travel is the standard issue rewards model.

It’s worked for a long while, though customer engagement levels are flagging. The new breed of consumer who is digitally connected is making pre-purchase decisions based on interactions in social networks and other digital channels. If we don’t take steps to meet the consumer where they are gathering information and forming opinions, our offer of points/miles/whatever might be presented too late in the game to interest any but the cherry-pickers.

Given that learning by doing is the premise for success in digital marketing, I conducted a survey of the Top 30 loyalty solutions providers in North America to see how much “doing” is taking place. Here’s what I found:

• 54% of companies have a Facebook page, though only 18% have a Fan base of 100 or more
• 75% have a Twitter account, though only 18% carry a Klout score of 40 or greater
• Looking at the executives who are leading these firms, I found 43% with Twitter accounts in their name with and 29% registering regular activity and 100 tweets or more

The results have improved from a similar survey I took at the first Loyalty Expo about 4 years ago, but have a long way to go to demonstrate that Loyalty Marketers take social media marketing seriously.

Announcements of new products and tools to engage, reward, and recognize the new consumer are made daily. Some companies I have heard from say they have developed tools in-house, and I’m sure there will be a slate of DIY’ers among the crowd. For the broader market, a sensible and easier short term path to social media fluency will be found through partnership, purchase, or licensing of technologies developed by third parties.

The fact that your CEO doesn’t tweet is not the end of the line. Social media interaction takes effort and time that most CEO’s just don’t have. Hiring to meet this need or outsourcing the bevy of tasks to create an online presence are both viable options.

It was recently reported in the trade press that Pepsi had slipped to the #3 soft drink in sales, behind Coke and new #2 Diet Coke. But most interesting was the speculation behind the drop. In an Ad Age article titled “How Pepsi Blinked, Fell Behind Diet Coke”, it was hinted that Pepsi had put too many of its marketing eggs in the social media basket.

Some background: In 2010, the company launched the Pepsi Refresh Project. As I reported in a previous Loyalty Truth post: This Web-based initiative asks customers to submit ideas that they think will have a positive impact on the world, including everything from building community playgrounds to caring for wild cats. Consumers vote on ideas they think should be funded, and to date Pepsi has committed over $15 million to nearly 400 winning ideas.

The Refresh Project was backed by a big social media presence and its launch coincided with Pepsi’s move away from traditional advertising channels, including an ad boycott of the Super Bowl and other major marketing events. (By comparison, Coke is ubiquitous, sponsoring everything from the NCAA tourney to NASCAR to the hit TV show American Idol.)

In the Ad Age article, John Sicher, editor and publisher of Beverage Digest, expressed his concern about Pepsi’s marketing efforts saying, “In the cola wars, the Refresh Project by itself isn’t enough to market Pepsi’s cola brands.” Sicher believes that in addition to Refresh, the company needs “more product-oriented advertising and marketing. I think that the 2010 results are probably a wake-up call for Pepsi.”

In an Ad Age editorial, Rance Crain chimed in “there’s also the danger that consumers could conceivably tire of causes or decide that Pepsi, a marketer long known for its ability to amuse and entertain, is taking itself too seriously. After all, we’re talking about fizzy soda water here.”

Julie Rohem, the ex-marketing chief of Wal-Mart, also expressed her doubts about Refresh in a recent blog post:“the message had nearly nothing to do with the product or the sale of that product. It was altruistic and admirable but it did not engage people with the drink itself—only the endeavors that the campaign supported. Pepsi at the end of the day is a mass brand and that means appealing to the masses on the product first.”

So was the Pepsi Refresh Project a mistake? A qualified yes—if the company really thought it could abandon its more traditional advertising efforts for one that pitched good vibes instead of good taste. A message of corporate benevolence is all well and good, but it feels like the company forgot the primary goal of any marketing department: move the product.

That said, Pepsi should also be commended for doing something a lot of bottom line-focused companies have ignored in recent years—giving back to the community. Handing cash to initiatives like “supporting the rescue and care of injured and orphaned wildlife ” and “getting the lowest income students in our community into college” is truly a noble endeavor.

It’s enough to make this bleeding-heart chug a cold bottle of Pepsi or two. If only I drank cola.

Tom Rapsas is a regular contributor to Loyalty Truth. You can follow him on Twitter @tomrapsas

When I first saw a QR code, I shrugged my shoulders and thought “one more piece of technology looking for a solution”.

I’m not cynical … I’ve just lived through years of expectation for smart cards and contactless cards only to see the technologists and vendors more excited about the product than consumers ever were.

Now I found myself staring at a black and white digital pattern slightly more intriguing than a bar code, and wondering what all the fuss was about. My disdain for QR codes has grown into mild fascination as I have experienced their use on a personal level and have witnessed how brands are using them to efficiently engage customers and grow their business.

Newspapers have made good use of the codes, allowing readers to instantly shift from print to online sources of content, in the process bringing a print story to life with a video or blog. Promotions and offers have been mixed in with content delivery to award readers for taking time to read the codes and explore an online version of the publication.

Retailers, especially local merchants fighting to win mind-share from the national brands, are using QR codes to effectively keep the store open “24/7″ by highlighting featured inventory or take viewers to online stores where they can shop at their leisure.

I’ve also seen the use of QR codes stretched beyond what consumers can digest. A local realtor comes to mind who substituted codes in a monthly print ad for the usual four color pictures of listed properties. The presentation was a bit too obscure and I noticed that the realtor reverted to pretty pictures the next month with one QR code in the corner directing readers to a web site.

Speaking of web sites, the most common use of QR codes I have seen in business so far is the inclusion of a code on a business card or online profile offering another way for visitors to link to a web site home page. Even though I created the code in this post with the same linkage, it’s an unimaginative use of the technology.

QR codes are much better used to send visitors to micro-sites, videos, or other dynamically changeable content that serve a specific business purpose. They could also be used in single-use format to enable reward redemption at point-of-sale.

With Nielsen projecting the penetration of smartphones in the US to exceed 50% by the end of 2011, more people will be able to easily access the information available. It might be merely an anecdotal commentary, but I’ll bet that the people who do have smartphones today represent an audience willing to take a digital shortcut to view useful content and get needed information from their phones without having to type clumsy URL’s into their browser.

Like most technology, the real fun starts when people apply their imagination to use applications in ways not anticipated by the inventors. QR codes have high potential for imaginative use and we expect to see more of them in both B2C and B2B settings.

The customer has escaped. We can no longer control the process of how and where they get information. ~Marjorie Kalter

There’s a sea of change taking place in the way we communicate with customers, and these changes are rewriting the definition of advertising as we know it. In fact, I believe that as marketers we now two choices: swim with the tide or have the new communications wave roll over us.

The truth is that the effectiveness of old-fashioned “push” advertising, whether it’s a TV spot, print ad or e-mail, is waning. More and more customers, especially in the under-40 demographics, are ignoring traditional advertising altogether, and turning exclusively to the Web and social networking tools for product and service information and recommendations.

Some have labeled this change “Advertising 2.0”, but one of the movement’s philosophical godfathers, Edward Boches, simply calls it “the evolution of advertising”. Boches is the long-time creative leader at Boston-based ad agency Mullen, which in the past couple of years has transformed itself from a traditional ad agency into “a firm that blends digital, social, media, creative, mobile and direct response”.

I’ve been looking at some recent slide presentations and blog posts from Boches, and he has a number of compelling insights about the changes taking place in the industry. Here are a few choice ones:

• Customers don’t want to watch and read and consume. They want to participate, share and respond.

• Once we were in the business of telling stories. Now we are in the business of getting others to tell stories for us.

• User experience and engagement are the new art and copy.

Boches also sees changes in the future of traditional advertising, believing that as brands become less dependent on advertising and messages, they will focus on ways to become more relevant and useful. Think of it as advertising that does less selling and more connecting.

A prime example currently in the marketplace is the Pepsi Refresh Project. This Web-based initiative asks customers to submit ideas that they think will have a positive impact on the world, including everything from building community playgrounds to caring for wild cats. Consumers vote on ideas they think should be funded, and to date Pepsi has committed over $15 million to nearly 400 winning ideas. Does the site sell Pepsi? I suppose so, but in a very indirect way.

Will this advertising change effect loyalty marketing? It already is.

In loyalty marketing, it’s time to think about going beyond the everyday communications of postcards, e-mail and statement inserts. It’s time for a full-throttled commitment to an idea I first began talking about in 2002: starting a dialog with customers. (Not that I can take credit for the concept, it was the brainchild of Frequency Marketing’s visionary founder Rick Barlow.)

This means communicating with your customer base when and where it works best for them, via the social media channels where they congregate—which these days is sure to include Facebook and Twitter, and possibly Foursquare. It also means opening up the lines of communication via your company Web site and blog.

There are also marketing opportunities galore in leveraging your current customer base, by giving them perks that encourage them to spread the good word about your product or service. For instance, when restaurant chain P.F. Chang’s introduced its Home Menu frozen meals to grocery stores, its first communications target was the brand’s loyal customers.

P.F. Chang’s selected members of its loyalty program and customers engaged in the brand’s social media channels (Facebook and Twitter) and asked these fans to raise their hands and tell why they loved the brand so much. Those who participated in spreading word of mouth were entered into a sweepstakes to win one of 50 home dinners for two, complete with custom table settings.

The bottom line is that, like it or not, the way we communicate with customers is changing. The question is, are your clients or your company changing with them?

Tom Rapsas is a creative director and writer and can be reached via Twitter @tomrapsas or at tomrapsas@gmail.com.

The Mega Event wrapped up last week in Montreal with the first annual presentation of the Mega Awards honoring the best in airline frequent flyer programs (FFP) and a second day of presentations that covered social media, coalition marketing, and a keynote which unveiled the term “Trustability” from Don Peppers.

Mega Awards were conceived to recognize marketing campaign and product development excellence in the airline industry covering Loyalty, Social Media, and Ancillary Revenue.Freddie Laker hosted the awards evening. A founder of Sapient Nitro and son of legendary airline innovator Sir Freddie Laker, he was so entertaining that an ESPY hosting gig might be in his future.

You’ll have to visit the Mega Awards web site for all the details, but here are three highlights that stood out for me:

Best Merchandising Product
Wessco International won top honors here for creating a co-branded offer that bundled a $10 off $30 coupon for Bed Bath and Beyond with a blanket and neck pillow package sold on board American Airlines. With airlines fracturing the flight experience and turning each piece into a revenue opportunity, passengers need a little incentive to play the game. American Airlines trialed the BBB coupon on its flights and sold over 200,000 units in 6 months, creating ancillary revenue for AA while giving travelers more coupon value than the cost of the blanket and neck pillow kit.

Best in Airline Social Media
Air New Zealand created its AirPoints Fairy as a flighty persona that listens to customers and often grant their wishes – all through the AirPoint Fairy’s Twitter account. There was lots of innovation in this category with Lufthansa’s MySkyStatus allowing people to stay connected within their networks during travel and Volaris and airBaltic using Facebook pages to deliver messages about special fares and generate big chunks of incremental revenue. ANZ leveraged its program to set it apart from competition and illustrated how social media could be used to drive tangible results.

Best in Airline Loyalty
A tough category to judge with many worthy entrants, Velocity, the loyalty program of Virgin Blue, came out a winner. Locked in a dog-fight with rival Qantas, Virgin Blue had 60 days to create and execute a campaign to protect its frequent flyer base in light of market changes impacting how banks would allow consumers to use their credit card rewards points.

The promotion was multi-faceted and included an immediate 25% bonus point award to transfer points to Velocity as well as the chance to win 25 million points – the biggest rewards based prize ever offered in Australia. 25 million points equated to a chance to go into space on the highly publicised Virgin Galactic space ship.

Using the creative premise that Velocity was offering ‘average Joes’ the chance to go into space the campaign told the story from the “civilian” side and that of a disgruntled astronaut. The fictitious astronaut, Sgt Major Scott Petersen, protested in a YouTube video that “space is not for amateurs” and circulated petitions via Facebook pleading for support against “this crazy Velocity promotion that will let mere amateurs go into space”.

The promotion achieved the overall goal of shifting a key segment of bank card point collectors to the Velocity program and notched a 1605% increase in points transfers compared to a non-campaign period.  Points transferred per day increased by over 850% compared to a non-campaign period and approximately 400,000 visitors were attracted to the micro-website.

All costs accounted for, the promotion returned an outstanding 10:1 ROI, enough maybe to even pacify that angry astronaut.

While I’m a firm believer that you shouldn’t post anything online that you wouldn’t want everyone to see, many might be happy to know that Facebook’s privacy capabilities are getting stronger. This week, Facebook announced a new feature called Groups, which will allow users to divide their network into smaller sub-networks, like friends, relatives, classmates and coworkers.

With Groups, users can selectively share their information, instant message and edit online documents with the people in a chosen group. Now “Work Stefanie” and “Play Stefanie” don’t have to be the same person.

Yes, this does sound familiar. Facebook already has something called Friend Lists which let you set up subgroups in your network, but compared to Groups, Friend Lists is much more manual – and only 5 percent of members regularly use it.

If you wanted to create a group of old college friends, you had to weed through your friends list and manually click on each person to add them to the group. With Groups, you can set up a ‘College’ group and only add a few people. The people you added can then add other people to the group, and before you know it, your whole group is set up. And if you are tagged into a group you don’t want to be in, all you have to do is leave.

Stefanie Stricklin is a Public Relations Manager at JZMcBride and Associates.

Editor’s Note: Does this seem like a clever or clumsy way for Facebook to address their ongoing privacy issues?

Would the owner of a blue Honda Civic please come to the front desk…Your lights are on. It’s situations like these that Bump.com is trying to help resolve more efficiently. Theservice, touted as “AAA meets Foursquare” by founder Michael Thrower, is essentially a social networking tool that links drivers through their automobile’s license plates.

The idea is that drivers will be able to communicate with other motorists, the government and marketers—using license plates as identifiers. Bump’s video explores a bevy of solutions that it will offer fellow drivers, including everything from alerting when a taillight is out to letting someone know about leaking oil.

The possibilities of Bump do not end with simply helping other drivers. The company has also expressed how there are endless other ways to put the service to use. A few of these, according to Wired Magazine include, “Fleets and cab companies using Bump to contact their drivers, meter maids alerting you when your car is about to get towed, car manufacturers sending important recall information directly to Bump accounts and eventually drivers being able to renew their licenses and registrations through the service.”

As with any new social networking service, Bump has raised privacy concerns. Objections to social media that can track an individual’s location and activity will always exist. A Bump member can choose to share their personal information or not, but this does not answer all of these legitimate privacy uncertainties.

Thrower said Bump will be in a public beta by Thanksgiving, so that leaves the rest of us to speculate. Will Bump take off and enjoy similar success like its social networking kin? Predictions are all over the map for Bump, but the service’s critics seem to be the loudest right now.

Don’t forget though, back in 2004 people said a website with that linked 1 million college students would never grow to become worth an estimated $40 billion and redefine how the world uses the Internet.

Everyone has to start somewhere, right Facebook?

By: Ray Kowatch, of JZMcBride and Associates

Earlier this week, social media author Chris Brogan wrote a blog post about how to get your press release/news noticed by influential bloggers titled “Improve Your Pitch’s Chance of Success.” Brogan’s blog concludes with this thought:  ”PR isn’t bad. Bad PR is bad. You’re probably doing it right. Unless you’re doing it wrong.  For more classic examples of bad PR, check out the Bad Pitch Blog.

There are many effective ways to generate media coverage.  Often, a targeted pitch (preferably after you’ve done your homework about what the reporter covers, likes, etc.) is the most effective tactic.  However, when you’re trying to reach a broad audience, a press release can be a very effective vehicle, if it’s crafted correctly.

It’s a common mistake to be thinking of newspaper and magazine readers when composing a press release. The only true audience for a press release is the reporters and editors who decide if the information ever sees the light of day. Here are some unfiltered tips:

• Let writers do the writing, not the executive secretary, not the director of development, not someone from IT.  Communicating with the media is too important to be left to the amateurs.
• The reporter isn’t interested in helping you make money. He could care less about your great selection and super customer service. He only wants the info that will help him get a good story. Take your inclination to sell, sell, sell out of it. Marketing-speak offends reporters.
• Say something is first, most, fastest, tallest – that’s likely to get attention. Use words like money, fat, cancer or sex and you’re likely to get some ink.
• No good whatsoever are words like solutions, leading edge, mission critical, end-to-end and turnkey.
• Avoid the temptation to clutter your lead with a glowing generalization about your company, such as: XYZ Corp., a global leader in the manufacture of high-end widgets for the royalty of Europe. Many releases are written this way, despite the fact that editors delete this kind of fluff. Everybody says they’re the leader. Don’t waste the editor’s time.
• Don’t tease them. Get the most important information out at the top of your release and then give more details. Don’t forget the specifics, such as numbers.
• No more than three pages. Two pages are good, but one is better. No more than one page… you get the point.
• Create a small text box with bulleted content that adds relevancy to the story.
• Take William Safire’s advice and “avoid clichés like the plague.”

Earlier this week, social media author Chris Brogan wrote a blog post about how to get your press release/news noticed by influential bloggers titled “Improve Your Pitch’s Chance of Success.” Brogan’s blog concludes with this thought:  ”PR isn’t bad. Bad PR is bad. You’re probably doing it right. Unless you’re doing it wrong.  For more classic examples of bad PR, check out the Bad Pitch Blog.

There are many effective ways to generate media coverage.  Often, a targeted pitch (preferably after you’ve done your homework about what the reporter covers, likes, etc.) is the most effective tactic.  However, when you’re trying to reach a broad audience, a press release can be a very effective vehicle, if it’s crafted correctly.

It’s a common mistake to be thinking of newspaper and magazine readers when composing a press release. The only true audience for a press release is the reporters and editors who decide if the information ever sees the light of day. Here are some unfiltered tips:

• Let writers do the writing, not the executive secretary, not the director of development, not someone from IT.  Communicating with the media is too important to be left to the amateurs.
• The reporter isn’t interested in helping you make money. He could care less about your great selection and super customer service. He only wants the info that will help him get a good story. Take your inclination to sell, sell, sell out of it. Marketing-speak offends reporters.
• Say something is first, most, fastest, tallest – that’s likely to get attention. Use words like money, fat, cancer or sex and you’re likely to get some ink.
• No good whatsoever are words like solutions, leading edge, mission critical, end-to-end and turnkey.
• Avoid the temptation to clutter your lead with a glowing generalization about your company, such as: XYZ Corp., a global leader in the manufacture of high-end widgets for the royalty of Europe. Many releases are written this way, despite the fact that editors delete this kind of fluff. Everybody says they’re the leader. Don’t waste the editor’s time.
• Don’t tease them. Get the most important information out at the top of your release and then give more details. Don’t forget the specifics, such as numbers.
• No more than three pages. Two pages are good, but one is better. No more than one page… you get the point.
• Create a small text box with bulleted content that adds relevancy to the story.
• Take William Safire’s advice and “avoid clichés like the plague.”