Social pressure: Facebook shows how social networks can build or break brands

The stratospheric growth of social network sites like Facebook represents both a challenge and an opportunity for brand managers. Our most recent reminder of the web crowd-power phenomenon came barely a month ago: we saw HSBC Bank getting its fingertips fried by the issue of student overdrafts, and witnessed Cadbury’s milking of the same demographic to power the nostalgia-marketing re-launch of its Wispa chocolate bar.

At the heart of this ability to move hearts and minds within the corridors of corporate power is Facebook’s ‘groups’ facility, which gives Facebook users the ability to create arbitrary (and in many cases, really arbitrary) interest groups within the site’s 43-million-strong membership. Facebook has hundreds of such groups, each with hundreds to tens of thousands of members, on topics as diverse as ‘Kids Who Hid In Dep't Store Clothing Racks While their Mom Was Shopping’ (about 140,000 members) to ‘Stop animal testing in Nova Scotia’ (about 30,000 members). Frivolous or serious, these groups mirror the ebb and swirl of trend and opinion within Facebook’s typically collegiate demographic. And, as HSBC Bank found out very quickly, every now and then these groups can boil over into an irresistible tide of opinion — the kind with the power to build, and break, brands.

Social networks: Facing down HSBC

The HSBC story centres around the bank’s decision to change the terms of the interest-free overdraft facility it offered its student customers. The change was met with strong resistance by a large number of students, who felt that the bank had reneged on the deal it had originally offered them. Quickly, within Facebook, a new NUS (National Union of Students) co-ordinated group emerged: "Stop the Great HSBC Graduate Rip-Off!!!’ The group snowballed to around 6,000 members: its charter was a threatened boycott of the bank unless it addressed their concern.

Soon, and largely due to the growing pressure from the Facebook group, HSBC Bank announced that it had decided to reverse its decision: students would no longer be charged a 9.9% APR on their overdrafts. The bank went one further by announcing that interest charges collected in the previous month would be refunded. Andy Ripley, HSBC’s head of product development, is reported as saying: "Like any service-orientated business we are not too big to listen to our customers. Following the feedback from our graduate account holders, both directly and via the National Union of Students [NUS], we have taken the decision to freeze interest charging on 2007 graduates' overdrafts up to £1,500 and refund any interest charged in August."

There are many lessons to be drawn here, not least that cause-led Facebook groups can emerge quickly, bring a great deal of public pressure to bear, and achieve rapid and positive change even — or perhaps especially — with large corporate brands.

NUS vice president Wes Streeting is reported as saying: "There can be no doubt that using Facebook made the world of difference to our campaign. By setting up a group on a site that is incredibly popular with students, it enabled us to contact our members during the summer vacation far more easily than would otherwise have been possible. It also meant that we could involve our former members — the graduates who were going to be most affected by this policy."

And if you’ve ever wondered about the importance of the related topic of reputation management, check out the mix of up- and downbeat posts on this group at Facebook (login required).

Social networks: Wispa and we'll hear you

A lighter but equally revealing display of the brand-manipulating effects of social networks came only a couple of days ago when Cadbury’s, the company behind some of the world’s favourite chocolate confections, put its Wispa chocolate bar back on shop shelves throughout the UK.

A creation of the early 80s, the Wispa bar sold successfully for over 22 years until, in 2003, it was finally retired from active shelf service. The withdrawal immediately caused a minor uproar within a small but steadfast band of Wispa-worshippers, and over time it grew into a ground-swell of primarily Internet-driven lament and dissent: the world wanted Wispa back. By the time Cadbury’s found it could no longer ignore the pleading and the pressure, there were 93 ‘Bring Back Wispa’ groups on Facebook, with some 14,000 members, and further strong support from similar groups on Myspace and Bebo. Old Wispa ads found their way onto YouTube and other clip-sharing sites, and Wispa-nostalgia swept the blogosphere.

Cadbury’s listened. Showing both sensitivity and marketing savvy, the company auctioned the first box of reintroduced Wispa on eBay (with the proceeds going to charity) and put the bar back on shop counters in October. The Guardian quotes the firm's spokesman, Tony Bilsborough, as saying: "We had noticed the web interest for some time. It reveals a consumer passion which swayed our opinion about relaunching Wispa." He adds: “This is the first time that the power of the internet played such an intrinsic role in the return of a Cadbury brand.”

Social networking: Just a B2C phenomenon?

The social networking sites that capture much of today’s marketing mindshare, like Facebook, MySpace, Bebo and YouTube, tend to have high relevance in a B2C context — not least because, as Hitwise points out, 4% of traffic leaving Facebook currently goes to a retail website (music, fashion, event ticketing…), and this number has doubled during 2007 alone.

But coming up quickly are the social networking sites for professionals. And we’re not just talking LinkedIn either: the new crop of B2B networking sites focus on professional industry verticals such as medicine (Sermo), finance (Reuters), wireless telecoms (INmobile), and advertising (AdGabber). As other professional verticals find a voice, it’s only a matter of time before B2B marketers and reputation managers start to work these platforms — keeping tabs, for example, on what doctors are saying about a new drug, or taking prime visibility positions in ‘marketplace’ areas of a networking site for mobile-telco professionals.