Facebook’s antitrust woes serve as wakeup call for social media market strategy

By Hank Schultz contact

- Last updated on GMT

©Getty Images - Chainarong Passertthai
©Getty Images - Chainarong Passertthai

Related tags: Social media, Marketing

With the US government putting Facebook in the middle of its antitrust crosshairs, it’s a good time for supplement brands that rely heavily on social media platforms to review their marketing strategy, an expert says.

Yesterday the Federal Trade Commission sued Facebook​, alleging that the company has engaged in a years-long effort at market monopolization.   The FTC complaint alleges that, “Facebook has engaged in a systematic strategy—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers—to eliminate threats to its monopoly.”

Broad based complaint

FTC said in a statement that 46 state attorneys general and those of the District of Columbia and Guam have signed on to the lawsuit. The permanent injunction that FTC and its partners are is seeking in federal court may require the networking giant to divest itself of Instagram and WhatsApp and would require Facebook to cease trying to prevent software developers from working with other social media platforms.  It would also require Facebook to get prior approval for future mergers and/or acquisitions.

“Personal social networking is central to the lives of millions of Americans,” ​said Ian Conner, Director of the FTC’s Bureau of Competition. “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

Centrality of Facebook

Facebook is central not only to the personal lives of many Americans and citizens of other countries, it is also a key part of many companies’  marketing strategy.  Creating community around the use of dietary supplements is an important part of connecting with consumers in a vital way, and Facebook has come to dominate that conversation.

Facebook’s current difficulties are unlikely to upend anyone’s marketing strategy in the short term.  The suit will take many months or even years to run its course, and in the meantime the social media giant has about 2.7 billion users​, according to a recent count. 

What does it mean for marketing strategy?

So while the platform will continue to dominate the marketplace in the short term the development does remind companies of the need to have a broad-based and variegated strategy for social media marketing, said Steve Hanson, principal in the consulting firm Nutrasocial.  Hanson has been involved in product development and marketing in the natural products industry for almost two decades and has seen first hand how social media has transformed companies’ go-to-market strategies.

Companies now need to find their customers where they are spending time online, Hanson said.  It’s rare that any sort of consumer packaged goods company, much less one selling dietary supplements, will have so much pull that it can rely on consumers coming to seek its sites out specifically.

"A company should pick the social media platform allowing it to build the best relationships with its intended customer base. For ingredient manufacturers, I'd say LinkedIn would be a great place to start. For finished supplement companies, it's likely a mix but Instagram and Facebook have allowed brands to establish and create groups most likely to purchase their products. This is done through influencer networks or by creating topic-related groups,” ​Hanson told NutraIngredients-USA.

Finding the best influencers

Finding those influencers is a process that companies must work through, Hanson said.  Companies can find them on their own by combing through the messages circulating on social media and tracing them to their source.  Or influencers can come as part of a package that some consultants might offer, he said.

“Based on my industry experience, I've always found that a team of influencers work best. This team of influencers should include both ‘scientific experts’ and ‘social influencers.’ The scientific experts function as the ‘brains’ providing knowledge in the science and technical aspects of your products,” ​Hanson said.

“In contrast, the social influencers function as the ‘personality’ and are individuals that have become mainstream and popularized. These influencers are known broadly and have a large following base. If you can find an influencer who can function both as a scientific expert and a social influencer, that’s ideal,”​ he added.

Customer retention becoming ever more important

While social media has made communicating with consumers easier, faster and potentially more effective, it hasn’t made it cheaper.  Hanson said consumer acquisition costs have risen, making retention ever more important.

“That's why we're seeing online subscription-based supplement companies. We're also seeing customers assigned human representatives whose role is to build the relationship -- getting to know their health needs and finding ways to address those needs. This builds trust between the customer and the company. Having your customer trust you is key for health products,”​ he said.

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