August 2008 Franchising World

Easy to start, hard to measure, but potentially an effective marketing tool.

By Chris Bennett, Andrew Lord and Dmitry Shevalev

A Weblog, or “blog” for short, is simply a collection of articles posted on the Internet.  Popular blogs are regularly read and extensively discussed by tens of thousands of users.  Impressed by the extent and depth of consumer contact that blogs offer, many businesses are turning to blogs as a marketing tool.  For franchisors, blogs present a powerful opportunity to market their systems to potential franchisees and their brands to potential customers.  However, a blog is a somewhat quirky marketing channel that can present several unique challenges to unwary bloggers, including franchisors. 

Blogging is Different Than Advertising
Blogging is substantially different from traditional forms of marketing, particularly advertising.  Traditional advertising ranges from direct selling, where the benefits of a product or service are pitched and the consumer is asked to make a near-term decision to purchase and to build the brand, where the intangible attributes of a brand are promoted in the hope that consumers will feel drawn to the brand when it is time to make purchases.  Blogging is more in line with brand building than direct selling, but is really not equivalent to either.  Rather, a true blog will provide commentary on issues that are relevant to the readers.
 
The objective of a blog should be to develop a trusting and engaged ongoing readership.  If a reader trusts a franchisor to provide relevant and apparently impartial information, then he or she may be more likely to trust the franchisor when it provides more self-serving information.  Such self-serving information can be included directly in blog postings (e.g., mention of an upcoming event) or in the periphery of the Web page where the blog is posted (e.g., link to corporate Web site).  If readers are engaged, they may help spread a franchisor’s message and enhance its brand through word-of-mouth.  Word-of-mouth remains one of the most coveted and hardest forms of advertising to harness. It relies on vocal and persuasive individuals to deliver a message to fellow consumers. Blogging allows brands to tap these individuals and facilitates word-of-mouth advertising on an unprecedented scale. An active community of engaged and connected readers results in a message that travels further and louder.

A successful blog begins with a goal and ends with great content
A successful corporate blog begins with a goal. Is the goal of the blog to increase sales by building the brand?  Is it to improve a business’ services by soliciting feedback or innovative ideas from customers?  To communicate with franchisees about issues relevant to their operations?  By articulating a goal, a franchisor can make good decisions about the scope and tone of the blog, as well as what comments to include on the blog.

The choice of goal will help determine the appropriate themes for postings.  For example, a posting on a fast-food chain’s blog about rising fuel prices would be inappropriate if the goal is to increase sales, but could be very appropriate if the goal is to inform franchisees about current issues.  A focused blog with consistently relevant and timely postings will be more likely to attract a loyal readership. 
 
The choice of goal may also be relevant to the tone of the blog.  Blogging tends to be less formal than other types of business writing; still an informal tone is not always appropriate.  A blog designed to build the brand of a franchised chain of youth sporting goods stores would likely be much less formal than one discussing issues of interest to people interested in medical clinics.

The content of blogs can be enhanced by permitting readers to post comments.  However, franchisors must choose carefully whether to allow comments of readers to be placed on their blogs.  Where the comments are positive, they can be an extremely powerful way of facilitating word of mouth marketing.  However, where the comments are negative, they can be very destructive to the host company’s brand.  If a franchisor decides to allow comments on its blog, it should monitor the comments carefully and decide if and how it will respond to any criticisms that are levied against it.
 
Articulating a goal, choosing the scope and tone of the blog, and deciding whether to allow comments are critical first considerations.  However, blogging, above all, entails a commitment to write on a regular basis. A blog thrives on relatively short, but frequent posts. The constant flow of fresh content helps develop loyalty among readers, fostering the development of a community.  Before starting a blog, a franchisor should therefore be certain that it is committed to writing on a frequent basis.

Readers find and read blogs in different ways
Anybody with access to the Internet is a potential blog reader and a potential blog writer.  As a result, many people surfing the Internet are looking for blogs to read, with lots of blogs being available for them to choose from.  There are four ways in which readers hone in on particular blogs.  The first and most powerful way is through word-of-mouth recommendations from other readers.  A second related way is through links from other blogs (where one blogger recommends another).  A third way is for readers to discover new blogs using search engines.  Finally, some blogs garner attention when they are covered by traditional media.  The common thread of all four methods is that their effectiveness increases as the blog becomes more popular.  Readership promotes awareness, and awareness promotes readership.

Once a reader is aware of a blog, he or she will use any of three primary ways to read posts. A small portion of readers subscribe to receive e-mail updates from a blog (as with the well known IFA SmartBrief published by the International Franchise Association). The largest proportion of readers simply visit the blog’s Web site.  However, a significant and growing proportion of readers rely on Really Simple Syndication. RSS readers, also known as feed aggregators, allow readers to subscribe to blogs and read all postings through a single interface.  RSS readers present the content of postings only, and not any peripheral information that may be included on the blog’s original Web site.  The increasing use of RSS readers therefore makes high- quality content the key to a blog’s success.

Forget traditional forms of marketing measurement
Measuring traditional marketing initiative usually involves the consideration of three things: the cost of the initiative, the reach and frequency of the message (whom does it reach and how many times does the reader see it?), and the lift in sales that the initiative produces.  Both the cost of the initiative and the lift it produces depend strongly on the reach and frequency of the message.

This traditional approach to measuring and valuing marketing does not apply neatly to blogging for four reasons:

• First, the cost structure of blogging is different than that of traditional advertising.  With traditional advertising, it is generally true that the more a company spends on increasing the reach and frequency of the message, the more effective the advertising should be.  This is not the case with blogs, which can usually be made available to the entire World Wide Web at little or no cost.  However, just because a blog exists, does not mean that anyone is looking at it.  While companies can spend to promote their blogs, the single biggest investment they will likely make is in the quality of the postings.  This investment must be made at the outset, long before any lift will be felt.

• Second, measuring reach and frequency can be extremely difficult to do with blogs.  While it may be possible to measure click-through traffic on the blog’s Web site, it is much more difficult to measure whether users of RSS readers or recipients of e-mail digests actually cast their eyes on a particular posting.  Furthermore, the magic of a good blog is when its message spreads by word of mouth.  The speed at which the message spreads can depend on the influence of a particular reader.  A brief mention of your blog by another popular blogger may be much more effective than 1,000 unknown voices singing a blogging franchisor’s praise.  The relative ability of readers to rebroadcast the message in a blog is not addressed by traditional advertising metrics.  It may therefore be impossible to know how far the message of a blog travels.

• Third, measuring the lift produced by a blog is also difficult.  Traditional advertising often includes a call to action: where that call is heeded by many consumers, the advertiser will experience a lift in sales soon after the marketing initiative is taken.  Blogs, on the other hand, rarely include such explicit calls to action, as blatant advertising is viewed as a serious breach of blogging etiquette.  Instead, blogs tend to influence consumers more gradually.  The lift may therefore come slowly and may be very difficult to trace to particular postings.

• Finally, the goal of a blog may not be the same as the goal of advertising.  For example, a blog that solicits feedback from customers may not produce any changes in sales.  Instead, it may equip the blogger to refine its services and products to make them more appealing in the future.  In such circumstances, the value of the blog is not measured by the number of people who read it, but rather the quality of the feedback obtained.  Traditional marketing approaches may not be suitable to analyzing, implementing and measuring the benefit of such qualitative feedback.
 Marketing experts have recognized these challenges.  However they have yet to reach a consensus on the best way to capture and analyze blogging data in meaningful ways.  There is even less agreement around how to put a dollar value on a blog’s performance.

Franchisors should take care to protect their legal interest
Blogs are a very dynamic and widespread public communication medium.  This makes blogs extremely powerful, but also means that franchisors should take certain precautions, some of which are listed below, when creating corporate blogs:

• First, a franchisor should create a policy regarding the content and use of its blogs.  The policy should not only articulate the positive goals of the blog, but should also emphasize the need to avoid breaching franchise agreements, disclosing trade secrets, violating privacy laws, violating intellectual property rights or defaming third parties. The policy should be legally comprehensive, but should also be presented in a way that does not unduly stifle the creativity of those posting or commenting on the blog.

• Secondly, if content for a posting is provided by someone who is not an employee of the franchisor, there is a good chance that the copyright to that posting will be owned by the contributor.  Franchisors should consider obtaining written transfers of such copyrights, or at least perpetual licenses to use it as needed.

• Finally, franchisors should consider displaying a disclaimer on the blog, especially if some of the content from the blog will be provided by third parties (for example, in the form of comments or replies to postings).  The disclaimer should make it clear what, if any, of the content can be legally attributed to the franchisor.

Blogs can offer franchisors a dynamic way to communicate with franchisees, potential franchisees, customers and potential customers.  Readers will devote a surprising amount of time to read and recount postings on popular blogs.  However, readers are also humans who are capable of rewarding or punishing arbitrarily.  It is therefore critical that franchisors only blog if they are willing to commit to blogging frequently and effectively.  Even a successful blog will present certain challenges for franchisors, particularly with respect to measuring return on investment.  However, that the benefit cannot be readily measured does not mean it does not exist.  In the end, blogging remains a tool with enormous potential for a franchisor wishing to better market its franchise system. 

Chris Bennett is a partner, Andrew Lord is an associate and Dmitry Shevalev is a summer articled student of the law firm Davis LLP.  They can be reached at cbennett@davis.ca, alord@davis.ca and dshevalev@davis.ca. 

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