Gunfight at the E-Cig Corral

Pending government regulation may or may not rope in electronic cigarettes, a booming product category seen by some as the last cowboy in the Wild West. But beyond the shootout over regulation, health concerns and underage smokers, a whole consumer channel — that of social media — is affected little by the white noise of mainstream media and legislators.

In a study conducted exclusively for Convenience Store News, Brand Chorus, a social intelligence practice and brand identity firm in New York City, performed a deep-dive analysis of all social media chatter surrounding electronic cigarettes during a one-month period for a comprehensive online snapshot of consumers’ thoughts and concerns about this tobacco segment.

“Very quickly, it became clear that if we separated all of the media chatter, which is almost entirely around the issues of legislation and health, an entire consumer universe of conversations having nothing to do with these subjects revealed itself,” said Bradley Nix, a partner of Brand Chorus. “It is inside this world that consumer insights reside.”

A significant amount of online chatter centers on the topic of e-cigarettes, with 137,000 posts in a recent 30-day period alone. This is a significant number, made more significant because, for the most part, e-cigarette brands are not currently using social media to rally supporters or build brand loyalty.

However, a large amount of this activity is being driven by dubious Internet marketing practices by some manufacturers. For example, there is a plethora of affiliate marketing — a questionable brand-building practice where a manufacturer posts a seemingly legitimate news article that drives prospects to a sales pitch for online purchase or pushes a bunch of coupons.

“There is an identifiable sub-segment of manufacturers online promoting their wares without a great deal of forethought to the future of their brands or the category,” Nix said. “This is ironic because when you listen in to what the consumers are actually talking about, these fringe marketing tactics are thoroughly unnecessary. There is a wealth of valuable conversation taking place; a treasure trove of interest across this category.”

If legislation isn’t the topic, what are social media users talking about?

Key Observations

Looking at the social media activity for the top 10 electronic cigarette brands, Brand Chorus identified three key observational trends based on its expert data analysis:

1. Nearly one in five online conversations included mentions about how e-cigarettes help with smoking cessation. That is an astounding 20 percent of social media users talking about quitting smoking. Sometimes brands initiate or harness the conversations, but hundreds of Twitter and Facebook posts are not tied to a specific brand. This creates opportunity.

There is a clear path for manufacturers and retailers to engage consumers in positive conversations about stepping over to non-smoking through e-cigarettes, without becoming involved in the highly charged, politically complex issues of health. The implications for the category and at retail are entirely positive. If manufacturers are willing to take the high road presented to them by social media users, the entire industry can benefit.

2. The majority of e-cigarette brands still compete on functional attributes such as price, flavor, variety, battery life, etc. Only a handful of brands, notably blu, NJOY and FIN, have emerged as strong, distinctive brands that elevate the conversation to more emotional themes.

The brands that will win in this space are ones that can engage users beyond functional product attributes and establish emotionally beneficial connections. The lifestyle space is still wide open with a multitude of niches to be carved. Manufacturers should resist the urge to bottom-feed (such as employing questionable tactics like affiliate marketing). Instead, they should begin to build user relationships. Social media users are actively reaching out for connection points. Engage them with multiple touchpoints.

3. Leading e-cigarette brands do their best to make vaping/e-cigarettes look cool. They are creating a lifestyle. They sponsor music festivals and race cars, as well as use DJs and celebrities to promote their brands. Two words of caution: Some celebrity endorsements can backfire, as shown with the social media backlash against Jenny McCarthy’s blu campaign. The Brand Chorus study found that a majority of negative sentiment about blu during the recent 30-day period studied was driven by negative reaction over the Jenny McCarthy ads, as well some general posts against e-cigarettes.

It is not necessary for all brands to cluster in the same lifestyle space of rugged individuality and standing up for one’s freedom. There is opportunity for one or more companies to develop differentiated messaging to break away from competitors.

Key Insights & What You Can Do

So, what should retailers and manufacturers in the e-cigarette space do to ride off into the sunset as a winner within the category? Brand Chorus recommends four important strategies based on its initial snapshot study:

Focus on your brand. Right now, there are 200-plus electronic cigarette brands in the market. Only a handful have moved from talking about basic functional benefits to building a strong brand. Retailers should look to the stronger, more established brands and not the multitude of brands with seemingly questionable online marketing practices.

Don’t let pending regulation influence marketing strategy. Continue to exploit your advantage over traditional cigarettes and build customer loyalty while the opportunity to connect with customers on broadcast advertising and other marketing avenues — forbidden for cigarettes — are available.

Currently, blu, NJOY and FIN all position themselves around the idea of freedom, individualism, etc. NJOY recently shifted tactics with new TV ads that boast, “Friends don’t let friends smoke,” tiptoeing around the health claim ban.

Embrace and engage the space. Most e-cigarette brands have a social presence, but lack followers and have low engagement levels. E-cigarette brands need to develop a social strategy and create content their consumers find engaging. What’s the benefit of making generic posts or using social media to issue corporate press releases?

Use video and images to the fullest effect. Social media users love video and pictures. There are: 229,819 media (what Instagram calls photos) tagged “ecig” and another 625,566 media tagged “vape;” 616,000 videos on YouTube about e-cigarettes; 749,000 videos on YouTube about vaping; and hundreds of blogs and posts about e-cigarettes on Tumblr with images and video.

Brands need to look beyond Facebook and Twitter. Include social platforms such as YouTube, Instagram, Tumblr and others. For example, YouTube is vastly underused, but is the most engaging medium for the category. While not every brand will achieve the social success of E-Lites, a brand whose Gangnam Baby video has 1.75 million views on YouTube, there is significant room to improve upon current engagement levels.

Interestingly, blu is the most talked about brand on social media, but also has one of the lowest engagement scores at 12 percent for the recent 30-day period studied. This leading bestseller from Lorillard Inc., the maker of Newport cigarettes, has the resources and awareness to continue to build sales, but the disconnect with engagement shows how much work even the market leader has to do within the social media space.

“Given the volume of conversations in this category, it’s puzzling that e-cigarette manufacturers and retailers aren’t more active in social media,” said Martyn Tipping, a partner of Brand Chorus. “It’s a must-be platform for brands.”

Listen to consumers. E-cigarette brands can learn a lot by listening to what consumers talk about online. If one in five consumers talk about e-cigarettes as a smoke cessation product, how should manufacturers address this, even with the current prohibitions on health claims? Could this have implications for where retailers stock e-cigarettes? Consumers are posting new product ideas for the taking. They are asking for different pack forms, e-cigarette pack cases (similar to iPhones) and many other suggestions.

WHO WILL Survive the E-Cig Wild West?

Electronic cigarettes are a category in flux, but some clear leaders are emerging and there’s room for many more strong brands. Eventual winners must build a compelling brand, an engaging social presence and a strong social dialogue with consumers.

And what if the electronic cigarette industry is regulated? Be like Gary Cooper and not the rest of the town in High Noon. Don’t be too quick to consign the category to the scrap heap. Consider the rapid growth of the dietary supplements industry after its regulation in 1994. With standardization comes opportunity for legitimate players.

The best way to achieve leadership or market to an emerging category like e-cigarettes is to keep your finger on the pulse of new consumer products and store preferences, potential issues and new trends. The social media space can identify these issues in real time, help create meaningful connections and build customer relationships.