5th May

Written by Thomas Koponen

Social media: Are marketers using it right?

Introduction

Social media has changed the way consumer’s communicate and interact with companies and their brands. The possibilities offered by social media have allowed consumers to create user generated content (UGC) and engage in multi-channel communication with brands and other consumers (Wind, 2008; Muniz and Schau, 2011), a difference from the earlier one-way information exposure during Web 1.0 (O’Reilly, 2009). Social media has caused a change in the marketing paradigm (Deighton and Kornfeld, 2009), resulting in a shift from the push to the pull model of communication (Schultz, 2006). Consumers have now become more empowered (Christodoulides, 2009), which has resulted in both excitement and worry amongst marketers and brand managers. How should marketers react to these new empowered consumers? Should marketers embrace social media platforms and abandon the declining and more expensive traditional media in their marketing strategy? Which social media platform to choose?

Problem

The emergence of the Internet has offered consumers many possibilities to circumvent traditional media gatekeepers such as TV, radio and print media (Skovsgaard and Van Dalen, 2013) allowing consumers to avoid the content, promotions or messages that traditional media advertises expensively (Winer, 2009). Companies have noticed that their traditional advertising model is not reaching these new empowered consumers, and that traditional media audiences such as TV are constantly declining (Edwards, 2013). This has encouraged marketing managers to explore implementing social media in their marketing strategy, but the marketing managers inexperience and lack of know-how of social media has led them to create multiple ineffective social media platforms which have not re-enforced the brand or content, but rather damaged the brand reputation (Kapferer, 2012).

Purpose

The purpose of this article is to provide an overview of how the marketing paradigm has changed from a push to pull and then discuss social media platforms in relation to creating effective marketing strategies and explain why some marketing managers are not currently doing so. I examine literature on social media vs traditional advertising and use the honeycomb framework to highlight why not all social media platforms are the same and therefore should not be generalized by marketing managers when it comes to planning an effective marketing strategy involving social media. Finally, a conclusion is drawn where I attempt to answer the question while also posing a question for the future of social media implementation for marketers.

3 Analysis

Communications have changed

Before the Internet and even during Web 1.0, companies largely controlled the flow of information. They were able to distribute advertising to a general mass audience through a few selected means such as TV’s, radios, print media and newspapers. Consumers were faced with the choice to either receive the content or avoid it. When Web 2.0 technologies emerged, it gave consumers unprecedented power in terms of giving them control over what they were exposed to, but it also gave them the power to interact and engage with companies through social media platforms such as Facebook, Twitter and Youtube. Customers could engage, share and spread company’s content to a large audience instantly through these social media platforms. Wind (2008) states that companies can decide if they want to participate and lead in social media or ignore it, but it might happen anyway, so it might be smart for companies to enter social media platforms at an early stage, before others (unofficial) do and cause some brand damage through negative e-WOM, creation of parody accounts and anti-brand sites (Krishnamurthy and Kucuk, 2009).

Social media changed the communication mix as outlined by Winer (1999).

a: The traditional mass communication model was fairly simple. It allowed firms to create and control their content through advertising, sales promotion, and PR channels and spread the content to a large mass audience tuning in to receive the content by a selected medium. The firm was in control of the brand and could dictate the terms of the relationship between firm and customer.

b: The modified mass communications model was the result of social media. The Internet allowed customers to engage in multi-channel communication at very low costs. Through social media platforms such as Facebook, customers could voice out their opinion to an individual, a firm or to the masses instantly and electronically.

This new model has had a large impact on how brands and products are perceived by the general public. It amplifies the voice of a single customer complaint about a company to the masses. The credibility of many firms is tested, as customers share both negative and positive experiences with a company through use of e–WOM such as online reviews on YouTube, tweeting about it on Twitter or writing status updates on their Facebook profile. A firm’s well-protected brand reputation can either quickly be applauded or tattered by online customers opinions as Armelini and Villanueva (2009) point out that e-WOM is a more credible source of information than a company’s traditional advertising.

Many marketers are then rightfully worried about losing control over the brand due to social media (Winer, 2009). After all, some companies own brands with strong brand identities (Kapferer, 2012) that they have protected vigorously over many years. The thought that a single negative complaint going viral is terrifying, as it can damage a firm’s brand reputation instantly. There are many cases of public customer complaints on a company’s official twitter or Facebook page that have gone viral and resulted in brands either winning or losing brand equity, depending on their response the negative e-WOM (Luo, Zhang, Duan, 2013).

Another difficult issue marketers now struggle with is planning and budgeting (Winer, 2009). This becomes ever more important if a company adopts both social media and traditional media marketing strategies. The more communication channels means that there is a higher risk for the message to be changed or re-interpreted than the original intent. This is highly problematic since the brand starts losing its identity and positioning (Kapferer, 2012) if consumers are unable to decode the communication messages that are being sent out.

However, the new pull paradigm with empowered customers provides a good opportunity for firm’s to improve their marketing strategies to align more with customer values. Marketers do not have to come up with the next ‘big thing’ by themselves or in groups. They can gain immediate consumer insights by listening to their audience and use that information to encourage engagement and improve the brand reputation (Cova and Pace, 2006). For example a few years ago jewelry makers Tiffany & Co listened to the diamond industry activists and also their own customer wishes to purchase jewelry that would come from countries or workers where they were paid a fair wage, not involved in civil crises and the diamond process was ‘clean’. Tiffany & co and other jewelers as a result, joined the “no dirty gold” movement to ensure that their suppliers would adhere to these and higher standards of jewelry sourcing. The Tiffany & Co brand received praise from the public for standing up and taking action along with sellers, causing buzz on social media sites and positive E-WOM about the brand.

Adding social media to the marketing mix

Armelini & Villaneuve (2009) stated that 84% of European Internet users belonged to at least one social network. The researchers strongly advocated that companies should incorporate social media to their marketing mix because it was not just an alternative to traditional media, but a tool to reinforce the marketing strategy. What traditional media lacked, social media could make up for. As earlier mentioned, the credibility of advertised content by traditional advertising was seen as “limited”, in contrast to the credibility being “high” for e-WOM (Armelini & Villaneuve, 2009). This is because customers are more likely to trust friends, and objective reviewers because they lack a specific agenda, and will communicate the content more ‘truthfully’ unlike advertisers, whose objective is an increase in sales (Cheung et al., 2009).

The second part of this blog post and bibliography will be published on 8th of May.