The effect of Social Media – Should companies abandon Traditional Advertisement? Part 2

October 30, 2014

Written by  Elisabeth Matsson


Part 2- Social Media versus Traditional Advertisement


The benefits of social media

The massive rise of social media has been a phenomenal sensation and has affected our everyday lives (Powers et al., 2012). As mentioned before, social media has not only effected consumers’ way to act but it has also increased the companies’ possibility to gain valuable information about their customers (Brawise & Meehan, 2010). Social media encourage people to share their thoughts and feelings online, which is consider being both positive and negative for the (Tuten & Angermeier, 2013). This has resulted in that transparency and authenticity of companies has become even more vital due to the arena of social media and this must be a priory for every participating company (Scott, 2008). When a customer feels deceived by a dishonest company and spreads the word, there can be devastating consequences for the company which indicates the importance for companies to be honest (Scott, 2008; Vázquez-Casielles et al., 2013). The effect of social media cannot be denied but whether it is the number one marketing activity for companies of today still remains uncertain.


What about traditional advertisements?

As stated before, social media has made it possible for word of mouth to reach a larger audience and is now considered to be one of the most effective communication tools for companies (Vázquez-Casielles et al., 2013). It has also been proven that positive word of mouth has a positive impact on brand-purchase probability (Vázquez-Casielles et al., 2013). Since social media encourage word of mouth, and word of mouth has an impact on increasing sales, should companies then focus more on social media than traditional advertisement?   

Traditional advertisement can be defined as one-way communication where there is no interaction between the company and consumer (Varisha & Vaish, 2013). Communication through social media invites the consumers to discuss, request and share their opinions with both the company and other consumers as well. Social media has the advantage of being accessible for interactions and providing the company with consumer insights and encourage word of mouth (Brawise & Meehan, 2010). However, traditional advertisement has its advantages as well which cannot be ignored. Traditional marketing allows the company to keep control over the message they wish to communicate and it is also easier to measure the outcome of traditional advertising compared to social media (Armelini & Villanueva, 2011).


Traction or just interaction?

There are many ways of how companies can interact with their customers through social media, for instance by creating Facebook pages, blogs et cetera. Nevertheless, it is important to understand the real effect by using these interacting channels. Having a Twitter account, a Facebook page et cetera should not be considered as a billboard, it should rather be viewed as a café where people do not just receive messages from the company, instead they interact with each other and obtain information from others (Armelini & Villanueva, 2011). If a company instead chose to use an advertising banner on a webpage, it works just like a billboard and this is categorized as traditional advertisement since it is one-way communication.

It is important to distinguish what traditional advertisement is in relation to social media since they can both occur on the same arena but in two completely different ways.  Social media does not focus on a specific sales offer, it focus is on creating an engagement with the consumers and encourage them to buy their products when there is an arising need (Trends Magazine, 2012). Traditional advertisement is however famous for targeting a specific segment for a specific product or service offer (Kotler & Keller, 2011).


Social media versus traditional advertisement

To communicate through social media is relatively inexpensive since companies do not have to pay a huge amount for the marketing space (Swilley et al., 2013).  However, it is easy to be fooled to believe that the use of social media in total is a low-cost alternative towards traditional marketing activities. This is only true to some extent. To establish a presence in social media costs relatively little but to generate content can be very costly since it requires time, creativity and qualified talent (Armelini & Villanueva, 2011).

Regardless of the  evidence of social media functioning as a success-maker for companies, Armelini and Villanueva (2011) and Barwise and Meehan (2010) both states that social media should be viewed as a complement to traditional advertisement. It should not be used as a company’s only communication tool. Pepsi learned this the hard way when they put almost their entire marketing budget into social media. The campaign was successful in terms of followers, fans and votes, but in terms of sales, Pepsi fell down from a second place to a third in the US (Armelini & Villanueva, 2011). According to Powers et al. (2012) offline advertising and brand perception are very important components to the media mix which means that without it, social media would not be a success for companies. Further, Barwise & Meehan (2010) argues that it is because of social media that it has become even more vital than ever before for companies to get their basics right and focus on traditional marketing activities. If they do not, the social media will only create buzz, not sales.


Even though social media is being rewarded for encouraging word of mouth and increasing the possibility to reach a large audience, not all word of mouth happens online. In fact, according to Keller and Fay (2012), most of the word of mouth happens face to face. A company cannot rely on social media to drive conversations, other tools are needed as well. Both online word of mouth as well as offline word of mouth has been proven to increase sales. However it has also been proven that it is the traditional advertisement that actually triggers word of mouth (Keller & Fay, 2012). If companies disregard traditional media, it will simply result in a lack of word of mouth. Keller and Fay (2012) states that companies should focus on the social consumers instead of social media and that the most effective way to increase sales is to use traditional advertising which gets people to start talking about it. Unfortunately, there is no magical solution for how a company should balance social media and traditional advertisement, it has to be judged in every specific situation (Armelini & Villanueva, 2011). The formula that will be ideal for one company will not give the same outcome in another.

So, what does this mean?

Social media and traditional advertisement are two very different things, but still very related. They are both connected to each other and have a mutual effect on each other’s outcome. Traditional advertisement gets people to start talking and by using social media, their thoughts can reach a larger audience. With this said, it is vital for companies to understand the importance of keeping their doors open for both social media and traditional advertisement. Social media is simply depending on traditional advertisement and the effect of traditional advisement is simply depending on social media as well. There is no magical solution on how to balance this in terms of percentages, it all depends on what effect the advertisement should have, the specific brand as well as the consumers the company wants to target.

To sum up, I would strongly recommend managers to participate in the social arena to boost their brand awareness and engaging customers to spread the word. This will be seen as a complement to their traditional marketing activities that should not be ignored. The combination of these two will generate a better outcome and provide the consumers with both the possibility to express their opinions through social media as well the opportunity to receive controlled message from the company’s traditional advertisement. If this is managed in the correct way, it will increase sales and generate a more profitable outcome.


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