Threats of Brand management in social media Why Strong Social Media Presence Magnifies Brand Weaknesses and How International Brand Managers Can Address This Part 1

January 15, 2015

Written by Jenni Väisänen

Nowadays, brand managers focus more and more on marketing online, due to the multiple opportunities it offers. However, to manage brands efficiently in social media settings, marketers need to understand the rules of their new marketing environment. This paper examines survival tactics of brand management in social media in the form of literature review. Based on Fournier and Avery’s article (2012) about the evident characteristics of social media and their impact on brand management practices, this paper discusses four factors, which can threaten brand management by magnifying their weaknesses, and ways to overcome them. The factors are characteristics and demands which have risen at the era of online marketing. They are 1) power of social collective, (2) entertaining parodies, (3) demand for transparency, and (4) constant criticism. Depending on the way these characteristics are addressed by brand managers, they can work either as an endorsement or threat to branding practices in social media.

Introduction

Today, being present in social media is necessary for most companies, as it provides possibilities to connect and create relationships with various groups of stakeholders. Intensive use of Web 2.0 technologies in marketing pays off, as it has a remarkable impact on company reputation, profitability and market share, when properly implicated. (Bughin and Chui 2010; Kietzmann et al 2011) Because web 2.0 is regarded as a door-opener for two-way communication and information sharing (Filho and Tan 2009, cited in Akar and Topcu 2013), including it to the traditional marketing mix provides various new platforms for marketing activities (Winer 2009). Akar and Topcu (2013) define social media marketing simply as a tactic to promote both company and its brands via different social media channels, such as Facebook, Twitter or Youtube.

Despite the opportunities social media marketing has to offer, brand managers need to realize that there is a thin red line between success and failure, when a brand is presented in social media. Rapidly spreading electronic word of mouth (Akar and Topcu 2013), powerful consumer activism within online communities (Cova and Pace 2006), and co-creation process of brand image (Singh and Sonnenburg 2012) do not run only with positive energy. If brand managers lack understanding of vital rules in the jungle of social media marketing, strong brand presence and visibility can turn into a threat for the brand. Negative brand reputation spreads fast in social media, which can have serious impact on sales and even survival of a company (Kietzmann et al 2011). As the prerequisite of social media is that it was created for people – not for marketers nor brands- companies should be aware that they are to walk on their toes in the online jungle. (Fournier and Avery 2011)

Fournier and Avery (2011) summarize four phenomena in social media, which brand managers ought to take into consideration when marketing online. They are (in other words than Fournier and Avery, 2012, presented) (1) power of social collective, (2) entertaining parodies, (3) demand for transparency, and (4) constant criticism. As social media has changed the landscape of marketing practices remarkably, resulting in “traditional” marketing techniques becoming invalid, it is important for companies to understand conditions of their new marketing environments (Awasthi, Sharma and Gulati 2012).  These phenomena, help to clarify the root causes of the benefits, without forgetting the threats, of having strong social media presence. (Fournier and Avery 2011)

Purpose of the study

The purpose of this paper is to understand, why social media as a marketing landscape is challenging for brand managers. The aim is to encourage learning from others’ mistakes, and discuss some ways to address the dilemmas. This paper is divided into two parts; in the first part, focus is to discuss the power of social collectives and parodies, whereas the second part concentrates on how companies should handle demands to be transparent and constant criticism.

Magnifying and managing brand weaknesses: need for belongingness and entertainment

Power of Social Collective 

Social media answers to peoples’ need of being accepted and feeling the sense of belongingness through its various communities, virtual friend-making and social bonding. By “liking” their friends’ updated statuses and “joining” different groups, people connect with each other conveniently. Online communities offer a place for like-minded people to share their opinions, photos and experiences, which enhances the feeling of belongingness. (Fournier and Avery 2011) Picture 1 below demonstrates, how many people Nike reaches via Facebook.

Nike Facebok coverpage, with 16,508,118 "likes".

Picture 1: Nike social media –Facebook (Nike 2014)

Marketers have traditionally been able to bring brands and their messages to the awareness of consumers, possessing full control over the message, but social media has changed this. Today, managers are creating their brands together with consumers by sharing experiences and opinions. Because this new type of branding process is dependent on consumers’ opinions and perceptions of the brand image, managers need not only to listen carefully what their customers are saying, but also engage consumers into the co-creation of their brands. This two-way communication has changed the ideology of branding online completely. (Corstjens and Umblijs 2012; Fournier and Avery 2011; Singh and Sonnenburg 2012) 

The fact that consumers may connect different characteristics to a brand than the previous owner, brand manager, can cause problems to the company and threaten the brand image (Fournier and Avery 2011, Corstjens and Umbljis 2012). Singh and Sonnenburg (2012) suggest that instead of trying to control the brand message too much, brand managers should concentrate on guiding consumers’ comments to support and endorse the original brand-story. According to Singh and Sonnenburg (2012), some corner stones of the new way of brand management are to switch focus to the process instead of the output and understand the role of “tension” in brand-creation.

Switch focus to the process, not to the output

As the core idea is to co-create brand-stories together with consumers, they need to be encouraged to participate into the process. Brand managers need to accept that brand image will be affected by different kinds of experiences and stories shared by individual consumers, which, in other words, means that there is no “one storyline” or “one image” of a brand. What brand managers can and should try, is to guide shared comments to reflect the desired brand concept. This can be done by e.g. engaging, provoking and seeding. Engaging can be done by encouraging different opinions and by challenging new stories, whereas provoking by addressing emotional topics for discussion. Seeding is a tactic to encourage co-creation in multiple social media platforms (Shau, Muñiz, and Arnould 2009). Additionally, brand managers should provide a suitable social media platform for consumer-discussions. (Singh and Sonnenburg 2012)

Realize the role of “tension” in branding

In order to activate consumers to participate in branding, marketers must provide tension to the story. Tension as a concept has been divided into three categories: internal, personal and external. Internal tension rises from the need to look into the mirror and identify oneself, whereas personal tension lies in the differences between people. By external tension, the issues between people and their environment, nature and even supernatural, are brought up to discussion. When holistically practiced, all sources of tension are discussed in a brand co-creation process. Hence, tension is the driving force to generate consumers’ emotional engagement to the brand story. (McKee 1998, in Singh and Sonnenburg 2012) Below, in Picture 2 it is visible how Ben&Jerry’s Icecream creates tension at their Facebook site: they promote well-being of cows and ask, which flavour their consumers prefer on “Belly laugh day”.

Ben&Jerry's ice-cream highlighting the importance of happy cows and asking flavour preferences, i.e. creating tension.

Picture 2: Ben&Jerry’s social media -Facebook (Ben&Jerry’s 2014)

The curse of co-creation is that it makes branding uncontrolled: if consumer societies’ opinions collide with brand’s mission or values, solving the emerging problems can be challenging. (Fournier and Avery 2011) A good example of a mismatch between consumers’ and brand managers’ perceptions of a brand is Frito-Lay’s: brand managers enhanced environmentally-friendly values in product development, whereas consumers considered “convenience” as a more important factor. The brand had to give up its ecological packaging material in order to meet customer wants: a package with less-rasping sounds. (Brady 2010, cited in Fournier and Avery 2011)

Entertaining parodies

Yet parodies about brands are not a new invention, spoofing has emerged as a form of entertainment in social media. Parodies about different brands and advertisements have become normal in different social media platforms, such as Youtube. Previously parodies were distributed mainly by professionals, but nowadays anyone can entertain others in social media. In general, brands and advertisements offer a variety of themes to make fun of. (Fournier and Avery 2011)

The Dove Beauty 'Sketches' ad has been parodied in terms of men's face. Sketches are completely different as men see themselves as more attractive than they are.

Picture 3: Dove sketches parody –men. (Adweek 2013)

When consumers use parody in order to attack a brand and in order to humiliate it, it is time for brand managers to get restless. Rude parodies concerning the core values and positioning can be particularly damaging for any brand. (Fournier and Avery 2011) After Dove’s Real Beauty campaign was launched, some parodies were uploaded into Youtube. They were made about men, with the same idea as “sketches”-video: men were drawn on the basis of their description about themselves, and then, on the basis of another person’s description. The descriptions concerned, depending on the spoof, their faces or their testicles. (AdhocVids 2013; Irakli Kopaliani 2013) Pictures 3 and 4 demonstrate the two parodies.

The Dove Beauty 'Sketches' ad has been parodied to put testicles front and center.

 Picture 4: Dove sketches parody –testicles. (Ma, 2013)

    Be fun if you can –and if not, know your audience

If the brand identity supports the idea of being funny, some marketers themselves can use the idea of silliness and implement “parody” as a selling tactic before consumers do. Indeed, there are some brands who sell by being funny, such as Blendtec. Even though the idea of a kitchen blender is not entertaining, commercials made it funny by blending almost anything. (Fournier and Avery 2011) However, if the brand image does not convert into a funny story, brand managers should realize that their online marketing activities can reach anyone. Even though target group is defined, social media allows other people, who do not even consume the product, share their point-of-views and therefore, have an impact on the co-creation of the brand. (Singh and Sonnenburg 2012)

Demand for transparency and constant criticism are discussed in part 2.

Internet’s development impact on consumers’ behavior in past 10 years and recommendations for marketers’ to adapt successfully

January 12, 2015

Written by Monika Vaiciulyte 

Purpose of the article

There is no denying the fact that the Internet has made a huge development and terrific impact on our daily lives. The main purpose and objectives of the Internet have been changed and adapted partly by society itself and partly by the technological shifts. Business units and entrepreneurs saw it as an opportunity and started to explore the possibilities lying there. The adaptation had to be accepted not only by the managers but from the consumer’s side as well. In this paper the first part is going to focus on the consumer’s changes issue and the second part is going to emphasize on the ways how marketers can adapt to these changes and recommend ways to do it. Including the shift from Web 1.0 where consumer was just the receiver of information and Web 2.0 where the communication and relationships started to matter. Gained experience and understanding of how Internet works allowed consumers to actively participate in the marketing process and be a big part of brand building.

This article is going to present the main changes of the Internet and its impact to the consumers’ behavior, grounded by the statistics available on this theme. Later, the recommendations for marketers will be presented, conducted from the peer articles reviews.

Development of the Internet in last 10 years and consumers’ behavior changes

Growth

Talking about the changes in the Internet I will follow J. Macdaniel (2012) suggested changes that were made upon the usage of Internet during the last ten years. 

The biggest one and the most obvious is the change in the number of users; the growth of Internet usage is just impressive – from more than 500 million Internet users worldwide to 2.7 billion people using it in 2013 which estimates 39% of the world’s population in total. At 2013 Europe was the region with the highest Internet penetration – 75%, while the Americas had 61% penetration (ITU, 2013).

This growth of course was followed by the business development and shift to the Internet as well. The major growth of websites number was witnessed and the statistics say that in 2002 there were roughly 15, 6 million websites and till the 2011 the number grew to 366, 8 million (Statistic brain, 2012). Of course this affected the amount and variety of information available for the users as well as the opportunities created and services available.

After considering the growth of Internet facilities available the next logical step is to review the availability of the broadband access; that leads to the conclusion that Internet, at the beginning was mostly related with work and its needs; just after a while it moved to the households, letting people to use it in a daily life basis as well as for entertainment. As the statistics are providing, nowadays 41% of the world’s households are connected to the Internet, but the region with the highest amount of household connected is still Europe (ITU, 2013). Considering this, it is logical to say that for users the shift from Internet as a work tool was made towards Internet as a daily life supporter.

Meanwhile, while Internet was developing, a growing platform of e-commerce has made its appearance. In 2012, the B2C e-commerce reached 1 trillion dollars, which means that in only one year it grew 21.1% in total. According to the statistics North America was in the first place of e-commerce sales, closely followed by Asia-Pacific region, which in 2013 was expected to outrun North America. Internet accessibility and high penetration in all regions led to the change of consumption habits. As it is visible from the statistics, contemporary consumers are more relying on e-commerce. Authors Ahuja, Gupta and Raman (2003) researched the motivations for the consumers to shop online and the most trending ones were – convenience, better prices, time saving and availability.

Technological changes

A huge step that moved Internet usage and its applications to the next level was the ability to access Internet through the mobile phone. According to the statistics in 2013 the global active mobile broadband subscriptions reached more than two billions. This is 29, 5% of the general population and in these area developing countries outrun the developed countries (mobiThinking, 2013). As it is observed by Kaplan and Haenlein (2010) mobile Internet access in developing countries gives the opportunity to brands and marketers to reach the audience and expand the market shares in certain areas. Mobiles or so-called smart phones are being used not just for searching information and checking e-mails, but also for social media purpose and entertainment. This had a high impact on the Internet usage time and accessibility.

By the time Internet users became more sophisticated and demanding they needed to localize their search results and companies needed geographically targeted consumers; this need was covered by an online service called Google Local (J. Macdaniel, 2012). After a while, as the Internet and its users were developing, Google started to use intuitive or personalized advertisements, composed according to the e-mails content and users search information. Improvements are being done here constantly as the technological side allows specializing and understanding every consumer as a unique personality (B. Rangen, 2011).

The most influencing change that implemented the environment of the Internet itself was the appearance of various social platforms. Moreover, it had a tremendous influence on users’ interactions and activity online. The emergence of blogs, forums and other platforms where people can create virtual communities and interact with each other empowered users to let the particular brand or company to the community or not. It is the place where users have the power and are able to set up the so called “game rules”. For example fashion bloggers who became famous and powerful because of their social media usage or the companies that created buzz around their brand using videos that became viral, like Vodafone flash mob in the Heathrow airport. As Fournier and Avery (2011) are explaining in their article – brands rushed into the social media, expecting that users are waiting for their one way messages and more information about products; but that was not the case. People came to social media to hide themselves from marketers and were not willing to let them in, using the traditional marketing methods.  

The infographic to visualize changes discussed above can be found here.

First step to successful online marketing implementation

In this part the attention is being paid to the social media and its usage by marketers, because this is the area where the influence for consumers could be made, not taking into consideration traditional online advertising methods, like banners and pop ups.

The understanding of Internet changes and their influence on current or potential clients is crucial for successful e-marketing. Being aware of the consumer activities and attitudes is not enough. New marketers need to know the whole social media ecosystem, to be able to create and maintain flawless strategy and not getting lost with the messages spread to their consumers. As  Hanna, Rohm and Crittenden (2011) are explaining in their work, one of the biggest mistake that a company can do is to treat all the platforms separately and not synchronized with each other and with marketing strategy. However, Internet based marketing cannot be treated as a substitute for the traditional marketing. Marketers need to understand that in social media there is no monologue, consumers are receiving the messages and deciding to start a dialogue or ignore it.

Social media platforms as a connected online environment

Social media usage for better consumers’ understanding

After understanding the social media environment and the principles of how to manage it as a system, it is time to dig deeper into the usage of it. Knowing the tendency that Internet users are keen on spending more and more money online and trusting e-commerce, marketers can conduct the online shopper’s segmentation as it is suggested by Aljukhadar and Senecal (2010). Used to identify characteristics of buyers segments it could help marketers make a decision to move part of their sales online, provide 24/7 online shopping support or any other service to encourage and lead consumer to purchase action. In this case author’s example can be used when the emails inviting consumers to shop in actual shop were used by providing a special discount offer.

Similarly, the social media networks can be used to illuminate consumer world and create better understanding about their environment and problems they are facing (P. Barwise, S. Meehan, 2010). It leads rather more to innovating than instant growth of the sales, but at the long perspective, solving consumer’s problems and making certain things easier, more comfortable or even more entertaining, might drive sales up eventually and create positive brand/company reputation.

Moving even deeper in the online marketing, the analyzed Internet development and usage changes are showing that mobile connection with Internet is growing fast and that needs to be observed and considered by marketers too. Firstly, it can help to gather information in real time; for example from check ins and comments made during the visit, till the particular emotions that a person felt there. Combining this knowledge together with the modern technologies, marketers can reach a great communication level, which might feel like one- to-one marketing and give back some power to the companies (Andreas M. Kaplan, 2012). The author also presented the 4 I’s (integrate, individualize, involve, initiate) model that can be used as a powerful tool by marketers to create, engage and implement relationships with their consumers.

When talking about the creating of relationships, it is necessary to mention that certain loyalty for the brand or company in social platforms can grow into the online communities that could provide incredibly valuable advertising, through e- word of mouth, straight to the potential and undecided consumers. The consumers themselves might create the content and perception of a certain brand.  This is one more niche that marketers can explore and use to improve relations with Internet users.  Collaboration with consumer’s communities is also being discussed by Antorini, Muñiz, Jr. and Askildsen (2012) who are providing the example of Lego group when the desire to collaborate came from its adult users. The main idea and lesson taken from this case is that after observing people’s want and aspiration to participate in the product creation or development, Lego management provided them with the communicational platform and gave them the tools in order to collaborate with the company. In this way marketers might get not only the valuable ideas for the future product lines and implementations, but also collect information about their users. Some particular expertise knowledge helping to develop and innovate could be gained too. Consumer generated content can be developed and empowered by using Muñiz Jr. and Schau (2011) proposed steps :

• Systematically employ consumer created content in their long term marketing campaigns;
• Consider the role of the firm in facilitating prolonged CGC endeavors;
• Actively encourage collaborative CGC.

However, consumer skills should be examined before investing a lot of time and money to this process.

Conclusion

Having observed the main developments of the Internet (growth and technological) and its effect on the consumer behavior the recommendations for the marketers have been made.

The most important thing in this constantly changing and vital environment called Internet is to keep scanning the periphery for the new technologies coming, appearance of the new social channels or other signals that the environment is likely to make a shift again. As Day and Schoemaker are claiming – being aware of the signals from environment that can have an effect on marketing and business itself, might provide not just understanding about threats on the way, but enlighten the opportunities as well.

The recommendations for marketers are:

• Before jumping into the online and social media marketing to be aware of its environment and understand that it works as a system;
• Conducting the online shoppers segmentation might help to characterize consumers;
• Using social media channels can help to illuminate the so called consumers world;
• Spotting the new coming Internet usage trends – as for now it is mobile Internet usage and try to implement in marketing plan;
• Provide consumers the opportunity to participate and be part of the brand. Provide a platform and facilitate this process.

To sum up, it is just a small list of recommendations for the marketers to implement. In order to achieve success, investment of time and practice is needed.

Reference list

Ahuja, M., Gupta, B., Raman, P. (2003). An empirical investigation of online consumer purchasing behavior. Communications of the ACM - Mobile computing opportunities and challenges. 46 (12), p145-151.

Aljukhadar, M., Senecal, S. (2011). Segmenting the online consumer market. Marketing Intelligence & Planning. 29 (4), p421- 435.

Antorini, Y. M., Muñiz A. M. Jr., Askildsen, T.. (2012). Collaborating with Consumer Communities: Lessons From the Lego Group. MIT Sloan Management Review. 53 (3), p73- 79.

Barwise, P., Meehan, S. (2010). The one thing you must get right when building a brand. Harvard Business Review. p80- 84.

Day, G. S., Schoemaker, P. J. H. (2005). Scanning the periphery. Tool kit. Harvard Business Review. Noverber, p1- 13.

Dyer, P. (2013). How the Internet has Changed in the Last 10 Years [Infographic]. Available: http://www.pamorama.net/2012/10/06/how-the-Internet-has-changed-in-the-last-10-years-infographic/. Last accessed 12th Feb 2014.

eMarketer. (2013). Ecommerce Sales Topped $1 Trillion for First Time in 2012. Available: http://www.emarketer.com/Article/Ecommerce-Sales-Topped-1-Trillion-First-Time-2012/1009649. Last accessed 6th Feb 2014.

Fournier, S., Avery, J. (2011). The uninvited brand. Business Horizons, Kelley School of Business, Indiana University. 54, 193-207.

Hanna R., Rohm A., Crittenden L.V. (2011). We’re all connected: The power of the social media ecosystem. Business Horizons, Kelley School of Business, Indiana University. 54, p265- 273.

International Telecommunication Union. (2013). ICT Facts and Figures. Available: http://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2013-e.pdf. Last accessed 6th Feb 2014.

Kaplan, A. M. (2012). If you love something, let it go mobile: Mobile marketing and mobile social media 4x4. Business Horizons, Kelley School of Business, Indiana University. 55, p129- 139.

Kaplan, A. M., Haenlein, M. (2009). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, Kelley School of Business, Indiana University. 53 (1), p.59- 68.

Macdaniel, J.. (2012). 10 Years, 10 Ways The Internet Has Changed and Changed Us. Available: http://www.1stclickconsulting.com/blogs/1st-click-works/2012/04/02/10-years--10-ways-the-Internet-has-changed--and-changed-us. Last accessed 6th Feb 2014.

mobiThinking. (2013). Global mobile statistics 2013 Part B: Mobile Web; mobile broadband penetration; 3G/4G subscribers and networks. Available: http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/b#mobilebroadband. Last accessed 6th Feb 2014.

Muñiz, A. M. Jr., Schau, J. H. (2011). How to inspire value-laden collaborative consumer-generated content. Business Horizons, Kelley School of Business, Indiana University. 54, p209- 217.

Rangen, B. (2011). Gmail Plans for More Intuitive Ads. Available: http://searchenginewatch.com/article/2049807/Gmail-Plans-for-More-Intuitive-Ads. Last accessed 10th Feb 2014.

Statistic brain. (2012). Total Number of Websites. Available: http://www.statisticbrain.com/total-number-of-websites/. Last accessed 6th Feb 2014.

NEW MEDIA, OLD PROBLEMS

December 22, 2014

Written by Dylan Sellberg

Information is knowledge. In 2014, the biggest marketing firms all the way to the National Security Agency (NSA) all want to understand who the people of the world are, and more importantly what they are interested in. But, the real question is what do these companies want to do with your information and how will they leverage it? 

There are now over 1.15 billion Facebook users and over 550 million registered users on Twitter. That’s a lot of people, translating into a lot of untapped advertising dollars. So, I set out to see exactly where these advertising dollars were being spent.

Data collection began on January 30th, 2014. The collection would last for 14 days and the task was simple, record every advertisement I saw on my Facebook and Twitter feeds. Not only were the advertisements recorded, they were also checked for relevant metrics of effective advertisement; the company who they were advertising, my interest in a given advertisement, whether or not the advertisement was recommended through my network, and the advertisement’s relevance to my demographic were all considered.

Back in 2011, the term native advertisement didn’t exist. Marketers used the context and content of a page to target their audience (Aljukhadar, Senecal 429) as opposed to their users, to determine which advertisements should be placed where. This new media has been categorized using two characteristics: 1) interactivity and 2) digital, (Shankar and Hollinger, 2007) both of which are inherently present on both Facebook and Twitter. In this new media, there are three groups of advertisements. Intrusive where the consumer is “interrupted” (Godin, 1999) by advertising, non-intrusive where the consumer chooses to receive the communications, and user generated where the consumer actually creates the communications.  From what was recorded in the study, Facebook and Twitter advertisements would fall under the category of non-intrusive. While they do clutter a timeline with information that was not consensually signed for, they do so in a manner that blends and adheres to the look and feel of the page. Over the course of two weeks, a total of 182 of these non-intrusive advertisements were recorded across Facebook (135) and Twitter (47). 

FacebookvsTwiter

Was it interesting?

For the sake of this study, although ambiguous, I categorized an ‘interesting’ advertisement as one that would typically yield a click-through or a purchase in the near future. These ‘interesting’ advertisements were all effective in creating a buzz in my mind about the company or their product and/or service; something that social media provides the opportunity for. (Papasolomou & Melanthiou, 2012). An advertisement has not served a proper purpose if it has not interested its target. 

After two weeks of survey 27% of Facebook, and 26% of Twitter advertisements were defined as ‘interesting’. Those numbers seem strikingly low considering how much both of these platforms know about the individual. These results are a contribution to the conclusion that even though these social media sites are aware of my gender, age, education, location, and much more, they still have a difficult time targeting what interests the user. Being so unsatisfied with the results, I turned to a Men’s Health Magazine to study those advertisements. Out of a total of 51 advertisements in the magazine, 17 (33%) struck me as interesting. This helped cement the notion that even though companies know plenty about their consumers, both digitally and traditionally, it is difficult to specifically trigger what makes them interested in each and every advertisement. 

Was I connected?

“Billions of people create trillions of connections through social media each day.” (Hansen, 2011). I set out to measure how effectively advertisers were leveraging this phenomenon as stated above.

To do this, I measured if an ad was “liked by a friend” or “followed” by somebody I follow. On Facebook, 17% of advertisements were accompanied by the text “Facebook friend likes this” and on Twitter 32% of advertisement were alongside a “followed by somebody I follow” text. This is perhaps the only instance where Twitter earned a superior statistic to Facebook in advertisement, and this particular category means a lot. On Facebook, it seemed that if a friend liked the ad that it was a mere coincidence. On the contrary, advertisement on Twitter seemed to be placed on my timeline purely because I followed somebody who followed the advertisers account.

Consumers can be fooled into thinking something is not spam if the ad is also liked by a member of their tribe, somebody who has a common interest in a specific activity. (Cova & Dalli, 2009) In layman’s terms, this strategy is like the advertising agency saying “Hey! Your friends like this, you should too!” This is perhaps one of the most important qualities of an effective advertisement. 

Another reason for this feature in advertisement is avoidance of the interpretation of spam. Spam in general has an extremely negative connotation, in some communities spammers or “trolls” are even banned from taking part altogether. (Seraj, 2012) If an ad is seen as spam or a nuisance, it violates the feeling of being non-intrusive as discussed earlier. One way that these advertisements avoid this perception is that they do in fact fit seamlessly into your timeline or newsfeed. Their placement and design are sometimes even mistaken for a friend’s post, which would be the ultimate goal here. It is important to note that overall, Facebook is much less crowded with these trolls and spammers than Twitter. Facebook and Twitter differ on this account due to the complex and simplistic nature, respectively, of registration for an account.
It has been suggested that in order to tap into the social connections we have developed the advertiser must understand the “social media ecosystem”, visualized in three types of media: owned, paid, and earned (Hanna et al. 2013). The way I see it, through analysis of Facebook and Twitter advertisements, first a firm must pay for media space, at which point it owns certain portions of the media. Then, once it has garnished credibility it earns the right to be shared with a subject’s connections. This reason alone is enough to justify tapping into the aforementioned trillions of connections made each day through social media. 
 

Was it relevant?

The ‘relevance’ test of these 182 advertisements was admittedly ambiguous, much like the interest test. An advertisement was deemed relevant if it would be considered useful or effective to anybody in a similar situation to me. The qualifications here were much less strict than the ‘interest’ test, yielding a 75% relevance rate for Facebook advertisement and 53% relevance for Twitter advertisement. 

Relevance of an advertisement is essential to ensure the widest range of consumer enjoyment. If an advertisement has no relation or connection to the audience targeted, there will be widespread dissatisfaction. It is crucial to understand that just because an ad is not interesting to a consumer, it could still serve as relevant. For example, car advertisements are not interesting to me because I am not in the market for a car. However, when I see a car company promoting themselves or their models on my Facebook or Twitter feeds I understand that they are relevant to my demographic. 

The essence of enjoyment is a good attitude, therefore it is important for companies and marketers alike to shape their marketing activities in ways in which consumers enjoy them, as opposed to looking like a blatant attempt at a sales pitch. (Akar & Topu, 2011) As long as an advertisement maintains perceived relevance in a potential consumers life, it is not seen as merely an advertisement, it is seen as a product providing entertainment or enjoyment. 

What does it all mean? 

After 14 days of tracking the so-called “future of advertising” social media frenzy, it became clear to me that there is still much to learn and develop through this platform. The truth is, social media advertising is not all it is cracked up to be. This epiphany did not come to me after I had finished analyzing Facebook, nor after dissecting Twitter; it came to me after flipping through a Men’s Health Magazine. What shocked me most about this Men’s Health Magazine is that 100% of the advertisements were relevant, and 1/3 of them interested me. Now, how is it that a website that knows so much about me cannot put together a better advertisement showing than that? 
Aside from my realization that traditional media advertisements were better served than social media, I have come to realize two limitations that may inhibit new media marketing growth. The first is privacy concerns, and the second is cost. 

Primarily, in regards to privacy, “recent development has raised privacy concerns, and calls by privacy advocates and lawmakers for regulations that set limits on web tracking across web sites by Internet service providers.” (Varadarajan et al., 2009) These privacy concerns should prove as hurdles for marketers moving forward as people and governing bodies alike become more concerned with their personal digital protection.

The second hurdle social media marketing will need to jump is the myth of low-costs. The traditional and overused phrase and perception that “social media marketing is free” is complete garbage.  Ever since I was a kid my father has taught me “nothing is free, son” and that stands true with social media marketing. All of the posts that show on Facebook and Twitter as promoted have been paid for. These types of advertisements are not cheap, either. It is also important to consider that even though reach may be higher per dollar on a social media ad versus a magazine, the magazine leaves room for volumes of creativity and design beyond 140 characters. 

To conclude my arguments drawn from observations I would like to allude to a quote by one of the greatest financial moguls of our time: 

“If you see a bandwagon, it’s too late” –Sir James Michael “Jimmy” Goldsmith

Reference

Aljukhadar, M & Senecal, S (2011), “Segmenting the online consumer market”, Marketing Intelligence & Planning . [Online] Emerald Database P. 421-435. Available from: http://emeraldinsight.com [Accessed 15th February 2014]

Cova, Bernard & Dalli Daniele (2009) “Working consumers: the next step in marketing theory?”, Marketing Theory [Online] Sage Publications Volume 9(3):315-399 DOI: 10.1177/1470593109338144

Erkan Akar & Birol Topu (2011) “An Examination of the Factors Influencing Consumers' Attitudes Toward Social Media Marketing”, Journal of Internet Commerce, 10:1, 35-67, DOI: 10.1080/15332861.2011.558456

Godin, Seth (1999), Permission Marketing, New York: Simon & Schuster

Hanna, Richard & Rohm, Andrew & Crittenden, Victoria (2011) “We’re all connected: The power of the social media ecosystem” Business Horizons [Online] Elsevier database P. 54, 265-273. Available from www.elsevier.com/locate/bushor [Accessed 15 February 2014]

Hansen, D., Shneiderman, B., & Smith, M. A. (2011). Analyzing social media networks with NodeXL: Insights from a connected world. Boston: Elsevier.

Hollinger, Marie (2007), “Online Advertising: Current Scenario and Emerging Trends,” Marketing Science Institute Report, 07–206.

Ioanna Papasolomou & Yioula Melanthiou (2012) “Social Media: Marketing Public Relations’ New Best Friend”, Journal of Promotion Management, 18:3, 319-328, DOI: 10.1080/10496491.2012.696458

Seraj, Mina (2012) “We Create, We Connect, We Respect, Therefore We Are: Intellectual, Social, and Cultural Value in Online Communities” Journal of Interactive Marketing, [Online] Elsevier database P. 209-222. Available from http://dx.doi.org/10.1016/j.intmar.2012.03.002 [Accessed 15 February 2014]

Shankar, Venkatesh (2008), “Strategic Allocation of Marketing Resources: Methods and Managerial Insights,” Marketing Science Institute Report, 08–207.

Varadarajan, R & Yadav, M (2009) “Marketing Strategy in an Internet-Enabled Environment: A Retrospective on the First Ten Years of JIM and a Prospective on the Next Ten Years” Journal of Interactive Marketing. [Online] Elsevier Database P. 11-22. Available from: www.elsevier/locate/intmar [Accessed 15 February 2015]

The Rise of Social Media: Effects on Consumers and Brands

November 29, 2013

Written by Ioannis Petalidis

Purpose – introduction

It is an undisputable fact that the Internet was a revolution that changed not only the consumption field, but in general the way people live and exist; according to Aleks Krotoski and his BBC documentary “Virtual Revolution” it actually created a brand new kind of human being: the “Homo Interneticus”. Nevertheless, the last 10 years this revolution, took a totally different shape that occurred with the rise of social media. When Mark Zuckerberg in 2004 invented the Facebook platform for his classmates in Harvard, no one could imagine that 10 years later he would be one of the world’s richest people. But what was the reason, behind the shaping of “Homo Interneticus”?   

social media connect the world

How the rise of social media and the evolution of the Internet changed the consumption landscape

Susan Fournier and Jill Avery (2011) claim that this dramatic rise and success has its roots to one of the most basic human motivations: “the desire to feel accepted, to fit in and to belong; they name this new era “the age of the social collective” and describe it like a community through virtual connections among like-minded people, that creates “micro-targeted niche groups” to which people can easily belong.

Hanna, Rohm and Crittenden (2011) argue that the main shift in the consumption landscape through the social media revolution is that consumers are no longer passive recipients in the marketing exchange process; rather than that, consumers have a progressively active role in co-creating the marketing content. In their effort to highlight this immense change in the rules of marketing game, they are attempting to bust some prevalent myths that existed in the pre-Internet era:

1. Brand managers own and orchestrate their brands

2. Phones are for making phone calls

3. The Web is for finding information

4. Companies use marketing communications to control their message

5. Consumers purchase products promoted by marketers

6. Providing a forum for customers to talk is dangerous and risky.

Those 6 myths that marketers believed in and were building their strategies upon them are today something more than obsolete; they can prove disastrous.

For instance, if one focuses on myth number 2, it will become clear that during the last years mobile phones transformed completely from a calling and texting device to a portable mini-computer. This shift resulted to the rise of a brand new marketing field, the so-called mobile marketing. Andreas M. Kaplan (2011) defines this field as “any marketing activity conducted through a ubiquitous network to which consumers are constantly connected using a personal mobile device”. Social media went mobile and this was a revolution inside the revolution; from a broader perspective, mobile social media allowed for a tighter integration of virtual and real life, proving wrong some researchers that believed the Internet would result in less communication. (Andreas M. Kaplan, 2011). The Facebook check-in for example is a tool that has proven powerful, as a mean of exhibitionism, but also for helping people meet each other. Nonetheless, as far as the consumption field is concerned, the increasing use of check-in, pushed companies (especially restaurants and cafeterias) to engage in the social media world.

Papasolomou and Melanthiou (2012) highlighted another great change in the consumption landscape that came with the rise of “Homo Interneticus”; the existence of intermediaries or Non Media Connectors (NMC) in the marketing procedure and their crucial role in the building of the brand in the virtual world. This evolution has made marketing being a field of Public Relations, rather than the traditional detailed strategic arena. 

Furthermore, the rise of social media democratized corporate communication, while messages and information about brands circulate with or without permission of the firms in question (Kietzman, Hermkens, McCarthy and Silvestre, 2011). From this point of view, the statement of BBC Business Editor, Tim Weber, summarizes in an emblematic way the position of the brands in the era of Homo Interneticus: “These days, one witty tweet, one clever blog post, one devastating video – forwarded to hundreds of friends at the click of a mouse – can snowball and kill a product or damage a company’s share price”. It is worth mentioning that his kind of anti-branding activism on the Internet is a very common phenomenon, which indicates the online consumer power and the growing consumer sovereignty in the virtual world; what is more, the majority of online anti-brand attacks target well-established and powerful brands (Krishnamurthy, Kucuk, 2008).

Moreover, another important aspect of the latest evolution in the virtual world is the high degree of credibility with which Internet users treat the online word of mouth (Akar, Topcu, 2011). There is no doubt that customers perceive the user generated content as more reliable than straightforward business communication; as a result, electronic word of mouth has turned into a dominating channel that influences consumer behavior; social media marketing has become multidirectional, participatory and consumer driven.

Movies industry – example

After having examined some prevailing theories about the major shifts that the Internet revolution and the rise of the Homo Interneticus brought to the consumption landscape, it is time to focus on a field that the virtual revolution not only had a strong impact, but changed it radically: the movies industry.

 IMDb (Internet Movie Database)

IMDb logo

“Those Eyes”, the predecessor of IMDb, was launched in 1990 by professional computer programmer and British film Fan, Col Needham and it was about listing actresses with beautiful eyes. Others with similar interests soon responded with additions of different lists of their own: “Actors List”, “Dead Actors/ Actresses List”, “Directors List”. The goal of the participants changed over time towards making the lists as inclusive as possible. By the end of 1990, the lists included almost 10,000 movies and television series. When Needham developed and inserted a program that could search among the lists, Internet Movie Database was born. In 1993 IMDb became an independent website run by its followers and the amount of stored data increased hugely. In 1998, due to restricted funding, Needham sold IMDb to Amazon.com, with the condition that he would remain in operational charge.

There is no denying the fact that nowadays, IMDb is the most powerful and useful tool for everyone, before watching a movie. The democratized way of its rating system and the message boards in which the users exchange opinions about movies and TV series, are its two strongest components that allowed it to prevail in the movie’s critic field. A series of negative e- words of mouth in the IMDb message board or a low rating can prove devastating for the reputation of a movie and lead to a catastrophically small attendance in the theaters.

Besides, the site gives the opportunity for users to make their own lists of top movies, in general, by movie category or by actor. The evolution of IMDb demonstrates the shift from the passive movie consumer to the active co-creator of movies industry’s reputation. Award ceremonies like the Oscars and film festivals like Cannes review movies every year, however, those judgments might be biased due to financial interests of the industry or lobbying and are likely not to be proportional to the public’s opinion. On the other hand, professional film critics lost their authority over the quality of a movie.

How can marketers best adapt

While in a world that is ruled by Homo Interneticus and social media, the challenges have become clearer, the answers that marketers should imply are still surrounded by fog. According to Fournier and Avery (2011) the traditional branding strategies seem obsolete, disconnected and irrelevant in a space owned by the social collective, where transparency, criticism and parody of the well established firms reign. Instead, they suggest a different approach where brand building gives its place to brand protection, as an ever present need to protect reputation from attack and demise. As it can be clearly seen, the old attack-oriented brand strategies do not apply to the world of social media; whereas, a defensive attitude is more applicable and a strategy focused on risk management and risk control is much more effective. In addition to this, Fournier and Avery (2011) highlight the need for a shift from strategic planning and proactive, pre-constructed strategies, towards a branding ruled by faith in intuition and excellence in execution; for this purpose they encourage firms to employ the so-called “digital natives” or “Generation Y” who was raised amid the social media revolution. Last but not least, for the best adaptation of marketers in this brand new world, it is proposed to stop giving priority to differentiation and turn towards the creation of resonant cultural conversations; following this road, marketers will start to focus on building short - term brands, opposing to the dominant branding philosophy that emphasizes in creating long- term brand assets.

Moreover, Kietzman, Hermkens, McCarthy and Silvestre (2011), suggest a framework with a form of a honeycomb that consists of seven functional blocks of social media activity: presence (the extent to which users know if other users are accessible), sharing (are users exchanging, distributing and receiving content?), relationships (at what point are users are related to each other?), identity (the extent to which users reveal their true identities), conversations (how often users communicate with each other?), groups (are users forming communities?) and reputation (the extent to which users can identify the standing of themselves or others in a social media setting). Having those seven blocks in mind, marketers should try to recognize and understand in depth the social media landscape, finding out if and where conversations about a firm are being held, who are the main influencers and gathering competitive intelligence. Also, they should adapt their strategies to the different social media functionalities and develop a clear understanding of how often and when a firm should interfere in conversations as well as who will represent it online; the key success factor here is to identify who has the ability to listen and care about online chatter and especially who is capable of creating emotionally appropriate content for the community. This has to be done by creating relationships that solve customer issues, not just sympathizing. It is significant for marketers to scan the environment in order to understand the velocity of information; even when it seems too late an appropriate response may turn the tide.

Likewise, the case of negative e- word of mouth and its managing by the companies has gained attention by a lot of researchers. It is claimed that bad evaluations have a stronger impact on the brand reputation than positive ones and this is based on Kahneman and Tversky’s (1979) principle of prospect theory: people perceive losses more severely than gains (Shimabukuro Sandes, Torres Urdan, 2013); consequently, companies should remain vigilant and treat the criticisms properly.

At the other end of the scale, the example of Lego Group gave another perspective; not only monitored or interacted with customer communities, but took a step further and collaborated with them; the Lego paradigm is an exceptional case of how a traditional, tightly controlled company that for decades was run by the slogan “we don’t accept unsolicited ideas”, was transformed into an open-minded, collaborative and customer-oriented business. When LEGO management was found at the crossroad of either taking legal measures against the violation of their copyright or invite users to collaborate on new innovative products, the decision was brilliant and characterized by strong peripheral vision. Antorini, Muniz Jr, Askildsen (2012) highlight the main principles that marketers should keep in mind when collaborating with customer communities; at first it is important to clarify the rules and expectations; secondly there is a need of forming a win-win mindset, by creating the feeling to the collaborating customers that the firm does not only care about “getting the job done”; thirdly, it is significant to recognize that outsiders are not insiders, which means that user communities should always be treated as independent entities and not a part of the firm; additionally, companies should not expect one size to fit all and create different environments for each type of innovation; last but not least, they should be as open as possible in order to allow collaborators to interact with each other to the maximum extent and not sacrifice this openness for confidentiality reasons.

In the same wavelength, Muniz Jr. and Jensen Schau recommend to companies to take the initiative and create on their own the virtual community of their consumers in a well structured environment that embraces the differences of the members; it is very important for marketers to give motives at the members of brand communities in order to keep their attention and interest at high levels.

Conclusion

To recapitulate, it can clearly be noticed that the dawn of the 21st century was the transition point from a world that the big brands set the agenda, to a virtual reality that consumers break their chains and take things at their hands. Nevertheless, this era of the social collective and growing criticism about the power of firms, is also characterized by an unprecedented overload of information, where the consumer is bombarded in a daily basis by a huge amount of new data. Especially in the Internet field, the new experiences that an individual gets have become countless; consequently, the challenge for marketing experts is not only to create a friendly environment that serves their customers but also to keep the attention of the consumer in an everyday tough battle, among the never ending stimuli of the virtual world. Marketing strategies should be innovative, entertaining and avoid the web’s worst enemy; boredom.    

Reference list

Akar E., Topcu B. (2011). An Examination of the Factors Influencing Consumers’ Attitudes Toward Social Media Marketing. Journal of Internet Commerce. 10, 35-67.

Antorini Y.M., Muniz A. Jr. and Askildsen T. (2012). Collaborating with Customer Communities: Lessons From the Lego Group. MIT Sloan Management Review. 53 (3), 73-79.

Fournier S., Avery J. (2011). The uninvited brand. Business Horizons, Kelley School of Business, Indiana University. 54, 193-207.

Hanna R., Rohm A., Crittenden V.  (2011). We’re all connected: The power of the social media ecosystem. Business Horizons, Kelley School of Business, Indiana University. 54, 241-251.

Kaplan A. (2012). If you love something, let it go mobile: Mobile marketing and mobile social media 4x4. Business Horizons, Kelley School of Business, Indiana University. 55, 129-139.

Kietzman J., Hermkens K., McCarthy I., and Silvestre B. (2011). Social Media? Get serious! Understanding the functional building blocks of social media. Business Horizons, Kelley School of Business, Indiana University. 54, 241-251.

Krishnamurthy S., Kucuk U. (2009). Anti-branding on the Internet. Journal of Business Research. 62, 1119–1126.

Muniz Jr. A., Jensen Schau H. (2011). How to inspire value-laden collaborative consumer-generated content. Business Horizons, Kelley School of Business, Indiana University. 54, 209—217.

Papasolomou I., Melanthiou, Y. (2012). Social Media: Marketing Public Relations’ New Best Friend. Journal of Promotion Management. 18, 319-328.

Shimabukuro Sandes F., Torres Urdan A. (2013). Electronic Word-of-Mouth Impacts on Consumer Behavior: Exploratory and Experimental Studies. Journal of International Consumer Marketing. 25, 181-197.

Wikipedia. (2014). Internet Movie Database. Available: http://en.wikipedia.org/wiki/Internet_Movie_Database. Last accessed 15th Feb 2014.

Wikipedia. (2013). The Virtual Revolution. Available: http://en.wikipedia.org/wiki/The_Virtual_Revolution. Last accessed 15th Feb 2014.

VALUE FROM ONLINE CONSUMERS: AN ACADEMIC APPROACH TO MARKETING AND BRANDS Part 2

November 27, 2014

Written by Kristina Persson

Analysis: The Why and How: Generating value from online consumers

Why?

Armelini & Villaneva (2011:29) suggest that brands don't have any presence in consumer's thoughts unless the brands are blogging, tweeting and conversing with the customers on social platforms. Fourneir and Avery point out that the internet, the web, is a social space, for people first, and brands have 'crashed the party' (2011:193). Invited or not, brands are part of the web. As in Virtual Worlds, or "lifeworlds" (Zwick, Bonsu and Darmody 2010:168) real people and real brands are present, and brands can use these webs to communicate, and also sell, including real and virtual products (Eisenbeiss et al 2012:17).

In these complex webs of information, people and messages, it is important not only to realise why, but for marketers to figure out how, to engage in marketing online. While people are present on various platforms and in different communities, messages are not necessarily directed at any specific audience. In this new media age, brands do not have control over messages, or who they are influencing, '..everyone and no one [is] the audience' (Fourneir and Avery 2011:194). At the same time, online media messages compete for customer's attention (Armelini & Villaneva 2011:30). Consumers themselves generate content (Muñiz Jr & Schau 2011:210-212), and the web allows for many forms of alternative media, in non-geographically bound and fragmented markets (Winer 2009:109). Careful targeting to the desired audience, through profiles of participants may help marketers focus their resources.

Who?

Aljukhadar & Senecal 2010 classify people online into  three broad segments (2010:428) of 'basic communicators' such as people who use the internet for email, 'lurking shoppers' who would remain fairly passive, but engaging in online shopping, and 'social thrivers' who are interactive - blogging, chatting, video streaming, downloading. The 'Social Thrivers' are the largest group, would be most engaging and engaged with brands, but at the same time, for some businesses, would be seen as less important than lurker shoppers in e-commerce (Aljukhada & Senecal 2010:429).

In social media, where 'social thrivers' are active (Aljukhada & Senecal 2010:429), Web 2.0 platforms provide 'lifeworlds' for consumers and brands to interact together (Zwick, Bonsu and Darmody 2010:168). Keitzmann et al describe social media based on various 'engagement needs' that are fulfilled for users (2011:242). These are presented as seven 'building blocks' that stacked together, and labelled as  'Presence' 'Sharing' 'Relationships' 'Identity' 'Conversations' 'Reputation' and 'Groups' (Keitzmann et al 2011:242). Different social media platforms with combinations of these building block provide a social space for users to fulfil needs relating to these themes.

The way people act in these spaces have been classified into 5 roles, 'Creators' 'Critics' 'Collectors' 'Joiners' and 'Spectators' (Li and Berhoff (2005, cited in Hanna, Rohm and Crittenden 2011:269-269). These indicate various levels of engagement, and upon various platforms would attract different segments of people. Social media provides the possibilities for developing deeper relationships, and space to interact 'communally' both with individual and personal responses, and forum to share with group as a whole (Christodoulides 2009:142-143).

How?

A range of strategies are given for brands and marketers to adapt their approaches from 'traditional marketing' to social media marketing, how to engage online. Suggestions range from surrendering control, developing co-created brands, giving control to customers (Zwick. Bonsu & Darmody 2008:167) to developing cooperation, leveraging relationships (Hanna, Rohm & Crittenden 2011:266).

There are a 'multiplicity of factors' embedded in a corporation, or brand's business strategy, such as the company itself, the industry, products and buyers, that can influence marketing strategies, including in online environments (Varadarajan and Yadav 2009:12). Each of these suggestions require brands to understand their business strategies, resources and aims.

Brands have objectives such as brand promotion, reaching audiences, and achieving sales (Winer 2009:109). Brands and corporations can experiment on different social media platforms, with various functions such as social networking, content sharing of photos, podcast and video, or multiple sites, to engage and influence audiences  (Hanna, Rohm & Crittenden 2011:266). The brand story can be fed into this ecosystem, where conversations are 'products' (Hanna, Rohm & Crittenden 2011:267). Compared to being recipients of traditional media and brand messaging, consumers want to become participants, gaining intimate experiences (Hanna, Rohm & Crittenden 2011:267-268). Marketers can use technology to monitor behaviour, to understand the process of thought consumers take to reach ideas, and monitor their physical location, to send personalised advertising and messages (Winer 2009:109).

Credibility is given as an important factor by Armelini & Villaneva which relate to brand promises, trust and emphasise the power of personal recommendations, easily shared online, over advertising (2011:32). Barwise and Meehan provide similar suggestions including to continually strive to improve, and demonstrate an understanding of what consumers want, and play by their rules (2010:83-84). Playfulness is said to make value-creation interactions enjoyable, and activities are attractive for people engaging in them (Seraj 2012:212). Playful, self-governed and quality content driven activities were found to create value, and encourage loyalty for members in online communities (Seraj 2012:209,212). Zwick Bonsu & Darmody, warn brands against aiming to 'co-create' value as it can be seen as exploitative of consumer freedom and labour (2008:163).

Discussion

From the occasional internet browser to activist blogger; people contributing to conversations, every web page visit, action, comment, click, check in at a certain location, when and with whom, stands as an endorsement, reminder, signal of interaction with brands and consumers.  In the online world, these are recorded, visible and public. Consumers participate online enjoyable, playful, creative experiences and engagement to fulfil individual needs. Brands have the same freedom to enter these 'lifeworlds' and can engage with consumers, in order to fulfil their business objectives. While called 'mutually beneficial' relationships for consumers, brands are still in a position to direct how consumers interact, and shape messages to them accordingly.

Marketers can generate value by communicating in this social space alongside consumers, in order to engage and 'co-create' and develop social meaning, which can be translated into financial value. Readers may understand that their interactions in activities in social media are sources of consumption and production, and consider what these acts mean for themselves in their worlds, and to the brands they are interacting with.

References

Aljukhadar, M., & Senecal, S. (2011). Segmenting the online consumer market.Marketing Intelligence & Planning, 29(4), 421-435. http://dx.doi.org/10.1108/02634501111138572

Akar, E., & Topçu, B. (2011). An examination of the factors influencing consumers' attitudes toward social media marketing. Journal of Internet Commerce, 10(1), 35-67. http://www.tandfonline.com/doi/abs/10.1080/15332861.2011.558456#.Uv5zdkqwW9k

Armelini, G, & Villanueva, J. (2011). Adding social media to the marketing mix. IESE-Insight Magazine, 3(4), 29-36.

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Christodoulides, G. (2009). Branding in the post-internet era. Marketing Theory,9(1), 141-144.

www.uk.sagepub.com/clow/study/articles/PDFs/05_Christodoulides.pdf

Eisenbeiss, M., Blechschmidt, B., Backhaus, K., & Freund, P. A. (2012). “The (real) world is not enough:” motivational drivers and user behavior in virtual worlds. Journ Winer, R. S. (2009). New communications approaches in marketing: Issues and research directions. Journal of Interactive Marketing, 23(2), 108-117. al of Interactive Marketing, 26(1), 4-20.

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Firat, A. F., & Venkatesh, A. (1995). Reenchantment of Consumption. The journal of consumer research, 22(3), 239-267.

http://www.jstor.org/stable/2489612

Fournier, S., & Avery, J. (2011). The uninvited brand. Business Horizons, 54(3), 193-207.

http://www.sciencedirect.com/science/article/pii/S0007681311000024

Hanna, R., Rohm, A., & Crittenden, V. L. (2011). We’re all connected: The power of the social media ecosystem. Business Horizons, 54(3), 265-273.

http://www.sciencedirect.com/science/article/pii/S0007681311000243

Kietzmann, J. H., Hermkens, K., McCarthy, I. P., & Silvestre, B. S. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business horizons, 54(3), 241-251.

http://www.sciencedirect.com/science/article/pii/S0007681311000061

Muñiz Jr, A. M., & Schau, H. J. (2011). How to inspire value-laden collaborative consumer-generated content. Business Horizons, 54(3), 209-217. http://www.sciencedirect.com/science/article/pii/S0007681311000036

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Seraj, M. (2012). We create, we connect, we respect, therefore we are: intellectual, social, and cultural value in online communities. Journal of Interactive Marketing, 26(4), 209-222.

http://www.sciencedirect.com/science/article/pii/S1094996812000187

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Winer, R. S. (2009). New communications approaches in marketing: Issues and research directions. Journal of Interactive Marketing, 23(2), 108-117.

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VALUE FROM ONLINE CONSUMERS: AN ACADEMIC APPROACH TO MARKETING AND BRANDS Part 1

November 24, 2014

Written by Kristina Persson

Introduction

Changes in technology over the past decade have influenced the way consumers engage and participating in activities online. The web is an environment for creation, consumption, and socialising (Seraj 2012). Marketers realise the potential to capitalise on consumers as creators, advertisers and advocates for their brands through co-creation of products and experiences, in turn generating value. By understanding roles consumers take when engaging online, marketers can better target, reach, engage and interact with the right audience for their brand. 

Purpose

This paper provides an overview of online marketing, branding and consumption, to explain why and how marketers can adapt their strategies online to create value. Consumers participate on social media platforms to fulfil personal needs, which can also generate value for brands. This paper seeks to explain the concept of value, the roles consumers take, and provide considerations to 'why and how should marketers generate value from consumers?'

Ideas presented in academic literature will provide the basis for defining these concepts. The analysis will outline why and how marketers can adapt their activities in the context of the internet. Finally, some conclusions will provide a summary of the findings and encourage readers to ask themselves where they find value when engaging online. For brand managers, taking a marketer's perspective, they may consider where are potentials source to exploit to capture and create value and meaning for their brands. Readers may consider their own consumer roles, and how their social media activity might appear outwardly to their friends, communities, followers, and the millions of internet users with access their information, blog posts, comments and conversations online, and marketers who may be monitoring them (Varadarajan & Yadav 2009:19). The paper is presented in two parts, the first part outlining the theoretical framework and definitions, and the second addressing the 'why' and 'how' aspects of analysis and discussion about marketers generating value from consumers.

Theoretical Framework

This paper is written from a social viewpoint, considering roles of marketers and consumers and social interaction online, with a theoretical perspective of postmodern consumerism (Firat and Venkatatesh 1995:259). Postmodernism expresses the possibility to create spaces outside the market system, in a 'lifeworld', for example in social spaces, community and civic life (Firat and Venkatesh 1995:259) to explain consumption occurring in these spaces, beyond pure markets. Zwick, Bonsu and Darmody (2010:168) explain that brands are becoming embedded in these 'consumer lifeworlds', which means marketing itself is entwined with consumers, who are producing and consuming, and partners in brands creative and production processes (Zwick, Bonsu and Darmody 2010:168).

Value creation is considered from a perspective of neo-liberal Marxism, where marketers manage and seize creativity, knowledge and communication to generate economic value (Zwick. Bonsu & Darmody 2008:177). Seraj uses a definition that explains value as consumers perception and assessment of 'what is received and what is given' (2012:209). Co-creation and constructing 'productive social relations' for capitalist growth (Zwick. Bonsu & Darmody 2008:177) is used to describes how marketers can generate value from consumers interacting with corporations, or brands, and with each other (Zwick. Bonsu & Darmody 2008:177; Winer 2009:109). Brands manufacturing involvement and emotional and social attachments around products, which gives them value (Zwick Bonsu & Darmody 2008:186).

Definitions and concepts

Marketing

'Traditional marketing' (Armelini & Villaneva 2011:29) 'old' marketing (Zwick, Bonsu & Darmody 2008:164) or 'offline marketing' (Christodoulides 2009:141) is characterised by its one-way nature and corporate brand-directed messages broadcast to audiences. This style of marketing has also been called 'one-sided', where marketers and brand hold the power and information and opportunity to have their say (Christodoulides 2009:142) and consumers reactions to marketing are limited by their expression of choice to participate in the market, and purchase, or not (Muñiz Jr & Schau 2011:209).

New marketing is characterised by its interactivity, and digital nature (Winer 2009:110). Electronic versions of traditional 'one-way' advertising in banners, billboards and static messages and content online are found in addition to podcasts, video streams, as well as platforms of social communities where two-way and multi-way dialogue is possible (Winer 2009:110; Muñiz Jr & Schau, 2011:209; Seraj 2012:209). Akar and Topcu  highlight that marketers, involvement in social media, and communications affect the internet, and the lives of people using the internet (2011:58).

Consumers

Consumers engage in social acts of consumption and production, symbolic acts, in moments where meanings, relationships and social definitions are interpreted and reinforced (Firat and Venkatatesh 1995:242). That is, activities and social exchanges that people take part in generating meaning.  In social online communities, people fulfil individual and social needs such as desires to seek information, experiences, express creativity, develop identity, and escape (Seraj 2012:209, Eisenbeiss et al 2012:12).

Lifeworlds

Varadarajan & Yadav explain the market place extending beyond the physical market, into electronic, and a technology and internet-enabled one (2009:11). Eisenbeiss et al. (2011) describe Virtual Worlds, where people assume identities, have experiences, cooperate and interact, and take part in virtual activities, such as travel, business and relationships, in virtual worlds with virtual markets (2011:5,17). This may be one clear 'lifeworld' that can be understood as a social community, however market and social transactions or 'exchange processes' do occur (Eisenbeiss et al. 2011:5; Firat and Venkatesh 1995:240). 

Online marketing, can therefore be understood as social marketing, groups of people, including consumers and brands communicating in all directions - that is, creating, receiving, and responding to messages. This is enabled by the internet and communications technologies, particularly with Web 2.0 tools (Christodoulides 2009:143; Varadarajan & Yadav 2009:21) and virtual worlds (Eisenbeiss et al 2011).   

The types of social environments online include webs of content, which have value (Akar &Topcu 2011:35). Social media channels allow observers to become participants are platforms for influencing users (Hanna Rohm & Crittenden 2011:267) and  include, social Media channels such as Twitter, Facebook and other Web 2.0 platforms, including Youtube, MySpace and Flicker (Akar & Topcu 2011: 36; Hanna Rohm & Crittenden 2011:266)

Branding

Park, Jaworski & MacInnis (1986:135) define branding as activities that firms, or corporations,  engage in to convey an image effectively to a target market, to maintain a market position and improve performance. Brand Concept-Image Management is a complete system for firms to develop, maintain and control brand image (Park, Jaworski & MacInnis 1986:135) and manage it long term (Park, Jaworski & MacInnis 1986:144). Managing a brand's image is considered important as a brand itself, alongside firms resources and products, can be seen as something worthy of long term investment, and source of long-term competitive advantage (Park, Jaworski & MacInnis 1986:144). With or without physical presence, brands are sources of economic value, which makes them something worth valuing and protecting (Christodoulides 2009:141)

Christodoulides view of branding incorporates activities that take place in social networks, as dynamic environments enabled by computer and technology (2009:141-142). Rather than managing, brand 'hosts' conversations and manage customer perspectives about their experiences with brands based on their products and services (Christodoulides 2009:143). This branding activity occurs  in social media spaces, in groups, blogs, networking sites, where consumers create, define and dictate messages and advertising about the brand  (Christodoulides 2009:143). Marketers can listen and follow the conversations and messages being communicated in the social media ecosystem (Hanna, Rohm and Crittenden 2011:266).

Continue reading Analysis and Discussion

Interactive Consumer Engagement: how the internet has changed consumer engagement over the past 10 years, and how marketers can best adapt

November 10, 2014

Written by Amy Mulcahy 

Purpose of the article

The purpose of this paper is to identify how the changing online environment has affected interactive consumer engagement with the medium over the past ten years. The paper will examine the evolution of consumer behaviour from the beginnings of Web 2.0 to present day, providing a case studies and a discussion of the implications for marketers and the means by which they can accommodate, utilise and ultimately benefit from such emerging behaviours. The paper will conclude with a summary of findings and recommendations for marketing practitioners.

Theoretical Framework

The transition from Web 1.0 to Web 2.0 is epitomised by developed Internet technologies, user-generated content, and greater cooperation amongst internet users; it has changed both what the Web contains, and the way it works (Akar and Topcu, 2011). Whereas the audience once used the internet to expend content, today, these factors are considered “hygiene,” i.e. they have to be there. Instead, Web 2.0 is concerned with a whole host of factors outside a brand’s control, and it is these facets of Web 2.0 that interactive consumers are increasingly engaging with (Christodoulides, 2009.)

Over the past ten years, we have witnessed a divergence from the Web 1.0 user, to a user of more purposeful intent when using the internet; indeed, interactive consumer engagement has emerged. Deighton and Kornfeld (2009) distinguish five emerging marketing paradigms in response to the growing power of the consumer in the new media environment. They use the term “person” to describe the roles the individual assumes when partaking in: thought-tracing, activity-tracing, property exchanges, social exchanges and cultural exchanges. These cornerstones of interaction set the foundations for the more specific category with which we are concerned: the social consumer.  

With the development of the Internet, peer-to-peer tools have enabled interactive consumers to talk back and talk to one another. As an extension of Schultz’s Social Media Ecosystem (2007), Li and Bernoff (2008) segment participants according to five different types of social behaviour: creators, critics, collectors, joiners and spectators (Hanna et al., 2011). With the rise of social media, these participants are driven to structure their daily lives around interactive technology in the pursuit of constant connectivity, motivated by connections, creating, consuming and controlling (www.forbes.com; Hoffman and Fodor, 2010). As a response to the diminution of traditional communication channels relative to the utility of applications, interactive consumers are seeking engagement with one another through new media platforms such as blogs, content sharing sites, wikis and social networking. It is abundantly clear we have witnessed a shift from the passive consumer, to a consumer empowered through greater information access, instant publishing power and a participatory audience; an environment in which it is paramount firms adapt (Krishnamurthy and Kucuk, 2009). 

Analysis

In recent years, companies have started going beyond simply maintaining a website for transactional purposes; instead, they are accommodating the socialising aspect consumer’s desire from their online experience and are finding new ways to instigate interactive customer engagement  (Papasolomou and Melanthiou, 2013). This has proven both beneficial to firms that have engaged successfully with their markets. 

CouchSurfing, the hospitality exchange and social networking site for example, has positioned itself as a tool for consumers interested in travelling and connecting with other users to foster a “cultural exchange” (www.couchsurfing.org). The service relies upon users creating detailed and accurate profiles of themselves online. The website encourages interactive consumer engagement by requesting users to leave feedback so other users can decide whether they think the member would be a suitable host or surfer; doing so provides the starting point for opening a discussion with a fellow surfer, helping members determine whether they want to instigate contact offline and arrange a CouchSurfing experience; introductory videos interactively educate the consumer and can be watched here. Forums and discussion boards further aid members to arrange events and cultural exchanges creating both an online and offline community of CouchSurfers. 

Harnessing an online community means Couchsurfing facilitates interactive consumer engagement people feel within their real groups; these users are sharing information because they trust one another (Papasolomou and Melanthiou, 2013). Through offering a platform to interact and share information, the service has effectively disrupted the boundaries of the hospitality industry and provided the consumer with the power and control to collaborate with fellow users to satisfy their travelling needs. 

Though CouchSurfing is exclusively concerned with the sharing of experiences amongst their users, other companies have followed suit by facilitating the users desire to construct interactive consumer engagement with other consumers. Amazon for example, the largest online retailer has successfully engaged their market by offering tools that enable consumers to create their own content in the form of wish lists and reviews (amazon.co.uk). Fellow users are not only more likely to read the consumer generated content rather than relying on summary statistics, but they also perceive recommendations and interactive consumer’s opinions as trustworthy; they are more likely to believe the opinions of engaging interactive consumers than a company representative (Chevalier and Mayzlin, 2006; Sandes and Urdan, 2013; Papasolomou and Melanthiou, 2013). Ultimately, these tools enable users to supplement information provided by electronic storefronts such as product descriptions and reviews by experts, aiding the decision making process of purchasing a good (Mudambi and Schuff, 2010). 

Finally, engagement can be elevated through social media platforms in various ways, and doing so can bring about positive results for a brand when executed successfully. In an effort to achieve interactive consumer engagement, football team Tottenham Hotspur collaborated with their supplier Under Armour to create an interactive social media campaign that invited fans to submit images of themselves in the new Under Armour football kit (tottenhamhotspur.com). 

Understanding how to reach their consumers and the best channels to do so enabled the brand to customize their interactive user engagement. Promoting the campaign through a microsite, video and social networking platforms, the campaign promised 2,500 recipients images would be displayed in White Hart Lane tunnel and seen by the players at every home game for the rest of the season. Understanding the importance of the teams’ history to fans ensured the tagline “earn your place in history” pulled at the heartstrings of customers resulting in a hugely successful interactive campaign. Once the spaces had been taken, a digital version of the mural was made available through the microsite, viewable here. As a result of the campaign, the football team created interactive consumer engagement with its fans, successfully targeted its customer base and raised awareness more broadly.

How can marketers’ best adapt? 
In respect of the increasingly interactive marketplace, marketers must learn the power of harnessing their resources to substantiate a relationship of interactive consumer engagement that encourages two-way conversation. It is no longer appropriate for marketers to interrupt consumers with promotional material; instead customers want firms to listen (Kietzmann et al., 2011). Netnography in terms of monitoring forums, feedback and customer reviews is a good starting point for firms to understand the current needs and expectations of consumers (Elliott and Elliott, 2003). It is through these observations that marketers will learn that value creating activities develop even in the absence of marketer efforts. 

Interactive consumer engagement has become the main drivers of conversations; the task for the marketer is to establish credible and durable ways to foster this value creation through interaction and engagement with their audience (Papasolomou and Melanthiou, 2013).  It is therefore crucial that marketers understand the whole Social Media Ecosystem and learn to navigate and integrate these multiple platforms; they have to understand the different types of social behaviour exhibited by users and learn how to influence and  create interactive consumer engagement (Hanna et al., 2011). Identifying the company’s targeted segment of the online market and understanding their underlying motivations for interactivity will enable marketers to tailor their promotional campaigns to achieve maximum exposure (Aljukhadar and Senecal, 2011). 

With greater understanding of consumer requirements, marketers can instigate collaboration through their communities. Doing so can bring about new product ideas, improvements in functionality of their service offering and greater customer loyalty. Equally, as in the case of CouchSurfing, online communities can facilitate offline interaction and brand exposure. However, whilst facilitating interactive consumer engagement online can promote brand awareness, it is important to consider that although satisfied consumers are likely to spread their satisfaction to other consumers, they are equally likely to use this channel as a means of expressing their dissatisfaction (Sandes and Urdan, 2013). This has important implications for companies facilitating interactive consumer engagement online; if the product or service is deemed inadequate, electronic word-of-mouth facilitates the user to make it publicly known. 

Conclusions and Recommendations
In conclusion, it has been observed that through the development of the Internet, the consumer has evolved from the role of passive listener, to interactive consumer engager, collaborator and creator of user generated content. The theoretical underpinnings demonstrate the multiple roles of user interactivity, from property exchanges to social and cultural exchanges. In response to the diminution of traditional communication channels relative to the utility of applications, users are seeking engagement with one another through new media platforms such as blogs, content sharing sites, wikis and social networking. In effect, new communication channels have ended the interruption techniques of old marketing; it is the task of the marketer to identify who and what their interactive consumer segment is online, and how best to address their needs through observing, interacting and listening to interactive consumer engagement through the multiple social media platforms that have evolved through the digital era; the recommendations are as follows:

•    Marketers should understand their media landscape, their objectives and determine how best to engage their segmented market
•    Firms should be aware of the Social Media Ecosystem and accommodate their strategy accordingly to the five different types of social behaviours: creators, critics, collectors, joiners and spectators
•    Marketers should provide interactive opportunities for consumers, as in the case of Tottenham Hotspur, to build brand awareness
•    Providing a platform for consumers to interact with one another will facilitate online communities and build trust amongst consumers
•    Marketers should be aware of the implications of facilitating customer feedback and reviews; this will not always be positive and firms should be prepared to listen and respond timely and effectively
•    Firms need to be patient when building online relationships; ROI is not always immediate but will be demonstrated through brand loyalty 

References

Akar, A and Topcu, B. (2011). An Examination of the Factors Influencing Consumers' Attitudes Toward Social Media Marketing. Journal of Internet Commerce. 1 (10), p35-67.
Aljukhadar, M and Senecal, S. (2011). Segmenting the online consumer market. Marketing Intelligence and Planning. 29 (4), p421-435.
Amazon. (2014). Wishlist - get what you want. Available: http://www.amazon.co.uk/gp/wishlist. Last accessed 12th February 2014.
Chevalier, J.A and Mayzlin, D. (2006) The Effect of Word of Mouth on Sales: Online Book Reviews. Journal of Marketing Research, 43 (3), p345-354.
Christodoulides, G. (2009). Branding in the pot-internet era. Marketing Theory. 9 (1), p141-144.
CouchSurfing. (2014). Getting Started - How it works. Available: https://www.couchsurfing.org/n/how-it-works. Last accessed 12th February 2014.
Deighton, J and Kornfeld, L. (2009). Interactivity's Unanticipated Consequences for Marketers and Marketing. Journal of Interactive Marketing. 23 (1), p4-10.
Elliott, R. and Elliott, N.J. (2003). Using ethnography in strategic consumer research. Qualitative Market Research: An International Journal. 6 (4), p215-223.
Forbes. (2013). 2014 Digital Trends And Predictions From Marketing Thought Leaders. Available: http://www.forbes.com/sites/ekaterinawalter/2013/12/17/2014-digital-trends-and-predictions-from-marketing-thought-leaders/. Last accessed 12th February 2014.
Hanna, R., Rohm, A. and Crittenden, V,L. (2011). We're all connected: The power of the social media ecosystem. Business Horizons. 1 (54), 265-273.
Hoffman, D, L and Fodor, M. (2010). Can You Measure the ROI of Your Social Media Marketing?. MIT Sloan Management Review. 52 (1), p40-49.
Kietzmann, J.H., Hermkens, K., McCarthy, I.P. and Silvestre, B.S. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons. 54 (1), p241-251.
Krishnamurthy, S and Kucuk, S.U. (2009). Anti-branding on the internet.Journal of Business Research. 62 (1), p1119-1126.
Mudambi, S.M and Schuff, D. (2010). What makes a helpful online review? a study of customer reviews on amazon.com. MIS Quarterly. 4 (1), p185-200.
Papasolomou, I and Melanthiou, Y. (2013). Social Media: Marketing Public Relations' New Best Friend. Journal of Promotion Management. 18 (3), p319-328.
Sandes, F.S and Urdan, A.T. (2013). Electronic Word-of-Mouth Impacts on Consumer Behaviour: Exploratory and Experimental Studies. Journal of International Consumer Marketing. 25 (3), p181-197.
Tottenham Hotspur. (2013). Earn a spot in the tunnel at White Hart Lane!. Available: http://www.tottenhamhotspur.com/news/earn-a-spot-in-the-tunnel-at-white-hart-lane-130913/. Last accessed 12th February 2014.

Social Media Fails: Can a Brand Benefit from It?

October 2, 2014

  Written by Masters Student at Lund University

Social Media Revolution

Nowadays, it is difficult to imagine the world without the internet as over 2 billion people use it and 70% of them use it daily. The number of internet users has grown by an astonishing 566% since 2000. Most of the time online spent on social media, around 3.2 hours each day; it has become an integral part of people everyday life (www.thecultureist.com).

These numbers and the importance of social media platforms simply cannot be ignored by the companies if to develop their brand. Whether to participate in this communication or not is up to a brand but both decisions will have a remarkable impact on brand equity (Kietzmann et al., 2011). People are there and they are discussing and spreading the word without permission of the firms in question or as Akar and Topcu (2011, p. 36) put it, “Social media converts consumers into marketers and advertisers, and consumers can create positive or negative pressure for the company.”

The social media revolution is here and the question is how to make a good use of it rather than fail. There seems to be a lot of noise on the Internet as well as literature on how damaging it is if to fail at social media and how much it can affect your financial performance and brand. But is it always the case, especially when talking about big brands? Are there any possibilities to avoid a significant damage and even to capitalize on your fails, benefit from it?

The following section will provide a review of the current theories and thoughts regarding social media marketing, addressing such questions as: What is social media and why should companies consider establishing their presence on it? Two very different real-life cases will be discussed to answer my research question and support an idea that social media fails is actually something a company can benefit from and should not be afraid to confront.  Finally, this paper will be concluded with a few suggestions regarding social media fails effect on the performance of the business and what it could possibly depend on as well as some possible suggestion for the future research.

Why Implement Social Media?

The beginning of 21st century has experienced an explosion in new media being utilized by companies to reach their potential customers, so called, social media.  What is social media and why companies should be considering being present in it?

 Nair (2011) refers to social media as to all available online tools, where content, insights, perspective and information can be shared while Papasolomou and Melanthiou (2012, p. 319) describe it as “…synonymous with social networks like Facebook and MySpace.”

Why is it important for a brand to be present in social media? The major drive is the shift in consumer’s lives. The social media has completely changed how individuals communicate with each other and how users exchange and process information with others (Aula, 2010). Moreover, social media has transformed where and how people spend their time, so if to imagine that most of their day people spend in front of desktops and mobile devices as well as if to consider that 48% of 18-34 year olds check Facebook right away when waking up, it should be obvious that marketers need to shift their budget into new media categories if to continue developing their brand and reach the potential customers (www.digitalbuzzblog.com). The evolution of social media has significantly changed the approach towards online marketing; however, it has not caused the old marketing methods, such as television and magazine advertising to become completely insignificant (Winer, 2009). In fact, marketing strategy should consist of both to form an ecosystem where all the elements work together towards a common objective (Hanna et. al., 2011).

It should also be mentioned that the swift growth of Internet and social media has taken the power from companies to the consumer (Kietzmann et al, 2011; Deighton and Kornfeld, 2009).This has caused the consumers’ expectations to change as they are not willing to be talked at but rather with (Varadarajan and Yadav, 2009; Wind, 2008) or as Christodoulides (2006, p. 801) contends, “Command and control branding simply cannot be tolerated online”, therefore today companies are almost expected to be present in social media and facilitate the conversation with their customers. Social media marketing is user generated; therefore the aim of it is to make users talk (Akar and Topcu, 2011). Adding to an idea, Fournier and Avery (2011, p 193) in their article summarize this phenomena really well by stating that, “The technology that was supposed to empower marketers has empowered consumers instead.”  

In such manner, due to its interactive nature, more opportunities are available for companies to collect consumer insights that could be helpful for the advertising campaigns, product development and market research (McAfee et al., 2011).Undoubtedly all of the reasons listed above should be a good push for a company to adjust its marketing strategy and consider implementing social media.

However, let`s imagine for a second that a company has implemented social media advertising and trying to be active, follows the rules, innovates and engages but suddenly fails to meet customer expectation by being rude, not answering a message or maybe just an angry customer has posted a complaint on their Facebook page and that has been shared hundreds of times. What should a company do? Unfortunately academic articles suggest all sorts of ways how to go social but a few of them say how to get out of social media fails and how much it actually affects your business performance if it does at all. Therefore the purpose of this research is to prove by representing two case studies that social media fails do not necessarily mean losing loyal customers or experiencing a loss in sales but could be something a company, if dealt with in certain ways, can benefit from.

Examples of Social Media Fails 

Nestlé

Nestle has been established over 140 years ago and now is a world`s leading and most recognized company with an extensive portfolio that covers almost every possible food and beverage category (www.nestle.com). It is most certain that you will find at least one of their products in your own kitchen and it is very likely that you have heard about Nestlé social media failure back in 2010 that will be briefly discussed below.  A three-month campaign has been started by Greenpeace against Nestlé due to their excessive use of Palm Oil that has been known for deforestation and loss of endangered species.  Greenpeace took it to YouTube by posting a video that Nestlé urged to be removed.  Shortly after adjusted logos started appearing on Nestlé Facebook page but Nestlé representatives went defensive by stating that whoever is commenting with a “provocative” logo will have their comments removed (Hickman, 2010).  Social media failure is evident as this sort of behaviour is unacceptable for a brand and social media users are aware of it but how much damage did it actually cause to a business? According to Mulier (2011) the revenue went up by 6.2% regardless of the Greenpeace campaign and all the mistakes made.  Of course, it is difficult to predict whether it could have been even higher without it but the numbers are there and they are positive. In such manner, it could be argued that social media fails certainly put a pressure on brands and only those companies that got the basics of marketing right, and gained a significant number of loyal customers outside of social network can manage to survive the social media fails and keep the sales up (Barwise and Meehan, 2010).

Maker`s Mark

The following case is more recent than Nestlé but takes a different perspective on social media fails where the quality of the product, in this case whiskey, is questioned. Back in February 2013 Maker`s Mark announced its` plans to reduce the amount of alcohol from 45 to 42 percent due to high demand and low bourbon supply (Stampler, 2013). Angry but at the same time loyal customers took over all the possible social media websites to complain about watering down their favourite whiskey. However, this case is a brilliant example of how a brand can turn social media fails into a success and record an amazing 44% sales increase, which has been a topical issue discussed by Dooley (2013) in Forbes magazine.  What did they do right? First of all, Maker`s Mark was quick to realize they have made a mistake and that a swift action needs to be taken. As a consequence, the company has reversed its decision to lower down the alcohol level in their beverage and apologised to their customers by posting just a short, well thought message on a Twitter “You spoke. We listened”, which has become a popular hashtag. This is a great example of how a company can reduce or even avoid the damage by social media fails if to monitor, be quick and stay true to a product, respect your customer opinion.

Major Lessons on Social Media Fails

The number of internet users is going up and given this tremendous growth a company should try and figure out the way to employ social media to reach the millions of potential customers that use it on a daily basis (Parsons, 2013).  A company should not be afraid to fail but rather test and correct mistakes as it goes.

On the whole, the damage social media fails make to a brand depends on a wide spectrum of factors. The main ones identified through the analysis of the above case-studies, that might be of a help for other companies to consider, are discussed below. First of all, it depends whether the brand has already been well established outside of the social media, like in the case of Nestlé, where we can see that there is a loyal base of customers that did not turn their back on the brand. Secondly, whether the quality of the product is questioned like it was discussed in Makers Mark case. Similarly it is essential to be able to respond quickly, thus be efficient in social media communication even though it is tremendously time-consuming it gives a business a greater chance of getting away from a significant loss (Kietzmann et al., 2011).

Are there any ways to benefit from social media fails? Certainly, if dealt with correctly by providing a prompt response and listening to your customers a brand is still able to capitalize on social media fails. It raises publicity and statistics presented earlier suggests that it might actually trigger a purchase intention rather than putting consumers off. However, a different view is presented by Phan (2011), who has conducted a research regarding the use of social media for fashion brands to establish whether a presence in social media has any influence on consumer brand perceptions and product purchase. The outcome of it is negative – no, it does not. In such manner, whether positive or negative information, for example regarding a failure, is posted on social media does not necessarily affect the purchase behaviour thus sales should not be affected by the negative publicity.  Most importantly social media fails should be seen as a lesson for a company, opportunity to learn and adjust the strategy. Certainly, even if social media fails might not necessarily cause a significant financial damage to brands that is of course still not a reason to leave it unnoticed.

Trying to develop a tool to measure a failure, define terms for social media fails as such, could be a suggestion for the future research as there is no real clear guidance on it. It is very unclear whether it should simply be assessed based on sales figures, share prices or shall we measure social media fails based on the volume of negative publicity and word of mouth. Hanna (2011) suggests that companies are confused by the indicators of the performance, where to look and how to measure as there is clearly a lack of research conducted in this area. 

Reference List

Akar, E. and Topcu, B., 2011. An Examination of the Factors Influencing Consumers` Attitudes Toward Social Media Marketing. Journal of Internet Commerce. Vol. 10, pp. 35-67

Aula, P., 2010. Social Media, Reputation Risk and Ambient Publicity Management. Strategy and Leadership. Vol. 38(6), pp. 43-49

Barwise, P. and Meehan, S., 2010. The One Thing You Must Get Right When Building a Brand. Harvard Business review. December, pp. 80-84

Christodoulides, G., de Chernatony, L. and Abimbola, T., 2006. Conceptualising and Measuring te Equality of Online Brands. Journal of Marketing Management. Vol. 22(8), pp. 799-825

CultureIst., 2013. More Than 2 Billion People Use the Internet, Here`s What They`re Up to. Available at: http://www.thecultureist.com/2013/05/09/how-many-people-use-the-internet-more-than-2-billion-infographic/ [Accessed 6 February 2014]

Deighton, J. and Kornfeld, L., 2009. Interactivity`s Unanticipated Consequences for Marketers and Marketing. Journal of Interactive Marketing. Vol. 23, pp. 4-10

DigitalBuzzBlog., 2011. Facebook Statistics, Stats and Facts For 2011. Available at: http://www.digitalbuzzblog.com/facebook-statistics-stats-facts-2011/ [Accessed 6 February 2014]

Dooley, R., 2013. Did Maker`s Mark Commit Brand Suicide? Forbes. 14 February. Available at: http://www.forbes.com/sites/rogerdooley/2013/02/14/makers-mark/ [Accessed 6 February 2014]

Dooley, R., 2013. How to Turn a Social Media Disaster Into Higher Sales. Forbes. 27 June. Available at: http://www.forbes.com/sites/rogerdooley/2013/06/27/social-media-disasters/ [Accessed 6 February 2014]

Fournier, S. and Avery, J., 2011. Uninvited Brand, Business Horizons. Vol. 54, pp. 193-207

Hanna, R., Rohm, A. and Crittenden, V., 2011. We are all connected: The Power of the Social Media Ecosystem. Business Horizons. Vol. 54, pp. 265-273

Hickman, M., 2010. Online Protest Drives Nestlé to Environmentally Friendly Palm Oil. The Independent. 19 May. Available at: http://www.independent.co.uk/environment/green-living/online-protest-drives-nestl-to-environmentally-friendly-palm-oil-1976443.html [Accessed 6 February 2014]

Kietzmann, J., Hermkens, I., McCarthy, I. and Silvestre, B., 2011. Social Media? Get Serious! Understanding the Functional Building Blocks of Social Media. Buiness Horizons. Vol. 54, pp. 241-251

McAfee, A., Howe, J. and Surowiecki, J., 2011. The Revolution Will Be Shared: Social Media and Innovation. Research Technology Management. Vol. 54(1), pp. 64-66

Mulier, T., 2011. Nestlé Beats Sales Estimates and Foresees 2011 Growth. Bloomberg News.17 February. Available at: http://www.bloomberg.com/news/2011-02-17/Nestlé-2010-sales-growth-beats-estimates-on-nespresso-digiorno-sales.html [Accessed 6 February 2014]

Nair, M., 2011. Understanding and Measuring the Value of Social Media. The Journal of Corporate Accounting and Finance. Vol. 22(3), pp. 45-51

Papasolomou, I. and Melanthiou, Y., 2012. Social Media: Marketing Public Relations` New Best Friend. Journal of Promotional Management. Vol. 18, pp. 319-328

Parsons, A., 2013. Using Social Media to Reach  Consumers: A Content Analysis of Official Facebook Pages. Academy of Marketing Studies Journal. Vol. 17 (2), pp. 27-36

Phan, M., 2011. Do Social Media Enhance Consumer`s Perception and Purchase Intensions of Luxury Fashion Brands? The Journal for Decision Makers. Vol. 36(1), pp. 81-84

Stampler, L., 2013. How Maker`s Mark Turned Its Watered Down Whiskey Debacle Into a Social Media Win. Business Insider. 19 February. Available at: http://www.businessinsider.com/makers-mark-turns-whiskey-fail-into-win-2013-2 [Accessed 6 February 2014]

Varadarajan, R. and Yadav M., 2009. Marketing Strategy in an Internet-Enabled Environment: A Retrospective on the First Ten Years of JIM and a Prospective on the Next Ten Years. Journal of Interactive Marketing. Vol. 23, pp. 11-22

Wind, Y., 2008. A Plan to Invent the Marketing We Need Today. MIT Sloan Management Review. Vol. 49(4), pp. 21-28

Winer, R., 2009. New Communications Approaches in Marketing: Issues and Research Directions. Journal of Interactive Marketing. Vol. 23, pp. 108-117

www.nestle.com [Accessed 6 February 2014]

Master marketing in a new era of engagement in social media

September 22, 2014

Written by Nadezda Kaskure 

In the times of globalization and technological innovation, the Internet has tremendously developed and so a role of consumers’ has been continuously evolving since social media platforms enabled consumers to become more engaged into a brand equity creation. Social media became more than socializing channel, it has grown up into an efficient marketing tool to expand brand and product recognition, increase profitability, generate higher sales and rouse loyalty (Divol, Edelman, & Sarrazin, 2012). Content marketing within social media became a currency in a digital world due to high involvement among the Internet consumers worldwide. As based on KPCB report (Meeker, 2013) 2.4 billion Internet users were recorded globally in 2013, out of which approximately 44 % spend time on user-generated social media marketing platforms (Richter, 2013). This definitely highlights potential of consumers, who are engaged into online media, and hence companies need to discover and capture opportunities and address challenges of user-generated content and social media to create a successful dialogue with consumers (French, LaBerge,& Magill, 2011).

In order to provide insights into mastering the new era of engagement in social media marketing the article is broken into three parts. Firstly, I am going to address the Internet development, define social media, and introduce the consumers’ role in social networking. Thereafter, I will address opportunities and challenges of user-generated content marketing in social media. Lastly, empirical example of a campaign will be presented and discussed.

Social media, the Internet development and consumers’ role in it

Experimentation with marketing and employing various tools to acquire customers developed the traditional concept of media. From advertising, sales promotion and direct marketing, the nature of communication has evolved into “hypermedia”, where social media platforms play an important role in strategies of enterprises (Winer, 2009). According to Tuten (2008, in Papasolomou & Melanthiou, (2013)) social media is

“synonymous with social networks, wherein consumers can produce, publish, control, rank and interact with online content.”

Corcoran (2009, in Hanna, Rohm & Critten, (2011)) classified social media into three media types: owned, paid and earned media, where user-generated content is considered to be a part of earned media. Shankar and Hollinger (2007, in Winer (2009)) elaborated that user-generated content is a type of new social media, which includes various platforms as, for instance, blogs, video sites, and rating or recommendation sites. These platforms are a confirmation that the Internet has evolved from one-way interaction into a dialogue space, offering online collaboration between enterprises and customers in social media, which affects branding and positioning of a value proposition (Filho & Tan, 2009, in Akar & Topsu (2013)). Such phenomenon has been named as the Web 2.0 era (Akar & Topcsu, 2013; Chrisodoulides, 2009), or, in other words, second generation of Web applications, where consumers take active participation in social media marketing as they create the online content through cooperation among the Internet users. According to Osimo (2008, in Akar & Topsu, (2013)), Web 2.0 is user-generated content or participatory Web, where consumers create and share information, therefore this era could be viewed as revolution of social media and media marketing since it empowers both marketers and consumers (Postman, 2008 in Akar & Topsu (2011)). Consumers simply expect to be actively enrolled into social media process (Hanna, Rohm & Crittenden (2011). Ability to share, participate and collaborate with networks makes the Web 2.0 a powerful time for combining traditional and new marketing   (Weber, 2007; Tomlinson, 2008; Carter, 2009; in Papasolomou & Melanthiou, (2013)).

Interaction through social networking enables cultural exchange since enterprises and consumers can contribute to collective value creation and development of identity projects. Muniz & Schau (2011) believed that collaborative relationships and long term marketing strategies of user-generated content strategies has value of extensive involvement of “creative consumers” (Berthon, Pitt, McCarthy, & Kates, 2006; Kozinets, Hemetsberger, & Schau, 2008, in Muniz & Schau (2011)). Social media became a stage of social and property exchange, where consumers can anonymously participate in exchange of goods and build their desired identities through expressing own beliefs and opinions (Deighton & Kornfeld, 2009). Accordingly, social media enhances power of consumers as they become advertisers and marketers, and so consumers can affect enterprises in both positive and negative ways  by creating user-generated content through engaging in question-and-answer-platforms, blogs, wikis, and social media posts (Roberts and Kraynak, 2008, in Akar & Topsu (2011); Hoffman & Fodor, 2010 ). The essence of user-generated content is to allow the Internet users to collaborate, be creative, connect and network with brand, products and other like-minded consumers through social media platforms, such as amazon.com, facebook.com, youtube.com, etc. (Filho & Tan, 2009, in Akar & Topsu (2011)). Within the context of free information flow in cyber space and no-ownership nature of online social networking, users, their actions and user-generated content play key role in success of applications within social media marketing, which again enhances power of consumers (Ahlqvist, Halonen, & Heinonen, 2007, in Akar & Topsu (2011); Hoffman & Fodor, 2010).

Opportunities and challenges of user-generated content within social media

Rapid development of the Internet and media shift from one-way interaction into a dialogue between two engaging parties bring on several challenges and opportunities within social media for both marketers and consumers (Varadarajan & Yadav, 2009). The main question is why to employ social media into marketing tactics, and what to consider when applying it?

Opportunities

1.     Define sales leads

According to Hanna, Rohm & Crittenden (2011) it is possible to identify sales leads and increase acquisition rates since user-generated content platforms as, for instance, blogs and video platforms, enable consumers to engage, share and connect, therefore affecting marketing communication.

2.     Leverage relationships

It is a way to establish and retain relationships (Ricadela, 2007, in Hanna, Rohm & Crittenden (2011)), understand consumers and create bonds with them (Papasolomou & Melanthiou, 2013).

3.     Save resources

Since user-generated content is defined as e-word-of mouth (Smith, Fischer & Yongjian, 2012; Hoffman & Fodor, 2010), which is basically a free marketing to increase awareness among consumers. However, it might bring up not only positive, but also negative statements about a company or product.

Challenges

1.     Measurement

How success of social media marketing should be measured and what analytics to perform in order to get reliable and valid results? Winer (2009) believes that by experimenting with social media metrics each company will define the most valuable measurements approach for them whether it is secondary research approach with measurements as budget spending, click per posts, volume of comments, visitors, or primary one with approaches as return on marketing objectives, cross media optimization study, etc. Hoffman & Fodor (2010) also addressed measurement issue, and they stated ROI of social media should be assessed not only from financial perspective, but also from consumers’ behavior point of view. Thus the key is to define the main outcomes and specify metrics based on the objectives at the planning stage, whether it would be direct orders per platform, brand mentions, clicks, etc. (Hanna, Rohm & Crittenden, 2011; Hoffman & Fodor, 2010).

2.     Planning and budgeting

Since there is no need for actual budget, when applying social media marketing, management needs to emphasize on communication strategy as it is an essential part of success in open market of social media. The starting point is to conceptualize the ecosystem, define objectives of the presence and create a definite story for audience (Hanna, Rohm & Crittenden, 2011). Winer (2009) argues it is also necessary to state specific objectives, define ROI and rate importance for each social media platforms as it becomes challenging to manage effective communication strategy across several platforms. Moreover, adopting new technologies and adjustment of enterprises towards new paradigm of marketing requires implication of organizational models since there is a need to ensure presence of academics and practitioners and create valuable ecosystem to share and diffuse up-to-date knowledge about possible shifts and development of social media and user-generated content (Wind, 2008).

3. Consumers behavior and brand control

Management is required to update their knowledge about social networking and media, audience behavior online, consumer insights and its impact on brand equity (Wind, 2008; Barwise & Meehan, 2010; Singh, Sonnenburg, 2012; Winer, 2009). Understanding of consumers’ freedom in social media is crucially important when applying user-generated content marketing.

User-generated content is a beneficial social media type

Case: The Australian Tourist Board

The Australian Tourist Board decided to apply a user-generated content marketing strategy in 2009, which cost them AUD $ 1 million. The objective of the social media campaign was to select an applicant for a six-month position as caretaker at Whitsundays of the Great Barrier Reef in Australia with salary of AUD $150 000. All applicants were required to submit one-minute motivation video about why they should get the job (news.com.au, 2009). As the outcome, the marketing campaign has generated earning of AUD $ 368 million, 4 million click on the first day of the campaign, submission of 34 684 video applications, 8.6 million views of marketing campaign for the Great Barrier Reef, and high media publicity since the winner of the campaign got more than 100 interviews within 24 hours after the winner was selected (Queensland tourism, 2009).  In 2013 another round of the social media marketing campaign was launched, which cost AUD $ 4 million. 330 000 applicants from 196 countries have applied for the position, and the marketing campaign has already led to more than 1 000 articles worldwide in nearly 200 countries (news.com.au, 2013). Moreover, 15 000 of the applicants revealed that 39% of those planned taking a working holiday in the next six months after the campaign ended, and 72 % considered to apply for working holiday visa (WYSE Travel Consideration, 2013).

Discussion

Case of the Board is an example of a viral activity of the marketing campaign since the company had a great value equity, namely, the core value for the consumers was a position of caretaker with high salary, with add-feature as holiday, and valuable association of relaxing time at a beach and staying at an island for a period of six-months.

From applicants’ point of view, participating in the competition was more than the chance to get the dream job; it was part of self-identity projects since participants could present their desired identity, their values and beliefs through creating video and sharing it in social media. They could get famous for at least a minute through engaging in a viral marketing campaign, and also get “more popular” on personal social media accounts. “Getting noticed” could be considered as the main driver of participants.

The campaign was also beneficial to the board since it had high ROI, high consumer engagement and advocacy. It was a free, and highly successful, marketing tool, because e-word-of-mouth acquired new participants and attracted new visitors to Australia. Moreover, the Board engaged consumers by reacting to comments and posts, thus strengthening customer relationships. In such manner, the Board captured all three opportunities addressed previously. The success of the story also represents the Board’s readiness to face challenges of social media marketing.

Based on the discussed example above, I do believe that user-generated content is a chance to create desired self-identity for consumers and express themselves knowing that their input will be meaningful not only for them, but also for the company. Enterprises need to stay aware and assess consumers’ activities in order to capture social media opportunities.

Conclusion

Although social media is a free marketing tool once earned, it may require financial investments in the beginning. Challenges such as budgeting, knowledge sharing, metrics and measurements should be addressed in order to capture opportunities of decentralized social media approach or “bottom-up” marketing of user-generated content. Consumers play the key role in social media nowadays; therefore enterprises need to keep an eye on development of consumers’ behavior in order to uncover new opportunities. In addition, it might be also important to assess return-on-relationship of social media marketing, actual “freedom” within social media and its negative effects.

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