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Role Of Social Media In Contemporary Marketing
 

Role Of Social Media In Contemporary Marketing

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A literature review on how social media can affect or assist in contemporary marketing. Written and submitted for my BA (Hons) Marketing Management program's final project. ...

A literature review on how social media can affect or assist in contemporary marketing. Written and submitted for my BA (Hons) Marketing Management program's final project.

Appreciate your reviews and comments.

Update 10/12: Received a Distinction grade for overall Final Year Project, including this component.

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Role Of Social Media In Contemporary Marketing Role Of Social Media In Contemporary Marketing Document Transcript

  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie A Literature Review: Role of Social Media in Contemporary Marketing By Isman Tanuri isman.tanuri@gmail.com groovygenie.wordpress.com Section 1 1.1 Introduction 2 1.2 Background 3 Section 2: 2.1 Marketing with Social Media 5 2.2 Influencing with Social Media 7 2.3 Social Media and CRM 11 2.4 Communicating with Social Media 12 2.5 Other Approaches to Social Media Marketing 16 Section 3 Summary and Conclusion 18 References 19 Appendix A-C 22-24 Copying, altering or plagirising of content is wrong. Otherwise, feel free to use, print or quote this document. 1
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie A Literature Review: Role of Social Media in Contemporary Marketing Section 1 1.1 Introduction The sudden emergence of social media in the public realm and the realisation of a powerful and coordinated online consumer-force have raised alarms in corporate offices all over. As consumers increasingly influence each other and share opinionated views on brands and products on the internet, businesses are compelled to rethink and reorganise marketing and communication strategies in order to address this ‘threat’ to traditional ways of doing business. Changed Landscape However, as with any shift in philosophy and trend adoption, understanding the true benefits of leveraging social media in marketing initiatives continues to be a challenge for business organisations. Many question the value of investment in social media and its direct influence on revenue generation. Others question the wisdom of ‘easing control’ over the brand to customers and risking further exposure to public scrutiny. Hence, many early commercial approaches to social media are misguided and flawed as traditional corporate objectives are in disparity with social media’s concept of open and transparent engagement with the marketplace. Nonetheless, this sentiment is beginning to change and marketers are increasingly embarking on social media campaigns in support of traditional marketing efforts. Review Objectives This literature review will attempt to discover whether current social media theories and concepts are relevant and applicable to long-held marketing principles and business philosophies. This review will highlight and critically examine articles and key expert views on the use of social media as a tool in a consumer marketing environment. Through a detailed discussion, the general consensus and established practices of enterprise social media activities will be ascertained and that social media will indeed represent a new frontier that will be beneficial and relevant to the marketing discipline. 2
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie 1.2 Background Social media is currently an evolving ‘phenomena’ in business marketing. Enlightened marketers are beginning to drive the use of social media as a component in their marketing strategy and campaigns to reach out to customers and fans. Among the sub- disciplines of marketing that may utilise social media include promotions, marketing intelligence, sentiments research, public relations, marketing communications and product and customer management. Appendix A provides statistical information of social media adoption across networks and around the world. New Media Channels Social media is described as the “shift in how people discover, read and share news, information and content” (Solis, 2007a). People are doing so through the internet in the form of blogs, social networks (eg. Facebook, Myspace, Orkut), news aggregators (eg. Digg, Stumbleupon), video and music portals (eg. YouTube, Last.FM), social bookmarking (eg. Delicious, Reddit), micro-blogging (eg. Twitter, Plurk), online forums and reviews (eg. Amazon, Yahoo Answers!) and other social communication channels (see Appendix B for overview of social media tools). This has been made possible through converging technological evolutions on the internet, dubbed ‘Web 2.0’, the internet as a 2-way communication platform (O’Reilly, 2005). O’Reilly further explains this revolution as the era of participation and of harnessing the collective intelligence, also referred to as the ‘wisdom of crowds’ This surge in consumer online activity and user-generated content is termed the ‘groundswell’ by Forrester researchers, Charlene Li and Josh Bernoff (2008) in their book of the same title. As the groundswell began exhibiting collective influence through sharing on the internet, businesses began to take notice and seek ways to participate in the ‘conversations’. Enterpriserands, such as IBM and Lego, began building their own community forums, and corporate blogs, including Dell’s and Ford’s, began appearing to reach out to customers (Li and Bernoff, 2008). In time, the marketing function also began integrating social media in campaigns. The use of Facebook and Twitter to market products and services are beginning to receive attention from businesses in recent years. Primary to these widespread adoption are its 3
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie relatively low cost-to-implement and the ability to bypass traditional media outlets for advertising and promotional needs. #FAIL However, not all attempts at social media marketing have been successful in implementation. A case in point is Sony’s Playstation Portable (PSP) fake blog fiasco. The seemingly-innocent blog, presumed to belong to a teenager, was uncovered to belong to an advertising firm hired by Sony to promote the PSP (Kingsley-Hughes, 2006). The uproar generated from this proved to be an embarrassing public relation disaster for Sony. Turning Tide Particularly because of its open and connected infrastructure, the internet facilitates the spread of information across geographies and boundaries. This has been a critical factor in the success of viral marketing campaigns launched by businesses. However, social media has also proven to be a handful for companies. When United Airline passenger, Dave Caroll, found his guitar broken by the airline and subsequently endured a less- than-pleasant customer service experience in his compensation bid, Dave decided to write a song about his experience, videoed and posted it on YouTube (Guardian.co.uk, 2009). The video became a viral sensation and has received 5.4 million views to date since July 2009. The Times UK estimated that the bad publicity generated by the video cost a 10% drop in stock prices (amounting to US$180 million) within days of the video’s debut (Ayres, 2009). This powerful effect of the groundswell on businesses is one of many examples of social media’s persuasive influence. Experts and Thought Leaders Due to this being a new field of study, there is a lack of peer-reviewed resources on this subject. Interestingly too, because of its fairly recent introduction into mainstream commercial landscape, many of the recognised experts and key authors in social media today are current practitioners in the social media/marketing space. Therefore, this research is focussed on theories and ideas by these widely-accepted thought leaders in the field. Unlike academia, these experts have emerged and influenced others through the medium they know best: social media. Many of these leading social media experts, including Seth Godin, David Meerman Scott, Mitch Joel and Chris Brogan, are bloggers 4
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie who have build their personal brands and share their body of work or innovations at companies they worked for through online channels and digital word-of-mouth. Their brief profiles are shown in Appendix C. Section 2 2.1 Marketing with Social Media The Engagement Concept In the ‘Groundswell’ (2008), Charlene Li and Josh Bernoff outlined the following as core activities that define the engagement with the groundswell: listening, talking, energising, supporting and embracing. This is the framework that has been developed and proposed by Li and Bernoff to facilitate the transition for companies to understand and engage their customers within the social media space. They argued that social media is predominantly about the people and those relationships and communities must the cornerstone of any social media marketing strategy. Although the framework, as outlined, provides a clear community engagement model, it does not satisfactorily provide an understanding of the long-term value of investment in these activities. Engaging closely with customers and prospects on a broad scale represents a significant cost to most companies. However, Mitch Joel, in his book ‘Six Pixels of Separation’ (2009) makes a clear argument for close engagement. People are increasingly becoming digitally connected to each other via social networks and online activities. With current rate of adoption, the online population will represent a significant, easily-targeted market for businesses. By investing in getting connected with their online market and customers now, companies will have the edge and advantage on competitors in the future. Customers’ trust and rapport built over time are durable business assets that are hard to encroach on by competitors (Godin, 1999). ‘No’ to Social Media Marketing Nonetheless, the consensus on marketing via social media is not universal. Tom Martin (2009), in Advertising Age, is adamant that social media is not a channel for marketing and that any corporate involvement behind a social identity devalues the conversations. Glen Dury (2008) points out the argument that marketing has no place in ‘social’ media and that it ‘destroys social media’s foundations’ by undermining its human elements. This, 5
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie he contends, is because of the very nature of marketing, which is a commercial corporate function. This study however is not in agreement with these views. Even in traditional marketing, engagements with prospects through advertising and promotional channels are activities that involve multiple levels of human interaction, seen or unseen (for an example, an advertising creative devising a copy for an audience). The marked difference at present is that social media allows for reciprocal, two-way communication between advertiser and customer. Essentially, the core marketing principle of satisfying human wants and needs does not change. Marketing in social media is an evolution of commercial practices in tandem with the times. Independent Disciplines Further in this, the prominent blogger and social media expert, Chris Brogan, in his blog post ‘Marketing is NOT social media-Social Media is NOT marketing’ (2007), argues that social media and marketing are distinctive disciplines and independent from each other. His primary argument is that social media is a set of tools that ‘permits regular people access to potential audiences of shared interest’ and that marketing should not ‘own’ these tools. Instead, he suggests that marketers should observe and take advantage of the effect of having the media in the hands of regular people. The same sentiment is similarly echoed by Lee Odden, voted number 15 by peers in 2008’s top 100 list of digital marketers. Odden (2009) believes that social media is ‘no place for direct marketing’ and that people join social networks, and the Web 2.0 space in general, to be social with a like-minded community, instead of being marketed to. Discomforting Truth Herein lies the disconnect. On one end, consumers are empowered by the internet to have their say and opinions on brands, and some, including experts such as Brogan and Odden, believe that consumers should be given total freedom to decide when to engage with brands. On the other end, marketers are desperately trying to leverage on social media to drive their marketing campaigns and to manage perceptions of their brands online. 6
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie The Advocates Supporters of social media marketing for enterprise believe that the right approach can be beneficial for both businesses and customers. Eikelmann, Hajj and Peterson (2007) support the notion that companies should re-strategise and profit from this ‘threat’. They believe that companies should actively seek to engage in conversations with their customers. However, companies must observe a condition of moving away from ‘controlling the message’ and let consumers decide on the flavour of the conversations. Additionally, in their research, they observed that Web 2.0 has caused the fragmentation of marketing channels, in that, communities and websites tend to cater to niches and particular demographics. These should be used to the advantage of companies as they can be efficient through the use of highly-targeted effective marketing messages despite the clutter. This study agrees that the sheer volume of advertising clutter is causing consumers to question the authenticity behind the claims of these messages. It is also agreed that brand recall is suffering from increased consumerism as companies capitalise by developing countless new products and brands. Tellingly, a CBS news report (2006) states that an average person is exposed to about five thousand advertising messages in a day. As such, David Meadows-Klue (2007) argues that, with the explosion of cheap, one-way advertising channels and growing customer literacy in the art of marketing, the impact of traditional marketing communications has been undermined. Therefore, Meadows-Klue is of the opinion that social media is the right channel for marketers to regain attention from customers. 2.2 Influencing with Social Media The Bridging Factor: Influencers Despite the opposing arguments for social media’s involvement in marketing, it is ultimately social media’s creation of a new layer of influencers that will prove to be beneficial for both marketers and consumers (Solis, 2007b). In ‘The Tipping Point’ (2000), author, Malcolm Gladwell, emphasises on the importance of influencers in the transference and spread of any new idea or knowledge. Without these idea facilitators, many commercial successes, such as the Apple, Hush Puppies and Google brands, will 7
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie remain on the peripheral. For consumers, recommendations through peer influence tend to be perceived as highly authentic and objective. For marketers, whose predominant purpose is the influence of customers to their products, the easy creation of consumer-influencers is a vital benefit that can be reaped from the integration of social media in their campaigns. Moreover, many marketing experts agree that word-of-mouth (WOM) is an effective element of promotion. In the Web 2.0 era, the WOM activity can be easily facilitated through the sharing of viral videos, email or peer reviews on Facebook. Trusov et al (2009), in a research on the effect of WOM on social networks’ sign-up, found that the elasticity of WOM referrals is 20 and 30 times higher than that of marketing events and media publicity, respectively. Thus, this study is of the opinion that a major role of social media in marketing practices (if adopted) must be objectively related to the creation of influencers within communities. Return on Influence Another applicable theory in the matter of WOM through social media is the Return on Influence (Brogan and Smith, 2008). The prevailing idea is that marketing must be strategically carried out through identifying and influencing those with the most influence over others. At present, social media is the only medium that allows for such detailed effort. Despite the intricacy of this tactic, the objective of focussing messages to the right audience is in accord with marketing fundamentals of segmenting and targeting audiences for maximum conversion. This tactic is also in agreement to Gladwell’s Law of the Few theory (2000). The influence of a Connector personality (‘Connectors know lots of people’) over an ideology or trend will quickly mobilise its spread and reach until it reaches the ‘tipping point’. This is when an idea achieves critical mass and universal recognition through a sudden exponential growth. Brand Advocates However, traditional marketing philosophies do not explicitly cater for external contribution to a brand by anyone, other than an employee of a company. Commercial marketing objectives are typically aligned to achieve incremental revenue through quality lead generation and brand building. Because of this, no added emphasis is usually given to building external non-sale relations with customers. 8
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Nevertheless, with social media, the unpaid brand advocates are a reality. In the ‘Groundswell’ (Li and Bernoff, 2008), it is proposed that brand advocates are ‘grown’ through purpose-built community forums for ardent fans of brands such as Lego, Dell and the iPhone. In retrospect, this act of ‘energising the groundswell’ is in effect a controlled and strategised word-of-mouth effort. Stickiness Wins Another triumphant brand advocate campaign was the successful bid to have Barack Obama elected as President of the United States (Lardinois, 2005). The synchronised use of social media channels gave extended awareness and publicity to the Obama digital campaign and a measurable edge over John McCain, the Republican Senator. This was achieved through endorsements made online by Obama advocates which has a lasting and visible impact as the internet retains a level of permanency and transparency. Again, this observation concurs with another of Gladwell’s theory in ‘The Tipping Point’, the Stickiness Factor (2008). This is the study of the strength of a message in a person’s mind that will allow it to be relayed from one person to another effortlessly until it reaches tipping point. From a marketing perspective, the Stickiness Factor is an important criterion in the crafting and testing of marketing messages: the viral effect of ‘United Breaks Guitars’ and Susan Boyle’s 100 million YouTube views (Ostrow, 2009) are evidence that the carefully-crafted message is a powerful tool for the marketer. Conclusively, the use of external resources, who will evangelise a brand to friends, relatives and colleagues for “the most honest form of marketing” (WOMMA, 2009), is similar in effect to an over-achieving direct marketing campaign, at minimal or no cost. The Obama campaign is compelling evidence that social media can assist in achieving marketing objectives if efforts are focussed on marketing through influence and brand advocacy. Permission and Trust Marketing Irrefutably, traditional marketers are grappling with the decline of mainstream advertising and the rise of social media which has deeply affected the media and newspaper industry. Forrester Research, in its 5-year forecast, reports that global advertising budget will decline significantly and this will be supplanted by a 34% growth in social media 9
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie budget (VanBorskirk, 2009). This is a strong indication that advertising is fast losing its effect as a promotions tool. Without a doubt, the works of Seth Godin in the area of permission marketing have influenced a new generation of digital marketers. In ‘Permission Marketing’ (1999), Godin explores the use of interactive technology, such as email and online games, in order to receive explicit customer permission for a brand to initiate direct interact. Godin argues that only marketing messages and approaches that are relevant, personal and anticipated will be readily accepted by customers. Godin’s theory has been proven just as relevant today as customers continue to eschew traditional advertising in favour of word-of-mouth recommendation and peer reviews. With social media, practitioners of digital marketing are able to gain inroads to potential customers through the proven method of permission marketing. Instead of brands pushing and ‘shouting’ their messages across, social media channels allow for consumers to voluntarily ‘befriend’ (via Facebook Fan Pages) or accept communication (via Twitter or email newsletters) from brands. The building of trust through such relationships typically benefits both companies and consumers. As organisations become exceedingly visible through social media, it is therefore notable that marketing of trust is important. Mitch Joel (2007) expounds the theory that if an organisation does not provide value, be open and transparent and create opportunities for two-way communications, the brand will not survive in a time when social media is becoming an accepted platform for brand-building. Joel further states that these ideals are can only be possible through the ‘building of community based on trust’. Based on these arguments, this study therefore has the opinion that modern organisational marketing must involve efforts in social media in order to maintain and increase trust and authenticity from customers’ perspective. The Reality The above arguments indicate that social media can be mutually beneficial for both parties if the boundaries of engagement are specified. In areas where corporate- sponsored social media activities are managed (such as product support forums), branding and direct marketing should be reasonably accepted. In public and closed social networks, such as Twitter and Facebook respectively, permission must be sought for 10
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie marketing messages to be broadcasted or relayed to specific users. Breaching these boundaries is akin to interruption marketing, similar in purpose and effect to untargeted advertising and email spam. 2.3 Social Media and CRM Bernoff (2009) recommends that every organisation must know every single one of their best customers by name. To achieve this, social media can be used to provide visibility and almost real-time direct channels to engage and interact. The argument also extends to the idea that your best customers will always know where to find your company if they have a problem. Meadows-Klue (2007) concurs with this view. He further states that, as customers have been empowered by easily-available social media tools, the expectation is growing that their favourite retailers will engage them in the online domain. Limitation to Resources However, such idealistic views may be contrary to business ethos of efficiency and that close attention on every single customer, even the best ones, may be a resource drain, especially in the fast moving consumer goods industry. The call for companies to be exceptionally frugal in this economic climate resonates clearly among business leaders. Expert advice dictates that the focus must be on spending that generates real returns on investment (ROI), not just in marketing activities but also in operations (Maddox, 2009). New Rules of CRM This is where the argument for social media and customer relationship management (CRM) converges. CRM drives the radical customer-oriented marketing concept (4Cs of customer, cost, convenience and communication) that is slowly replacing the traditional 4Ps of marketing thinking (product, place, price and promotion). As outlined by Dr. Ned Roberto (World Village, 2008), the 4Cs’ emphasis is to approach marketing from consumers’ perspective. In this regard, we can find that both CRM and social media offer the same benefits and end-results for companies and their customers, which is visibility and long term patronage. A recent Forrester survey found that social media is extensively helping companies to deepen their relationships with customers through complementary uses of social tools 11
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie and CRM systems (Karpinksi, 2008). Supporting this view, David Myron (2009), in his editorial in CRM Magazine, also theorises that using social media, in conjunction with CRM tools, provides a new level of customer intelligence. Listening in to customers’ sentiments and gathering attitudinal data via social media will provide business strategists with higher level of confidence in decision making. Real-Time Customer Management Close customer management through social media also translates into an enhanced customer service experience. A good example of this is Comcast’s Twitter service. Customers’ ‘tweets’ sent to its @comcastcares Twitter account are typically responded in full public view. Todd Defren, in his article ‘A Social Media Guide from the Edge’ (2008), enthuses that, in an online world, a company must be seen as responsive by customers and non-customers. This, he believe, will provide for the manifestation of ‘good karma through good service’. This study agrees in that this approach not only provides a level of transparency and genuine authenticity to the company’s profile but will ultimately enhance the efforts in customer retention. The above arguments certainly demonstrate that social media can fulfil the traditional metrics of marketing, which are to limit churn and increase customer retention. More importantly, the CRM practice, coupled with freely available social tools, can be a cost effective activity to any organisation intent on a long-term and sustainable business model, albeit with budget limitations. 2.4 Communicating through Social Media The advent of social media has changed the way companies organise their outwardly communication activities. Companies are also beginning to realise that customers will talk about them, with or without them (Solis, 2007b). As most of the internet is open and unsecured, these comments or sentiments can be easily seen or read by potential customers or clients. David Roth (2009) contends that this is a double-edged sword. Where companies can now observe their customers or competition by listening in to conversations, they are also susceptible to the same reciprocal tactics. This is the challenge that companies and brands are facing in the Web 2.0 and social media era. 12
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Loss of Control Today’s popular consensus is that companies can no longer control the perceptions to their brands (Eikelmann, 2007). These include control of the company’s corporate message as well as parties responsible for disseminating information from the organisation (Young, 2009). Conversely, any person with an internet connection and a computer is able to review or comment on a brand, either on their Facebook page, Twitter or anywhere else on the internet. This effect of the ‘democratisation of media’ is a vital inducement to re-evaluate how brands and companies communicate (Dury, 2008). Public Relations David Meerman Scott, in his book ‘The New Rules of Marketing & PR’ (2007), fervently suggests that traditional public relations (PR) practices ‘do not work anymore’. Scott cites that, instead of pushing press releases or information to traditional media outlets (for eg. journalists, newspapers and TV stations), companies can now take ownership and independently publish information or news via Web 2.0 mediums. These include official company blogs, YouTube, online news sites and even through direct relations with market analysts and influential bloggers. This study believes that this strategy of bypassing conventional media provides PR practitioners an almost instant access to communication channels, unlike traditional methods. An almost real-time reaction is indeed a timely benefit for companies in dealing with developing crisis' communications. In fact, Li and Bernoff (2008) propose a proactive approach to crisis management. Through dedicated and around-the-clock close monitoring of online social spaces for public sentiments, companies can address minor complaints quickly before they become a public relations disaster. Similarly, Forrester’s social media analyst, Jeremiah Owyang (2009), advocates the hiring of a brand monitoring company to provide regular reports to analyse public reactions to a company’s manoeuvres in the market as a form of intelligence gathering. Based on these arguments, this study believes that the PR practice must evolve beyond press releases and reactive damage control. 13
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Changing Perceptions In real-life practice, social media has also provided public relations with a formidable tool in altering public perceptions. In a current takeover battle between Kraft and Cadbury (Mullman and York, 2009), Kraft engaged a renown PR firm, Brunswick Group, to connect with Cadbury’s stakeholders via social media. The campaign uses video messages from Kraft’s executives and informative microsites to win over support from Cadbury’s stakeholders to the proposal of being acquired. By developing niche messages and directly targeting and communicating to the audience, Brunswick’s personal approach is likely to appeal the stakeholders (Scott, 2007). From a marketing perspective, this in fact a form of permission marketing as advocated by Seth Godin (1999), communication that is relevant, personal and anticipated. Public vs. Media From the earlier arguments, this study deduces that the public relations role in a company’s brand and perception management has indeed transformed with social media’s arrival. What used to be a function that tries to influence and alter public perceptions predominantly through close media relations, is in fact much more associated now with direct public management and engagement in the Web 2.0 environment. However, such close association with the public is a positive development in the age of increased corporate social responsibility (CSR). Online Thought Leadership David Meerman Scott (2007) also outlines a holistic strategy in marketing a company online. By communicating online thought leadership through content development and knowledge sharing (for example, white papers, e-books and articles), the company will receive recognition for its expertise and an enhanced brand perception from potential clients or customers. The online thought leadership is in fact a long term investment that will ensure a company maintain an extended influence over a community audience (Matthews, 2007). With a loyal community audience, the company may find that it is easier it to push through innovative and revolutionary ideas to its clients and customers. 14
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Blogging with Authority In purporting thought leadership, Li and Bernoff (2008) suggest that blogging is an effective method of communicating an organisation’s message. Other than being direct and immediate, a blog allows for a two-way dialogue to be established for a customer to provide his views and comments. This activity, as stressed by Li and Bernoff, is a cost effective method to receive feedback and inputs from customers regarding a company’s products or services. However, Seth Godin (2005) provides a different concept to blogging. Godin contends that a blog, as a marketing tool, should be a launch pad for spreading of ideas. Termed ‘viral blogs’, Godin is of the view that a blogging corporate leader or employee must have an authoritative opinion but with a flexible allowance for discussion. This study contextually agrees with such an ideal. However, a focus on content must be exercised. In this case, David Meerman Scott (2007) provides a framework for relevant blogging: companies should not write in an advertorial manner but instead focus on topics that may concern their industry as a general. This lends authenticity and an opportunity to augment a thought leadership persona. CSR through Social Media In this time of increased corporate social responsibility awareness and green marketing, an organisation’s degree of openness and transparency are a sure measure of its serious intention. Sandy Carter, IBM’s Vice President for Websphere Marketing and author of ‘The New Language of Marketing 2.0’ (2009), theorises that CSR and green marketing objectives are best achieved through the adoption of Web 2.0 technology. Apart from efficiency in use of resources (which directly contributes to green credentials), Carter maintains that using social media to promote a company’s CSR and green initiatives can trigger solid word-of-mouth references and drive influencers’ willingness to tell a company’s story. Such viral outcomes are welcomed as most typically, the primary objective of CSR and green campaigns are in the creation of strong advocates that will passionately support a motion or alternative solution to an environment issue (Howell, 2009). 15
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie 2.5 Other Approaches to Social Media Marketing Product Development Other authors and practitioners are equally bullish about enterprises deploying social media as an idea development tool. The academic team of Constantinides, Romero and Boria (2008) are of the opinion that companies should involve the customer in making business decision through the collaborative use of social media. These can be made possible in areas such as product development and service improvement. An example of this is Domino’s Pizza’s customised pizza program, where customers can create their own pizza, name them and make it available to others (Costantinides et al, 2008). Li and Bernoff also touched on this approach in ‘Groundswell’ (2008). In the presented Bearingpoint case study, the company uses a wiki for its effort in cataloguing its information management solutions for its clients and system support information. The significant difference in this knowledge management activity is that the wiki is open and accessible for viewing and editing by its clients, systems users and even competitors, who provides content related to specific information management issues. With a substantial body of knowledge contained in the wiki, Bearingpoint is even able to sell the content of this ‘crowdsourced’ knowledge along with its projects for clients. Li and Bernoff believe that by developing communities where customers are allowed to feedback and contribute ideas, a company can market more efficiently with products that have been evaluated and verified by its own customers. By tapping on the collective knowledge of the consumer and directly soliciting the wants of the customer, such approach deserves merit as it fulfils the prime marketing fundamental of serving the needs of the customer. An Organisational Approach Another remarkable concept that is a result of the social media revolution is the brand organisation. In this approach, the organisation must adopt the philosophy that internal branding is just as important as external communication. Employees must understand and deliver the brand’s promise at all times. This is because customers can easily gain access to online information on the company and its employees and make unaided decisions based on these gathered information (Interakt, 2009). 16
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Despite its revolutionary concept, the brand organisation approach is a highly visible endeavour in an increasingly customer-oriented landscape. Interestingly and in accord, the author, Tamar Weinberg (2009), proposes that customer service should be a core component of any social media strategy. She argues that ‘customer service is social too’ and favourable impressions in this area will translate and propagate into online and offline reputation for companies. As described, this study believes the organisational approach to social media may encounter considerable resistance in organisations with legacy operational practices. The technological and communication aspect of social media may prove a challenge for widespread adoption within a company, especially one with a mature population. However, Amber Naslund (2009), an advocate of the social media-savvy organisation, outlines the following for senior management buy-in: transparency provides business intelligence in managing internal employee relations, improved customer experience through consistent organisational message and better decision making through real-time operational insights. Catalyst for Change Additionally, this study also believes that social media is the right catalyst for the next era of business, from IT-driven to CSR-driven. In a recent research, it is found that there is an increased adoption in Web 2.0 business efficiency practices in organisations, for example the use of tools such as wikis, blogs, RSS (Bughin, 2007). Therefore, it is only a matter of time before social media is an accepted norm within corporate activities. However, only with early internal and external adoption of social media initiatives can businesses maximise current and future opportunities, ahead of competitors. 17
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Section 3 Summary The above study has shown that social media do indeed have a significant role to play in contemporary marketing. Although there are dissenting voices in regards to the use of social media as a marketing tool, generally, social media has been proven to have important applications for marketing campaigns, public relations activities and customer relationship management programs. Marketing through Influence A balanced and complementary approach is required to integrate social media into marketing practices. The expert consensus calls for marketers to engage in a subtle and restrained manner when engaging customers in social media. Making inroads through influence and permission, rather than direct selling, will more likely provide the benefits of long-term engagement. Therefore, the objective for social media marketers is indeed to turn customers into brand advocates. Communication 2.0 The significance of social media as a possible corporate ideology cannot be ignored. With open and transparent communication through social media, companies can benefit from the increased level of trust by customers and stakeholders. This is important in an era where corporate social responsibility is emphasised in the wake of corporate scandals, such as Bernie Maddox’s and Satyam’s. Social media has also been proven to be an effective tool for public relations and in the creation of thought leadership for a company. Conclusion Although social media is a recent arsenal to the field of business marketing, its potential as a marketing tool cannot be overlooked. However, further development in its practice and usage is required in order to increase corporate adoption. Also, a study into the measurement of social media’s effectiveness and its return on investment must also be undertaken. Only then can the real value of social media to an enterprise be ascertained. Nonetheless, social media is a powerful tool for any organisation moving in the Web 2.0 space and beyond. 18
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie References Ayers, C. (2009) Revenge is best served cold – on YouTube. Available at: http://www.timesonline.co.uk/tol/comment/columnists/chris_ayres/article6722407.ece (Accessed: 30 August 2009) Bernoff, J. (2009) ‘Who Are Your Best Customers’, Groundswell, 11 August. Available at: http://blogs.forrester.com/groundswell/2009/08/who-are-your-best-customers.html (Accessed: 30 August 2009) Brogan, C. and Smith, J. (2008) Trust economies: investigations into the new ROI on the web. ChangeThis [Online] Available at: http://changethis.com/44.04.TrustEconomy (Accessed: 27 February 2009) Brogan, C. (2007) ‘Marketing is NOT Social Media-Social Media is NOT marketing’, Chris Brogan, 14 December. Available at: http://www.chrisbrogan.com/marketing-is-not-social- media-social-media-is-not-marketing/ (Accessed: 30 August 2009) Bughin, J. (2007) ‘The rise of enterprise 2.0’. Journal of Direct, Data and Digital Marketing Practice, 9 (3) pp 251-259 Carter, S. (2009) The new language of marketing 2.0: how to use ANGELS to energize your market. Massachusetts: IBM Press CBSnews.com (2006) Cutting through advertising clutter. Available at: http://www.cbsnews.com/stories/2006/09/17/sunday/main2015684.shtml (Accessed: 9 September 2009) Constantinides, E., Romero, C. and Boria, M. (2008) Social media: A new frontier for retailers?’, European Retail Research, 22, pp 1-28 Defren, T. (2008) A social media guide from the edge. [Online[ Available at: http://www.pr- squared.com (Accessed: 29 January 2009) Dury, G. (2008) ‘Opinion piece: Social media: Should marketers engage and how can it be done effectively’, Journal of Direct, Data and Digital Marketing Practice, 9 (3), pp 274-277 Eikelmann, S., Hajj, J. and Peterson, M. (2007) ‘Opinion piece: Web 2.0: Profiting from the threat’, Journal of Direct, Data and Digital Marketing Practice, 9 (3) pp 293-295 Gladwell, M. (2000) The tipping point. New York: Back Bay Godin, S. (1999) Permission marketing, Reprint, London: Pocket Books, 2007 Godin, S. (2005) Who’s there: Seth Godin’s incomplete guide to blogs and the new web. Do You Zoom, Inc. [Online] Available at: http://www.sethgodin.com (Accessed: 3 September 2009) 19
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Guardian.co.uk (2009) United breaks guitars singer reprises YouTube airline lament. Available: http://www.guardian.co.uk/technology/blog/2009/aug/19/united-breaks-guitars- song-sequel (Accessed: 30 August 2009) Howell, P. (2009) ‘The 12 faces of social media for sustainable green marketing’, 14 April. Available at: http://parkhowell.com/green-advertising-and-marketing/the-dozen-faces-of- social-media-for-green-marketers-and-sustainability (Accessed: 9 September 2009) Joel, M. (2009) Six Pixels of Separation. New York: Grand Central Publishing Joel, M. (2007) ‘Trust economies: the new marketing ROI’. Six Pixels of Separation, 17 March. Available at: http://www.twistimage.com/blog/archives/trust-economies---the-new- marketing-roi/ (Accessed: 9 September 2009) Karpinski, R. (2008) ‘Forrester survey finds social media leading way toward CRM2.0’, B to B, 93 (8), p 15 Kingsley-Hughes, A. (2006) Sony and the fake PSP blog. Available at: http://blogs.zdnet.com/hardware/?p=186 (Accessed: 30 August 2009) Lardinios, F. (2008) Obama’s social media advantage. Available at: http://www.readwriteweb.com/archives/social_media_obama_mccain_comparison.php (Accessed: 9 September 2009) Li, C. and Bernoff, J. (2008) Groundswell: winning in a world transformed by social technologies. Boston: Harvard Business School Press Interakt (2009) Marketing 101: communications inside out. [Advertisement in Marketing magazine, Singapore]. August. Maddox, K. (2009) ‘Frugality first’, B to B, 94 (1), pp 1-29 Martin, T. (2009) ‘Social media is meant for conversation, not ‘marketing’’, Advertising Age, 80 (6), p11 Matthews, S. (2007) Thought leadership – a long term investment. Available at: http://www.slaw.ca/2007/10/14/thought-leadership-a-long-term-investment/ (Accessed: 10 September 2009) Meadows-Klue, D. (2007) ‘Falling in love 2.0: Relationship marketing for the Facebook generation’, Journal of Direct, Data and Digital Marketing Practice, 9 (3), pp 245-250 Mullman, J. and York, E. (2009) Does Kraft’s PR play for Cadbury remind you of something? Available at: http://adage.com/article?article_id=138907 (Accessed: 10 September 2009) Myron, D. (2009) ‘Social media spawns a new era in customer intelligence’, CRM Magazine, 13 (6), p 6-6 Naslund, A. (2009) Building a social media team. [Online] Available at: http://altitudebranding.com/wp-content/uploads/2009/09/buildingasocialmediateam.pdf (Accessed: 9 September 2009) 20
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  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Appendix A Social Media Adoption Statistics 22
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Appendix B Social Media Applications Tools 23
  • Role of Social Media in Contemporary Marketing By Isman Tanuri Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie Appendix C Social Media Thought Leaders The following profiles the leading experts in social media and digital marketing: Seth Godin Godin is author of ten books that have been bestsellers around the world. His most recent titles include The Dip and Meatball Sundae. Free Prize Inside was published in early May, 2004 and All Marketers Are Liars was published in 2005. His books that have been bestsellers around the world and changed the way people think about marketing, change and work. Permission Marketing was an Amazon.com Top 100 bestseller for a year, a Fortune Best Business Book and it spent four months on the Business Week bestseller list. It also appeared on the New York Times business book bestseller list. Charlene Li Charlene Li is the Founder of Altimeter Group and co-author of the business bestseller, “Groundswell: Winning In A World Transformed By Social Technologies“, published by Harvard Business Press in May 2008. She frequently consults and speaks on social and emerging technologies and publishes a blog, The Altimeter. Josh Bernoff Josh is senior vice president, idea development at Forrester Research and is responsible for identifying, developing, and promoting some of the company's most influential and forward-looking ideas.Josh is the coauthor of the BusinessWeek best-selling book Groundswell: Winning in a World Transformed by Social Technologies, a comprehensive analysis of corporate strategy for dealing with social technologies. Abbey Klaasen of Advertising Age picked it as "the best book ever written on marketing and media," and Amazon's editors put it in the top ten business books of the year David Meerman Scott David Meerman Scott is a marketing strategist, keynote speaker, seminar leader, and the author of the hit new book World Wide Rave. His previous book, The New Rules of Marketing & PR is an award-winning BusinessWeek bestseller and is being published in 24 languages. He is a recovering VP of marketing for two publicly traded technology companies and was also Asia marketing director for Knight-Ridder, at the time one of the world’s largest newspaper and electronic information companies. Mitch Joel Mitch Joel is President of Twist Image - an award-winning Digital Marketing and Communications agency. He has been called a marketing and communications visionary, interactive expert and community leader. He is also a Blogger, Podcaster, passionate entrepreneur and speaker who connects with people worldwide by sharing his marketing insights on digital marketing and personal branding. Mitch is also the author of ‘Six Pixels of Separation’. Chris Brogan Chris Brogan is President of New Marketing Labs, a new media marketing agency, and home of the Inbound Marketing Summit conferences and Inbound Marketing Bootcamp educational events. He works with large and mid-sized companies to improve online business communications like marketing and PR through the use of social software, community platforms, and other emerging web and mobile technologies. 24