Mark Cahill MBA thesis - To what extent have Online Social Networks Changed Business to Consumer Marketing
To what extent have Online Social Networks Changed Business to Consumer Marketing Mark Cahill ID Number: 0014206 University of Limerick Masters of Business Administration 2008 Dr. Lisa O‘Malley Word Count: 12,437
To what extent have Online Social Networks Changed Business to Consumer Marketing AbstractThe purpose of this Thesis is to investigate and better understand Online Social Networks fromthe perspective of Marketing in a business to consumer context. The proposition guiding thisthesis is that online social networks have changed, or evolved the rules of traditional marketing.Some of the questions that will be asked and hopefully answered: What has caused this socialnetworking trend and what effect this has on Marketing? What companies have alreadyparticipated in this trend and how successful they have been, are there any learning‘s from theirexperiences. Has this phenomenon changed how customers communicate with each other and inturn how business and ultimately marketing communicates with customers? Has the powershifted from the Marketers to Consumers? Who owns the Brand?
AcknowledgementsI would like to thank, my wife, Róisín, my son Dylan, and my daughter Abigail for their Support,Patience and Love, especially throughout the past 2 years.I would also like to thank Dr. Lisa O‘Malley for her support, advice and guidance with thisThesis.Finally, I would like to thank those who took the time out to be interviewed for this Thesis.
Table of ContentsAbstract................................................................................................................................................... 1Acknowledgements ................................................................................................................................. 2Table of Figures ...................................................................................................................................... 5Chapter 1 - Introduction .......................................................................................................................... 7Chapter 2 - Summary .............................................................................................................................. 8Chapter 3 - Literature review ................................................................................................................ 10 1. Mass and Direct Marketing ....................................................................................................... 10 2. Brand ........................................................................................................................................ 14 3. Technology and Marketing – Customer Relationship Marketing (CRM).................................. 18 4. Social networks and Brand communities .................................................................................. 21 4.1 Brand communities/Tribes ...................................................................................................... 25 4.2 Online social networks – the link between you and your customers through Web 2.0 ...... 29 4.3 What is Web 2.0? and what is it‘s relevance to marketing? .............................................. 32 4.4 Viral marketing ................................................................................................................. 36Chapter 5 - Methodology ...................................................................................................................... 42Chapter 6 - Results ................................................................................................................................ 45 6.1 Twitter................................................................................................................................... 46 6.2 MySpace ............................................................................................................................... 46
6.3 Blogs ..................................................................................................................................... 47 6.4 Dell Case ............................................................................................................................... 51 6.5 P&G beinggirl.com Case ...................................................................................................... 56 6.6 Adobe Communities Case ..................................................................................................... 57 6.7 Twitter and brands ................................................................................................................ 58 6.7 Interviews.............................................................................................................................. 61Chapter 6 - Conclusion and Discussion ................................................................................................ 68Bibliography ......................................................................................................................................... 72Appendix A – Interview questions ........................................................................................................ 78
Table of FiguresFigure 1 - Marketing and Technology ................................................................................................... 18Figure 2- Basic Social Network Diagram ................................................................................................ 23Figure 3 –Marketing and Social Networks ............................................................................................ 29Figure 4 - Tweetup ................................................................................................................................ 34Figure 5 – Conversation Prism by Brian Solis ........................................................................................ 35Figure 6 –Social Technographics ladder source Forrester ..................................................................... 38Figure 7 – Online Social Networking Marketing Strategy ...................................................................... 40Figure 8 –Blogger participation in Web 2.0 activities – Source Technorati ........................................... 49Figure 9 – Dell Second Island Life .......................................................................................................... 53Figure 10 – RichardatDell connecting with customers using Twitter .................................................... 61Figure 11 – Online Social Networking Marketing Strategy .................................................................... 69
Chapter 1 - IntroductionIn recent times there has been an explosion of online social networks, the list includes but is notconfined to Facebook, Myspace, Bebo, Second life, linkedin, YouTube, Orkut, Twitter. Socialnetworks are seen as serious business, one such recent example is Facebook, founded by MarkZuckerberg, the 23-year-old who has been compared to of Bill Gates as both dropped out ofHarvard to build a highly successful company. Facebook was founded on the 1st of February2004; by October 24th 2007 Microsoft beat Google and Yahoo to take a 1.6 percent stake inFacebook, costing Microsoft $340million. This investment has the three and a half year companyvalued at $15 Billion, making Facebook the 5th Most Valuable U.S. Internet Company.Facebook has more than 40 million members (News.com 2007) (Nytimes.com 2007)
Chapter 2 - SummaryThe proposition guiding this thesis is that online social networks have changed, or evolved therules of traditional marketing with particular focus on business to consumer marketing. Some ofthe questions that will be asked and answered: What has caused this social networking trend andwhat effect this has on Marketing? Has Marketing Spotted this trend, is this seen as a newchannel within which to market, have the rules of marketing changed or simply evolved? Whatcompanies have already participated in this trend and how successful they have been, are thereany learning‘s from their experiences. Has this phenomenon changed how customerscommunicate with each other and in turn how business and ultimately marketing communicateswith customers? Has the power shifted from the Marketers to Consumers? Who owns theBrand?A combination of existing case studies, observations in the form of perspective of ananthropologist doing ethnographic field research and observation, and from the perspective of astrategist marketing resources shall be used, in conjunction with Interviews of business‘s usingsocial networks for marketing as well as interviews of customers who connect to other customerusing social networks as the as the methodology to answer these questions.
To understand how marketing has gotten to this point, we shall look back briefly how marketinghas evolved through various stages. The stages are as following, 1. Mass and Direct Marketing. 2. Brands. 3. Technology and Marketing – Customer Relationship Marketing (CRM) 4. Marketing and Social networks. a. Online Social networks and Brand Communities 5. Finally, the convergence of Marketing, Technology (in particular Web 2.0) and Social networks.
Chapter 3 - Literature review 1. Mass and Direct MarketingEarly marketing media was mostly in the form of advertising and direct mail; these were thetools of the trade used by companies to generate visibility and customer demand. These werevery much broadcast in nature, with a very low response rate. Webster (2004) states that―Typical response rate to their direct mail campaigns is 1%‖. Part of the reason to such a lowresponse rate is that these types of campaigns are often quite easy to ignore, and ignore becausethe message may not have any relevance to the end recipient. It is still more difficult to link andquantify the true impact of advertising to increases in brand value. For services firm marketingefforts to be effective using ―tangible media,‖ they had to exhibit three characteristics: repetition,volume, and creativity (Webster 2004), these efforts have an effect on increasing cost in anonlinear fashion.Traditional media is used by marketing to bombard the public—newspapers, direct mail,television, radio, magazines, billboards, bus backs, subway cars, as is evident in any major townor city in the world. Van Den Bulte and Wuyts (2007 page 4) suggest that there is a decline ineffectiveness of mass media and this may be the primary interest for Marketers renewed interestin social networks. The effectiveness of traditional marketing is been eroded due the consumersbeen able to ignore marketing messages, especially of the broadcast type. (Van Den Bulte andWuyts 2007 ). Due to the ever increasing number of radio-stations, TV channels, magazines andwebsites there has been a decline in effectiveness of mass media and traditional marketing(Clemons, et al. 2007 ; Leskovec, J.et al 2007), especially as this effects those companies whose
products are best suited towards the mass market (Turrow 1997). Forester research completed astudy which investigated consumer rejection of advertising. It discovered that consumers areusing technology and other means to block ads. Most Americans watching broadcast televisionhave access to a remote, TiVo and 30-second-skip function on their VCR‘s. (Van Den Bulte andWuyts 2007 page 20). Furthermore they are avoiding internet popup and banner ads throughsoftware, and print ads the old fashioned way by simply turning the page. Another worryingtrend for marketing is an increase in consumers distrust and cynicism in marketing andadvertising (Clemons, Barnett, Appadurai 2007), Friedstad and Wright (1994, 1995; cited byVan Den Bulte and Wuyts 2007) say that there is an increase in the number of consumers, inparticular teenagers, whom view marketing efforts as schemes. Court (2007) has also noticedthat consumers sceptical of push ads, are flocking to a medium they trust more, such as User-generated media account which accounts for almost one-third of all the time individuals spend onthe 100 most visited US Web sites, up from roughly 3 percent just two years ago.(Court 2007)Thus, traditional Marketing communication is overall becoming less effective and it is inmarketing‘s interest to discover new means of capitalising on consumers networks in order toconvey their message.It also appears that consumers have control where once it was the marketer who was in control. The increasing importance of third parties will force businesses to enhance their awareness of blogs, chat rooms, and other social-networking media and to develop new strategies both to capitalise on marketing opportunities revealed by consumers and to defend themselves from attacks. (Court 2007).
One such very famous attack is that on Dell from a Blogger, Jeff Jarvis of theBuzzMachine.com. This all unfolded in the Summer of 2005, after Dell refused to replace or fixJeff‘s computer, Jeff proceeded to post ―Dell Hell‖ posts on his blog. After several days he stillhad received no response from Dell, so he posted an open letter on his blog to Michael Dell, thechairman and Michael George the then Chief Marketing Officer. This post summarised hisresistance and struggle with Dell‘s customer service. At the time Jeff‘s blog would have 5,000visits per day, but when this open letter was posted, the post became the third most linked in theblogosphere, and received 10,000 visited per day as people commented on their bad Customerexperiences with Dell. (mediapost.com 2005)A review of the literature conversely suggests that the biggest shift in today‘s marketing worldisn‘t the much-discussed declining effectiveness of television advertising but the changes in howconsumers research and buy products. The Internet is a major contributor to this shift. (Court2007) (Porter 2001), many new media that seem to be promising ways of gaining access toconsumers as they conduct their research are not yet at scale. The result is fragmented mediaspending and, sometimes, rising costs to generate the desired consumer impact.Webster 2004 highlights the marketing crisis in relation to advertising and direct mail where theystill play a part in a significant foundation of firms‘ marketing plans—at whereby they typicallyaccount for about one third of all marketing firm expenditures. She says that ―this is not becausefirm management is convinced that advertising is effective, but because they are uncertain aboutwhat to do instead‖. Webster 2004, also draws attention to the fact that Marketing activities are
rarely linked to tangible metrics or even tied to strategic business goals. Furthermore, Websterhighlights that ―a survey by Forrester on marketing success, reports that less than half ofmarketers measure the effectiveness of individual marketing program elements and less than athird measure the impact of integrated marketing activities‖. This suggests that not only ismarketing in crisis, but businesses that practise this type of waste may be also in crisis. Animportant and core element of any business is to measure return on investment.
2. BrandAccording to the American Marketing Association, a brand is a: ‗name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition‘.The word brand is derived from the old Norse word ‗brandr‘, which mean ‗to burn‘ as brandswere originally and still are used as a method that owners could mark their animals in order toidentify ownership (Keller, 2003 strategic brand management book). Similarly today, companiesadd their brand is order to identify ownership and differentiate from competitors. Patterson andO‘Malley (2006) highlight that the majority of brand building activities taking place in massmedia environments rather than through direct consumer communications.A well-recognised brand could help a company withstand the impact of increased competition. Italso adds value to both the firm and to the customer. It increases loyalty, as discussed in thebrand equity literature and creates a strong identity (Doyle, 1990; Keller 1993; Simon andSullivan 1993; Aaker 1996). It it is more expensive (6 times) to win new customers than to keepexisting ones (Peters, 1986) and brand loyalty plays a vital role in retaining existing valuablecustomers. Strong and establish brands can be used as a platform for growth via brand extensionsas well as been able to command a premium price over weaker competitors – 20% more thandiscount brands. Another function of a brand is used to make the decision processes simpler and
more efficient. In a typical situation a consumer is faced with been bombarded with many formsof information, purchasing brands that have proved satisfactory in the past are usually selected,this is more probable for low involvement products (Doyle, 1990). A strong brand also acts as asource of differentiation thorough its name, symbol or personality which are very difficult toemulate (Doyle, 1990; Aaker, 1996; Aaker, 1997).David Penn (2006) has recently written a good summary of the current state of advertisingresearch, in which he shows how the earlier conscious rational models of advertising have beenchallenged, in the last two decades, by neuroscience. He summarises the neuroscience learningas follows: ‗the most important brand response is emotional‘, ‗Most of our decisions areunconscious‘ and ‗ultimately, brand response is more important than ad response‘. Also, DavidSmith (2006) says, ‗in a straight choice between emotion and reason, emotion wins‘. This showsthe importance of associating your brand with strong positive emotions.Thus, the symbolic value of brands may be used by consumers to establish membership of socialgroups, to signal aspirations of group membership, or to point toward differentiation from otherconsumers. Many contemporary brands have achieved iconic status (Holt, 2004), such asRedbull, Guiness, Ferrari, Lego. A study by WPP, found that brands considered iconic enjoyedfar higher top-of-mind awareness: 58 percent versus 36 percent. Critically, however, recentfindings in neuroscience suggest that the strongest mental representations of brands are those thatare well balanced across physical cues, functional benefits and emotions evoked.
In his book ―How Brands Become Icons‖, Oxford University Professor Douglas Holt proposesthese three principles. Iconic brands address acute contradictions in society. By tapping into a collective desire or anxiety, iconic brands develop a status that transcends functional benefits. They challenge people, either directly or subtly, to reconsider accepted thinking and behaviour. The famous Coca-Cola ad from 1971, "Id Like to Teach the World to Sing," voiced a desire to overcome the deep divisions in American society created by the Vietnam War. Iconic brands develop identity myths that address these desires and anxieties. By creating imaginary worlds, they offer escape from everyday reality. The Marlboro man represents the values of the Western frontier: strong, independent and capable. Over time, the brand comes to embody the myth. It becomes a shorthand symbol that represents far more than just a brand of soft drink, cigarette, or car. While there are now many expensive watches to choose from, Rolex still symbolizes success and status around the world.As brands, such as those just mentioned come to possess such meaning for consumers it is quiteobvious to see how we might depict the connection between consumers and brands asrelationships. And relationships is quite an accurate description however is, are they the same asinterpersonal relationships?
Patterson (1999, p. 419) defines brand personality as the consumers emotional response to abrand through which brand attributes are personified and used to differentiate betweencompeting offerings. Given the fact that consumers infuse brands with personalities, it is largelyheld that as a result consumer personalities; and brand personalities should reflect one another.This is not necessarily the case, but there may be some degree of fit between the two if, asLannon (1992, p. 12) states brand choice is the direct manifestation of a set of personal values.Brand personalities, therefore, are emotional projections used to simplify brand choice decisionsacross a range of product categories. (Patterson and O‘Malley 2006)
3. Technology and Marketing – Customer Relationship Marketing (CRM)With the advent of the internet, marketing saw an opportunity with Customer RelationshipMarketing (CRM). This powerful new medium was viewed as the mechanism for buildingbrands, reaching new markets, and finding new customers. Figure 1 - Marketing and TechnologyGummesson (1994:12) defines relationship marketing as ―marketing seen as relationship,networks and interactions‖. The internet was powered by huge databases and marketing alsocreated an opportunity use database technologies to store knowledge gained about customers.The goal of relationship marketing is to build customer loyalty for the firm. Therefore, any CRM
strategy (including technology investments) must build a strategic competitive advantage thatdistinguishes a product/brand/company in a competitive environment. This helps createimmunity from competition as well as stronger customer loyalty. Information on customers iscritical to developing and maintaining customer relationships.For small organizations with very few customers, where the ratio of customers to employees waslow, it relatively easy to collect and use relevant information in building customer relationships,however for larger organizations with a larger customer to employee ratio this becomespractically impossible to do as it does not scale very well. Thus, information technology, initiallyin the form of the database, was regarded as ‗an agent of surrogacy to be enlisted to helpmarketers to re-create the operating styles of yesterday‘s merchants‘ (Sisodia and Wolfe, 2000,p. 526).O‘Malley and Mitussis (2002) highlight that relationships are core, but, for large organisationsthat these relationships now rely on a technology foundation to support and maintain theserelationships. Whilst there is a suggestion that relationships between consumers and organisations (see Sheth and Parvatiyar 1995) and consumers and their brands (see Fournier 1998) have always been important, it is also recognised that, today, such relationships must be facilitated or at least supported by technology (Dwyer et al., 1987; Blattberg and Deighton 1991).A downside of CRM is rather than treating each customer with the consistency and respect onemight expect in a relationship (Sheaves and Barnes, 1996), in reality customers often getcompeting relational offers from different parts of the organization. This can lead to anexacerbation of privacy issues with customers becoming increasingly concerned with
organizational intrusion (Patterson et al., 1997), a perception that might actually translate into areduction in consumer trust (O‘Malley et al., 1997; Fournier et al., 1998).Unfortunately, academic research has shown that it is often hard to demonstrate the link betweenthe implementation of information technology and returns that show on the bottom line(Brynjolfsson, 1993; Willcocks and Lester, 1997). The move from transaction to relationshipmarketing (Dwyer et al., 1987) in consumer markets was driven by changes in the businessenvironment and enabled by technology (Sisodia and Wolfe, 2000).Salesforce.com specialises in selling CRM solutions through ―software as a service‖ model. Thefact that this company has become so large shows he demand and success of CRM solutions.There are also many others providing CRM solutions, a simple search on google for ―CRMsoftware‖ yields 2.75 million results. O‘Malley and Mitussis (2002) sum up CRM as ―basedupon sound marketing principles through identifying customer needs, segmentation, offeringsuperior customer value, and customer retention all of which processes are enabled by theapplication of sophisticated technology.‖
4. Social networks and Brand communitiesBefore we delve into the depths of Brand communities it is important to understand socialnetworks. The first step in determining the usefulness of online social networks to marketers is tohave a basic understanding of a social network. Social networks are everywhere in a Marketersworld, consumers share information about products and services. And in some cases consumersgo as far as gravitating towards each other to form brand communities.Social network analysis, which is related to Network Theory has emerged as a tool to understandhow social networks work. Social networks have been studied for quite a while, in field‘sranging from modern sociology, anthropology, social psychology, communication studies,information science, organizational studies as well as Biology. (Van Den Bulte and Wuyts 2007)A social network is a social structure made of nodes (which are generally individuals ororganizations) that are tied by one or more specific types of interdependency, such as values,visions, ideas, financial exchange, friendship, kinship, dislike, conflict or trade. The resultingstructures are often very complex, after all human nature is inherently complex.The question of how the pattern of interconnection among social entities – consumers,colleagues, business units, competitors and complementors - affect behaviours and theoutcomes of those entities in now receiving more attention than ever. (Van Den Bulte and Wuyts2007).
Social network analysis views social relationships in terms of nodes and ties, as basic buildingblocks. Nodes are the individual actors within the networks, and ties are the relationshipsbetween the actors. There can be many kinds of ties between the nodes. Research in a number ofacademic fields has shown that social networks operate on many levels, from families up to thelevel of nations, and play a critical role in determining the way problems are solved,organizations are run, and the degree to which individuals succeed in achieving their goals.Social networking has created powerful new ways to communicate and share information. Socialnetworking websites are being used regularly by millions of people, and it now seems that socialnetworking will be an enduring part of everyday life. Wikipedia is an incredible example of howinformation is shared, where there are more than 75,000 active contributors working on morethan 10,000,000 articles in more than 250 languages, and these are all voluntary contributions. IThas grown rapidly into one of the largest reference Web sites, attracting at least 684 millionvisitors yearly by 2008. (Wikepdia.org 2008)In its simplest form, a social network is a map of all of the relevant ties between the nodes beingstudied. The network can also be used to determine the social capital of individual actors. Theseconcepts are often displayed in a social network diagram, where nodes are the points and ties arethe lines.
Figure 2- Basic Social Network DiagramTie Strength is an important property of social network, and of particular importance tomarketers. Tie strength simply refers to the intensity and tightness of a tie between nodes, suchexamples are the depth of a friendship, or frequency of interaction. It should be noted that tiestrength, therefore, is not a binary on or off state, but, is a variable measurement. Van Den Bulteand Wuyts (page 10, 2007) conceptualise a tie strength as having two dimensions, (1) tieintensity or activity (the frequency of contact) and (2) tie valence (the affective, supportive, orcooperative character of the tie) and they state that this conceptualisation of tie strength agreeswith best empirical evidence to date. Mark Granovetter (1973) first introduced the ―Strength ofweak ties‖ where acquaintances are weak ties and our friends are strong ties. He concludes thatStrong ties share the same limited information while weak ties are a source of new informationand thus are more valuable.
In Malcom galdwell‘s book ―The tipping point‖ he suggests the law of the few, this law describesthe basic structure of social networks and how messages are passed through word of mouth. Itattempts to classify three important types of people who affect the rapid spread of messagesthrough the network. These three types of people are connectors, mavens, and salesmen.The first type are Connectors, these are the socialites. They are people with many friends andacquaintances who spend time maintaining these connections. If you were to draw connectors ona network diagram, they would be the most central nodes with a higher number of connectionsthan most others. According to Gladwell connectors are rare in society, but they maintain manymore times the number of relationships than the average person does. Because of their ability tospread a message to a huge number of people quickly, connectors are central to understandinghow tipping points are reached.The second group are Mavens, who gather and harvest information from the social network.They listen and evaluate the messages that come through the network and they pass theirevaluations on to others, along with the adding their own messages to these evaluations. Mavensregulate network because they have the power to control what flows through the network.Mavens are seen as trusted nodes.Finally there are Salesmen, and they are what the name implies. They are persuaders who arecapable of propagating messages through the force of their character. Thus, regardless of themessage content or their expertise in the area, they have a certain ability to sell which helps themmove messages which may be of importance to them.
It is only in recent times, due to emerging information technologies such as Web 2.0, whichfacilitates and accelerate the velocity of communication among consumers, and within firmsthrough online social networks. Web 2.0 shall be dealt with in more detail in the next chapter. 4.1 Brand communities/TribesNext, we shall introduce the concept of a brand community. A ―brand community‖ is defined as―a specialised, non geographically-bound based community, based on a structured set of socialset of social relations among admirers of a brand‖ (Muniz and O‘Guinn, 2001, p 142). In recentyears academic treatments of consumption activities have begun to move away from a focus onthe individual to considerations of the communal. There is a move from dyad to networksignalled a maturing of the emerging relationship literature (Ford, 1990). Enduring communitieshave been variously labelled as consumption communities (Boorstin, 1973), subcultures ofconsumption (Schouten and McAlexander, 1995), cultures of consumption (Kozinets, 2001),
brand communities (Muiiiz and OGuinn, 2001; McAlexander et al., 2002), and brand cults(Belk and Tumbat, 2005). More temporary communities have been referred to as socialcollectives (Greenwood, 1994), neo-tribes (Cova, 1997), and life-mode communities (Firat andDholakia, 1998). What is particularly interesting from the perspective of branding is the linkingvalue that brands provide to individuals seeking to become part of these new communities.Covas (1997, p. 307) agrues that, in contemporary consumer society, brands should beconsidered as objects used to facilitate social interaction: The system of consumption is notalways perceived as first and using the social link, but often as second, and in service of thesocial link: the link is more important than the thing. At the core of this argument is theacceptance that relationships with objects are abut always two-way (person-thing) but alwaysthree-way thing (person-thing-person) (Bengtsson, 2003, p. 157,citing Belk, 1988). Muniz andOGuinn (2001, p. 427) point out: developing a brand community could be a critical step in trulyactualising the concept of RM.These communities neatly capture the notion that people have relationships with other peopleand that brands may become a fulcrum around which such relationships are constructed(Patterson and O‘Malley 2006). The brands meanings are seen as less significant than the sociallinks that people form as a result of using the brand. Sustained interpersonal interactions canlead to relationships that transcend mere common interest in a brand and its applications(McAlexander et al., 2002, p. 43). These meanings are likely to be derived from the key elementsof communal interaction (Muniz and OGuinn, 2001, p. 413):; consciousness of kind, theintrinsic connection that members feel toward one another, and the collective sense of difference
from others not in the community; shared rituals, which contain the drift of meanings ... set upvisible public definitions ... and social solidarity; and moral responsibility, a felt sense of duty orobligation to the community as a whole. This concept is backed up by of the fact that we aresocial animals is that we live in a state of tension between the values associated with theindividuality and values associated with conformity. (Aronson 1972 Page 13) Conformity canbe defined as a change in a person‘s behaviour or opinions as a result of real or imaginedpressure from a person or group of people. (Aronson 1972, Page 13). From a trust perspective"Social networks are trusted because of shared experiences and the perception of shared valuesor shared needs" (Clemons et al. 2007)There are an increasing number of descriptive studies detailing the nature of such communities:Adobe Communities (Martin, 2007, page 51) Suns Java Center community (Williams andGothrel, 2000); in-line skating (Cova and Cova, 2001); Macintosh user groups (Belk andTumbat, 2005); Star Wan fans (Brown et al., 2003); and Nutella (Cova and Pace, 2005); Thesecommunities are expected to provide a bundle of benefits for the organisation: they positivelyaffect brand equity; they create a solid base of loyal, enthusiastic and forgiving consumers; andthey provide many opportunities for up-selling and cross-selling (Muniz and OGuinn, 2001;McAlexander et al., 2002).
In the past, it was seen as marketing‘s role to define the brand meaning however it should benoted by (Patterson and O‘Malley 2006) that ‗consumers are the ultimate arbiters of brandmeaning‘. Patterson and O‘Malley (2006) also recommend that: ‗managers need to pay close attention to how customers themselves define their various connections with the brand. Managers must adequately analyse the nature, characteristics and boundaries of those relationships and act accordingly. If, on the other hand, consumers view these connections in terms of communal interaction with other consumers, then managers need to identify how best to facilitate that interaction without overtly intruding upon it.‘The key here is around facilitating the interaction and not attempting to control it. In an interviewwith Knowledge at Wharton, Forresters Jeremiah Owyang , a senior analyst for SocialComputing backs up Patterson and O‘Malley (2006) by saying "Brands are not in control anylonger, and those that let go and put the power in the hands of the user will do well" .(knowledge.wharton.upenn.edu 2007)To further enforce this, Charlene Li and Josh Bernoff in their book Groundswell (page 78) state―Your brand is whatever your customers say it is‖. The real control of the brand has moved into
the customers hands, and technology has enabled that," says Lane Becker, president of GetSatisfaction, a Web site that draws together customers and companies to answer each othersquestions and give feedback on products and services (crm-daily.com 2008) Figure 3 –Marketing and Social Networks 4.2 Online social networks – the link between you and your customers through Web 2.0Cooke and Butler (2008) identify six trends that have contributed to a change in environment forMarketers, in particular marketing researchers. 1. Open source movement. 2. Emergence of Web 2.0.
3. Emerging social landscape. 4. Rapid growth of online social networks. 5. Social computing tools. 6. Tools to examine new forms of user-generated content.The first trend is the continued growth of the open source movement; this is caused by thefocused online collaboration of many on a scale that had not been previously possible. Thesecond is the emergence of Web 2.0, which offers us an array of collaborative tools with whichto develop new research approaches, most of these tools were created by the open sourcemovement. The social software tools that define Web 2.0 will continue to grow rapidly and shallprovide us with new and innovative ways to explore the rapidly changing social and mediaenvironment. This emerging social media landscape is the third trend, and is most easilyrecognisable by the phenomenon of user-generated content, again some of the software used tocreate user generated content is open source. Fourth, we observe the rapid growth of onlinesocial networks. These are radically changing our media landscape and these have rich researchliterature on the importance of studying humankind in these ‗tribes‘, ‗groups‘ or ‗socialnetworks‘. The opportunity to observe these social interactions will greatly benefit us in ourunderstanding of the role of advertising and marketing in the dissemination of ideas. Fifth, thecombination of social computing tools with an understanding of social networks will allow us tobuild new types of community in which respondents interact not only with the firm but, witheach other. Sixth, it will become increasingly easier to handle multiple sources of data, and be ascomfortable with these new forms of user-generated content.
There is a current new media revolution, which is based around social computing. Cooke andButler (2008) also give four points to understanding this media revolution. First, there is theemergence of user-generated content that is blurring the distinction between professional andamateur content. The second point is that new media is increasingly being pulled by consumers,rather than being pushed at them, this is also pointed out by Court (2007). This shown throughthe success of sites such as YouTube and Flickr is based on consumers who decide what videosor pictures they wish to look at, rather than on broadcasters who dictate their viewing. Third,today‘s media is micro-chunked, rather than monolithic. At blogs, consumers read posts; atYouTube, consumers watch micro-chunked videos; they can watch as little or as much as theywant rather than have the media experience pre-defined by the publisher. Fourth, the socialinteractions that develop around the content are the key to understanding the importance of thisbite-sized user generated content. It is the facility to rate, rank, comment on, review and respondto the new world of media that is driving the success of these new media properties. This summarised by ‗the emergence of a population that is ever more willing to record, and share, their experiences: mash them up and submit them to their friends and other community members for evaluation, and allow their ‗reputations‘ to be built via these assessments. This is an open, democratic and liberal use of media unlike anything we have seen before. It is a truly new phenomenon that offers market researchers new and exciting
opportunities, and the world of Web 2.0 provides us with the tools to exploit these opportunities. 4.3 What is Web 2.0? and what is it‘s relevance to marketing?The key characteristic of Web 2.0 is that it lets people collaborate and share information online.It has been described as an ‗architecture of participation‘ by O‘Reilly (O‘Reilly n.d.). The termWeb 2.0 became notable after the first OReilly Media Web 2.0 conference in 2004. TimO‘Reilly states that ‗Web 2.0 is ultimately about harnessing network effects and the collective
intelligence of users to build applications that literally get better the more people use them.‘(oreillynet.com 2005).You might recognise elements of this architecture in the form of blogs, wikis, podcasts, P2P filesharing, video sharing, photo sharing, virtual worlds and social networks.Basically, Web 2.0 is about making computing and media social. It is built around ‗socialsoftware‘ that enables people to connect or collaborate through computer-mediatedcommunication and, enabling consumers to easily form, join and participate in onlinecommunities. It is not one single type of software, but rather to the use of multiple modes ofcomputer-mediated communication that can result in community formation. Within onlinecommunities real-life meetings are a valued, and these online and offline meetings complementeach other. This is highlighted out by Cooke and Butler (2008) ―real-life meetings are a valuedpart of the communication repertoire, and this is one of the reasons that they have helped totransform the distribution of music through social network sites such as MySpace. Going to theactual gig can become an integral part of the Web 2.0 experience as it might be recorded, sharedand then relived via various Web 2.0 services.‖ This is also evident with ―Tweetups‖, wherepeople connected through the micro-blogging social network Twitter, will arrange a physicalmeet up of likeminded individuals in order to exchange knowledge and build social capital.
Figure 4 - TweetupThe key to understanding the importance of Web 2.0 is this ease of sharing, cooperating and co-creating, including ‗mash-ups‘. There is a broad spectrum of Web 2.0 software applicationswhich blur into one another. An initial glance at the social media landscape is overwhelming
however, the Conversation Prism by Brian Solis is an excellent reference tool for Social Mediaprofessionals to start listening to the voices that define and steer your markets. It features thenetworks where conversations occur. Figure 5 – Conversation Prism by Brian Solis The Conversation Prism is a living, breathing representation of Social Media and will evolve as services and conversation channels emerge, fuse, and dissipate. As a communications or service professional, youll find yourself at the centre of the Prism - whether youre observing, listening, trafficking, or participating. Get your ear to the ground and start listening and learning. (Brian Solis, Brian Solis.com 2008)
4.4 Viral marketingViral marketing refers a marketing techniques that exploits already existing social networks, byencouraging customers to share product information with their friends to generate an increase inbrand awareness, or to achieve other marketing objectives, this is achieved through voluntarilyself-replicating viral processes, analogous to the spread of pathological and computer viruses.Viral promotions may take the form of video clips, interactive Flash games, eBooks, images, oreven mobile phone text messages. Previously, a few in-depth studies have shown that socialnetworks affect the adoption of individual innovations and products (Rogers, 1995) (Strang andSoule, 1998). Microsoft hotmail is quite a famous example of viral marketing. (Shuen, 2008 page161) The Hotmail user base grew faster than any media company in history—faster than CNN,faster than AOL, even faster than Seinfeld‘s audience. (Leskovec, J., Adamic, L. A., andHuberman, B. A., 2007). By mid-2000, Hotmail had over 66 million users with 270,000 newaccounts established each day (Bronson 1998).Most products cannot be advertised in such a direct way. Through ―The Long Tail‖ as describedby Chris Anderson in the same named book and blog, the choice of products available toconsumers has increased manyfold thanks to online retailers such as Amazon.com who cansupply sell a large number of unique items, each in relatively small quantities than traditionalbrick-and-mortar stores. Effectively advertising these niche products using traditional advertisingapproaches is impractical. (Leskovec, et al 2007)
A Lucid Marketing survey found that 68% of individuals consulted friends and relatives beforepurchasing home electronics, more than the half who used search engines to find productinformation (Burke 2003).In order to have some insight into how to manage and understand participants in social media‗Social Technographics®‘ is a very useful tool. This tool is introduced in the book Groundswell,authored by Charlene Li and Josh Bernoff, both of whom at the time of publishing were vicepresidents and principle analyst for Social computing Social with Forrester. The ‗SocialTechnographics®‘ classifies a population of consumers into six overlapping levels ofparticipation within Social media. The six levels are: 1. Creators 2. Critics 3. Collectors 4. Joiners 5. Spectators 6. Inactives
Figure 6 –Social Technographics ladder source ForresterThe group at the top of the ladder are the Creators, these are consumers who have, within theprevious month, posted to a blog, updated or maintain a web page, uploaded a video‘s or audiothat they themselves may have created. The second group are Critics, they participate and reactby commenting on blogs or posting ratings and reviews, or updating wikis. They are on averageseveral years older than Creators. Since it is easier to react than create there are more critics than
creators, four out of ten are Creators. The third group are Collectors they save URLs on a social-bookmarking services such as deli.cio.us, Ma.gnolia, StumbleUpon , Windows Live Favorites,‗vote for‘ sites like Digg or Mixx , they also use RSS (Really simple syndication) feeds, or createmetadata that they share with a community. The fourth group is Joiners they maintain theirprofiles on social-networking sites, such as Bebo, Facebook, MySpace and are the youngest ofthe Social Technographics groups. The second last group are Spectators, they consume what thefirst 3 groups produce. They are made up of mostly of blog readers and also video viewers andpodcast listeners, essentially constituting the audience for user-generated social content.Spectators are the largest group of all, Spectators represent 48 percent of online adultsAmericans. The final group are Inactives are the remaining online adults and do not participate atall in social computing activities.
Together Social networks, Marketing and Technology (mainly in the form of Web 2.0) haveconverged into 3 circles, the focus is on the centre, where online social network strategy resides. Figure 7 – Online Social Networking Marketing Strategy
Some of the questions raised by the literature review are:Are there companies using marketing within online social networks? Are there any numbers onthe use of online social networks and what profile of people uses them? Of the people usingsocial networks, what do they use them for? Can marketing use online social networks forBranding and relationships? Is there evidence of the fragmentation of social media, and hasmarketing lost power because of this? Do people trust others and/or brands on online socialnetworks? Do bloggers or those who participate in online social network more power andinfluence than marketers. Are Social Marketing efforts measure or monitored your?
Chapter 5 - MethodologyThere are three parts to the methodology, existing cases studies, observations in the form ofperspective of an anthropologist doing ethnographic field research and observation, and from theperspective of a strategist marketing resources and finally semi-structured interviews. All threemethods shall be integrated in such a way to complement each other giving a bigger picture thanis possible it they was to be presented individually.The first part is that existing case studies shall be used, this case studies with be based around theOnline Social Marketing, and the information extracted shale be whether the campaigns weresuccessful or not, lessons learned and if possible some sort of figures around return oninvestment.The second part, is from the view of an anthropologist doing ethnographic field research andobservation. Kozinetz (1998) created netnography which is base on the traditions and techniquesof cultural anthropology, netnography investigates the specific instance in which community isformed through computer-mediated communications (CNC). Kozinets (1998) points out thatnetnography is useful for three types of studies and in three general ways. Firstly, as amethodology to study ―pure cybercultures and virtual communities that do not exist off-line inreal life, but are manifest exclusively through CMC. Secondly, as a methodological tool to study
―derived‖ cybercultures and virtual communities, and thirdly, as an exploratory tool to studygeneral topics. As such it is a written account that results from fieldwork studying on-line,computer-mediated or Internet-based communications. (CMC).As Kozinets points out, the Internet offers increased opportunities for social group participation,where consumers form virtual communities of consumption in order to assert social power, tounite, and to claim symbols and ways of life that are meaningful to them and the communitiesthey build. Hence, netnographic studies seem to be able to offer those ―thick descriptions‖ of thelife worlds of consumers, researchers look for. Moreover, netnography makes particularly sensefor attempts to analyse communities where access based on conventional methods is difficult(e.g., Langer, 2003; Pires et al., 2003).Referring to common ethnographic procedures, Kozinets (2002, p. 63) recommends thefollowing methodological stages and procedures for netnographic studies: 1. Entrée: formulation of research questions and identification of appropriate online fora for study 2. Data collection: direct copy from the computer-mediated communications of online community members and observations of the community and its members, interactions and meanings 3. Analysis and interpretation: classification, coding analysis and contextualization of communicative acts
4. Research ethics: ―(1) The researcher should fully disclose his or her presence, affiliations, and intentions to online community members during any research; (2) the researchers should ensure confidentiality and anonymity of informants; and (3) the researchers should seek and incorporate feedback from members of the online community being researched… (4) The researcher should take a cautious position on the private-versus-public medium issue. This procedure requires the researcher to contact community members and to obtain their permission (inform consent) to use any specific postings that are to be directly quoted in the research‖ (Kozinets, 2002, p. 65; cf. Kozinets & Handelman, 1998). 5. Member checks: presentations of some or all final research report‘s findings to the people who have been studied in order to solicit their comments.Kozinets (1999, p. 254) recommends distinguishing between tourists, minglers, devotees andinsiders when analysing messages from online community members: Tourists as those who lackstrong social ties to the group, and maintain a superficial or passing interest in the consumptionactivity. Minglers maintain strong social ties, but are only perfunctorily interested in the centralconsumption activity. Devotees maintain a strong interest in the consumption activity, but havefew social attachments to the group. Finally, insiders have strong social ties to the group andmaintain a strong interest in the central consumption activity. Kozinets (2002, p. 64) highlightsdevotees and insiders – i.e. the most enthusiastic, actively involved and sophisticated users - asthe most important data sources.
Finally, the semi-structured interviews of business‘s using social networks for marketing as wellas interviews of customers who connect to other customer using social networks. The basicquestions are in Appendix A, they shall be used as a guide, however should relevant aconversation present itself it shall be perused. As part of the interview some of the questionsasked will use the ‗Social Technographics®‘ to understand the interviewee‘s level of maturity inwith social media. Chapter 6 - ResultsWe shall initially go through data and statistics on some of the major online social networks.Blogs shall be also included in this as Blogs themselves are a type of social network.The second part of this chapter will look at Dell, P&G, and Adobe as case studies, on what theyhave done in the marketing space with online social networks. Data from interview andethnography shall be integrated into this section to complement and give more depth to the casestudies.As there is a large range and number of online social networks, some of the statistics are here forjust Twitter, Facebook and MySpace as these are considered among the largest and mostinfluential.
6.1 TwitterTwitter is a free social networking and micro-blogging service that allows its users to send andread other users updates (otherwise known as tweets), which are text-based posts of up to 140characters in length. As of March 2008, the total users as estimated to be over 1 million, with200,000 active users per week the total 3 million Twitter Messages per day (TechCrunch.com2008)More than 110 million active users Facebook is the 4th most-trafficked website in the world(comScore). Facebook is the most-trafficked social media site in the world (comScore)As far as user Demographics are concerned there are over 55,000 regional, work-related,collegiate, and high school networks where more than 50% of Facebook users are outside ofcollege. The fastest growing demographic is those 25 years old and older. It is the No. 1 photosharing application on the Web (comScore) where more than 30 million photos uploaded dailyIn a little over five months, Facebook have released the site in more than 20 languages, includingSpanish, French, German, Russian and Korean. (facebook.com 2008) 6.2 MySpaceMySpace the largest Social Network in North America and maintains a dominant position asmedia site. It was once the biggest in the worldwide but in April 2008 it was surpassed byFacebook (TechCrunch.com 2008).
MySpace has more than 110 million monthly active users around the globe. 85% of MySpaceusers are of voting age (18 or older). 1 in 4 Americans is on MySpace, in the UK it‘s as commonto have a MySpace as it is to own a dog. On average 300,000 new people sign up to MySpaceevery day. Myspace is localized and translated in more than 20 international territories: U.S.,UK, Japan, Australia, France, Germany, Ireland, Italy, Spain, Mexico, Canada, Netherlands,New Zealand, MySpace en Espanol, Latin America, Austria, Sweden, Norway, Denmark andFinland. There are 60,000 new videos being upload to MySpaceTV each day. There are Morethan 8 million artists and bands on MySpace. (web-strategist.com/blog/ 2008;techradar1.wordpress.com 2008) 6.3 BlogsBrands make up a major part of bloggers online conversations. More than four in five bloggerspost product or brand reviews, and blog about brands they love or hate. Companies are alreadyreaching out to bloggers: one-third of bloggers have been approached to be brand advocates.(technorati.com 2008)One in five bloggers dont think that newspapers will survive the next ten years. Two ofinterviewees said they would only buy a newspaper if they had written an article in it. And oneof them DM thinks that in the near future, buying a physical news paper will become a novelty.
It should be noted that both of these were creators on the Social technographics ladder and theirmain source of reading material is on Blogs.Bloggers are early adopters, they spend twice as much time online as U.S. adults 18-49, andspend only one-third as much time watching television. While they are online, bloggers areparticipating in an average of five ―Web 2.0‖ activities such as RSS and Twitter. Bloggers areimportant to watch, as they are generally the first ones to use new web applications, and arehighly influential in speeding adoption. (technorati.com 2008) Table 1 Source (Technorati : State of the Blogosphere 2008)Bloggers are active Web 2.0 participants, while they are online, bloggers are participating in avariety of Web 2.0 activities.
Figure 8 –Blogger participation in Web 2.0 activities – Source TechnoratiBloggers are generally the first to learn about new web technologies and applications, such asRSS and Twitter. Bloggers could be seen as Mavens as defined in Gladwell Tipping point, theyare information specialist and like to share this information. On average, bloggers participate infive of the ten Web 2.0 activities listed, with one-third regularly conducting more than sevenWeb 2.0 activities.On page 112 and 113 of Groundswell (Li and Bernoff 2008), there is a return on investment(ROI) exercise of a large companies executive‘s blog, GM‘s [General Motors] fastlane blog isused to get real number estimations. It is also noted that many of the costs would be lower forsmaller companies. Including setup costs, and ongoing costs, year 1 costs $283,000 and thebenefits add up to $393,000. From these figures the financial benefits are clear.
Here is a non-exhaustive list of large companies that use Online Social networks as part of theirconnection to their customers. You nd Facebook Twitter MySpace 2 Life Blog Flickr Tube Created their ownAdobe Apple Dell GeneralMotors Google Jetblue Kodak Lego SalesForce Southwest
AirlinesStarbucks Toyota Zappos Table 2 – A selection of Companies that user Online Social Networks for Marketing6.4 Dell CaseAs can be noted from this table Dell has a very large presence across a range of online socialnetworks. They also have their set up their own communities to encourage customerengagement and conversations. Among their initiatives, are Ideastorm, Direct2Dell blogs, Studioand Studio Dell Videos. Ideastorm, which leverages the wisdom of crowds, is an onlinesuggestion box for Dell‘s customers, where a customer you can add, read and vote on what youand others have in mind. Popular idea‘s bubble to the top and thus create an automatic prioritylist to act upon. Dell have implemented some of the popular suggestions, one such example of a
suggested implementation is ―Don‘t eliminate XP just yet‖ which received 27,230 votes.(ideastorm.com 2008; salesforce.com 2008)Direct2Dell is Dells blog – it encourages customers to read whats driving thoughts aroundtechnology and Dell. Customers can also comment on the blogs and if they post a comment orquestions they will receive an answer. Studio Dell is a Dell created community with hostsVideos, podcasts from Dell and members of the community about technology. It containsdivided into sections for Home, Small Business and IT professionals.Of the existing online social networks, Dell is present on Facebook, where it has several groups,including ―Social Media for Small Business‖ group, a ―DELL PartnerDirect‖ group and groupsfor ―Dell Employee & Locations‖. They also used Facebook to run their Dell Re-generationGraffiti Facebook CampaignOn Flickr Dell has photos shared within groups such as Dell Photos Group, Digital Nomads Theofficial Flickr group of DigitalNomads.com, The ―ReGeneration‖ group of people whocommitted to sustaining the worlds natural environment and ―Dell Student Union‖ group forstudents and readers of the Dell Student Union blog. Dell is also very present on Twitter, amirco-blogging service that is known for ―conversations‖. Dell have over 50 officialrepresentatives on Twitter. Dell is using Second Life 3D virtual world to allow people to buildtheir own computer, and even to buy the finished product if they wish.
Figure 9 – Dell Second Island LifeAnother Dell created community is the ―Dell regeneration community‖, Dell launched a Re-generation Graffiti Campaign through Facebook. The Goal of the campaign was to help improveDell products to be more eco-friendly, and of course, spur affinity towards the brand from greenleaning consumers, the Re-Generation site has more details. In this contest, Dell encouragedexisting Graffiti artists task is to interpret what green means to them‘ with graffiti. One of thegoals was to foster meaningful dialogue on the environment….dialogue that will lead to actionand results. This was launched with Federated Media (A social media marketing agency), andGraffiti Wall (A popular self-expression Facebook application). This interactive marketingcampaign spurred members of the group to create campaign resulting in affinity towards Dell.
Jeremiah Owyang senior Social Computing analyst of Forrester Research: was briefed by JamesGross, a Director at Federated Media, as well as CEO John Battelle, about the contest as follows: 1) Existing application with thriving community Graffiti is a self-expression application in Facebook. It has popular (rated 4 out of 5 stars) Based on 242 reviews, and has 177,506 daily active users. Rather than creating a new application, this campaign took advantage of an application –and community–that already existed. 2) An art contest: What does Green mean to you? Facebook members who used Graffiti were encouraged to join in a contest to win a 22″ environmentally friendly Dell monitor (appropriate for artists) to create art around the theme of ―What does Green mean to you?‖ The contest lasted for one week 3) Engaged contributors spur theme Over 7000 pieces of artwork were created and submitted to the contest. If you watch the replay of the art being created, you‘ll see hidden messages (like easter eggs) from the artists as they discuss what green means to them. Many of the drawings had the Dell logo or the regeneration logo embedded in it. 4) Self Regulation There were few negative pictures that would detract from the campaign, as the community of existing artists will self-regulate and vote off pictures that were not appropriate. 5) Community Voting and Winners Announced
Voting began on the second week by the members and over one million votes were cast. The winners were from United States, Canada, Sweden and Maldives. You can see the actual winners here, or click image.From a cost perspective it was quite low in comparison to running a similar campaign usingtradition media, most of the Dell dollars would have been spent on the mirco-site, and the rest inthe prizes, 22‖ Dell monitors, which were $399 each for six winners, which is little over twothousand dollars. In turn Dell got over 7300 Graffitis created from Jan. 16th-Jan 23rd around thetheme of ―What Does Green Mean to You‖There were 1,515 fans of the contest, more than 1,000,000 votes were logged from Jan. 26th-Jan.31st for the artwork. In excess of 1,000 ideas have now been submitted over atReGeneration.org.Jeremiah Owyang (web-strategist.com/blog 2008) deemed this a successful campaign with thefollowing points: As they turned the action over to the community, decide on the winners, all under the context of the regeneration campaign. The campaign moved the active community from Facebook closer to the branded Microsite, closer to the corporate website, migrating users in an opt-in manner that lead to hundreds of comments.
―We are present on most online social networks, we go where our customers are.‖ from Martin(Dell) interview. ―2 million conversations per day with our customers‖ from Martin (Dell)interview . ―there have been improvements in positive conversations since we started monitoringand acting.‖ from Martin (Dell) 6.5 P&G beinggirl.com CaseIn July 200 Procter & Gambles launched BeingGirl.com in order to create a new way to talk toconsumers, the consumers in question were those of feminine care products. Bob Arnold,Interactive Marketing Manager - Beinggirl.com Global Leader at Procter and Gamble, and histeam set out on this big challenge to create the right environment to make this a success. The siteis about everything that young girls deal with as part of their everyday life. Using thetechnographics tool, Li and Bernoff (2008, Page 119) gives the breakdown of girls ages twelve
to fifteen are community joiners and three out of ten are Critics. Critics are those who not onlyread but, react to discussion forums. Because of the type of consumer, trust is a huge part andalso a measure of success. The approach that Bob took was to create a site that had categoriesthat would be most interesting to the community: your body, your mind, beauty, sex &relationships, Ask Anna, games, Music, Advise for life (source: beinggirl.com, 2008). This wasthe perfered option over a site that would just sell products. Advice and articles are deliveredwith information trust and some subtle branding. It is a real social space, and the audience isimmersed, and not bombarded by branding.Beinggirl.com attracts more than 2 million visitor per month worldwide, and traffic has increasedby 150 percent up on 2006 (Li and Bernoff, 2008 page 121). An important part of the successwas the creation of a dialogue, created though a social network, this also facilitated sharing ofknowledge. According to P&G, say that beinggirl.com is four times as effective as advertising inreaching its target customer (Li and Bernoff, 2008, page 121). More hard numbers that back upthe initiave are the cost of running the site is put at $3 million a year, the site has to persuadeonly 6,250 girls to use its products in order to break even, a number that it easily exceed. (Li andBernoff, 2008, page 122). 6.6 Adobe Communities CaseThe adobe communities are segregated into four distinct area‘s Developers, Educators, Designersand Partners. The developer‘s area contains knowledge with articles, tutorials, code samples,downloads, and sample applications relevant to developers. Stay on top of trends and newtechniques with blogs, forums, Exchanges, and events (adobe.com/communities 2008). It also
has the option to connect with other developers though blogs (ADC- adobe developerconnection) and message boards/forums, this has the effect of creating a community connection.The educator‘s area contains case studies, explore resources, find pricing, and learn how Adobesoftware can help faculty, teachers, and staff deliver engaging instructional experiences. Thedesigners area facilitates Exploration, learning, and connection with the latest in digital designand motion graphics. It also allows the browsing of work by leading artists, so that designers candiscover new design trends, and hone your skills with tutorials, key workflows, and advancedtechniques. Within the adobe communities because the main reason for connection is to createand share knowledge and not primarily to make friends, there are many weak ties. Martin (2007)points out that these types of ties, and the fact that you are immersed in the adobe brand throughand messages discussion, this may be more powerful than traditional advertising. This sameeffect is evident in the beinggirl.com case also. Marketing is about discovering the needs andwant of a customer and Adobe, to great success also uses blogs to communicate with customersfor the development of new products. 6.7 Twitter and brandsOn Twitter the following companies are using Twitter to support and strengthen their brands are10 downing street , Apple, Amazon, Dell, Comcast, General motors, Jetblue, Kodak, Starbucks,Stephen Fry Toyota and Zappos (twitter.com 2008). The total numbers of Twitter users areestimated to be over 1 million, with 200,000 active users per week and a total 3 million Twitter
Messages per day (techcrunch.com 2008). The main reason for the presence it isn‘t solely theaudience size that draws brands to it, it is that some of the users have considerable influence andare likely to sway their followers. A single Twitter message—known informally as a tweet—sentin frustration over a product or a services performance can be read by hundreds or thousands ofpeople. Similarly, positive interaction with a representative of the manufacturer or serviceprovider can help change an influencers perspective for the better.Through Twitters search functionality (http://search.twitter.com/), it is possible to seek out whatis been said about a company‘s name by users on twitter, you can also create an RSS feed of thesearch to monitor on an ongoing basis. This search can reveal comments, either negative orpositive about a brand, it is very wise for a company to monitor and respond to these commentsin a timely manner.One such example, GM took notice the day a prospective buyer was at a Saturn dealership, ready to make a purchase, but couldnt find anyone to help him. "He was starting to get upset about it," says Adam Denison, who helps coordinate social media communications at GM. "When we saw it, we immediately let our Saturn colleagues know about it…and they could get the ball rolling a little bit better." The person bought a Saturn in the end—though at a different dealership, Denison says. (Businessweek.com 2008).
Below is an extract from RichardatDell on Twitter, note the human element of the conversationsespecially highlighted by the green box. In the orange highlighted boxes we have Dell relatedactivities, including listening to a highlighted issue with a customer and passing it on to therelevant part of the organisation. Finally, in the purple box there is a link about tips to saveenergy and computer use. As can be seen from this page, there is an element of listening,conversation and action with a real person, in these few tweets.
Figure 10 – RichardatDell connecting with customers using Twitter 6.7 InterviewsIn the interviews carried out, when asked do People use online social networks to researchBrands, products, services? Yes, in some cases they will ask? And in others, they will hear buzzaround a new product. One such example as given by Billy: At the Cork Open Coffee Clubmeeting one of participants brought in a Nokia Tablet PC and showed it to everyone as he was
very impressed with it. When the meeting was over one of the other participants of the meetingwent out and bought one also, he then tweeted to his Twitter community the fact that he hadbought it and really thought that it was a great product. From this single tweet, a conversationwas started around the product, this had the knock on effect of 17 of these Nokia Tablet PC‘sbeen bought in the space of two weeks. This shows great trust in from peer within socialnetworks, as some of the follower‘s that purchased the product had not physically met those whowere praising the product.When asked do they trust others on these online social networks, one of the replies was Joe:―Yes, when they establish a relationship. Once trust is established then you will buy based onrecommendations from your online social network.‖ This was the general consensus, Brands arebeen followed and been interacted with on these Social networks, some example of Brands beenfollowed are: Whole Foods, the Dell people, JetBlue, Comcast, Tyson Foods, Molsonsemployees, Apple, Starbucks, and Zappos.Among the top uses for online social networks, are Business leads, socialising, communication,knowledge and information. Twitter, Linkedin, Facebook and blogging are the main socialnetworks used by those interviewed. Twitter is used for conversations, for trends andinformation, Facebook seems to be used more for ‗Friending‘, keeping in touch and generalcommunication.From trust perspective, brands on social networks are trusted but, Johhny: ―Only when thebrands act like humans and interact like humans‖, Social networks give Brands the opportunityto act and interact like humans, try doing that with a newspaper ad. Billy ―No one every trusts acompany, they trust personality‖ this again emphasises the human element, ―this is why blogs
work so well, you would trust Kieran Murphy of Murphy‘s ice cream, you don‘t trust Murphy‘sice cream.‖All those interviewed agreed that traditional media/advertising is not trusted, Billy ―there is ahuge degree of cynicism for tradition advertising.‖ It appears as well that when traditional ormass media is not getting the response they want the just push more, and shout louder.There is a definite fragmentation of tradition media and it is losing control.Johnny: ―Conversation is enabled by social media tool (web 2.0). Media has become fragmentedfor example in Ireland in the 1960‘s there was only one TV station and one radio station, nowthere is a large choice of TV stations and more than 40 radio stations. These now serve nichemarketing, long tail effect.‖Johhny: ―listener becomes the programmer using feeds [RSS] and podcasts‖ from push to pull.―Most of what I read [all online] comes recommended by other people on online social networks,they think how I think‖Those who watched TV, which was a minority of their time usually, used Sky+ used to pull TVprograms and watch them in their own time, similar to subscribing to a podcasting. Thereappears to be a frustration with working to someone else‘s schedule and not their own.Blogging is around business or personal interests, Brian uses blogs to share insights, thispositions him as a thought leader, through this leads are generated both internationally as well asnationally.
When asked have they ever Blogged or commented (negative or positive) about a brand, or on anonline social network? One of the responses was Joe: ―Yes, all the time‖. This had the effect ofmost people agreed with this perspective as they had similar experiences. On several occasions,the business reached out this blogger, either directly or on the blog. This shows the influence thisblogger has that he is listened to, and action was taken by the companies in question.Those interviewed feel more empowered than before online social networks existed.Joe: ―Yes, because we now have a voice that is equal (in opportunity) via this web as a medium.I can blurt my feelings without any gatekeepers.‖ There are also quite a number of companiespresent on social networks that are actually listening and acting. The fact that there arecompanies out there listening and acting based on conversations from customers shows thepower shift towards the consumer.Most of those interviewed all promoted themselves on using online social networks, and of thosewho this was their primary method of promotion. Johnny: ―I have most of my business contactsand sales leads through social networks‖, ―I spend no money on advertising, negligible amounton marketing, my marketing budget is cost to attend an event that I sponsor‖, ―my mainmarketing activity is to be visible and active on social networks‖. The way they promotethemselves is in a helpful transparent way, they share their knowledge and experience in order tobuild up a credible reputation. According to those interviewed they have found these methods,very profitable as the cost is low and the return is high. Through this social medium, they feelcloser to their customer, Joe: ―My customers know exactly what I think long before they choose
to become my customers. ― Joe: ―I believe the web plus the social networks give my customerslots of visibility into what I do.‖Brian: Slow adoption in Ireland, but there are businesses showing interest in using socialmedia/online social networks. This is especially prominent in smaller businesses wheremarketing budgets are smaller and there is less bureaucracy. Big companies (Ireland) appear tobe waiting for other big companies to make the move and they may follow depending on theirresult. There seems to be little understanding and experimentation, engagement and listening arerequired. A big mistake is that some companies see social networks as the end all solution.Some of those interviewed, had developed metrics for their marketing efforts, but it was thesmaller operations that did not use direct measurements, the reason for this appears to be that thereturn was so obvious there was no need to measure. From a monitoring perspective, there was agood use made of free web 2.0 tools, while some of the very large organisations would outsourceto companies such as Factiva, Umbria , Buzzlogic, Nielsen BuzzMetrics , MotiveQuest, Radian6who specialise in measurement and monitoring within Social media.Alan : Salesforce.com are using ‗yahoo pipes‘, which is a free composition tool to aggregate,manipulate, and mash-up content from around the web, to monitor customers and their ownreputation. Awareness is the first step, this is reactive and is based on monitoring customersthrough a tool called the Social media firehose, created by Kingsley Joseph of Salesforce.com.This enables each product manager to monitor by brand name, the product manager in turn cantake action based on the result. Yahoo pipes are also used by Salesforce.com in a highly
innovative way as a proactive prospecting. Approximately 50 to 60 conversations per day occurwhereby customers are discussing ―Which CRM solution to buy?‖ on Twitter, boards, and otherpart of the Social Web, this tool finds these conversations and enables salesforce to pursue thelead. These customers are those with a high intent to buy. The alternative to this free method is topay appoximatley $10 per click on Google adwords. Finally, this tool can be used to seek out acustomer that may be asking a support type question and send the right support person to thecustomer. This is a powerful use to Web 2.0 to connect with customers.Zappos started out as is an online shoe company, and now supplies and handbags, clothing,eyewear, watches, and accessories with gross sales of $840 million. Zappos have over 400employees that are using Twitter, including the CEO. They also use a software tool that theybuilt themselves: http://twitter.zappos.com this tool enables zappos to track their brand name andmanage their reputation.‗Social Technographics®‘ resultsCreators, They tend to be younger and evenly split between men and women. Based on a 2007Forrester survey, creator represent 18 percent of the online adult population and are quite a smallgroup. The second group are Critics, they participate and react by commenting on blogs orposting ratings and reviews, or updating wikis. They are on average several years older thanCreators. Since it is easier to react than create there are more critics than creators, four out of tenare Creators.The third group are Collectors they save URLs on a social-bookmarking services. They are themainly male-dominated among the Social Technographics groups.
The fourth group is Joiners they maintain their profiles on social-networking sites, More thanhalf also read blogs and nearly a third themselves publish blogs. Joiners make up a quarter of theonline population.Spectators, they consume what the first 3 groups produce. They are made up of mostly of blogreaders and also video viewers and podcast listeners, essentially constituting the audience foruser-generated social content. Spectators are the largest group of all, Spectators represent 48percent of online adults Americans, 37 percent of online Europeans and two thirds of onlineadults of Japan. They are slightly more likely to be women and have the lowest householdincome among Social Technographics groups. The final group are Inactives are the remainingonline adults and do not participate at all in social computing activities. Their average age is 50,and they are more likely to be women. (Li and Bernoff , 2008, page 43-45).Overall the interviewees were all on the creator step of the Social Technographics, the mostlikely reason for this is that they all work with social media.
Chapter 6 - Conclusion and DiscussionOnline Social networks are still in an early experimental stage, the majority of the users on socialnetworks are early adopters or generation Y. This experimental stage, as with all experiments, isa necessary step which shall produce patterns, results, and behaviour that will serve as genuinebenchmarks for measuring metrics and Return on investment. There is already evidence of manybig companies involved online social marketing, engaging with their customer and participatingin conversations.Online social marketing and social media marketing should not be seen as a silver bullet formarketing, and must be integrated with traditional marketing. The basic rules of Branding andrelationship marketing still apply, but the approach to marketing within online social networks isdifferent. This is summed up by In order to survive many skills, such as ‗expertise in the business use of social networking, in digital marketing, or in emerging markets, require a degree of specialization that complements the generalist capabilities of traditional marketing managers‘. (David Court, 2007)There are some subtle changes to be made such as one-way communications typically employedby marketers with their customers — such as mass advertising, promotional offers, manuals,price lists, and product literature, must be replaced with two-way communications to involve thecustomer. Monologue needs to become dialogue between Marketing and Consumer. Onlinesocial networks are a great way to connect and communicate with your customer and although
there are many Web 2.0 software tools, focus should be kept firmly on the people and humanelements. To ensure focus on your online networking marketing strategy, there must be a balancebetween Marketing, Technology (Web 2.0) and social networks. Figure 11 – Online Social Networking Marketing StrategyAs online social network marketing mature there may be an emergence towards CRM-styledashboards and hubs to streamline internal and outbound communications. For now, there aremany aggregation and tracking companies such as BuzzLogic, Radian6, BuzzGain, BrandsEye,
Brandwatch who will also monitor conversations across the networks and communities that youknow and dont know to effectively map, engage, and manage participation efforts. A first step isfor a marketer to experiment with free tools such as google alerts, yahoo pipes, and so one.The social technographics ladder from Forrester can be used a guide to social media maturity,Marketing should move from Inactives to Spectator by reading blogs and consuming topodcasts/video that their customers would read. The next step is to become a joiner, join twitter,facebook or other online social networks, immersing yourself will enable you to gaincommunication skills within these social networks. Once this skill has been accomplished thenyou need to start collecting and gathering by tagging and using RSS feeds. Becoming a critic,this is done by commenting on blogs or posting ratings and reviews. Finally, start your own blogand created audio or video files and upload. You should move through each level slowly andsteady, ensuring that you are comfortable at the present level before taking the next step up theladder. Going straight to the top of this ladder may result is dizziness and falling from the topcould hurt.Within online social network marketing, Segmentation by demographics is not as effective aspsychographics, whereby customers are grouped by behaviour, opinions, attitudes, interests andwhat is important to them.From the interview data, there may be an opportunity for small businesses, they are at anadvantage, because they don‘t have the same overheads as bigger companies, such as abureaucratic culture, they are more agile and can take advantage of these new changes. The factthey may have smaller marketing budgets may force them to more creative and creativity is at
the core of the social web, this view is also shared by Dell CMO Mark Jarvis in a podcastinterview (ductapemarketing.com 2007)From the interview and observation there is an evident shift in power to consumer, one of porters5 forces, and in turn this can be seen by the power consumers have over the definition andownership of Brands. Traditional media/advertising is not trusted and there is a huge degree ofcynicism for tradition advertising.Also observed, and from interview data, relationships with others within the social network orbrand community and not directly with brand, but with each other using the brand as a focus. These communities neatly capture the notion that people have relationships with other people and that brands may become a fulcrum around which such relationships are constructed (Patterson and O‘Malley 2006).
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http://www.businessweek.com/technology/content/sep2008/tc2008095_320491.htmhttp://pipes.yahoo.com/pipes/pipe.info?_id=f1ae63990f6d5b9e48ce807a77bb9995http://www.adobe.com/communities/http://qik.com/blog/239/regeneration-road-trip-dell-grist-use-qik-to-live-stream-their-tourhttp://technorati.com/blogging/state-of-the-blogosphere/Appendix A – Interview questionsInterview questions for Thesis & RationalThe interview shall be conducted in a semi-structured fashion, the questioning during theinterview shall centre on the below questions but, should an opportunity arise to examine andinteresting and relevant area it shall be perused.Interview Question 1: Do you use online social networks to research Brands, products, services?Interview Question 2: Do People recognise or recall brands on online social networks?