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Social Media in the UK - MA Dissertation


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The MA Dissertation - The Evaluation of Social Media Effects on Marketing Communications: The UK Consumers' Perspective (by Social Media Citizens)

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Social Media in the UK - MA Dissertation

  2. 2. THE EVALUATION OF SOCIAL MEDIA EFFECTS ONMARKETING COMMUNICATIONS: THE UK CONSUMERS’ PERSPECTIVE GIEDRIUS IVANAUSKASA dissertation submitted in partial fulfillment of the requirement of London Metropolitan University for the degree of Master of Arts (International Business and Marketing) LONDOND METROPOLITAN UNIVERSITY 2009
  3. 3. AcknowledgmentsThis dissertation could not have seen the light of day without the support, help and assistance ofthe people listed below:A special thank you goes to all Web 2.0 citizens who everyday inspires and guides methroughout the labyrinths of social media.I am especially thankful to my family and my friends who supported my dreams and never letme give up and kept me going forward. I dedicate this work to my beloved grandmother, whopassed away during this period.I am very grateful to everyone who has made an input on this project and supported me throughall the ups and downs - sharing their thoughts and knowledge. Without them it would have beenimpossible to make this dissertation happen.
  4. 4. Declaration of AuthorshipI certify that the work presented here is, to the best of my knowledge and belief, original andthe result of my own investigations, except as acknowledged, and has not been submitted,either in part or whole, for a degree at this or any other University.________________________Giedrius Ivanauskas
  5. 5. AbstractPurpose – The evaluation of Social Media as affective marketing communications tool andchannel. To identify the UK consumers‟ profile and its preferences in terms of channels andtools.Design/methodology/approach – The quantitative research was conducted by arrangingconsumer survey among social media users. The deductive logic was used to verify thehypothesis.Findings – The general UK consumer profiles were identified. The hypotheses were proven thatsocial media can be a valuable tool and channel for marketing communications.Research limitations/implications – The research was designed to test only the users of socialmedia properties. Even though, it gathered the needed data to help marketers in their search forsuitable tools when marketing in social media environment.Originality/value – The conducted study added the knowledge to the indicated information gapin academic literature regarding the social media usage for marketing campaigns from theconsumer perspective. It defined the main social media tools and tested the consumer perceptionsabout the possible practices.Keywords – Social media, Web 2.0, Social Media Marketing, Marketing Communications,Consumer behavior.
  6. 6. ContentAcknowledgments........................................................................................................................... 3Declaration of Authorship............................................................................................................... 4Abstract ........................................................................................................................................... 5Content ............................................................................................................................................ 6Figures and Tables .......................................................................................................................... 8Chapter 1: Introduction ................................................................................................................... 9 1.1 Introduction and Motivation............................................................................................. 9 1.2 Aims & Objectives of the research ............................................................................... 10 1.3 Statement of Hypotheses ................................................................................................ 11 1.4 The outline of Thesis (following the introduction) ....................................................... 13Capter 2 : Literature review .......................................................................................................... 14 2.1 Introduction to changing media and communications landscape................................... 14 2.2 Social media and Web 2.0 .............................................................................................. 18 2.2.1 Social media ................................................................................................................. 18 2.2.2 “Web 2.0” .............................................................................................................. 23 2.3 Consumer 2.0 - “Web 2.0 citizens” ................................................................................ 37Chapter 3: Procedures and Methodology...................................................................................... 44 3.1 Description and justification of the methods.................................................................. 44 3.2 Research design .............................................................................................................. 45 3.2.1 Research procedure ................................................................................................. 45 3.2.2 Primary and secondary data .................................................................................... 46 3.2.3 The Questionnaire design ....................................................................................... 47 3.2.4 Target population and Sampling design ................................................................. 48
  7. 7. 3.2.5 Reliability and Validity ........................................................................................... 50 3.2.5 Fieldwork ................................................................................................................ 51Chapter 4: Data analysis and results ............................................................................................. 52 4.1 The consumer profile of Web 2.0 Citizen in the UK ..................................................... 52 4.1.2 Where and How are they using Social Media Properties? ..................................... 54 4.2 The thechonographic profiles of the UK social media users ......................................... 56 2.3 The influence of Social Media on the UK consumers and “Traditional” media............ 63Chapter 5: Findings & Conclusion ............................................................................................... 67 5.1 General findings ............................................................................................................. 67 5.2 Conclusion and Further Implications of the Study ........................................................ 69References and Bibliography ........................................................................................................ 71Appendixes ................................................................................................................................... 80
  8. 8. Figures and TablesTable 2.1. The Concepts of online interactivity.Table 2.2. Bloggers‟ motivations.Table 2.3. Online community needsFigure 2.1. Internet Users Growth in the World between 200 and 2008.Figure 2.2Changing distribution of the message.Figure 2.3. Micro InteractionsFigure 2.4. Clustered overview of Web 2.0 applicationsFigure 2.5. Types of BloggersFigure 2.6. Content posted on social networkFigure 2.7. Extrinsic value.Figure 2.8 Most visited websitesFigure 2.9. The closed loop of needs.Figure 2.10 Uncontroled marketing stimuli – Web 2.0.Figure 2.11 The new drivers of value.Figure 2.12. Participation model of a Web 2.0 serviceFigure 3.1. The activities list of the projectFigure 4.1 The sex of the social media users in the UKFigure 4.2 The age groups of the social media users in the UKFigure 4.3 The social media users by income.Figure 4.4 Most popular Social media properties in the UKFigure 4.5 Where are you using social media properties?Figure 4.6 Time spent on SMP (a week) in the UKFigure 4.7 Time spent on SMP (a week) in the USFigure 4.8 Technographic profile of Web 2.0 Citizens in the UKFigure 4.10 The SMP used by “Creators”.Figure 4.11 The SMP used by “Joiners”.Figure 4.12 The content preferred by “Joiners”.Figure 4.13 The obstacles to interact on SMP (“Joiners”).Figure 4.14 The content preferred by “Spectators”.Figure 4.15 The reasons for engagements “Spectators” vs “Joiners”.Figure 4.16 The reasons for engagements “Spectators” vs “Joiners”.Figure 4.17 The reasons for engagements “Collectors” vs “Critics”.Figure 4.18 The reasons for engagements “Collectors” vs “Critics”.Figure 4.19 The SMP used by “Collectors”.
  9. 9. Chapter 1: Introduction 1.1 Introduction and MotivationTechnological development has been seen as one of the main factors effecting company‟sprocesses and profitability in the last century. The birth of the Internet and its success inchanging our society has been largely researched in various subjects and defined in variousterms. But as year‟s passes by the Internet evolves and creates new rules for companiesinteracting and doing business with their costumers and partners. The new applications andservices are being developed and offered in order to catch up with changing information societydefine new concepts of doing business. In the last few years the terms of Web 2.0 and SocialMedia has emerged as the definitions for second generation of web based services andcommunities that emphasize online collaboration, networking and user created content(Eikelman et al, 2008). According to Strategy Analytics report (2007), Social media users willexceed 1 billion by 2012. The enormous growth of Social networks (MySpace, Facebook, BeBo)Blogs, Wikis and consumers‟ participation in these platforms forces companies to reevaluatetheir business strategies. The recent investments by leading companies like Microsoft (240millions in Facebook) and Google (900 millions in MySpace) in social networks gives a clearsignal that company‟s presence in dialogue with consumer gains a new meaning in terms ofcommunication strategy. Nevertheless, there is a clear shortage of academic literature whichdefines the Social media environment and Web 2.0 applications. Moreover, it is not clear whatapplications and how they should be used by the company in order to make thesecommunications more valuable. Finally this subject is not enough researched in differentenvironments. The most of the rare academic literature and professional insights are dedicated toUS market and there are no findings presented how consumers perceive company‟s initiatives toinfluence their private space on the net in the UK. Therefore, this research project willsummarize Social Media and Web 2.0 definitions; will evaluate the influence of different typesof Web 2.0 applications on the consumer in terms of communication interactivity; and willanalyze the general patterns of the consumer‟s perception about the differences between SocialMedia and Traditional Media in the UK market.
  10. 10. The interest in the topic was influenced by 3 years‟ personal engagement with social mediaplatforms. The participation in various virtual communities, conferences and seminars led to thehuge motivation to test the existing knowledge and increase it. 1.2 Aims & Objectives of the researchAccording to Constantinides and Fountain (2008) in order to enable Social Media Properties(SMP) to integrate into corporate commercial strategy, these areas must be researched in greaterdepth: the effects of Web 2.0 applications on consumer behavior, differences between exitingWeb 2.0 applications effectiveness and their relationship with traditional mediums. As this studyconcentrates particularly on the marketing communication strategies the two main aims areidentified below, followed by the objectives of the research:Aim 1 - To determine the Social Media environment and indentify the UK consumer profile:  To define the main changes brought by social media in marketing communications environment  To identify “Who” are the users of SMP in the UK?  To identify “What” SMP are they using?  To identify “Where” and “How” are they using SMP?Aim 2 - To evaluate the SMP effectiveness as marketing communication tool and channel:  To verify if the interactions through SMP could result in positive outcomes for the company.  To verify if different SMP have to be used for different communication purposes.  To verify if SMP could be a valuable channel in changing consumer‟s attitudes towards the company  To verify if communications through SMP triggers the positive word of mouth.  To verify the level of involvement needed by the company in order maintain positive relationship with consumer  To verify if different type of consumers use different type of mediums
  11. 11. 1.3 Statement of HypothesesIn order to achieve the “Aim 2” several hypotheses must be tested:Hypothesis 1 - The interactions through Web 2.0 applications generate different outcomes forthe company. H0 : There is significant relationship between Social Media Properties used and the actions taken after the interaction. H1 : There is no significant relationship between Social Media Properties used and the actions taken after the interactionHypothesis 2 - Different Web 2.0 applications can serve different marketing communicationgoals. H0 : There is a significant relationship between the Social Media Properties used and communications wanted by the consumer. H1 : There is no significant relationship between the Social Media Properties used and communications wanted by the consumer.Hypothesis 3 - There is a significant relationship between the influence on the consumer‘sattitudes and the SMP used to engage with consumer. H0 : There is a significant relationship between the Social Media Properties and attitudes changed by the company and by the consumer. H1 : There is no significant relationship between the Social Media Properties and attitudes changed by the company and by the consumer.
  12. 12. Hypothesis 4 - The initiatives to communicate through SMP triggers the positive word of mouth. H0 : There is a significant relationship between the initiators of interaction with the creation of positive word of mouth about the company. H1 : There is no significant relationship between the initiators of interaction with the creation of positive word of mouth about the company.Hypothesis 5 – The consumer wants the company to start the conversation if he/she likes Socialmedia platforms as a marketing medium H0 : There is a significant relationship between the initiators of interaction and media channel preferred by the consumer. H1 : There is no significant relationship between the initiators of interaction and media channel chosen by the consumer.Hypothesis 6 - There is a significant relationship between technographics (―Creator‖, ―Joiner‖and etc.) of the consumer and the channel which he/she consumes. H0 : There is a significant relationship between the technographics of the consumer and the preferred media channel chosen. H1 : There is a significant relationship between the technographics of the consumer and the preferred media channel chosen.
  13. 13. 1.4 The outline of Thesis (following the introduction)Chapter 2 presents the literature review. It is divided into three main themes: 1) Changing medialandscape; 2) Social Media and Web 2.0 tools 3) Web 2.0 citizens. Each of the themessummarises the findings in the literature review and defines the background for the quantitativeresearch.Chapter 3 outlines the research methodology, applied techniques and procedures undertaken. Italso explains how the research was planned and implemented. The thorough description ofresearch design is also presented in this chapter.Chapter 4 outlines the main data gathered in the research and summarizes result. Accordingly tothe research aims, the whole chapter is divided into three main sub-chapters that analyze dataaccording to every aim.Chapter 5 indicates the findings that were linked to the insights gained in Chapter 2, and finalconclusions. It ties together what has been learned according to the set study aim and the mainresearch question. The limitations and implications of the study are also presented in this chapter.
  14. 14. Capter 2 : Literature review 2.1 Introduction to changing media and communications landscapeThe last century was a gold age for the media development. The new technologies as Telephone,Radio and Television have changed people‟s lives forever. The new ways of communicationshave been successfully adopted and become a norm. The last decade of the century brought thenew innovative technology – Internet. As predicted by Newman (1991) Internet: Altered the meaning of geographic distance. Allowed the huge increase in the volume of communication. Provided the possibility of increasing the speed of communication. Provided opportunities for interactive communication. Allowed forms of communication that was previously separate to overlap and interconnect.Grieco and Holmes (1999) (citied in Combe et al, 2003) identifies three powerful features ofInternet: 1. Disintermediation or the removal of brokers by allowing direct communication across spatial and sociometric distance; 2. Asynchronicyty of the removal of temporality as a barrier to communications; 3. Oculacy or the ability to communicate messages through images.According to Hermeking (2006) The global spread of modern technology, including informationand communication technology (ICT), is commonly regarded both as an indicator of thepostmodern era of globalization and as the very precondition for that era of intensive worldwideinteractions of people and exchanges of goods, services, information, and capital. Hoffman(Hoffman et al., 1995) argues that the popularity of the WWW as a commercial medium (incontrast to other networks on the Internet) is due to its ability to facilitate global sharing ofinformation and resources, and its potential to provide an efficient channel for advertising,marketing, and even direct distribution of certain goods and information services.
  15. 15. In the recent years Internet witnessed amazing growth, according to Internet ConsumptionReport (Soumukil, 2008) the 21% (1,407,724,920) of the world population (6,676,120,288) areinternet consumers. Most of them live in well developed regions as North America whereinternet penetration is as high as (73.1%), Australia (57.0%) and Europe (47.7%). Peters (1998)suggest that no other technological innovation has captured the imagination of users with thespeed and impact of the Internet (Graph 1).Figure 2.1. Internet Users Growth in the World between 200 and 2008.Source: Internet World Stats 2008 - to Linda Peters (1998), the “Web” presents a fundamentally different environment –both as a medium and as a market – from traditional communication channels perspective. It
  16. 16. creates the Marketspace – a virtual realm where products and services exist as digital informationand can be delivered through information-based channels (Rayport and Svikola, 1994). Thecompanies and consumers quickly adopted the new concept of the new interactive world for theirown benefits. These interactive channels allowed companies to reach new markets or have agrater influence in the existing one‟s (i.e. example media companies transferred their newspapers in order reach new audiences) and the consumers had an opportunity to save time andmoney by communicating, looking for information or buying product and services online. Theconcept of interactivity has been extensively researched in advertising and marketing literatureand was summarized by Johnson (Johnson et al, 2006) (Appendix 1.1).According to Liu & Shrum (2002) emergence of new media (Internet), brought new models ofinteractivity: user-to-user and user–to-message. Contemplating about user-to-user interactivity Haand James (1998) suggested that “the more communication in a computer-mediated environmentresembles interpersonal communication, the more interactive the communication is‖. Steuer (1992)defined users-to-message interaction as follows: ―the extent to which users can participate inmodifying the form and content of a mediated environment in real time‖. Lee (2005) summarizedthe main components of online interactivity (Table 1).Table 1.1. The Concepts of online interactivity.Source: Lee (2005)
  17. 17. Commercial online services and the introduction of the Web have created the potential for amass interactive dialogue between exchange parties (Peters, 1998). The world have witnessedthe evolution of a universal interconnected network of audio, video, and electronic textcommunications that blurred the distinction between interpersonal and mass communication andbetween public and private communication (Neuman, 2003). The new market space changed thebehavior of the people and the communication models. The shift is then from a “one (firm)-to-many (consumers)” model of communication to the “many-to-many” model where contributionto the medium and the message may come from both directions (Hoffman and Novak, 1996).Chaffey (Dave Chaffey et al., 2007) argues that such kind of communications allows masscustomization and personalization and the messages send trough Internet can be targeted moreeffectively. Moreover, the Web is changing the traditional marketing communicationsconcepts as the consumers can go all the way from awareness to interest to desire to action(AIDA Framework), all within the same medium and within the same session (Economist,2008a). Peters (1998) suggests four main changes in communication model compare the new andold media: 1. Communication style - tend to have little or no time lag between the giving, receiving and responding aspects of communication between the parties. 2. Social presence - or perceived personalness, the feeling that communication exchanges are sociable, warm, personal, sensitive and active. 3. Control of contact - Early research into the willingness of consumers to utilize technology in shopping behavior concludes that the ability to control the pace and presentation of product information has the strongest influence on willingness to engage in computer-mediated marketing activity (Carson et al., 1996). 4. Content – The content can be customised either by users or by senders. Where users are able to control the content, or presentation, of the message it is said to be interactive.Andrew L. Shapiro (1999) argues that the emergence of new, digital technologies signals ia apotentially radical shift of who is in control of information, experience and resources. One of thekey features of the new electronic communication media is the ability of consumers to controlboth contact and content (Peters, 1998). Sohn and Lackenby (2002) suggest that individual‟sparticipation in social communication processes is the crucial factor for increasing the perceivedinteractivity of the Internet (citied in Stafford and Ronald, 2005). Moreover, according to
  18. 18. Normann and Ramirez (1994) the consumers become co-producers, because the value isconstantly created in interaction with many different players, including consumers, suppliers,employees and managers. As a result, marketers are losing control over the communicationmessages their trying to deliver to their consumers.According to Gatarski and Lundkvist (1998) when communication, in the meaning of sharinginformation, meets interactivity, it creates not simple massages but forms two-wayconversations. These conversations can be applied in production as implementation of mutualideas (consumer‟s and producers‟) in order to create new enjoyable products or services. 2.2 Social media and Web 2.0 2.2.1 Social mediaThe real power of people can be noticed in the new revolutionized media channel – social media.According to Mayfield (2008) social media is best understood as a group of new kinds of onlinemedia, which share most or all of the following characteristics: Participation & Engagement: social media encourages contributions and feedback from everyone who is interested. It blurs the line between media and audience. Openness: most social media services are open to feedback and participation. They encourage voting, comments and the sharing of information. There are rarely any barriers to accessing and making use of content – password-protected content is frowned on. Conversation: whereas traditional media is about „broadcast‟ (content transmitted or distributed to an audience) social media is better seen as a two-way conversation. Community: social media allows communities to form quickly and communicate effectively. Communities share common interests, such as a love of photography, a political issue or a favourite TV show. Connectedness: Most kinds of social media thrive on their connectedness, making use of links to other sites, resources and people.
  19. 19. Drury (2008) suggests that when analyzing social media marketers too often concentrates on the“media” factor, when “social” element is the key, because marketing within social media is aboutbuilding a relationship and conversation with the audience, where the simple message delivery ischanged by ongoing exchange of perceptions and ideas between company and the consumer.Haven (2008) suggests that social media key elements are not entirely new as features of sharing,connecting, opining, broadcasting and creating has been long in our lives, but there are severalcharacteristics of new technologies and behaviors that set them apart from the past: Reach — Historically, audiences for the common person have been limited: a tribe, family, friends, neighbors, or the local community. Todays technologies provide scale and enable anyone to reach a global audience. Accessibility — The means of production for most media used to lie in the hands of enterprises with unlimited resources (financial or human). Todays technologies for media creation are available to anyone at little or no cost. Usability — The means of production typically required specialized skills and training, both technically and creatively. Todays technologies simplify those processes, or in some cases reinvent them, so anyone can create and operate the means of production. Transparency — People, especially Americans, historically kept personal information to themselves and had a general distrust of authority (enterprises, government, etc.). Today, people are willing to share anything about themselves (interests, location, family situations, health condition, etc.) in a public venue, and todays technologies make that both possible and purposeful. Recency — When people did have the means of production and distribution in the past (albeit limited), the time lag between communications was typically long (days, weeks, or even months). It was a limitation of the technology or system in which it operated. Todays technologies enable instantaneous responses and dialog where only the participant determines the delay in response.
  20. 20. The interactivity gains a new meaning when it is applied through Web 2.0 platforms andSocial media channels as dialogue between consumer and company becomes much more activeand interactive. As summarized in the media landscape analysis the past decade was all abouttwo-way communication‟s and interaction‟s models. Most of the marketing academics (Kotler,2003; Pettit and Brassington, 2005) recognized the importance of creating two-way marketingchannels between consumer and company for brand building, CRM, sales (and etc). Socialmedia, itself, does not change this idea, but redefines interactivity and takes it to another level.Armano (2008a) argues that social media goes beyond the interactive marketing which isfacilitated by computer-human interaction, and introduces human-to-human interaction enabledby technology (Appendix 2.1). The main difference is that the companies instead of pushing thecontent (i.e. automated e-mail‟s) through online channels empower people to engage and interactwith other people and produce new content about the company (blogging, commenting, socialnetworking and etc.). Free production of content and voluntary distribution is the key elementsof the social media. Meadows-Klue (2008) suggests that in social media marketing engagementreplaces interruption; diversity and self-expression replace conformism and unity; the media ofthe masses replace mass media; granular insights and rich data replaces generalization andconversations in marketing replace control.Another major change from the marketing perspective is the shift from persuasion to influence.Past decades marketing practitioners were using the communication mix in order to “attack”consumers with pervasive messages to make them buy goods and services offered, but in the agewhere 25 percent of search results on Google for the world‟s 20 largest brands links toconsumer-generated content (Nielsen Buzz Metrics, 2007), to do this is too late, not practical orimpossible, as the messages are already floating out there. According to Mitchell (2008) thisprocess is facilitated by the change of information flows from “top down” (B2C) to “bottom up”(C2B) what redefines marketing environment as marketers do not own the message anymore(Figure 2.2, Apendix 2.2). Armano (2008) suggests that people can be divided in differentgrouping according their “strength” as the massagers (Apedix 2.3)
  21. 21. Figure 2.2 Changing distribution of the message.Source: Bowman and Willis (2003).The User Generated Content (UGC) can become influential message of the consumer to theconsumer (C2C) about the company and therefore should be carefully monitored. In fact, thecontent is the new message in social media channels. According to Eikelmann (Eikelmann et al,2008) the best marketers can do in this environment is to try to engage with the consumersthrough social media in order influence these messages. Drury (2008) suggests that instead ofsending simple messages, marketers should provide the content which would be relevant forconsumers and would generate conversations among them. Therefore, influence will become astandard measurement in Marketing 2.0 (Dowdell, 2008). As blogger and social media strategistDouma (2008) put it: “The age of persuasion is over. Welcome to the age of influence.”Marketers are forced to look for alternative communication strategies to market in the socialmedia environment, because advertising clutter, growing advertising literacy and changingconsumer behaviour drives down the return on investment (Biegel, 2008; Constantinides andFountain, 2008). These strategies have to consider the increasing fragmentation in the markets
  22. 22. what may shift the rules of targeting into behavioral marketing favor. (Meadows-Klue, 2008).David Armano suggests that micro interactions and “Permission marketing / Unconventionalmarketing” (Godin, 1999) should be the right strategy to approach the consumer in the newmedia world (Figure 2.3).Figure 2.3. Micro InteractionsSource: David Armano (2008b)Micro strategies are more valuable in fragmented media environment, as they generate moreprecise consumer insight and as a result are better targeted. According to Godin (2008)unconventional marketing principals are effective because it considers the needs and wants of thepeople and listens to them. Therefore it aims to build a more in-depth and lasting customerrelationship based on loyalty and trust (Masterson, 2007).Viral and Word of Mouth marketing principals are the essentials in social media. This mediumprovides a platform for Web 2.0 applications and tools, which works as enablers in order toincrease reach and speed of the messages. According to Lockhorn (2007) word of mouthcampaigns can take off very quietly through niche communities and can be powerfullypersuasive, or conversely result in an astonishing backlash. It should be closely monitored bymarketers as various researches (RazorFish, 2008; Internet Consumption Report, 2008) shows
  23. 23. that people make purchasing decisions according what they here form other people about theproducts or services. 2.2.2 “Web 2.0”Social media and Web 2.0 are two terms which are often used interchangeably in the marketingliterature, even though they are not entirely the same. From the marketing perspective, the Web2.0 should be perceived as the new tools for the marketing communication mix and facilitatorand enabler of social media. The Web 2.0 term was introduced by Tim O‟Reilly in 2004, it hasoriginated from talks about social software and the communities surrounding these applications.According Tim O‟Reilly (Tim O‟Reilly, 2007) “the companies that survived the dotcom boomhad something in common;” these companies realized that the “Web” is much more useful fordelivering service than being used just as a platform for “packaged” products (i.e. software).Constantinides and Fountain (2008) defined Web 2.0 as follows:―Web 2.0 is a collection of open-source, interactive and user-controlled online applications expanding theexperiences, knowledge and market power of the users as participants in business and social processes. Web 2.0applications support the creation of informal users ‘ networks facilitating the flow of ideas and knowledge byallowing the efficient generation, dissemination, sharing and editing / refining of informational content .”Hoegg (Hoegg et al, 2005) suggests that Web 2.0 is “the philosophy of mutually maximizingcollective intelligence and added value for each participant by formalized and dynamicinformation sharing and creation‖.Both definitions share similar concepts of maximizing the collective intelligence, self-regulatingcommunity, network effect, transparency of the information creation and sharing process, but thekey element in these terms is the user. From technological perspective, there are not manychanges in the Web 2.0 compared to Web 1.0 applications; the real value is created by peoplenot only using this social software but participating in the creation process of it (by creatingand editing the new content or even in some cases modifying the application itself). According to
  24. 24. Constantinides and Fountain (2008), the key innovative elements typifying this new family ofweb applications can be summarized as three main principles: 1. Focus on simple, service-based open-source solutions in the form of online applications. 2. Continuous and incremental application development requiring the participation and interaction of users in new ways: not only ‗consuming‘ but also contributing, reviewing and editing content. 3. New service-based business models and new opportunities for reaching small individual customers with low-volume products.As Web 2.0 applications are still in the development stage, the grouping of them variesaccording to the purpose and field of the research. Hoegg (Hoegg et al, 2005) groups web 2.0applications according the services they provide (Figure 2.4).Figure 2.4. Clustered overview of Web 2.0 applicationsSource: Hoegg (Hoegg et al, 2005)Constantinides and Fountain (2008) classifies them into 5 broad types according their nature: 1. “Blogs: Short for Web logs: online journals, the most known and fastest-growing category of Web 2.0 applications. Blogs are often combined with Podcasts, that is, digital audio or video that can be streamed or downloaded to portable devices. Examples:,, http://www.
  25. 25. 2. Social networks: applications allowing users to build personal websites accessible to other users for exchange of personal content and communication. Examples:,,, 3. (Content) Communities: Websites organising and sharing particular types of content. Examples are applications of Video sharing:,,, Photos sharing:, Social Bookmarking:, and Publicly Edited Encyclopedias (Wikis): www., 4. Forums/bulleting boards: sites for exchanging ideas and information usually around special interests Examples:,, 5. Content aggregators: applications allowing users to fully customise the web content they wish to access. These sites make use of a technique known as Real Simple Syndication or Rich Site Summary (RSS). Examples, http://www.,”Tim O‟Reilly (2005) argues that “Web 2.0 doesnt have a hard boundary, but rather, agravitational core which could be visualized as a set of principles and practices that tie togethera veritable solar system of sites that demonstrate some or all of those principles, at a varyingdistance from that core” (Appendix 2.4). Therefore it is difficult to classify the Web 2.0 into theprecise groupings, because the applications are interrelated and most of the time a few Web 2.0features works on one platform. The mixture of Web 2.0 applications working under one site areknown as “Mash-ups”. According to Mayfield (2008) ―this combination of two or more pieces ofcontent (or software, or websites) is one of the phenomena in social media that make it at onceso exciting, fast-moving and sometimes bewildering‖. But even more important feature of Web2.0 applications is the adaptability in the different platforms. Social applications are becomingmore and more popular on mobile devices (Phones, iPods (via podcasts)). In fact, according toBBC News (2008) one of the reasons the Internet usage on the mobile devices is increasing -Web 2.0 applications. According to Drury (2008) social media applications has an ability tobring “Head” (Professional) and “Tail” (UGC) content together in all the formats (audio, video ,text). As more and more professionally edited websites incorporates social media content somecompanies (i.e. Joost) are trying to apply Web 2.0 principals (live participation) for even biggermedia platforms as TV. These applications are being tested in the Internet TV and in the nearfuture have a good chance to redefine TV experience completely. All theses changes open newopportunities for integrated marketing campaigns, where marketers are enabled to reach largeraudiences of consumers at all their touch points with mediated world at one-stop shop.
  26. 26. Hoegg (Hoegg et al, 2005) suggests that various kinds of web 2.0 services offer differentparticipation possibilities for users. Therefore, it is important to analyze each Web 2.0application type in depth.Blogs and bloggingWeb Logs (commonly knows as Blogs), according to Tredinnick (2006), are arguably the“oldest” Web 2.0 applications and have been in the web space since mid 1990‟s. Constantinidesand Fountain (2008) states that it is the most know and fastest-growing category of Web 2.0applications. According to McCann report (2008), 184 million people World Wide have started ablog and 346 million read blogs, which means that 77% of active Internet users read blogs.Furthermore, 17.8 m have read a blog and around 4.3 m have created their own blog in the UK(McCann, 2008). The most recent Technorati research (2008) confirms this phenomenon as theytracked blogs in 81 languages from 66 countries around the world, it suggest that blogging havemade a major influence on media ecosystem as bloggers are collectively creating almost onemillion posts every day and have representation in all top-10 web site lists across all keycategories.In general a “Blog” is a Web site, usually maintained by an individual with regular entries ofcommentary, descriptions of events, or other material such as graphics or video where entries arecommonly displayed in reverse-chronological order and has permalinks (Daily Blog Tips, 2008),but Pomerantz and Stutzman (2006) argues that for every blog author and consumer, the preciseunderstanding of a blog‟s use is different, therefore it is difficult to define its true meaning.Dearstyne (2005) summarized the definitions and blogging opportunities provided by majorcompanies: ―Microsoft defines blogs as frequently updated personal web journals that can dramatically help both small and large companies communicate their product messages. They increase peoples ability to share ideas and information exponentiallv, and on a worldwide scale. Accenture says blogs are an interactive website that allows the owner to publish ideas and information. Users can read and evaluate material and add new content, creating a conversation that spans lime zones and continents.
  27. 27. Technorati. a blog search engine and measurement firm, calls blogs a personal journal on the web and says the power of weblogs is that they allow millions of people to easily publish their ideas and millions more to comment on them. The firm further describes blogs as a fluid, dynamic medium, more akin to a "conversation" than to a library. Harvard Law School weighs in with a definition of blogs as a hierarchy of text, images, media objects, and data, arranged chronologically, that can be viewed in an HTML browser. The center of the hierarchy is a sequence of weblog posts each with a title, link, and description. The schools Internet policy slates that a weblog gives one a publication where ideas can stand without interference.‖According to Antony Mayfield (2008), the mostimportant features of the blogs are Linking,Trackbacks, Comments and Subscription (RSS)which allow companies to engage with theirstakeholders and facilitates conversations betweenthem. Theses are the main qualities of the blogsthat differentiate them from personal websites.There are hundreds of different type of blogs, butbloggers, in general, are divided in three broadsegments – personal, professional and corporate Figure 2.5. Types of Bloggers(Techonrati, 2008). Source: Technorati (2008)According to Technorati report (2008), as Blogosphere grows in size and influence the linesbetween what is a blog and what is a mainstream media site become less clear as larger blogs aretaking the characteristics of mainstream sites and mainstream sites are incorporating styles andformats from the Blogosphere (95% of the top 100 US newspapers have reporter blogs), but it isclear that amazing growth of blogs and blogging open new opportunities for marketers. Huang(Huang al., 2007) suggests that one of the biggest opportunities provided for marketers by blogs,that there is no longer a scarcity of media, but an even more fractural media space. Hardlyreachable segments of the market become easy to reach and target with the help of social mediaand blogging. They open doors to untapped markets which could be quite profitable for thecompanies if approached correctly. The responsiveness of the medium (blogs) is another keybenefit for the marketers. Blogging provides great opportunities for the companies to converse
  28. 28. and influence their stakeholders (internally and externally). According to Awareness report(2008), 53 % of surveyed companies in US are planning to use this tool in order to improve theirinternal communication, knowledge sharing and collaboration within the organization.Companies can use blogs to promote increased communications between peers and to allow aforum to emerge in which „„employees can talk back to their bosses‟‟, because individuals trustmore in blogs written by the executives and employees as opposed to an official corporate blogor website (Vara, 2006). According to Wyld (2008) blogs can enable their executives to beviewed as „„real‟‟ people and leaders. Although, companies have to be careful and introduceguidelines or code of practice to manage conversations derived from blogs as “silly talks”between/by employees can damage the corporate brand. Joshua L. Cox (Cox, et al., 2008) offersto follow 9 rules for internal corporate blogging: 1. Have a consistent and authentic first-person voice. 2. Allow comments but monitor them. 3. Be honest and transparent. 4. Add value. 5. Identify information sources. 6. Welcome feedback and issue corrections. 7. Respect your audience. 8. Protect confidential and/or proprietary information. 9. Use appropriate disclaimers and publish a ‗‗terms of use‘‘ policy.Even more exiting opportunities for marketing professionals derive from externalcommunications via blogs, as blogs can help the organization to develop and maintain strongerrelationships and brand loyalty with its customers, generate consumer insights. Li and Bernoff(2008) go even further; they suggest that blogging can increase ROI on the Advertising, PR,Customer Support and Research value. According to Maltoni (2008) blogs provide a realopportunity for marketers to speak with their customers and not to “shout” at them as it is oftenthe case in mainstream media. It is clearly important to join on-line conversation with thecustomers, as these conversations are developed with or without company interference anyway,as four in five bloggers post brand or product reviews, with 37% posting them frequently(Technorati Blogosphere report, 2008). The companies have to learn the lesson of Dell and
  29. 29. approach their brand advocates in the best possible manner. Cox (Cox et al., 2008) suggest threebasic rules for companies dealing with bloggers outside the company: 1. Be aware. Corporate managers should find and monitor influential blogs related to their companies and industries. 2. Engage. Establish relationships with independent bloggers when possible. 3. Respond quickly and appropriately.The internet guru Seth Godin (2004) remarked that good blogs work when they are based on:candor, urgency, timeliness, pithiness, controversy and utility. Armano (2008) groups thesefeatures to 4 C‟s of blogging (Appendix 2.5). Furthermore, Huang (Huang al., 2007) identifiedthe main techniques how to manage brand communications according to various bloggingmotivations.Table 2.2. Bloggers‟ motivations.Source: Huang (Huang al., 2007)At the moment amongst the marketers there is ongoing discussion about importance of anotherform of blogging – micro blogging. Twitter, Plurk and other companies provide the technology
  30. 30. based on short massages, limited to 140 symbols or less. The key difference and importance ofthis medium for marketers is – speed. The biggest names of the blogosphere (Godin, 2008;Armano, 2008,) suggested that micro-blogging is a new phenomenon and should be carefullymonitored in order to be used as a successful marketing tool. The article by Mossberg (2008) inWall Street Journal suggests that Twitter can be a great resource for fast information.Surprisingly, The US President Elect Barack Obama has tried these means of communication forhis election campaign where he is “followed” by 141 823 people. The Razorfish report (2008)suggested that with time-shifting, information overload permanent connectivity and theproliferation of communication channels, consumers are moving towards shorter micro-interactions provided by Twitter and similar applications. Therefore immediacy, simplicity,voyeurism and constant communication should be considered in the marketing eraSocial networksThe amazing recent growth of social networking sites is one of the main phenomenon‟s drivingsocial web. According to McCann report (2008) there are estimated 272 m users world-wide,from whom over 10 millions are using social networks in the UK. As there is no single definitionfor this phenomenon Stroud (2007) summarized the available definitions from variousorganizations researching this field:McKinsey - Social networking refers to systems that allow members of a specific site to learn about other members‘skills, talents, knowledge or preferences.Pew/Internet - A social networking site is an online location where a user can create a profile and build a personalnetwork that connects him or her to other users.Wikipedia - A social network service focuses on the building and verification of online social networks forcommunities of people who share interests and activities, or who are interested in exploring the interests andactivities of others. It provides various ways for users to interact - chat, messaging, email, video, file sharing,blogging and discussion groups.
  31. 31. According to McCann (2008) social networks have evolved into platforms which organize users‟internet experience where users are posting variety of content (text, photos and video) and it isaiming to become the one stop shop for all internet needs (Figure 2.6).Figure 2.6. Content posted on social networkSource: McCann (2008)It becomes quite feasible as some of the platforms opens up to the third parties developers inorder to keep the users on the one site.The social networks like,,, hasgenerated an interest amongst marketers as they provide an opportunity to reach millions ofactive users, who passionately share their personal information and are willing to converse on thenet. Moreover, the features of social networks present an opportunity to create brandcommunities and interact with them online. Marketers are discovering that community can get acompany‟s message across faster and more authentically than traditional media ever could(Razorfish, 2008). According to Awareness report (2008) 46 % of the surveyed companies havealready used social networking as a successful tool to build and promote brands, improvecollaboration and communication, and increase consumer engagement. Stroud (2007)
  32. 32. summarized the main ways in which companies can exploit social networking in order to achievetheir goals: Work with and use the functionality of the large generic sites (Facebook, MySpace and etc.) Create company or brand-specific sites. Provide content to generic sites. Imbed social networking functionality with the company‘ s existing online presence. Advertise on the generic sites.Even though, Stroud (2007) suggests that the final alternative is to do nothing which may be themost appropriate strategy, but should only be used following a careful evaluation of thealternatives.There are general tools offered by social networks to make every encounter more interactive.According to Razorfish report (2008) the best and most successful sites from Flickr to Facebookto Nike all provide the similar tools within the sites to support their members‟ abilities to connectwith one another and engage with each other directly by providing a continuum of ways tointeract: Low-level: rating, poking, tagging, commenting, subscribing Mid-level: writing statuses, twittering, playing games, adding widgets, uploading photos High-level: making videos, writing blog posts and reviews Expert-level: moderating groups and message boards, creating applications, running feeder businesses on the social network‘s ―economy‖Even though, social networking is mostly considered among B2C companies, it could be avaluable tool to create strong bonds with other stakeholders as business partners and employees.But those skeptical about social networking‘s value to business argue that ―networking‖ caneasily turn into ―not-working‖ and damage the relationships between the parts (MessageLabs,2007). Moreover, the companies have to be careful since social networks can also be a source ofdamaging publicity (Economist, 2008b), but it is another reason for the organization to have thepresence in social networks as it gives a chance to influence such activities.
  33. 33. Content CommunitiesWebsites organizing and sharing particular types of content are called content communities.These communities most of the time has all social networking features, but are developed toshare a particular type of content (Constantinides and Fountain, 2008): Video sharing: ; Photos sharing:; Social Bookmarking (Tags):; Publicly Edited Encyclopedias (Wikis): to McCann (2008) these sites are one of the most visited sites on the Internetattracting millions of user all around the world (estimated 394m world wide). From 15m activeusers within the UK, 8.7m shared the photo and 5,7m uploaded the video. The contentcommunities as other Web 2.0 applications and services are highly depending on the size ofthe supporting community and is a classic example of network effect. According toPew/Internet report (2008) one of the factors that plays a big role in the growth of video siteusage is that there are more videos on sites like YouTube now than there were a year ago.According to Hoegg (Hoegg et al, 2005) the intrinsic value of Web 2.0 communities itself is verylimited, but the content or the value generated through the supporting community can beinternalized and represents the value of the community itself as the quality of the contentimproves and the service gains more relevance when more users participate, what attracts evenmore users (Figure 2.7).
  34. 34. Figure 2.7. Extrinsic value.Source: Hoegg (Hoegg et al, 2005)Even though, the content communities attract large volumes of users, marketers have beenstruggling to find the needed tools to monetize these networks. Viral marketing concepts hasbeen successfully adopted on this type of Web 2.0 applications, but the examples of success like“Lonelygirl15” or Barack Obama (Yes We Can video) are rare exceptions rather than a generalpractice. According to Razorfish (2008) advertising can be a road to riches for some contentcommunities, but in general it is not a very powerful tool and community builders are going tohave to find other ways to get a return out of their social investment.Content aggregators and WidgetsAccording to Constantinides and Fountain (2008) content aggregators are the applicationsallowing users to fully customize the web content they wish to access and are based on RealSimple Syndication or Rich Site Summary (RSS) technologies (,, McCann report (2008) suggests that RSS(Really Simple Syndication) is a key technology in social media as it connects users to contentand moves content into a variety of platforms. Consumers prefer using multiple destinations, andthen aggregating media and services, via simple tools like RSS, into a highly personalized viewof their digital world (Razorfish, 2008). The applications or websites based on these technologieshad a major effect on social web development. It may seem like a trivial piece of functionality
  35. 35. now, but it was effectively the device that turned weblogs from an ease-of-publishingphenomenon into a conversational mess of overlapping communities (O‟Reilly, 2007).Widgets and applications had a huge influence on social web growth too. According to Razorfishreport (2008) widgets provide the purest glimpse into the new, improved networked future wherepeople will select, personalize, share and consume Web services wherever and whenever theychoose. McCann (2008) suggests that widgets and applications should be used to create agenuine consumer benefit and drive engagement.With 4,7m users in the UK (McCann, 2008) content aggregators and widgets still lack theneeded awareness about their functionality and possible opportunities provided by them. Eventhough, marketers have to monitor carefully the user‟s activity in these applications in order togenerate knowledge of how to use them in the best possible manor for marketing purposes.Forums, bulleting boards and reviewsThe sites for exchanging ideas and information usually around special interests are anothergrowing phenomenon on the internet (Constantinides and Fountain, 2008). Comparison, review,ranking and other opinion spreading sites are infused by Web 2.0 technologies and areexperiencing the re-birth.The editorial reviews of Web 1.0 era are changed by user generated reviews in Web 2.0.According to Razorfish, 2008 the large majority of consumers (61%) rely on user reviews forproduct information and research, with a much smaller group (15%) preferring editorial reviews.The sites like , would have never reached such highs if notthe successful development of consumer review/feedback strategies and technologies. The Web2.0 brought a greater transparency to these sites generating a bigger interest for contentcontributors (recognition need) and the trust amongst the consumers.
  36. 36. This type of social media sites have a huge influenceon consumer‟s purchasing behavior as most of themare developed for exactly this purpose – to helpmaking the right purchasing decision. According toInternet consumption report (Soumokil, 2008) suchtype of content is really welcomed by customers as64 % of internet users desires “user ratings/reviews”and 59 % is looking for “product or pricecomparison tools” on the net (Figure 2.8 ). From themarketers perspective such sites provide a directopportunity to influence the consumer‟s purchasingchoice. Carefully developed social strategy couldaffect the talks about their brands and services.Finding and influencing the opinion leaders on suchnetworks could be a key objective in communicationstrategy. Figure 2.8 Most visited websites Source: Soumokil (2008).
  37. 37. 2.3 Consumer 2.0 - “Web 2.0 citizens”―As powerful as it is technology is just enabler and it‘s the technology in the hands of almostalways connected people that make it so powerful‖(Blume, 1996; citied in Li and Bernoff, 2008)A decade ago Raaij (1998) identified that social and technological developments will create newoptions and possibilities for consumers and will bring some real changes for marketingmanagers. For the past 18 years the active discussions have taken place in marketing literatureanalyzing the relationship of postmodern marketing, semantic web, interactivity, tribes andchanging consumer behavior (Raaij, 1998; Flart et al, 1995; Cova 1997; Constantinedes, 2004;Simmons, 2008), but only today the discussed thoughts embrace their real meaning. The massacceptance of the Web as social medium is the biggest recent change in internet behavior whichallows the postmodern marketing concepts to flourish (Razorfish, 2008). These changes inpostmodern marketing era are mostly driven by the new consumers. Digital natives, Millennials,Generation Y it just a few names often met in marketing literature, describing the new generationof tech-savvy, success driven, self-confident, independent but community-minded people(Deloitte, 2005). According to Tapscott (2008,) that it is the first global generation ever which issmarter, quicker and more tolerant of diversity than their predecessors. Millennials neverexperienced life without computers and are just a click away from the world any minute. Thereverse accumulation of knowledge is typical for them - the younger they are, the more theyknow (Deloitte, 2005). Tapscott (2008) identifies eight norms that define Net Geners: They value freedom and choice in everything they do. They love to customise and personalise. They scrutinise everything. They demand integrity and openness, including when deciding what to buy and where to work. They want entertainment and play in their work and education, as well as their social life. They love to collaborate. They expect everything to happen fast. They expect constant innovation.
  38. 38. Moreover, Deloitte (2005) suggest that Generation Y is impatient, needs the flexibility and spaceto explore, wants to produce something worthwhile and seeks to make a difference in order to berewarded with a respect. This generation fits well the description of postmodern consumer whichlacks the commitment to grand projects and seeks different experiences, and is willing to seeoneself as a (marketable) object in the different situations s/he encounters in order to make eacha supremely exciting and enjoyable experience (Flrat et al., 1995)Even though, they are not the only ones affecting the marketing environment. So called “digitalimmigrants” (Palfrey and Gasser, 2008) or fast adapters of the technology arguably might haveeven bigger influence on the on going changes in marketing as they are aware about the changingsituation and they have a power, knowledge and resources to influence this phenomenon. Asboth of these consumer groups are very important for marketers they could be grouped under oneterm of - Web 2.0 Citizens.Web 2.0 Citizens worries marketers as their consumption patterns and the perception of the valueare evolving and the old marketing models are not working on them. Wipperman (Trendbureo,2008) argues that the Maslow‘s pyramid of needs is changed with the closed loop (a feedbackloop) where in the process that is never completed self-actualization remains the individual‘sbasic motivation and is increasingly coming to the means of self-optimization (Figure 2.9).
  39. 39. Figure 2.9. The closed loop of needs. Source: Trendbureo (2008)The changing needs affects buying behavior what makes it difficult for marketers to target theconsumer, especially when the new consumer takes the initiative for transactions, at the placeand time they want, what has considerable consequences for the distribution of goods andservices (Raaij, 1998). Easily satisfied psychological and safety needs moves the postmodernconsumer onto the search for social and self-actualizing experiences. The consumption becomesa way for individuals to creatively appropriate and construct self-images that allow them tobecome more desirable or likeable in various social contexts (Dawes and Brown, 2000;Goulding, 2003). Constantinides and Fountain (2008) argues that in social web era consumerpreferences and decisions are based on new inputs provided by parties beyond the control ofonline marketers: peer reviews, referrals, blogs, tagging, social networks, online forums andother forms of user-generated content uncontrollable by the marketers. These content creatingpeople are keen in building online communities, in order to satisfy their social, self-esteem andself-actualization needs. According to Kim (2000) (cited in Bowman and Willis, 2003) thehierarchy of needs differ between offline and online communities (Figure 2.10)
  40. 40. Table 2.3: Online community needsSource: Bowman and Willis (2003)In the post-modernity period which encourages a move away from individualism towards asearch for more social bonds, these communities tend to reorganize themselves into neo-tribes,networks of people gathering homogeneously together for social interaction, often aroundconsumption and brands (Simmons, 2008). From the marketers perspective it is very importantto consider tribal relationships as it may be a powerful tool in building loyalty and trust amongthe consumers. Even though neo-tribes and brand communities are two different concepts theyshare very similar features and often are very related to each other. According to Cova and Cova(2002) the main differences are that the brand communities are explicitly commercial whereastribes are not, furthermore, brand communities are concerned about relationship between brandand consumer, whereas tribes – relationship between consumers. Muniz and O‟Guinn (2001)(citied in Ouwersloot and Odekerken-Schroeder, 2008) describes a brand community as aspecialized, non-geographically bound community that is based on a structured set of socialrelations among admirers of a brand. Mairinger (2008) suggests that: The brand community is not just formed around a brand; it creates the brand. The brand community is not just formed around a product; it is part of the product.
  41. 41. Therefore, the creation and development of brand communities is one of the most importanttasks of the marketer as it can guarantee the company success in the long term. According toMairinger (2008) brand communities can add real experiences and emotion to the brand, reachthe long tail, address both individualism and collectivity needs and replace the celebrityendorsers with community brand advocates. Considering that 49 % of people made a purchasebased on friends recommendations on social media property (Razorfish, 2008), social media canbe viewed as an important channel and tool to interact, manage and enable these brandcommunities.Communication processChanging consumers requires different communication approach from marketers. According toTapscott (2008) Web 2.0 citizens do not accept the one-way communication approach becausethey have been immersed in two-way communication from childhood or their growingfrustration with traditional communication approaches has reached the maximum limit.This media literacy evolved into digital media literacy and let the audience to manage and selecttheir own exposure to marketing messages (Meadows-Klue, 2008). Therefore, a power shift canbe observed from the sender (advertiser) to the receiver (consumer) where communicationobtains a service-oriented (experience creating) rather than a persuasive role (Raaij, 1998). Flrat(Flrat et al., 1995) argues that in emerging postmodernity the consumer may be finding thepotential to become a participant in the customization of his/her world by immersing her/himselfas an object into the world of objects, instead of trying to maintain a position that is privileged toand detached from the objects. Therefore, marketing has to include the consumer not as a targetfor products but as producer of experience. Creating and sharing positive experiencesbecomes more important than just sending simple messages to the consumer. Constantinidesand Fountain (2008) argues that changing communications has to consider the new factorsinfluencing the decision making process of the consumer (online uncontrollable marketingfactors) (Figure 2.10).
  42. 42. Figure 2.10 Uncontroled marketing stimuli – Web 2.0. Source: Constantinides and Fountain (2008)Changing customer‟s perception of value affects the communication process as it is difficult tocreate suitable value proposition and target the consumer. Lawer and Knox (2006) identifies the Figure 2.11. The new drivers of value. Source: Lawer and Knox (2006)
  43. 43. new drivers of value (Figure 2.11) which has to be considered when planning communicationstrategy. Moreover, as the lines between consumers and producers disappear the value is gainedtrough completely different experiences where consumer becomes a producer – prosumer.Creativity and co-creation engages consumer, especially when it happens in neo-tribes or brandcommunities where the consumer can share the experience with others. As a result, the serviceor product itself can be modified in order to enable the consumer to take a part in co-creationprocess and guarantee a positive word of mouth for the company. Lawer (2006) proposes eightstyles of company-consumer value co-creation (Appendix 7). From the social media perspective,the people could be divided in 6 social technographic profiles according to their participationlevel (Li and Bernoff, 2008):"Creators" - Publish a blog/website; upload created videos/music; write articles or stories and post them;"Critics" - Post ratings/reviews; comment on blogs and forums; contribute to articles or wikis;"Collectors" - Use RSS feeds, add tags to web pages or photos;"Joiners" - Maintain a profile/ an account on social media site (Social network, Content community);"Spectators" - Read blogs or customer reviews, watch video or listen to audio (podcasts);―Inactives‖ – None of these activities.It is important to understand how social technologies are being adopted by the company‟scostumers as according to consumer‟s profile the social strategy could be adopted (Li andBernoff, 2008). Especially, marketers should be concerned about “Creators” as they are mostlikely to be the trend setters / brand evangelists (opinion leaders). Hoegg (Hoegg et al., 2006)summarized the participation model of a Web 2.0 (Figure 12).Figure 2.12. Participation model of a Web 2.0 serviceSource Hoegg (Hoegg et al., 2006)
  44. 44. Chapter 3: Procedures and Methodology 3.1 Description and justification of the methodsThere are two general types of the research approaches: scientific and ethnographic. Accordingto Maylor and Blackmon (2005) the scientific (or objective) approach is more concerned withunderstanding the general patterns of people‟s, organisations‟ and social systems‟ behaviour asan opposite to ethnographic (subjective) approach which is analyzing practises more thantheories in greater depth and more at individual level. Moreover, the scientific studies are basedon deductive logic and focused on testing theories and then arriving to the new knowledge ratherthan creating the knowledge in the process of the research (inductive).This research can be considered as a theory-led scientific study, since the main objective of thisresearch is to verify a set of theories that describe “what” is changing in the marketingcommunications environment and analyze consumer‟s behavior according to these hypotheses.It could be viewed as knowledge verifying study and an extension of similar researches done inthe USA market. Even though it is considered to be scientific research there are someappearances of ethnographic inductive logic. Maylor and Blackmon (2005) suggests that sometimes when there is scarcity of data it may be an acceptable to use two research approaches inone study. Sometimes it may not be possible to develop any hypothesis at all, if it is beinginvestigated for the first time as there are no previous data is available (Bhojanna, 2007).Therefore in this study, because the research subject is relatively new, the literature review wasdedicated not to generate hypothesis, but to build-up the theory itself and to prove that inchanging media landscape there are new marketing communication tools and channels requiringgreater consideration and that chosen hypothesis are valid. Furthermore, the findings in theliterature review were adopted in data analysis.The main reason why the scientific paradigm for this study has been chosen is its cooperationwith quantitative methods of the research. The quantitative research strategies are used to count
  45. 45. and measure the data in order to answer the questions “what”, “where”, “how”, “how many: and“how much” as an opposition to qualitative research questions “why” and “how”. There is adebate going on whether qualitative or quantitative research is better, but according to Maylorand Blackmon (2005) both qualitative and quantitative research have their advantages anddisadvantages and are used for different purposes.The success of the quantitative study is based on the validity of the data and statisticalsignificance of the results that could be generalized. Therefore, appropriate data had to becollected and processed. According to Maylor and Blackmon (2005) a suitable way to verify theresearch hypotheses and capture opinions, behaviors, attitudes and facts is doing a survey. In aresult, according to sample size and time frame the self-administrated online questionnairemethod was chosen for conducting the survey. In the short time frame it is considered to be oneof the best tool‟s to gather large amounts of valid data. 3.2 Research design 3.2.1 Research procedureIn order to guarantee successful implementation of the research project the Gantt‟s Chart wasdrawn to identify the main tasks and the time frame (days) assigned for them (Graph 1).
  46. 46. Figure 3.1. The activities list of the projectStudying and Personal ExperienceDesk study (Secondary data analysis)Prime literaturereview In-depth literature review Writing Designing the Questionnaire Pilot Survey Survey Analyzing the data and presenting the findingsJune July August September October November December JanuaryFigure 3.1. Research procedure in Grants chart. 3.2.2 Primary and secondary dataMalhotra and Birks (2003), states that an appropriate data collection method contributes to thesuccessfulness of research project. There are two types of data: primary data collected in theprocess of the study by the researcher; and secondary data – which have been already collectedand analyzed by others (Ghauri et al, 1991). Both sources of data should be used to achieveefficiency and effective research objective. The secondary data provides an ability to save timeand money, therefore it has to be analyzes first before the collection of the new material. The
  47. 47. primary data have to be collected as well, as the secondary data may not always provide theneeded answer to all research quesions (Ghauri, 1991).In order to answer the research questions the primary and secondary data were used in this study.First of all, to discuss the reasoning behind the hypothesis literature review was performed whichanalyzed secondary data. The data was collected from various academics‟ and practitioners‟sources. Because of the scarcity of data in the academic literature some of the most valuableinformation was gained through the community of marketing bloggers and research reports byindividual companies. The academic articles and research papers, books, published case studies,academic and industrial magazines or solitary articles where used to generate a broader view onthe subject.In order to answer the main research question and to test the hypothesis proposed in theintroduction the primary data was collected through the web survey (self-administratedquestionnaire were used). It enabled researcher to apply statistical analysis methods for thestudy. 3.2.3 The Questionnaire designAccording Easterby-Smith (1991) within the short time frame and limited resources a self-administrated questionnaire is the most appropriate method to collect data for research. Maylorand Blackmon (2005) suggest that in order to gather appropriate data with a questionnaire, thedesign and planning are the vital parts. In order to produce a reliable questionnaire and minimizebiases in the research, the designer has to consider three areas main issues: the wording of thequestions, the appropriate categorization of variables and the general appearance of thequestionnaire (Sekaran, 2003; Appnedix 3.1). Therefore the wording of the questionnaire wasconstructed considering the similar consumer surveys in the US market (Cone, 2008, Technorati,2008, Razorfish, 2008, Forecaster, 2008). The simple commonly used expressions and termswere used in order not to confuse respondents. The general appearance of the questionnaire wasselected from pre-designed themes for thesis type surveys suggested by the web portal providingthe surveying services (
  48. 48. In this research, the Questionnaire consisted of 4 sections. The questions in the first section (Q 1-3) were designed to gather general socio-demographic data about the respondents. The secondsection (4-8) of the questionnaire was determined to define the general consumers profile in theUK. The third section of the of the questionnaire (Q 9-16) was designed to test the Consumer -Web 2.0 applications - Company relationship. The fourth section of the questionnaire was aimedat comparison of social media and traditional media (Q 17-19). In order to gather necessary datadifferent types of questions were chosen. The closed-ended question was mostly used in thisresearch in order to gather defined answers. Even though, in some questions the combination ofclosed-ended and open-ended question were used in order to leave a possibility for respondentsto identify additional concerns. Moreover, Likert scale questions were used to test somecommonly known statements about the social media and gather the data about consumersattitudes and behaviors. 3.2.4 Target population and Sampling designAccording to Maylor and Blackmon (2005) the choice of the sample and correct samplingmethods are one of the key factors in gathering valid and measurable data for the research.Malholtra (2003) suggests the five steps for sampling design: define the target population, determine the sampling frame, select the sampling frame, determine the sample size execute the sampling process.The target population was chosen considering the objectives of this research. As a result, onlythe people who have ever used Social Media properties were considered as possible respondents.Moreover, due to limited data about the total number of social media users in the UK, and shorttime frame and the budget, only the Londoners were considered for the research. The biggestsocial networking website which represents almost all Web 2.0 features in one
  49. 49. site was chosen to do the research. It created the sample frame as Facebook does not represent allsocial media users in the UK, even though, according to the Hitwise (2008) is thesecond most visited website in the UK and as there are no better alternatives it can be taken as ayardstick of social media users for this research. According to, there are around 8millions UK users registered to the, from which 3 240 961 are identified asLondoners (almost a half of all population of London!). This sample frame was used to definethe sample size needed to collect appropriate and valid data for the research. According toMaylor and Blackmon (2005) if there is an accurate sampling frame and the probability samplingmethods are employed there is a better chance to reduce the sampling error. Therefore,probability simple random sampling method was applied in this study. Since each research isdistinctive, sample size can be subject to each study unique population, data collection tool andobjectives (Malhotra and Birks, 2003). In order to represent the target population (Web 2.0Citizens) sample size of 100 respondents was chosen. 3.2.4 The Pilot StudyIn order to conduct reliable and valid research the Pilot study has to be performed before theactual research. According to Malhotra and Birks (2003) the completion of the pilot study willlead to the identification of problems that are likely to arise with the questionnaire. Moreover,Veal (1997) suggests that the purpose of pilot survey is to check the following problems: 1. Questionnaire wording 2. Questionnaire sequencing 3. Questionnaire layout 4. Familiarity with respondents 5. Test fieldwork 6. Train and test fieldworks 7. Estimate response rate 8. Estimate interview e.g. Time 9. Test analysis procedure
  50. 50. Therefore, the Pilot study was preformed a month before the starting date of the real survey. AsChisnall (1997) suggests, the arbitrary size of a pilot survey is often taken at about 10 percent ofthe main survey. As the chosen sample size was 100 people, to the pilot study was sent to 10random respondents on the London Network on and left for one week in order toget needed response. Four respondents have completed the survey in two weeks time, and justthree of them filled it correctly, it suggested the possible response rate of 40 % (a bit lower thanexpected). Nevertheless, two of the respondents have replied the message sent with the surveylink and commented on the survey. According to theses comments questionnaire was reduced to19 questions (from 25) and the wording was adjusted to some of the questions as some of theterms used was unfamiliar for the respondents. 3.2.5 Reliability and ValidityAs the questionnaire is a highly structured data collection tools, limiting the powers of theresearcher, the design of questionnaire should include three characteristics (Bhojanna, 2007): 1. Validity: validity is the most critical criterion and indicates the degree to which an instrument measures what it is supposed to measure. Validity can also be thought of as utility. 2. Reliability: reliability means, measuring instrument should provide consistent results, even if it is measured repeatedly. 3. Practicality: measuring instrument must be economical and easy to use by the researcher. That means, researcher must be able to measure what he intends to measure.ANOVA analysis was used as the main tools to test hypothesis. According to Maylor andBlackmon (2005) this type of analysis guarantees the reliability and practicality. 5 % ofreliability coefficient was used to test the data for single and two factor analyses. The P and Fvalues were used as the main determinants of the significance of the data.
  51. 51. 3.2.5 FieldworkAs mentioned earlier, the survey was conducted on social networking site Aftercompletion of the pilot study it was decided to run the survey for 3 weeks period, due toconsidered possibility that some of the respondents might not be checking their accounts ormessages very often. According to the suggested response rate (40%) by the pilot survey, 400messages with the survey link were sent to random members of London Network with the intentto receive 101 filled surveys. The random selection was facilitated by Facebook as there is afeature allowing to see and contact randomly sorted members of your network(Settings>Account settings > Netwroks>London). 101 responses have been received, from which48 males and 53 females.
  52. 52. Chapter 4: Data analysis and results 4.1 The consumer profile of Web 2.0 Citizen in the UKIn order to achieve the “Aim 1” and create a general consumer profile of SMP in the UK, theanswers to the questionnaire were analyzed. The first question was designed in order to find outthe dominating sex on the UK social media properties. As it seen in the Figure 4.1 the sexdistribution among users is very similar, but female users outweigh the males in the UK. Figure 4.1 The sex of the social media users in the UKAs shown in the Figure 4.2 the respondents from 25 - 34 age group where most keen inparticipating in the survey followed by 15 -24 year olds. It is possible to make an assumption thattheses two groups are the main users of SMP, even though it can not be stated for certain as the Figure 4.2 The age groups of the social media users in the UK
  53. 53. results might be affected by the survey distribution method.According to the survey results the majority people using social media properties are on themiddle income or less, as most of them falls into the £10 000 – 25 000 group or under (Figure4.3). Even though 20 % percents of respondents, have claimed about receiving £25 000 – 45 000a year, what means that there are a few different segments in the market. Figure 4.3 The social media users by income. 4.1.1 What Social Media Properties are they using?The most popular type of social media property amongst UK users is “Content communities”(30%). Not so far behind goes “Social Networking” (26%) and “Blogs” (22%). According to thesurvey results “Micro Blogs” still have not found its users, with just 6 % of all respondents usingit. Surprisingly, “Opinion networks” are not very popular among UK users (5%) as on anotherFigure 4.4 Most popular Social media properties in the UK
  54. 54. hand “Content aggregators” are finding their way to success (11%).The research results complement the McCann (2008) findings. Even though, McCann report(2008) stated that blogs and blogging are the main sites used by almost all Internet users withinthe UK, according to this research it might not be necessarily true. But as the subject of theresearch and determinations differ, the outcomes of the research might be different as well. 4.1.2 Where and How are they using Social Media Properties?It possible to make an assumption that social media has spread into the main daily routines as97% of all respondents are using it “At home” and 44 % using it “At work”. 15% of allrespondents are using these applications or sites “On the go”, what means that social media gainspopularity on different platforms. Another interesting fact is that according to survey results 38%of people using SMP “On the go” use social networks on these platforms (mobile phones, iPods),what partly confirms previous statement made in the literature review (Web 2.0 applications hasan influence on the development of other platforms). Figure 4.5 Where are you using social media properties?The research results suggests that people using SMP in the UK are spending slightly more timecompare to US users, as 33 % are spending 1–3 hours a week and 32 % are spending 4-6 hours aweek (compare to 34.87 % and 20.76 % in the US). Even more surprising is that almost 10% of
  55. 55. respondents are spending more than 20 hours and only 5% are spending less than an hour a week on social media properties. Figure 4.7 Time spent on SMP (a week) in the USFigure 4.6 Time spent on SMP (a week) in the UK Source: Razorfish (2008) Most of Web 2.0 citizens consider themselves as “Joiners” (42%), from what the assumption can be made that social media is still quite new trend for most of the people in the UK market. Nevertheless, surprisingly almost 17% from all respondents state that they have crated the content on SMP what means that there are quite a few very active users in the UK. Figure 4.8 Technographic profile of Web 2.0 Citizens in the UK
  56. 56. Comparing to the similar research (Li and Bernoff, 2008) in the US (Appendix 4.1) even thoughthe research approach was different the similarities can be found in the usage patterns, as“Joiners” and “Spectators” are leaders in the technographic ladder in both countries.According to the research results in general consumers prefers UGC (27%) rather than companyprovided content (15%), but most of them see no difference (31%) between them or wants amixture of both (27%) (Appendix 4.2). Friends‟ recommendations (42%) have the biggestinfluence on the decision to interact with the company (Appendix 4.3). Furthermore, 76% of allrespondents indentify the relevance of the content and frequency (46%) as the main reasons tostay engaged with the company (Appendix 4.4). Moreover, the 73% of the respondents‟ statesthat personal satisfaction (52%) and personal development are the important reasons to stayengaged in the conversation (Appendix 4.5). According to survey, the interactions in socialmedia with the company generate new interactions and recommendations (Appendix 4.6). Theresults suggest, that the shortage of time and privacy concerns is the biggest obstacles to interactwith the company (Appendix 4.7). Nevertheless, all these features still differ among variousconsumer groups. 4.2 The thechonographic profiles of the UK social media usersCreatorsAs was mentioned in the literature review the “Creators” group should be in the biggest interestof marketers as they are most likely to spread the word of mouth (wom). According to theresearch results 72% of “Creators” prefers to interact with user generated, but 22% prefers amixed content (Compny and UGC). Also, marketers have to take in to the account that 50% ofthe “Creators” are likely to make a first step towards interaction with the company, as another40% will wait for the company‟s initiative. Moreover, 58% percent from all “Creators” wouldrecommend the company to their peers, what partly confirms the earlier statement about thewom.
  57. 57. Figure 4.9 Mostly likely actions after the interaction with the company on SMP by “Creators”.The “Creators” are most likely to use blogs (33%) as they way of interaction with social media.17% of creators are using micro blogs and content aggregators. Surprisingly, just 11% of thisgroup has stated that they use social networks as their main SMP and none of the respondentshave mentioned opinion networks.Figure 4.10 The SMP used by “Creators”.
  58. 58. JoinersThe biggest group of the Web 2.0 Citizens on the net is “Joiners”. It should be in a particularinterest of marketing professionals as they could be a target for the mass messages on the socialweb. Not surprisingly 37% of “Joiners” are spending their time on content community sites and35% are social networks as their main SMP.Figure 4.11 The SMP used by “Joiners”.Figure 4.12 The content preferred by “Joiners”.
  59. 59. “Joiners” are mostly interested in mixed content (34%) and 33% state that there is no differencewho provides the content. As a result, the assumption can be made that “Joiners” are vulnerableto company‟s communications on the SMP as this group is busy consuming without particularinterest about the kin of the content. Moreover, 34% prefer company‟s initiative to make a firststep in conversation and just 22 % are willing to look for the interactions themselves, while theinfluence from peers are the most important power pushing to interaction (44%). On the otherhand privacy (21%), poor content (17%) and time (26%) are the main obstacles stopping the“Joiners” from interacting on SMP. Marketers should be concerned how to overcome theseproblems, especially by improving the quality of the content.Figure 4.13 The obstacles to interact on SMP (“Joiners”).SpectatorsSimilarly to “Joiners”, the “Spectators” are most likely to be found on content communities(29%) and social networking (33%) sites. 17% of “Spectators” enjoys interacting withblogosphere and quite surprisingly 17% are active users of opinion networks, from what theassumption can be drawn that “Spectators” are keen into the research process. (i.e. researchingthe product reviews).
  60. 60. Figure 4.14 The content preferred by “Spectators”.As can be seen from the Figure 4.14 there is even smaller difference in terms of contentdistributor for the “Spectators” (42% states – No difference). Nevertheless, the UGC and amixture of the distributors are quite favorable by them. Moreover, recommendations have amajor impact on them, as 67% state that they would try to interact with the company if theirfriends would recommend doing so (21% Myself, 12% Company). In order to keep the“Spectators” engaged the company has to consider the factors mentioned in the Figure 4.15, ascan be seen the “Spectators” are more likely to consider all factors equally rather than “Joiners”.Figure 4.15 The reasons for engagements “Spectators” vs “Joiners”.
  61. 61. CriticsEven though the “Critics” amount for a small percentage of all Web 2.0 Citizens, they are quiteimportant for marketers because “Critics” are most interested in mixed (40%) and companycontent (30%). Moreover, 60 % of this group states that they are willing to see the companyinitiating the interactions with them.Figure 4.16 The reasons for engagements “Spectators” vs “Joiners”.Interestingly, the favorite SMP amongst “Critics” are blogs (40%) and content aggregators(30%), followed by micro blogs (20%). Critics are heavy users (40% states, that using SMP 20hours or more) and assumptions can be made that “Critics” are likely to interact more than othergroups from technographic ladder, except “Creators”.Figure 4.17 The reasons for engagements “Collectors” vs “Critics”.
  62. 62. In order to catch the attention and stay engaged with the “Critics” company has to consider thefactors show in the Figure above (4.17), wich are quite similar for another technographich groupof “Collectors”.CollectorsSimilarly to “Critics”, the “Collectors” likes to interact with company provided content (29%) orsee no difference (71%) with which type of content to interact with (no other responses!). Asfound in the literature review, that the content is the new message, therefore, in order tosuccessfully interact/communicate with “Collectors” marketers has to consider the reasons whyare they using SMP (Figure 4.18) and provide suitable content accordingly.Figure 4.18 The reasons for engagements “Collectors” vs “Critics”.The “Collectors” are using content communities (29%) and content aggregators (29%) as theirbridge to social media world. Therefore, marketers considering opportunity to approach the“Collectors” should actively participate on these platforms.
  63. 63. Figure 4.19 The SMP used by “Collectors”. 2.3 The influence of Social Media on the UK consumers and“Traditional” mediaIn order to answer the “Aim 2” of the research and to evaluate the influence of Web 2.0applications 6 hypothesis were tested. The “Hypothesis 1” was intended to demonstrate that theinteractions through Web 2.0 applications generate positive outcomes for the company. Theusage of Social Media Porperties (Q5) was compared with the consumer actions after theinteraction with the company (Q15). H0 : There is significant relationship between Social Media Properties used and the actions taken after the interaction. H1 : There is no significant relationship between Social Media Properties used and the actions taken after the interactionThe single factor ANOVA analysis results showed (Appendix 4.8) that there is a significantrelationship between the answers (even though quite small as p value is close to 0,05). As aresult the second (H1) hypothesis was deducted and the assumption was made that there is arelationship between different SMP used and the positive outcomes after interaction, but it isquite small. Even though, as F>F crit (7.807202 > 2.71089), there is a very strong relationship