19866535 role of social media in contemporary marketing

Role of Social Media in Contemporary Marketing

By Isman Tanuri

Email: [email protected] + Blog: groovygenie.wordpress.com

Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie

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A Literature Review:

Role of Social Media in Contemporary Marketing By Isman Tanuri

[email protected]

groovygenie.wordpress.com

Section 1

1.1 Introduction 2

1.2 Background 3

Section 2:

2.1 Marketing with Social Media 5

2.2 Influencing with Social Media 7

2.3 Social Media and CRM 11

2.4 Communicating with Social Media 12

2.5 Other Approaches to Social Media Marketing 16

Section 3

Summary and Conclusion 18

References 19

Appendix A-C 22-24

Copying, altering or plagiarising of content is wrong.

Otherwise, feel free to use, print or quote this document.


By Isman Tanuri



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A Literature Review:


Section 1

1.1 Introduction

The sudden emergence of social media in the public realm and the realisation of a

powerful and coordinated online consumer-force have raised alarms in corporate offices

all over. As consumers increasingly influence each other and share opinionated views

on brands and products on the internet, businesses are compelled to rethink and

reorganise marketing and communication strategies in order to address this ‘threat’ to

traditional ways of doing business.

Changed Landscape

However, as with any shift in philosophy and trend adoption, understanding the true

benefits of leveraging social media in marketing initiatives continues to be a challenge

for business organisations. Many question the value of investment in social media and

its direct influence on revenue generation. Others question the wisdom of ‘easing

control’ over the brand to customers and risking further exposure to public scrutiny.

Hence, many early commercial approaches to social media are misguided and flawed as

traditional corporate objectives are in disparity with social media’s concept of open and

transparent engagement with the marketplace. Nonetheless, this sentiment is beginning

to change and marketers are increasingly embarking on social media campaigns in

support of traditional marketing efforts.

Review Objectives

This literature review will attempt to discover whether current social media theories and

concepts are relevant and applicable to long-held marketing principles and business

philosophies. This review will highlight and critically examine articles and key expert

views on the use of social media as a tool in a consumer marketing environment.

Through a detailed discussion, the general consensus and established practices of

enterprise social media activities will be ascertained and that social media will indeed

represent a new frontier that will be beneficial and relevant to the marketing discipline.


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1.2 Background

Social media is currently an evolving ‘phenomena’ in business marketing. Enlightened

marketers are beginning to drive the use of social media as a component in their

marketing strategy and campaigns to reach out to customers and fans. Among the sub-

disciplines of marketing that may utilise social media include promotions, marketing

intelligence, sentiments research, public relations, marketing communications and

product and customer management. Appendix A provides statistical information of social

media adoption across networks and around the world.

New Media Channels

Social media is described as the “shift in how people discover, read and share news,

information and content” (Solis, 2007a). People are doing so through the internet in the

form of blogs, social networks (eg. Facebook, Myspace, Orkut), news aggregators (eg.

Digg, Stumbleupon), video and music portals (eg. YouTube, Last.FM), social

bookmarking (eg. Delicious, Reddit), micro-blogging (eg. Twitter, Plurk), online forums

and reviews (eg. Amazon, Yahoo Answers!) and other social communication channels

(see Appendix B for overview of social media tools). This has been made possible

through converging technological evolutions on the internet, dubbed ‘Web 2.0’, the

internet as a 2-way communication platform (O’Reilly, 2005). O’Reilly further explains

this revolution as the era of participation and of harnessing the collective intelligence,

also referred to as the ‘wisdom of crowds’

This surge in consumer online activity and user-generated content is termed the

‘groundswell’ by Forrester researchers, Charlene Li and Josh Bernoff (2008) in their

book of the same title. As the groundswell began exhibiting collective influence through

sharing on the internet, businesses began to take notice and seek ways to participate in

the ‘conversations’. Enterprises, such as IBM and Lego, began building their own

community forums, and corporate blogs, including Dell’s and Ford’s, began appearing to

reach out to customers (Li and Bernoff, 2008).

In time, the marketing function also began integrating social media in campaigns. The

use of Facebook and Twitter to market products and services are beginning to receive

attention from businesses in recent years. Primary to these widespread adoption are its


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relatively low cost-to-implement and the ability to bypass traditional media outlets for

advertising and promotional needs.

#FAIL

However, not all attempts at social media marketing have been successful in

implementation. A case in point is Sony’s Playstation Portable (PSP) fake blog fiasco.

The seemingly-innocent blog, presumed to belong to a teenager, was uncovered to

belong to an advertising firm hired by Sony to promote the PSP (Kingsley-Hughes,

2006). The uproar generated from this proved to be an embarrassing public relation

disaster for Sony.

Turning Tide

Particularly because of its open and connected infrastructure, the internet facilitates the

spread of information across geographies and boundaries. This has been a critical factor

in the success of viral marketing campaigns launched by businesses. However, social

media has also proven to be a handful for companies. When United Airline passenger,

Dave Caroll, found his guitar broken by the airline and subsequently endured a less-

than-pleasant customer service experience in his compensation bid, Dave decided to

write a song about his experience, videoed and posted it on YouTube (Guardian.co.uk,

2009). The video became a viral sensation and has received 5.4 million views to date

since July 2009. The Times UK estimated that the bad publicity generated by the video

cost a 10% drop in stock prices (amounting to US$180 million) within days of the video’s

debut (Ayres, 2009). This powerful effect of the groundswell on businesses is one of

many examples of social media’s persuasive influence.

Experts and Thought Leaders

Due to this being a new field of study, there is a lack of peer-reviewed resources on this

subject. Interestingly too, because of its fairly recent introduction into mainstream

commercial landscape, many of the recognised experts and key authors in social media

today are current practitioners in the social media/marketing space. Therefore, this

research is focussed on theories and ideas by these widely-accepted thought leaders in

the field. Unlike academia, these experts have emerged and influenced others through

the medium they know best: social media. Many of these leading social media experts,

including Seth Godin, David Meerman Scott, Mitch Joel and Chris Brogan, are bloggers


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who have build their personal brands and share their body of work or innovations at

companies they worked for through online channels and digital word-of-mouth. Their

brief profiles are shown in Appendix C.

Section 2

2.1 Marketing with Social Media

The Engagement Concept

In the ‘Groundswell’ (2008), Charlene Li and Josh Bernoff outlined the following as core

activities that define the engagement with the groundswell: listening, talking, energising,

supporting and embracing. This is the framework that has been developed and proposed

by Li and Bernoff to facilitate the transition for companies to understand and engage their

customers within the social media space. They argued that social media is predominantly

about the people and those relationships and communities must the cornerstone of any

social media marketing strategy.

Although the framework, as outlined, provides a clear community engagement model, it

does not satisfactorily provide an understanding of the long-term value of investment in

these activities. Engaging closely with customers and prospects on a broad scale

represents a significant cost to most companies. However, Mitch Joel, in his book ‘Six

Pixels of Separation’ (2009) makes a clear argument for close engagement. People are

increasingly becoming digitally connected to each other via social networks and online

activities. With current rate of adoption, the online population will represent a significant,

easily-targeted market for businesses. By investing in getting connected with their online

market and customers now, companies will have the edge and advantage on competitors

in the future. Customers’ trust and rapport built over time are durable business assets that

are hard to encroach on by competitors (Godin, 1999).

‘No’ to Social Media Marketing

Nonetheless, the consensus on marketing via social media is not universal. Tom Martin

(2009), in Advertising Age, is adamant that social media is not a channel for marketing

and that any corporate involvement behind a social identity devalues the conversations.

Glen Dury (2008) points out the argument that marketing has no place in ‘social’ media

and that it ‘destroys social media’s foundations’ by undermining its human elements. This,


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he contends, is because of the very nature of marketing, which is a commercial corporate

function.

This study however is not in agreement with these views. Even in traditional marketing,

engagements with prospects through advertising and promotional channels are activities

that involve multiple levels of human interaction, seen or unseen (for an example, an

advertising creative devising a copy for an audience). The marked difference at present is

that social media allows for reciprocal, two-way communication between advertiser and

customer. Essentially, the core marketing principle of satisfying human wants and needs

does not change. Marketing in social media is an evolution of commercial practices in

tandem with the times.

Independent Disciplines

Further in this, the prominent blogger and social media expert, Chris Brogan, in his blog

post ‘Marketing is NOT social media-Social Media is NOT marketing’ (2007), argues that

social media and marketing are distinctive disciplines and independent from each other.

His primary argument is that social media is a set of tools that ‘permits regular people

access to potential audiences of shared interest’ and that marketing should not ‘own’

these tools. Instead, he suggests that marketers should observe and take advantage of

the effect of having the media in the hands of regular people. The same sentiment is

similarly echoed by Lee Odden, voted number 15 by peers in 2008’s top 100 list of digital

marketers. Odden (2009) believes that social media is ‘no place for direct marketing’ and

that people join social networks, and the Web 2.0 space in general, to be social with a

like-minded community, instead of being marketed to.

Discomforting Truth

Herein lies the disconnect. On one end, consumers are empowered by the internet to

have their say and opinions on brands, and some, including experts such as Brogan and

Odden, believe that consumers should be given total freedom to decide when to engage

with brands. On the other end, marketers are desperately trying to leverage on social

media to drive their marketing campaigns and to manage perceptions of their brands

online.


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The Advocates

Supporters of social media marketing for enterprise believe that the right approach can be

beneficial for both businesses and customers. Eikelmann, Hajj and Peterson (2007)

support the notion that companies should re-strategise and profit from this ‘threat’. They

believe that companies should actively seek to engage in conversations with their

customers. However, companies must observe a condition of moving away from

‘controlling the message’ and let consumers decide on the flavour of the conversations.

Additionally, in their research, they observed that Web 2.0 has caused the fragmentation

of marketing channels, in that, communities and websites tend to cater to niches and

particular demographics. These should be used to the advantage of companies as they

can be efficient through the use of highly-targeted effective marketing messages despite

the clutter.

This study agrees that the sheer volume of advertising clutter is causing consumers to

question the authenticity behind the claims of these messages. It is also agreed that

brand recall is suffering from increased consumerism as companies capitalise by

developing countless new products and brands. Tellingly, a CBS news report (2006)

states that an average person is exposed to about five thousand advertising messages in

a day. As such, David Meadows-Klue (2007) argues that, with the explosion of cheap,

one-way advertising channels and growing customer literacy in the art of marketing, the

impact of traditional marketing communications has been undermined. Therefore,

Meadows-Klue is of the opinion that social media is the right channel for marketers to

regain attention from customers.

2.2 Influencing with Social Media

The Bridging Factor: Influencers

Despite the opposing arguments for social media’s involvement in marketing, it is

ultimately social media’s creation of a new layer of influencers that will prove to be

beneficial for both marketers and consumers (Solis, 2007b). In ‘The Tipping Point’ (2000),

author, Malcolm Gladwell, emphasises on the importance of influencers in the

transference and spread of any new idea or knowledge. Without these idea facilitators,

many commercial successes, such as the Apple, Hush Puppies and Google brands, will


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remain on the peripheral. For consumers, recommendations through peer influence tend

to be perceived as highly authentic and objective.

For marketers, whose predominant purpose is the influence of customers to their

products, the easy creation of consumer-influencers is a vital benefit that can be reaped

from the integration of social media in their campaigns. Moreover, many marketing

experts agree that word-of-mouth (WOM) is an effective element of promotion. In the Web

2.0 era, the WOM activity can be easily facilitated through the sharing of viral videos,

email or peer reviews on Facebook. Trusov et al (2009), in a research on the effect of

WOM on social networks’ sign-up, found that the elasticity of WOM referrals is 20 and 30

times higher than that of marketing events and media publicity, respectively. Thus, this

study is of the opinion that a major role of social media in marketing practices (if adopted)

must be objectively related to the creation of influencers within communities.

Return on Influence

Another applicable theory in the matter of WOM through social media is the Return on

Influence (Brogan and Smith, 2008). The prevailing idea is that marketing must be

strategically carried out through identifying and influencing those with the most influence

over others. At present, social media is the only medium that allows for such detailed

effort. Despite the intricacy of this tactic, the objective of focussing messages to the right

audience is in accord with marketing fundamentals of segmenting and targeting

audiences for maximum conversion. This tactic is also in agreement to Gladwell’s Law of

the Few theory (2000). The influence of a Connector personality (‘Connectors know lots of

people’) over an ideology or trend will quickly mobilise its spread and reach until it

reaches the ‘tipping point’. This is when an idea achieves critical mass and universal

recognition through a sudden exponential growth.

Brand Advocates

However, traditional marketing philosophies do not explicitly cater for external contribution

to a brand by anyone, other than an employee of a company. Commercial marketing

objectives are typically aligned to achieve incremental revenue through quality lead

generation and brand building. Because of this, no added emphasis is usually given to

building external non-sale relations with customers.


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Nevertheless, with social media, the unpaid brand advocates are a reality. In the

‘Groundswell’ (Li and Bernoff, 2008), it is proposed that brand advocates are ‘grown’

through purpose-built community forums for ardent fans of brands such as Lego, Dell and

the iPhone. In retrospect, this act of ‘energising the groundswell’ is in effect a controlled

and strategised word-of-mouth effort.

Stickiness Wins

Another triumphant brand advocate campaign was the successful bid to have Barack

Obama elected as President of the United States (Lardinois, 2005). The synchronised

use of social media channels gave extended awareness and publicity to the Obama

digital campaign and a measurable edge over John McCain, the Republican Senator.

This was achieved through endorsements made online by Obama advocates which has a

lasting and visible impact as the internet retains a level of permanency and transparency.

Again, this observation concurs with another of Gladwell’s theory in ‘The Tipping Point’,

the Stickiness Factor (2008). This is the study of the strength of a message in a person’s

mind that will allow it to be relayed from one person to another effortlessly until it reaches

tipping point. From a marketing perspective, the Stickiness Factor is an important criterion

in the crafting and testing of marketing messages: the viral effect of ‘United Breaks

Guitars’ and Susan Boyle’s 100 million YouTube views (Ostrow, 2009) are evidence that

the carefully-crafted message is a powerful tool for the marketer.

Conclusively, the use of external resources, who will evangelise a brand to friends,

relatives and colleagues for “the most honest form of marketing” (WOMMA, 2009), is

similar in effect to an over-achieving direct marketing campaign, at minimal or no cost.

The Obama campaign is compelling evidence that social media can assist in achieving

marketing objectives if efforts are focussed on marketing through influence and brand

advocacy.

Permission and Trust Marketing

Irrefutably, traditional marketers are grappling with the decline of mainstream advertising

and the rise of social media which has deeply affected the media and newspaper

industry. Forrester Research, in its 5-year forecast, reports that global advertising budget

will decline significantly and this will be supplanted by a 34% growth in social media


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budget (VanBorskirk, 2009). This is a strong indication that advertising is fast losing its

effect as a promotions tool.

Without a doubt, the works of Seth Godin in the area of permission marketing have

influenced a new generation of digital marketers. In ‘Permission Marketing’ (1999), Godin

explores the use of interactive technology, such as email and online games, in order to

receive explicit customer permission for a brand to initiate direct interact. Godin argues

that only marketing messages and approaches that are relevant, personal and anticipated

will be readily accepted by customers.

Godin’s theory has been proven just as relevant today as customers continue to eschew

traditional advertising in favour of word-of-mouth recommendation and peer reviews. With

social media, practitioners of digital marketing are able to gain inroads to potential

customers through the proven method of permission marketing. Instead of brands

pushing and ‘shouting’ their messages across, social media channels allow for consumers

to voluntarily ‘befriend’ (via Facebook Fan Pages) or accept communication (via Twitter or

email newsletters) from brands. The building of trust through such relationships typically

benefits both companies and consumers.

As organisations become exceedingly visible through social media, it is therefore notable

that marketing of trust is important. Mitch Joel (2007) expounds the theory that if an

organisation does not provide value, be open and transparent and create opportunities for

two-way communications, the brand will not survive in a time when social media is

becoming an accepted platform for brand-building. Joel further states that these ideals

are can only be possible through the ‘building of community based on trust’. Based on

these arguments, this study therefore has the opinion that modern organisational

marketing must involve efforts in social media in order to maintain and increase trust and

authenticity from customers’ perspective.

The Reality

The above arguments indicate that social media can be mutually beneficial for both

parties if the boundaries of engagement are specified. In areas where corporate-

sponsored social media activities are managed (such as product support forums),

branding and direct marketing should be reasonably accepted. In public and closed social

networks, such as Twitter and Facebook respectively, permission must be sought for


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marketing messages to be broadcasted or relayed to specific users. Breaching these

boundaries is akin to interruption marketing, similar in purpose and effect to untargeted

advertising and email spam.

2.3 Social Media and CRM

Bernoff (2009) recommends that every organisation must know every single one of their

best customers by name. To achieve this, social media can be used to provide visibility

and almost real-time direct channels to engage and interact. The argument also extends

to the idea that your best customers will always know where to find your company if they

have a problem. Meadows-Klue (2007) concurs with this view. He further states that, as

customers have been empowered by easily-available social media tools, the expectation

is growing that their favourite retailers will engage them in the online domain.

Limitation to Resources

However, such idealistic views may be contrary to business ethos of efficiency and that

close attention on every single customer, even the best ones, may be a resource drain,

especially in the fast moving consumer goods industry. The call for companies to be

exceptionally frugal in this economic climate resonates clearly among business leaders.

Expert advice dictates that the focus must be on spending that generates real returns on

investment (ROI), not just in marketing activities but also in operations (Maddox, 2009).

New Rules of CRM

This is where the argument for social media and customer relationship management

(CRM) converges. CRM drives the radical customer-oriented marketing concept (4Cs of

customer, cost, convenience and communication) that is slowly replacing the traditional

4Ps of marketing thinking (product, place, price and promotion). As outlined by Dr. Ned

Roberto (World Village, 2008), the 4Cs’ emphasis is to approach marketing from

consumers’ perspective. In this regard, we can find that both CRM and social media offer

the same benefits and end-results for companies and their customers, which is visibility

and long term patronage.

A recent Forrester survey found that social media is extensively helping companies to

deepen their relationships with customers through complementary uses of social tools


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and CRM systems (Karpinksi, 2008). Supporting this view, David Myron (2009), in his

editorial in CRM Magazine, also theorises that using social media, in conjunction with

CRM tools, provides a new level of customer intelligence. Listening in to customers’

sentiments and gathering attitudinal data via social media will provide business strategists

with higher level of confidence in decision making.

Real-Time Customer Management

Close customer management through social media also translates into an enhanced

customer service experience. A good example of this is Comcast’s Twitter service.

Customers’ ‘tweets’ sent to its @comcastcares Twitter account are typically responded in

full public view. Todd Defren, in his article ‘A Social Media Guide from the Edge’ (2008),

enthuses that, in an online world, a company must be seen as responsive by customers

and non-customers. This, he believe, will provide for the manifestation of ‘good karma

through good service’. This study agrees in that this approach not only provides a level of

transparency and genuine authenticity to the company’s profile but will ultimately enhance

the efforts in customer retention.

The above arguments certainly demonstrate that social media can fulfil the traditional

metrics of marketing, which are to limit churn and increase customer retention. More

importantly, the CRM practice, coupled with freely available social tools, can be a cost

effective activity to any organisation intent on a long-term and sustainable business

model, albeit with budget limitations.

2.4 Communicating through Social Media

The advent of social media has changed the way companies organise their outwardly

communication activities. Companies are also beginning to realise that customers will talk

about them, with or without them (Solis, 2007b). As most of the internet is open and

unsecured, these comments or sentiments can be easily seen or read by potential

customers or clients. David Roth (2009) contends that this is a double-edged sword.

Where companies can now observe their customers or competition by listening in to

conversations, they are also susceptible to the same reciprocal tactics. This is the

challenge that companies and brands are facing in the Web 2.0 and social media era.


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Loss of Control

Today’s popular consensus is that companies can no longer control the perceptions to

their brands (Eikelmann, 2007). These include control of the company’s corporate

message as well as parties responsible for disseminating information from the

organisation (Young, 2009). Conversely, any person with an internet connection and a

computer is able to review or comment on a brand, either on their Facebook page, Twitter

or anywhere else on the internet. This effect of the ‘democratisation of media’ is a vital

inducement to re-evaluate how brands and companies communicate (Dury, 2008).

Public Relations

David Meerman Scott, in his book ‘The New Rules of Marketing & PR’ (2007), fervently

suggests that traditional public relations (PR) practices ‘do not work anymore’. Scott cites

that, instead of pushing press releases or information to traditional media outlets (for eg.

journalists, newspapers and TV stations), companies can now take ownership and

independently publish information or news via Web 2.0 mediums. These include official

company blogs, YouTube, online news sites and even through direct relations with market

analysts and influential bloggers.

This study believes that this strategy of bypassing conventional media provides PR

practitioners an almost instant access to communication channels, unlike traditional

methods. An almost real-time reaction is indeed a timely benefit for companies in dealing

with developing crisis' communications. In fact, Li and Bernoff (2008) propose a proactive

approach to crisis management. Through dedicated and around-the-clock close

monitoring of online social spaces for public sentiments, companies can address minor

complaints quickly before they become a public relations disaster.

Similarly, Forrester’s social media analyst, Jeremiah Owyang (2009), advocates the hiring

of a brand monitoring company to provide regular reports to analyse public reactions to a

company’s manoeuvres in the market as a form of intelligence gathering. Based on these

arguments, this study believes that the PR practice must evolve beyond press releases

and reactive damage control.


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Changing Perceptions

In real-life practice, social media has also provided public relations with a formidable tool

in altering public perceptions. In a current takeover battle between Kraft and Cadbury

(Mullman and York, 2009), Kraft engaged a renown PR firm, Brunswick Group, to connect

with Cadbury’s stakeholders via social media. The campaign uses video messages from

Kraft’s executives and informative microsites to win over support from Cadbury’s

stakeholders to the proposal of being acquired. By developing niche messages and

directly targeting and communicating to the audience, Brunswick’s personal approach is

likely to appeal the stakeholders (Scott, 2007). From a marketing perspective, this in fact

a form of permission marketing as advocated by Seth Godin (1999), communication that

is relevant, personal and anticipated.

Public vs. Media

From the earlier arguments, this study deduces that the public relations role in a

company’s brand and perception management has indeed transformed with social

media’s arrival. What used to be a function that tries to influence and alter public

perceptions predominantly through close media relations, is in fact much more associated

now with direct public management and engagement in the Web 2.0 environment.

However, such close association with the public is a positive development in the age of

increased corporate social responsibility (CSR).

Online Thought Leadership

David Meerman Scott (2007) also outlines a holistic strategy in marketing a company

online. By communicating online thought leadership through content development and

knowledge sharing (for example, white papers, e-books and articles), the company will

receive recognition for its expertise and an enhanced brand perception from potential

clients or customers. The online thought leadership is in fact a long term investment that

will ensure a company maintain an extended influence over a community audience

(Matthews, 2007). With a loyal community audience, the company may find that it is

easier it to push through innovative and revolutionary ideas to its clients and customers.


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Blogging with Authority

In purporting thought leadership, Li and Bernoff (2008) suggest that blogging is an

effective method of communicating an organisation’s message. Other than being direct

and immediate, a blog allows for a two-way dialogue to be established for a customer to

provide his views and comments. This activity, as stressed by Li and Bernoff, is a cost

effective method to receive feedback and inputs from customers regarding a company’s

products or services.

However, Seth Godin (2005) provides a different concept to blogging. Godin contends

that a blog, as a marketing tool, should be a launch pad for spreading of ideas. Termed

‘viral blogs’, Godin is of the view that a blogging corporate leader or employee must have

an authoritative opinion but with a flexible allowance for discussion.

This study contextually agrees with such an ideal. However, a focus on content must be

exercised. In this case, David Meerman Scott (2007) provides a framework for relevant

blogging: companies should not write in an advertorial manner but instead focus on topics

that may concern their industry as a general. This lends authenticity and an opportunity to

augment a thought leadership persona.

CSR through Social Media

In this time of increased corporate social responsibility awareness and green marketing,

an organisation’s degree of openness and transparency are a sure measure of its serious

intention. Sandy Carter, IBM’s Vice President for Websphere Marketing and author of

‘The New Language of Marketing 2.0’ (2009), theorises that CSR and green marketing

objectives are best achieved through the adoption of Web 2.0 technology.

Apart from efficiency in use of resources (which directly contributes to green credentials),

Carter maintains that using social media to promote a company’s CSR and green

initiatives can trigger solid word-of-mouth references and drive influencers’ willingness to

tell a company’s story. Such viral outcomes are welcomed as most typically, the primary

objective of CSR and green campaigns are in the creation of strong advocates that will

passionately support a motion or alternative solution to an environment issue (Howell,

2009).


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2.5 Other Approaches to Social Media Marketing

Product Development

Other authors and practitioners are equally bullish about enterprises deploying social

media as an idea development tool. The academic team of Constantinides, Romero and

Boria (2008) are of the opinion that companies should involve the customer in making

business decision through the collaborative use of social media. These can be made

possible in areas such as product development and service improvement. An example of

this is Domino’s Pizza’s customised pizza program, where customers can create their

own pizza, name them and make it available to others (Costantinides et al, 2008).

Li and Bernoff also touched on this approach in ‘Groundswell’ (2008). In the presented

Bearingpoint case study, the company uses a wiki for its effort in cataloguing its

information management solutions for its clients and system support information. The

significant difference in this knowledge management activity is that the wiki is open and

accessible for viewing and editing by its clients, systems users and even competitors, who

provides content related to specific information management issues. With a substantial

body of knowledge contained in the wiki, Bearingpoint is even able to sell the content of

this ‘crowdsourced’ knowledge along with its projects for clients.

Li and Bernoff believe that by developing communities where customers are allowed to

feedback and contribute ideas, a company can market more efficiently with products that

have been evaluated and verified by its own customers. By tapping on the collective

knowledge of the consumer and directly soliciting the wants of the customer, such

approach deserves merit as it fulfils the prime marketing fundamental of serving the

needs of the customer.

An Organisational Approach

Another remarkable concept that is a result of the social media revolution is the brand

organisation. In this approach, the organisation must adopt the philosophy that internal

branding is just as important as external communication. Employees must understand

and deliver the brand’s promise at all times. This is because customers can easily gain

access to online information on the company and its employees and make unaided

decisions based on these gathered information (Interakt, 2009).


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Despite its revolutionary concept, the brand organisation approach is a highly visible

endeavour in an increasingly customer-oriented landscape. Interestingly and in accord,

the author, Tamar Weinberg (2009), proposes that customer service should be a core

component of any social media strategy. She argues that ‘customer service is social too’

and favourable impressions in this area will translate and propagate into online and offline

reputation for companies.

As described, this study believes the organisational approach to social media may

encounter considerable resistance in organisations with legacy operational practices. The

technological and communication aspect of social media may prove a challenge for

widespread adoption within a company, especially one with a mature population.

However, Amber Naslund (2009), an advocate of the social media-savvy organisation,

outlines the following for senior management buy-in: transparency provides business

intelligence in managing internal employee relations, improved customer experience

through consistent organisational message and better decision making through real-time

operational insights.

Catalyst for Change

Additionally, this study also believes that social media is the right catalyst for the next era

of business, from IT-driven to CSR-driven. In a recent research, it is found that there is an

increased adoption in Web 2.0 business efficiency practices in organisations, for example

the use of tools such as wikis, blogs, RSS (Bughin, 2007). Therefore, it is only a matter of

time before social media is an accepted norm within corporate activities. However, only

with early internal and external adoption of social media initiatives can businesses

maximise current and future opportunities, ahead of competitors.


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Section 3

Summary

The above study has shown that social media do indeed have a significant role to play in

contemporary marketing. Although there are dissenting voices in regards to the use of

social media as a marketing tool, generally, social media has been proven to have

important applications for marketing campaigns, public relations activities and customer

relationship management programs.

Marketing through Influence

A balanced and complementary approach is required to integrate social media into

marketing practices. The expert consensus calls for marketers to engage in a subtle and

restrained manner when engaging customers in social media. Making inroads through

influence and permission, rather than direct selling, will more likely provide the benefits of

long-term engagement. Therefore, the objective for social media marketers is indeed to

turn customers into brand advocates.

Communication 2.0

The significance of social media as a possible corporate ideology cannot be ignored.

With open and transparent communication through social media, companies can benefit

from the increased level of trust by customers and stakeholders. This is important in an

era where corporate social responsibility is emphasised in the wake of corporate

scandals, such as Bernie Maddox’s and Satyam’s. Social media has also been proven to

be an effective tool for public relations and in the creation of thought leadership for a

company.

Conclusion

Although social media is a recent arsenal to the field of business marketing, its potential

as a marketing tool cannot be overlooked. However, further development in its practice

and usage is required in order to increase corporate adoption. Also, a study into the

measurement of social media’s effectiveness and its return on investment must also be

undertaken. Only then can the real value of social media to an enterprise be ascertained.

Nonetheless, social media is a powerful tool for any organisation moving in the Web 2.0

space and beyond.


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Appendix A

Social Media Adoption Statistics


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Appendix B

Social Media Applications Tools


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Appendix C

Social Media Thought Leaders The following profiles the leading experts in social media and digital marketing:

Seth Godin Godin is author of ten books that have been bestsellers around the world. His most recent titles include The Dip and Meatball Sundae. Free Prize Inside was published in early May, 2004 and All Marketers Are Liars was published in 2005. His books that have been bestsellers around the world and changed the way people think about marketing, change and work. Permission Marketing was an Amazon.com Top 100 bestseller for a year, a Fortune Best Business Book and it spent four months on the Business Week bestseller list. It also appeared on the New York Times business book bestseller list.

Charlene Li Charlene Li is the Founder of Altimeter Group and co-author of the business bestseller, “Groundswell: Winning In A World Transformed By Social Technologies“, published by Harvard Business Press in May 2008. She frequently consults and speaks on social and emerging technologies and publishes a blog, The Altimeter.

Josh Bernoff Josh is senior vice president, idea development at Forrester Research and is responsible for identifying, developing, and promoting some of the company's most influential and forward-looking ideas.Josh is the coauthor of the BusinessWeek best-selling book Groundswell: Winning in a World Transformed by Social Technologies, a comprehensive analysis of corporate strategy for dealing with social technologies. Abbey Klaasen of Advertising Age picked it as "the best book ever written on marketing and media," and Amazon's editors put it in the top ten business books of the year

David Meerman Scott David Meerman Scott is a marketing strategist, keynote speaker, seminar leader, and the author of the hit new book World Wide Rave. His previous book, The New Rules of Marketing & PR is an award-winning BusinessWeek bestseller and is being published in 24 languages. He is a recovering VP of marketing for two publicly traded technology companies and was also Asia marketing director for Knight-Ridder, at the time one of the world’s largest newspaper and electronic information companies.

Mitch Joel Mitch Joel is President of Twist Image - an award-winning Digital Marketing and Communications agency. He has been called a marketing and communications visionary, interactive expert and community leader. He is also a Blogger, Podcaster, passionate entrepreneur and speaker who connects with people worldwide by sharing his marketing insights on digital marketing and personal branding. Mitch is also the author of ‘Six Pixels of Separation’.

Chris Brogan Chris Brogan is President of New Marketing Labs, a new media marketing agency, and home of the Inbound Marketing Summit conferences and Inbound Marketing Bootcamp educational events. He works with large and mid-sized companies to improve online business communications like marketing and PR through the use of social software, community platforms, and other emerging web and mobile technologies.

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