how has social media impacted consumer behavior

How has Social Media impacted Consumer Behavior?

3rd Dec 2013Rawan Aloul | @1108020835 | Consumer Behavior Marketing

1/4 of your day is spent on Social Media!

Shift into the Digital World!

Before 1999 2010 Onwards

Shift into Self-Publishing!

Today you are empowered!

WOM BeforeKnown as Bandwagon or

Snowball Effect

WOM Today

Social Media Amplified Word of Mouth!

• Social Media has revolutionized the reach & impact of WOM• Its no longer an act of intimate 1-to-1 communication • Users can now disseminate information at a click of a button• Shift from content users in to content creators

Search before Social Media

Search after Social Media Wikipedia, news pages, Facebook,

pictures from social networks, etc..z

Results mainly limited to company’s website

Example of Audi Search

Rise of Influencers

• Consumers empowered to share information, and become influencers• Law of the Few by Malcolm Gladwell explains different types of

influencers who can make ideas go viral today.• He classifies them into three types of people:

CONNECTORConnects people to

each other

MAVENConnects people through sharing

knowledge

SALESMANUses knowledge to

engage and persuade

• Websites such as Klout, Kred or PeerIndex measure the level of social influence of an individual & assign a score out of 100.

• Based on how people engage with the content he/she creates.• Brands & Marketers use this information to seek and hire influencers to be

their word-of-mouth transmitters.

Rise of Influencers, cont’d

Barack Obama has active Twitter & Facebook profiles & the most

important Wikipedia page online.

99

J.B. has one of the most engaged Twitter accounts,

but his Wikipedia ranking is much lower than President

Barack Obama’s.

92

Zooey Deschanel highly active on

Facebook, Twitter and other SM channels.

86

Klout.com

• Traditional Purchase Decision Journey– Linear approach; Funnel analogy– Based on pushed Marketing driven by companies– Assumes initial large set of potential brands which narrows

down to one according to consumer’s needs and preferences

Consumer Decision Journey

• Revised Purchase Decision Journey– Consider initial set of brands– Add or subtract brands as they evaluate what they want– Ultimately select & buy a brand– Express and share their experience online

• Dynamic, influenced by others, cyclical• Loyalty loop; contribute opinions and experiences thru social media• Based on Pull or Consumer-Driven marketing strategies

Consumer Decision Journey, cont’d

• Consumer driven marketing (part of which is Social Media, such as Internet reviews & WOM recommendations) now takes up 2/3s of the touchpoints in the purchase decision making process (unlike traditional marketing or mediums which make up 1/3).

Consumer Decision Journey, cont’d

Shifts in Communication

• Degree of Separation– Shift from six degrees of separation to almost half (3.74 degrees as

per study by Facebook)– Friendship norms redefined & friendship circles expanded– Average Facebook friends reached 318 for the Millennial generation

• Degree of publicity– Tendency for people to become public with their personal information

and day-to-day activities – Social graphs becoming public

• Five Degrees of Social Relationships– Constructed new degrees of relationship between people– Relationships of different dynamics and characteristics

Category DescriptionInner Circle Personal contacts with frequent personal

interaction such as friends, family, neighbors, work peers.

Social Friends Frequent personal contact, mostly online interaction, video chats, social networks etc.

Acquaintances Infrequent contact via social networks, mainly focused on business relationships, e.g. business colleagues on LinkedIn

Followers - Colleagues

Impersonal remote relationship. Two-way activity, e.g. reading each other’s blogs, followers on Twitter, etc.

Followers - Competitive

Impersonal remote relationship. One-way activity where one monitors the actions of another such as competitive analysis

Shifts in Communication, cont’d

Start your own business today!

Instagram• One of the fastest growing social media outlets with

150+ million monthly active users & 55 Million photos shared every day.

• The new gateway for Entrepreneurs.

Easy Access to Entrepreneurship

I know what you ate last night!

Social graphs can be traced online to determine a person’s

likes and dislikes!.

Brands are now empowered!

New Facebook Graph Search allows users to search for activities, check-ins, status updates, events attended, likes and dislikes, etc. e.g. People who like Horror Movies

Thank You!