Social Media Marketing: Do Positive Utilities to Businesses Outweigh Its Negative Utilities - Term Paper Example

Social Media Marketing: Do Positive Utilities to Businesses Outweigh its Negative Utilities? Social Media Marketing:Do Positive Utilities to Businesses Outweigh Its Negative Utilities? Introduction In the second decade of the 21st century, various studies show that social media is being used by people of almost all ages. Saying that social media has revolutionized how people interact would be an understatement. According to Zarella (2011), conversations used to take place in small groups, words disappearing as soon as they were uttered. Nowadays, conversations, even on the most mundane of things, happen in front of millions of people, and remain archived for years to come. Wankel (2011) argues that it is increasingly proving to be vital in the provision of popular platforms for collaboration and rapid information sharing. This, therefore, makes it a powerful mobilization and communication tool in social, economic, political and educational spectrums (Wankel, 2011). The Iranian green revolution of 2009-10 and the Egyptian revolution of 2011 best illustrate the power of social media concerning information sharing and citizen mobilization on the political scene. Because of the protesters’ reliance on Twitter and other social-networking sites for the purposes of information conveyance, the Iranian green revolution was nicknamed the “twitter revolution”. In light of the observations made above regarding social media in today’s society, one question emerges; is social media/social networking beneficial for society? In an attempt to answer this question, this paper will critically examine the impact of social networking on big business and marketing- in particular its positive utilities vis-à-vis its negative utilities, its role in advertising, its profitability, and finally, new trends in social media. Impact of social networking on big business and marketing The mere reach of social media, especially in the developed world, makes it invaluable in the marketing arena. In the old days, big corporations, with obviously bigger advertising budgets had a permanent grin as they continuously expanded their market share. Today, Small techno-savvy companies have been known to create viral videos whose multiple views go on to reach millions of people. Such a reach, with the use of traditional media, would require a massive advertising budget, which the small companies do not have. One may then argue that social networking has leveled the advertising playground. Zarrella (2009) thus refers to social media as “a great equalizer” where “small brands can make big names for themselves”. Companies that full-heartedly embrace collaborative Web 2.0 technologies also seem to be one step ahead of those that are reluctant to incorporate social media into their marketing strategies. Corstjens & Umblijs (2012) state that a survey of over 3,000 senior executives across various industries indicated that organizations qualified as “networked” outperformed other companies when it came to market share, profit margins and market leadership. The impact of social media marketing on businesses is illustrated by the fact that in some industries, such as the travel sector, the expectation that a company operates an alternative customer service line through their social media account has become an industry norm (U.S News & World Report, 2014). According to Naylor et al (2012), Consumers are increasingly turning towards social media to acquire information about unfamiliar brands. Big corporations, well aware of this development, are in turn using social networking sites to satisfy the consumer’s need for information. Naylor et al, further, note that, by 2011 approximately 83 percent of companies in the Fortune 500 were employing some form of social media in an attempt to connect with customers (2012). Starwood Hotels actively uses Twitter and linkedIn for the purposes of recruiting new employees (Tuten & Angermeier, 2013). The rush by businesses to develop a social media presence has been necessitated by what some commentators refer as social networking’s value addition to word- of -mouth marketing. In the past, a satisfied customer would simply inform a handful of close friends or relatives about the positive aspects of a product or service. In terms of reach, one would argue that word-of-mouth, has limits. Social media marketing moves a step further to capitalize on electronic word of mouth (eWoM). In present times, a satisfied customer may hop to facebook, twitter or even their own blog and within minutes proceed to inform tens or hundreds of friends, relatives and blog readers about their experience (Payne, 2014). Simply put, social media increase the speed of word-of-mouth marketing. Payne further notes that since most consumers tend to trust recommendations from people they know, then the key for successful corporations is to develop strategies that will result in an increase, in the number of personal recommendations given by customers. Huge corporations, by nature of their size, are seen by many as not having the intimacy of contact with their consumers as a small business. The use of social networking to increase personal recommendations from satisfied customers is one strategy being employed by big businesses to create a feeling of close association with their customers. It is crucial to note that though social media continues, in a very vibrant manner, to supplement brand awareness efforts employed by big businesses in traditional marketing media- print, radio, and television, its modus operandi is very different from that of traditional marketing strategies. Kabani (2013) argues that social media advertising, unlike traditional advertising, is not a marketer’s platform. It belongs to the consumers. Social media marketing will involve advertisement mediums being controlled by those participating in them through conversations and formation of online communities. No particular individual controls the activity. Traditional marketing, on the other hand, involved the marketer sharing a message about a business or a product. The message would be controlled by the business itself. In this sense, social media has revolutionized advertising in that consumers are not just passive receivers of content; they participate in creating it too (Kabani, 2013). Burger King’s successful whooper sacrifice campaign that offered consumers a free burger coupon upon them dumping ten of their Facebook friend’s best illustrates a social media advertisement campaign involving active participation on the part of consumers. The activity in this campaign was for the largest part, consumer-controlled yet Burger King was able to generate massive publicity at a extremely low budget. As outlined above, social media are of immense benefit to organizations in regard to accessibility to consumers and media-cost savings. However, Tuten & Angermeier (2013) note that in the same way that positive word of mouth spreads thus leading to more people walking through an outlet’s door in an attempt to experience exemplary service, so does negative word of mouth accelerated through social media. Social media hastens the spread of negative word- of- mouth. A business that is struggling may suffer more, courtesy of vitriol poured on social media. Inability to control the content on social media may also work against the interests of a business organization. Businesses have realized, often too late, about the difficulty in minimizing damage to their reputation because of negative customer review on social networks. Mcdonalds became a victim of negative social media utility after it set out to establish a trending story on twitter using #McDstories as the hashtag. The goal was for people to recollect all the enjoyable times experienced at McDonalds’ outlets and share the stories on twitter. What was supposed to be an effective and low-cost advertising campaign took a turn for the worst when people turned to posting stories of distressing experiences at McDonalds. Tuten & Angermeier (2013) notes that social media has made it easier for people to voice negative opinions on companies. Businesses, therefore, have to understand that social media is a double-edged sword; it helps magnify brand damage in the same manner it strengthens brand image to the eyes of the consumers. The recent backlash experienced by the New York police Department illustrates the need for organizations to weigh issues carefully before embarking on a campaign of self-promotion on social media. The department, having dealt with allegations of police brutality in the past, found it fit to use social media in an attempt to bring to the public stories that would paint their officers in good light. Hence, to achieve the goal they decided to solicit for photos of ordinary citizens posing with officers. The result was a flood of photos on twitter portraying the police in extremely bad light (The New York Times, 2014). In this case, rather than serving to improve the department’s image, social media became an avenue for people, using photographs, to express their anger at tactics used by police to quell unrest. Concerning social media, businesses need to pay attention to the image projected by their employees when representing the company in any way. Employees, through their activity in social media, have the power to hurt the company’s public image just as they can in the offline world. In the same manner that using profanity or wearing work uniform while intoxicated damages a company’s public image, so does bad behavior online (Tuten & Angermeier, 2013). Tuten & Angermeier, (2013) also note that, for companies, social media creates many potential legal liabilities. The Misuse of online information in the recruitment of new employees and potential violations regarding sexual harassment is some of the issues that they may result in legal liabilities. Employees operating a company’s social media account have also learnt, in most cases the hard way that social media presents a new frontier in regards to work etiquette. In November 2013, Home Depot fired an employee responsible for a racist tweet (Sneed, 2014). Chrysler is on record as having sent home an employee who found it fit to tweet profanities to Detroit, GM’s headquarters using the company account (Sneed, 2014). These incidences illustrate that employers fully appreciate the impact of social media activity on brand image. In contrast, US airways, appreciating the speed with which information moves online and the difficulty by social media managers to exercise control of content already in the hands of the online community, announced that an employee who mistakenly tweeted a pornographic image in response to a complaint from a customer would go unscathed (Sneed, 2014). Some commentators have argued that the decision by US airways to stand with its employee strengthened their brand image in the eyes of public. As a result, a situation that was to end as a marketing nightmare ended up turning into a brand strengthening opportunity with zero advertising budget. Online activity moves with dizzying speed. When they realize that its serve, in their business interest to post content owned by other individuals or organizations, social media marketers ought to have a structure in place that ensures they get permission to use the material quickly. Such rapid action helps them to post their messages before they turn stale (The Wall Street Journal, 2014). Proceeding to use other people’s content without permission may result in legal liabilities. New trends in social media In 2013, McCoy (2014) notes that Facebook expanded their advertising platform and continued tests for video ads. Can 2014 thus finally witness the impact of video ads on Facebook? Time will tell. Twitter launched Vine- a video tool while Instagram also introduced a video advertising program. These developments indicate that video advertising is likely to bear an enormous influence on social media marketing trends in 2014. As competition in the social media marketing arena gets tougher, companies are developing new strategies to stay ahead of the pack. One of these strategies involves marketers meticulously pouring over twitter and other social networks in an attempt at identifying topics that are getting the most attention. They then proceed to compile short blog posts, videos and tweets matching those themes. According to The Wall Street Journal (2014), the aim of this tactic is to ensure that the online audience becomes aware of the brand and perceives it as being relevant to their interests and needs. As the level of attention on the topic decreases, the companies drop it and quickly hop on to the next hot discussion. Advertisers are also experimenting with new types of media in an attempt at reaching their target audience. For instance, General Electric Company started sharing content on Vine immediately after Twitter introduced it (The Wall Street Journal (WSJ), 2014). This was despite the fact that it was a strategy that effectiveness was still unproven (WSJ, 2014). The results were impressive, as the video has enjoyed more than 227,000 likes prompting GE to turn it into a campaign extending for a week with the aim of promoting experiments tagged with the hashtag #6SecondScience. Overall, the strategy has proved effective in spreading awareness of the GE brand at an extremely low budget. According to the Pew Internet & American Life Project, 90% of Americans are in possession of a mobile device. Further, 57% of them use those devices to surf the internet (McCoy, 2014). These statistics indicate a shift from traditional desktop technology to smartphones and tablet devices (McCoy, 2014). For players in the social media marketing sphere, the message on the wall is that mobile marketing is bound to get stronger. To facilitate maximum brand visibility In 2014, advertisers have the task of ensuring that they invest in digital marketing solutions that are mobile friendly (McCoy, 2014). Conclusion Thus far, we have witnessed rapid growth in the popularity of social media marketing. Social media networks such as Facebook, twitter and linkedIn, are enabling businesses to reach their customers in a cost-effective manner. By applying innovative social media marketing strategies, small businesses are challenging large corporations for a slice of the market pie. Companies that create viral videos benefit from the resultant “buzz” generated as the video receives more views. On the other hand, companies resorting to social media to execute marketing campaigns ought to be aware of the risks involved. The sheer size of virtual space makes it impossible for advertisers to effectively manage content that they have created and posted. Anything published on social networking sites is henceforth left at the mercy of the public, who may post comments that generate negative publicity. The McDonalds and NYPD case studies illustrate such a scenario. As more companies seek to establish their presence in as far as social media marketing is concerned, the profitability of social media stock will continue to soar. More people are signing up to social networks thus translating to a wider market for businesses. This is the main reason why facebook remains the most profitable social media stock. Social media giants such as facebook and twitter will, therefore, continue to announce increases in revenue for the foreseeable future. However, competition in social media marketing is extremely fierce. Concerns have been raised that the number of “Preferred Marketing Developers” (PMDs) - companies that mainly create pages and serve ads for advertisers, is too bulky. This begs the question of whether there is enough to go round. Pointing out that there are more than 260 PMDs serving facebook alone, some commentators argue that there is a large mound of investment money -directed at establishing social media marketing ventures- chasing a relatively smaller amount of revenues. References Corstjens, M., Umblijs, A. (2012). The Power of Evil: The Damage of Negative Social Media Strongly Outweighs Positive Contributions. Journal of Advertising Research, 52(4) 1-17. Retrieved from http://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?sid=9bca19b9-1f4b-4511-9bc3-9be7010a8baf%40sessionmgr112&vid=2&hid=102. Goodman, J. D. (2014, April 27). Despite Twitter Backlash, New York Police Dept. Plans to Expand Social Media Efforts. The New York Times. 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