The Role of Social Media Essay Example Pdf

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This research investigates the role of social media in marketing in order to determine whether companies should focus all their marketing efforts on social media platforms. The term social media is used to refer to a group of internet based web 2.0 applications that enable users to interact, communicate and share content including video, text and graphics. Popular social media applications include social networking sites like Facebook and Twitter, photo sharing sites like Instagram and Flickr, social tagging sites such as Digg and video creating and sharing sites such as YouTube. Social media marketing leverages the potential of social media applications to promote a company and its products or services. Social media marketing is a trend that is growing rapidly as companies begin to realise the strategic importance of social media as a tool to engage consumers, create relationships and develop brand loyalty in a cost effective and efficient manner. Given the advantages of social media marketing, there is growing pressure on companies to adopt social media marketing. In order to determine if companies should focus all their marketing efforts on social media, this research will discuss the advantages of using social media as well as challenges of using it.

Advantages of social media marketing

The use of social media in marketing presents compelling arguments that companies cannot afford to ignore. These include social media marketing as a cost effective way to reach a wider audience, the shift from transactional to relational marketing and the exponential growth of social media.

Social media marketing is cost effective

Social media marketing is a cost effective way to reach a wider target. KirtiÅŸ and Karahan (2011) have argued that in the post-recession era, companies are focused on cutting costs, particularly advertising costs. Social media allows companies to reach a wider target in a timely, more efficient and cost effective manner than would be achieved through traditional communication tools, such as T.V. In the US, a thirty second advert during the Super Bowl costs $4.5 million dollars and has the potential to only reach a certain percentage of the American market while the same amount of money could buy four days of Facebook Reach Blocks with a potential audience of 100 million (Johnson, 2015). Kaplan and Haenlein (2011) argue that social media has enabled viral marketing which allows companies to promote their products and services with a very low budget and still achieve levels of awareness similar to those that can only be achieved by expensive TV advertising.

These researchers present the case of Proctor and Gamble, which in 2010 uploaded a 30-second video via YouTube to promote its Old Spice brand. The video was viewed 23 million times in 36 hours. For companies like Proctor and Gamble which operate in competitive global markets, it would be extremely expensive to achieve this kind of awareness through traditional media like TV because they would have to advertise in each individual country. Social media transcends national boundaries and presents a single interface to reach every corner of the globe. No social media application illustrates this point more powerfully than Facebook. According to a report by Stenovec (2015), more than 1.39 billion people in the world log onto Facebook each month, therefore, if Facebook was a country, it would be the most populous country in the world as shown in. figure 1 below. Figure 1: How Big is Facebook (Stenovec, 2015)

The exponential growth of social media

Researchers argue that consumers are turning away from traditional sources of advertising like radio, TV and newspapers and the internet is now the number one source of media for consumers (Mangold and Faulds, 2009). Social media dominates the internet and leading social platforms like Facebook, YouTube and Twitter have become main stream. As shown in figure 2 below, Facebook has grown from 1 million users in 2004 to more than a billion in 2014. Twitter has also seen growth from 6 million registered users in 2008 to over 500 million in 2014, while Google+, Pinterest and Instagram have also increased their user bases. Morrison (2014) also reports that 93% of marketers use social media for business with Facebook, Twitter and Google+ being the top 3 media sites used by marketers. Figure 2: Social Media Growth (Morrison, 2014) The exponential growth of social media use has been referred to as a revolution (Benioff, 2012) and companies are expected to take part or risk being left behind. As stated by Neti (2011: 1) "one cannot afford to have no presence on the social channels if the competitor is making waves with its products and services".

Similarly, Liu and Smit (2011) state that it is important for a company to have presence and share of voice in social media and companies cannot afford not to engage in the race against competitors. Social media marketing is therefore seen as a way to gain competitive advantage in an increasingly competitive business environment. An example is the case of Coca Cola and Pepsi presented by Liu and Smit (2011). These two companies are traditional rivals for the global soft drink market and they have extended their battle to social media where they are actively pursuing promotional activities on various social networking sites (, 2010). With 93% of marketers being on social media (Morrison, 2014), this means that no company can afford to ignore social media marketing. Also, social media marketing represents huge potential for sales growth particularly in developing countries which have very high rates of mobile phone penetration, for instance, Liu and Smit (2011) state that the social media opportunity in China is massive with more than 40% of the 1.4 billion population using the internet regularly.

Shift to relational marketing

With the rise in social media, power has shifted from marketing managers to individuals and communities (Mangold and Faulds, 2009). Researchers have argued that while traditional media is about reaching the market, in the current marketing environment consumers expect to be active participants in the media process (Hanna, Rohm and Crittenden, 2011). Researchers also report that there has been a shift in marketing theory and practice with an emphasis on relational (two-way) marketing rather than transactional marketing (CsordA¡s et al, 2014). Relationship marketing is focused on identifying and retaining long term customers which is a more profitable proposition than constantly renewing a strong customer base. Hanna, Rohm and Crittenden (2011: 267) refer to the empowerment of consumers as "bottom-up marketing" which results from the development of connections among billions of people on social media every day.

These connections build relationships that result in the creation of vast social networks which marketers can only access through conversations and engagement. One way social media enables relational marketing is through the creation of brand communities. de Vries et al (2012) state that companies can create brand fan pages on social networking sites where customers can interact with a company through comments or likes. This engagement helps to develop loyalty, commitment and emotional attachment to the brand, which in turn enhances the potential for electronic word of mouth (eWoM) marketing (Laroche et al, 2013). According to (2015), a website that tracks the top users on Facebook and Twitter, the most famous brands in the world including Disney, McDonalds and Nike are all top corporate brands on Facebook and Twitter with millions of fans talking about them and following them as shown in figure 3 below. Figure 3: Top Brands on Facebook and Twitter (, 2015)

Challenges of social media marketing

Despite the obvious advantages of social media marketing with regards to cost effectiveness, engaging and building relationships with customers and maximum exposure, some researchers have argued that social media is a tool for social interaction and is therefore not an effective tool for marketing (Martin, 2009; Drury, 2008). Companies also face challenges in implementing successful social media marketing strategies and achieving return on investment (ROI) from their initiatives. Companies like Coca Cola and Unilever have admitted that they have not achieved any impact on sales from their social media initiatives (Ritson, 2013).

The challenge for marketers is how to measure ROI given that traditional (quantitative) methods of measurement are not applicable (Hoffman and Fodor, 2010). The challenge of measuring ROI has prompted a debate on whether companies should continue to invest in social media marketing given that the goal of marketing is to achieve quantifiable results in the form of increased sales and revenues (Fisher, 2009; Liu and Smit, 2011). Social media also faces competition from traditional marketing channels particularly TV which is still considered an important marketing tool despite the growth of social media. A recent study conducted by market analytics company MarketShare in partnership with Turner Broadcasting and Horizon Media (CTV Media, 2015) lists some significant findings which reveal that TV is still the most effective advertising medium. Firstly, when comparing advertising performance at similar spending levels, TV averaged four times the sales lifts of digital; Secondly, TV is the only medium that has maintained effectiveness at driving advertiser key performance indicators (KPI's) over the last five years and thirdly, TV enables marketers to optimise their spend by leveraging data sources such as website visits and inbound calls to improve TV advertising performance.

Media as an integrated system

Stephen and Galak (2009) have argued that all media types have an influence on each other and media operates as an integrated system. According to these researchers, an integrated media approach is consistent with the literature on integrated marketing communication where a company's advertising and promotions are coordinated across channels in order to achieve organisational goals. This view proposes that advertising in one channel can increase the effectiveness of promotions in other channels, for instance, social media fans can generate a buzz over an unknown product/service thus creating awareness that in turn generates traditional media activity. The value of integrating media is being recognised by companies.

Hine (2013) reports that Dunkin Donuts has launched TV spots called #MyDunkin which is are made entirely from a single Vine (Twitter's popular six-second social video format). Hine (2013) also states that other brands including virgin mobile are also combining twitter and TV by incorporating hashtags at the end of ads during major sports events. These hashtags allow consumers to converse with the companies in real time as well as creating brand recognition. Certain types of TV such as reality shows (such as @BBCTheVoiceUK) and live events (such as #BritAwards) lead to greater engagement because they ignite conversation on Twitter. Companies are also adding social media icons on their print media in order to drive consumers to the company's social media profile. Even on radio ads, companies are incorporating social media at the end of the advertisement by encouraging listeners to follow them on Twitter, Facebook and other social media sites.


Given the exponential growth of social media and the fact that the internet is the preferred media of communication among customers, companies have no choice but to continue investing in social media marketing because this is where customers are. Social media also has cost advantages and provides a way for companies to engage with consumers, build relationships and develop brand loyalty. Companies cannot afford not to participate in social media marketing because competitors are already participating. However, this research finds that companies should not focus exclusively on social media marketing because traditional marketing, particularly, through the TV is still an effective way to reach consumers. This research also finds that companies are opting for an integrated approach, combining social media such as Twitter with traditional media such as TV in order to reach and engage more customers. In order to succeed in integrating social and traditional media, companies should determine their business and communication goals and identify their target markets. Companies should also determine where their target markets are and identify the most effective ways to connect and interact with them. Once a strong relationship has been established, consumers will be ready to trust and will begin to share positive information about the company and the brand with other people online, making the marketing strategy successful.


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