Social Network Marketing & Its Effectiveness

The objective of this review is to explore what the research says about social network marketing and its effectiveness. The first wave of internet revolution (web 1. 0) brought consumers e-commerce. The second wave, Web 2. 0 evolved into a much robust and interactive experience, allowing consumers to participate and share information effectively, Social network media such as Facebook, Tweeters, etc. have grown rapidly. Users are not only teens but also adults. The popularity of smartphones, hand-held tablet computers, computer notebooks also help the increase in popularity of using these sites.

For instance, social net work media have replaced e-mails to become the most popular communication tools. To marketing practitioners, this wave of digital revolution cannot be ignored. More than that Web 2. 0 enable consumers to generate content and share. This change is totally different from conventional marketing, in which firms generate content or messages to bombard users and potential users (such as advertising). It is now not a question of whether a company should use digital media, but how they can maximize the benefit from the rise of these new media network.

It may not mean that conventional marketing tools such as advertising will be replaced overnight, but social network media should be able to synergize conventional promotional tools. Thus, naturally the question of tracking and measuring social network media and its ROI will be asked, which will be addressed in this paper. The use of social network media in consumer marketing is well established. Its application in education, healthcare, and also in pharmaceutical promotion are also explored. Word of Mouth Marketing To begin with, the concept of word of mouth marketing is explored.

Marketers recognized that the conversations among customers are powerful influence of product adoptions (Ryan and Gross 1943; Rogers 1962). Traditionally, marketers develop message to influence selective consumers (who may be early users) and these consumers help propagate the product message to other consumers. More sophisticated marketers will identify influencers in the group of potential consumers (or opinion leaders) and influence them. Thereafter, these opinion leaders can help propagate marketers’ message to other consumers.

In web 2. 0 err, consumers will participate in the whole marketing communication process. They will coproduce content to be shared in their chosen network. Hence, Word of Mouth model has evolved from a consumer-to-consumer process in the past to a opinion leader to consumer model, and most recently, a network coproduction model (Figure 1. ) Marketers do not only influence the selective consumers (opinion leaders) in the launch phase, but also have to monitor the process of consumer to consumer messaging.

The coproduction model of word of mouth marketing is further depicted by Adrian Palmer and Nicole Koenig-Lewis. In their article “An experiential, social network-based approach to direct marketing”, the authors proposed a framework of 3 elements of the social network environment – the seller, the customer and the community (Figure 2). In this model, the traditional interface for direct marketings has been between the seller and the customers, represented by the hatched area. With the introduction of the community element, the customer interacts with self-selected communities.

Sellers need to interact with selected communities to achieve a variety of benefits, including spreading of positive word of mouth and gathering information about buyers’ needs and preferences. The challenge is how to balance the interest of the sellers, the customers and the community, and this is represented in the overlapping area of the 3 circles. Figure 2. Direct marketing in a social network Success Factors for Social Network Sites Shu-Chuan Chu and Yoojung Kim studied the determinants of consumer engagement in social networking sites (Chu & Kim 2011).

Based on literature review, the authors identifies 5 determinants – tie strength, homophily, trust, normative and informational interpersonal influence as important antecedent to eWOM behavior in SNSs. Tie Strength Tie strength refers to “the potency of the bond between members of a network” (Mittal et al. 2008, p. 196). Example of strong tie strength is family members, whereas weak tie strength is colleagues. Strong tie were more likely to be activated for the flow of referral behavior. The hypothesis is that SNS users’ perceived tie strength with their contacts is positively related to their engagement n eWOM behaviors in SNSs.

Homophily Homophily refers to the degree to which individuals who interact with one another are congruent or similar in certain attributes (Rogers & Bhowmik 1970). The assumption is that people with simailar characteristics, such as age & character may come together to form community. Hence, the hypothesis is that SNS users’ perceived homophily with their contacts is positively related to their engagement in eWOM behaviours in SNSs. Trust Trust is defined as ‘a willingness to rely on an exchange partner in whom one has confidence’ (Moorman et al. 1993, p. 82).

In todays popular SNS, users share information with their own real network and thus, significantly increase the level of trust. Therefore, the hypothesis is SNS users’ perceived trust in their contacts is positively related to their engagement in eWOM behaviors in SNSs. Normative influence Normative influence refers to the tendency to conform to the expectations of others. It affects attitudes, norms and values (Burnkrant & Cousineau 1975). The hypothesis is that SNS users’ susceptibility to normative influences is positively related to their engagement in eWOM behaviors in SNSs. Informational influence

Informational influences, on the other and, denote the tendency to accept information from knowledgeable others and be guided in product, brand and store search (Bearden et al. 1989; Deutsch & Gerard 1955). The hypothesis is that SNS users’ susceptibility to informational influences is positively related to their engagement in eWOM behaviors in SNSs. These factors were tested in an on-line survey of the college students on their 3 operationalized engagement: opinion seeking, opinion giving and opinion passing. The findings of the study are: Tie strength is positively associated with eWOM behavior.

On the other hand, a negative relationship was found between homophily and eWOM in SNSs. Trust is found to be positively impact engagement with eWOM. Normative and informational influences are important for the engagement, but informational influence in opinion giving is not determined. Implications: The results from this study suggest that advertisers must take social relationship factors into account and develop personalized marketing communications strategies to fulfil SNS users’ needs. Insight into Network Co-production of Product Messaging That marketers may not have full control in the product messaging in social etwork marketing, Kozinets, de Valck, Woinicki & Wilner studied a mobile phone launch campaign using social network media (blogs) (Kozinets, de Valck, Woinicki & Wilner 2010). 83 bloggers were seeded with a new mobile phone and their blogs were monitored for 6 months. The bloggers were selected based on their traffic on their blogs. There is no obligation for the bloggers to write or not write. This study gave detailed analysis of the posts and provide good insight and lessons learnt from a commercial program used in social network media. The study found that bloggers can be categorized based on their character style.

For instance, in the study at least 4 types are identified, 1. citizen journalist, 2. loving mother, 3. satirical exhibitionist, and 4. the making-ends-meet professional blogger. Four narrative strategies are identified (Figure 3) – evaluation, embracing, endorsement and explanation. Which strategy to be adopted depends on the blogger’s character, the governing norm in the community and the commercial element in the WOMM. The study found that the motivation for consumers to participate in the co-production of WOM are more complex and culturally embeded, shaped by communal interests and communicative orientations and charged with moral hazard.

WOM communicators demonstrate their need to balance inherent commercial-communal tensions while being consistent with the character elements of their ongoing narratives. It is also found that WOMM message and their attendant meanings will be altered by communicators in ways taht are attuned to a range of different individual and communal factors. The managerial implications from the study are the followings. Firstly, managers should pay attention to not only the quantity (so-called amplification by advertising professional), but also quality of the consumer-generated messages.

Secondly, consumers that play the role of communicators should be further explored, classified and devloped. Thirdly, managers should proactively explore the norms assococaited with the communication network. Marketer also need to rethink whether some degree of control must be imposed in a WOM campaign. For instance, in the current study, that bloggers are free to write and even disclose their relationship with the firm can generate negative WOM and distrust in the community. More important this study also suggests that managers have an opportunity to encoruage particular narrative stategies that may be ideal for their product.

Figure 3 Social Network Marketing vs Traditional Marketing? Studies shown that social network marketing (word of mouth marketing) and traditional marketing work synergistically (Onishi & Manchanda 2012; Trusov, Bucklin & Pauwels 2008). In a Japanese study, how blogs and advertising interact during product launch in movie and cell phone categories were studied. The study found that advertising will stimulate blogging activities during product pre-launch, and effect is less apparent post launch (Onishi & Manchanda 2012).

In another study (Trusov, Bucklin & Pauwels 2008), electronic word of mouth (eWOM) programs of a social network site were compared with PR programs (media appearance and Events) in terms of the effectiveness in generating new sign-ups. The founding is that eWOM is more effective than media appearance and events. However, it is also observed that eWOM and PR work synergistically. The studies also showed that blogging and eWOM effects are more long-lasting. The effectiveness of Social Media Marketing

In the article by Hoffman and Fodor (Hoffman & Fodor 2010), the authors attempted to address the ROI metric of social network marketing. As social network sites are now easily measured by search of your brand’s blogs or data mining, quantative measurement seems to be ppssible. Some people may want a simple direct short term sales against direct costs. The authors caution whether this is a suitabke measurement of social network effectiveness. Nevertheless, we know that Social network marketing can substituted traditional marketing.

As traditional marketing such as TV advertising is expensive, by allocating a certain amount of promotional budget to digital marketing can definitely reduce cost and achieve more or less same results. Another benefit of social network marketing is the improvement of market research by direct communicating with users and thus, significantly saving the amount of market research costs. To meaningfully measure ROI of social media marketing, the authors suggest to begin with identifying the objectives of a particular social marketing campaign in order to take into consideration of different nature of social network media.