Social Media Marketing: Implications for an E-Learning Startup

Influences of Social Media on Marketing

Social media has essentially put consumers in charge of communication channels in that they can now voice and share their opinions about content and products through reviews, rankings, and comments. Consumers also can now be highly selective in choosing what they consume and when and ignore, block, or filter everything else. Consequently, traditional marketing strategies are becoming increasingly less effective forcing organizations to devise new ways to market to consumers who prefer to rely on the opinions of other consumers when making purchasing decisions rather than on advertisers’ claims. A closer examination of the consumer empowerment phenomenon will help understand the marketing implications (Ferrara & Gale Group, 2013).

Consumer Empowerment

Social influence has a tremendous impact on whether products or services catch on (Berger, 2013) and has consequently empowered consumers to have more influence on company, product, and brand reputation than ever before. As Berger explained, word of mouth is more effective than advertising because it is more persuasive in that people trust their friends more than a self-proclaimed declaration that a company’s product is the best. Word of mouth recommendations are also more targeted than traditional advertisements because friends share with others who they know are interested.

Building alliances with social leaders and tapping into their networks is a topic of ongoing research. For example, in a study that determined the impact of opinion leaders reviews of 350,122 titles of books, CDs, videos, and DVDs sold by Amazon over a 10 year period, Bao and Chang (2014) identified three types of opinion leaders namely those who were the most communicative (write the most reviews), those who were buzz-generating (reach the largest number of consumers), and those who were considered the most trustworthy (write the most helpful reviews). The top 1% of reviewers (21,458) was considered opinion leaders who were classified three times (n = 64,371). Of those, 34,340 were distinct while 10,886 belonged to all three sets.

The results of statistical analyses of product sales rank, category count, number of reviews, and average rating along with reviewers’ product category knowledge revealed that all three types of opinion leaders had a positive and significant (p < .001) impact on sales (Bao & Chang, 2014). In addition, customer satisfaction, product differentiation, and product awareness/popularity were most strongly influenced by communicative, buzz-generating, and trustworthy opinion leaders respectively. The breadth and depth of opinion leaders’ knowledge of a product category also has a significant influence in that a leader who is highly interested in a category will have less influence on consumers who are less interested than on those with a shared interest. Bao and Chang therefore reasoned that leaders with broad product category knowledge will attract more followers. The implication for marketers is that influencers who spread the word can be targeted as part of a seeding strategy or even recruited if the incentive is right (Erdoğmuş & Çiçek, 2012).

Creating great content and finding the right influencers who gladly disseminate it on behalf of a company is what Handley and Chapman’s (2012) book is all about. The authors cautioned however, that gratuitously link baiting influencers can backfire and trying too hard to go “viral” looks contrived. It is best instead to get influencers’ attention by providing high-quality content they will happily review, rank, and share with others. Hyatt (2012) also explained that a marketer who has a material connection with an influencer who endorses the marketer’s product on a blog, for example, may have to require disclosure of that relationship under U. S. Federal Trade Commission (FTC) guidelines. It is the marketer’s responsibility to ensure that any testimonials shared by materially related third parties are in compliance with FTC rules.

Odden (2012) described how marketers can integrate social influence with search engine optimization (SEO) and content marketing. The author further explained why it is essential for businesses to master each aspect of marketing and SEO and to stay abreast of changing consumer preferences and platforms. Quality trumps quantity, according to Odden who recommended that marketers proactively seek out influencers as platforms change and as new ones are introduced. Safko (2012) emphasized that trust is what ultimately creates influence and for businesses to thrive they must cultivate that trust while Jucaitytė & Maščinskienė (2014) stated that the most important objective of participating in social networks is to influence consumers’ purchasing decisions. Schaefer (2014) expressed similar sentiments regarding the importance of social influence on marketing success but took it further by providing the following five practical things marketers need to consider before implementing SMM:

  1. Humans buy from humans
  2. Small well-timed meaningful interactions with consumers generate the most loyalty
  3. Adopt a social media mindset: Targeted connections + meaningful content + authentic helpfulness = business benefits
  4. Design the company information ecosystem: use SEO and content marketing to connect customers to useful content at each stage of the purchasing process

The authors cited thus far in this section all advocated active participation in the social channels deemed relevant to the marketer with the aim of influencing the influencers. As explained by Constantinides (2014), active literally means engaging strategically by joining the ongoing conversations in ways meaningful and beneficial to consumers without losing sight of the reasons why, which are to increase the customer base, build trust, and ultimately increase sales. Constantinides also acknowledged that most companies have no idea where to begin and suggested a passive approach which involves identifying the applicable social networks and simply listening in on conversations without contributing. The goal is to gather a sufficient amount of information about market needs, customer opinions, and competitive trends that can be analyzed and used as the basis for developing more strategic active marketing campaigns. Passive engagement in social networks can be thought of as a form of reconnaissance that informs strategic decision-makers and helps them identify market opportunities, manage public relations, and, when necessary, initiate damage control.

Push vs. Pull Marketing

Consumer empowerment through social media is clearly changing the way companies compete. The goal of traditional marketing is to maximize market reach and is done by advertising via broadcast and print media regardless of relevance to the recipient. Push messages, according to Schulze, Schöler, and Skiera (2015), are unsolicited direct or broadcast messages of which spam is the classic digital example. Spam, as of this writing, is considered applicable primarily to unsolicited email however, according to the experts interviewed by Janssens, Nijsten, and Van Goolen (2014), spam should be more broadly defined as unwanted digital messages suggesting spam will likely increasingly find its way into emerging communication channels including social media and mobile applications.

Janssens, et al (2014) therefore recommended that marketers become familiar with anti-spam legislations that govern consumer opt-in and opt-out rights. Hyatt (2012) explained that subscription-based content is one exception of pushed content that is actually solicited in that subscribers have given their permission to have content delivered to them and while permission-based subscriber lists are arguably marketers most valuable assets, marketers are advised to stay abreast of legislation governing consumers’ right to privacy and their right to unsubscribe. The practice of push marketing using mass-media is becoming increasingly inefficient and too broad to be effective in reaching target influencers on social media platforms. Tiago and Veríssimo (2014) questioned if the locus of power has shifted to the point that companies are now being pushed by consumers who demand to be heard.

In contrast, pull messages are ones consumers seek out purposively, such as a search engine query (Schulze et al., 2015) or ones that are highly relevant, such as one personalized to the consumer. With respect to search engine queries, Handley and Chapman (2012) recommended that marketers and content creators make sure all content is optimized to ensure top ranking which increases the likelihood that the searcher will choose that content over a competitor’s. Social media is an ideal environment where pull marketing can be used effectively. For example, Erdoğmuş and Çiçek (2012) studied the impact of social media on brand loyalty involving 338 survey participants who were active social media users and who followed at least one brand on the platform. Relevancy of content was found to be the second strongest driver of brand loyalty preceded by the perceived value of the incentive being offered. Schulze, et al (2015) studied the effectiveness of a Facebook marketing campaign and found that since Facebook is generally used for fun and entertainment, campaigns that market those types of products are more effective than those that market useful products. The researchers compared broadcast marketing with an individually targeted approach and found there was a trade-off between reach vs. relevance with the latter better suited for marketing useful products using a pull strategy.