Mark Cahill MBA Thesis

8/7/2019 Mark Cahill MBA Thesis

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To what extent have Online Social Networks Changed

Business to Consumer Marketing

Mark Cahill

ID Number: 0014206

University of Limerick

Masters of Business Administration 2008

Dr. Lisa OMalley

Word Count: 12,437


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To what extent have Online Social Networks Changed

Business to Consumer Marketing

Abstract

The purpose of this Thesis is to investigate and better understand Online Social Networks from

the perspective of Marketing in a business to consumer context. The proposition guiding this

thesis is that online social networks have changed, or evolved the rules of traditional marketing.

Some of the questions that will be asked and hopefully answered: What has caused this social

networking trend and what effect this has on Marketing? What companies have already

participated in this trend and how successful they have been, are there any learnings from their

experiences. Has this phenomenon changed how customers communicate with each other and in

turn how business and ultimately marketing communicates with customers? Has the power

shifted from the Marketers to Consumers? Who owns the Brand?


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Acknowledgements

I would like to thank, my wife, Risn, my son Dylan, and my daughter Abigail for their Support,

Patience and Love, especially throughout the past 2 years.

I would also like to thank Dr. Lisa OMalley for her support, advice and guidance with this

Thesis.

Finally, I would like to thank those who took the time out to be interviewed for this Thesis.


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Table of Contents

Abstract................................................................................................................................................... 1

Acknowledgements................................................................................................................................. 2

Table of Figures ...................................................................................................................................... 5

Chapter 1 - Introduction.......................................................................................................................... 7

Chapter 2 - Summary .............................................................................................................................. 8

Chapter 3 - Literature review ................................................................................................................ 10

1. Mass and Direct Marketing ....................................................................................................... 10

2. Brand ........................................................................................................................................ 14

3. Technology and Marketing Customer Relationship Marketing (CRM).................................. 18

4. Social networks and Brand communities .................................................................................. 21

4.1 Brand communities/Tribes ...................................................................................................... 25

4.2 Online social networks the link between you and your customers through Web 2.0 ...... 29

4.3 What is Web 2.0? and what is its relevance to marketing? .............................................. 32

4.4 Viral marketing ................................................................................................................. 36

Chapter 5 - Methodology ...................................................................................................................... 42

Chapter 6 - Results................................................................................................................................ 45

6.1 Twitter................................................................................................................................... 46

6.2 MySpace ............................................................................................................................... 46


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6.3 Blogs ..................................................................................................................................... 47

6.4 Dell Case............................................................................................................................... 51

6.5 P&G beinggirl.com Case ...................................................................................................... 56

6.6 Adobe Communities Case ..................................................................................................... 57

6.7 Twitter and brands ................................................................................................................ 58

6.7 Interviews.............................................................................................................................. 61

Chapter 6 - Conclusion and Discussion ................................................................................................ 68

Bibliography ......................................................................................................................................... 72

Appendix A Interview questions........................................................................................................ 78


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Table of Figures

Figure 1 - Marketing and Technology ................................................................................................... 18

Figure 2- Basic Social Network Diagram ................................................................................................ 23

Figure 3 Marketing and Social Networks ............................................................................................ 29

Figure 4 - Tweetup ................................................................................................................................ 34

Figure 5 Conversation Prism by Brian Solis ........................................................................................ 35

Figure 6 Social Technographics ladder source Forrester ..................................................................... 38

Figure 7 Online Social Networking Marketing Strategy ...................................................................... 40

Figure 8

Blogger participation in Web 2.0 activities

Source Technorati ........................................... 49

Figure 9 Dell Second Island Life .......................................................................................................... 53

Figure 10 RichardatDell connecting with customers using Twitter .................................................... 61

Figure 11 Online Social Networking Marketing Strategy .................................................................... 69


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Chapter 1 - Introduction

In recent times there has been an explosion of online social networks, the list includes but is not

confined to Facebook, Myspace, Bebo, Second life, linkedin, YouTube, Orkut, Twitter. Social

networks are seen as serious business, one such recent example is Facebook, founded by Mark

Zuckerberg, the 23-year-old who has been compared to of Bill Gates as both dropped out of

Harvard to build a highly successful company. Facebook was founded on the 1st

of February

2004; by October 24th

2007 Microsoft beat Google and Yahoo to take a 1.6 percent stake in

Facebook, costing Microsoft $340million. This investment has the three and a half year company

valued at $15 Billion, making Facebook the 5th Most Valuable U.S. Internet Company.

Facebook has more than 40 million members (News.com 2007) (Nytimes.com 2007)


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To understand how marketing has gotten to this point, we shall look back briefly how marketing

has evolved through various stages. The stages are as following,

1. Mass and Direct Marketing.2. Brands.3. Technology and Marketing Customer Relationship Marketing (CRM)4. Marketing and Social networks.

a. Online Social networks and Brand Communities5. Finally, the convergence of Marketing, Technology (in particular Web 2.0) and Social

networks.


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Chapter 3 - Literature review

1. Mass and Direct Marketing

Early marketing media was mostly in the form of advertising and direct mail; these were the

tools of the trade used by companies to generate visibility and customer demand. These were

very much broadcast in nature, with a very low response rate. Webster (2004) states that

Typical response rate to their direct mail campaigns is 1%. Part of the reason to such a low

response rate is that these types of campaigns are often quite easy to ignore, and ignore because

the message may not have any relevance to the end recipient. It is still more difficult to link and

quantify the true impact of advertising to increases in brand value. For services firm marketing

efforts to be effective using tangible media, they had to exhibit three characteristics: repetition,

volume, and creativity (Webster 2004), these efforts have an effect on increasing cost in a

nonlinear fashion.

Traditional media is used by marketing to bombard the publicnewspapers, direct mail,

television, radio, magazines, billboards, bus backs, subway cars, as is evident in any major town

or city in the world. Van Den Bulte and Wuyts (2007 page 4) suggest that there is a decline in

effectiveness of mass media and this may be the primary interest for Marketers renewed interest

in social networks. The effectiveness of traditional marketing is been eroded due the consumers

been able to ignore marketing messages, especially of the broadcast type. (Van Den Bulte and

Wuyts 2007 ). Due to the ever increasing number of radio-stations, TV channels, magazines and

websites there has been a decline in effectiveness of mass media and traditional marketing

(Clemons, et al. 2007 ; Leskovec, J.et al 2007), especially as this effects those companies whose


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products are best suited towards the mass market (Turrow 1997). Forester research completed a

study which investigated consumer rejection of advertising. It discovered that consumers are

using technology and other means to block ads. Most Americans watching broadcast television

have access to a remote, TiVo and 30-second-skip function on their VCRs. (Van Den Bulte and

Wuyts 2007 page 20). Furthermore they are avoiding internet popup and banner ads through

software, and print ads the old fashioned way by simply turning the page. Another worrying

trend for marketing is an increase in consumers distrust and cynicism in marketing and

advertising (Clemons, Barnett, Appadurai 2007), Friedstad and Wright (1994, 1995; cited by

Van Den Bulte and Wuyts 2007) say that there is an increase in the number of consumers, in

particular teenagers, whom view marketing efforts as schemes. Court (2007) has also noticed

that consumers sceptical of push ads, are flocking to a medium they trust more, such as User-

generated media account which accounts for almost one-third of all the time individuals spend on

the 100 most visited US Web sites, up from roughly 3 percent just two years ago.(Court 2007)

Thus, traditional Marketing communication is overall becoming less effective and it is in

marketings interest to discover new means of capitalising on consumers networks in order to

convey their message.

It also appears that consumers have control where once it was the marketer who was in control.

The increasing importance of third parties will force businesses to enhance their

awareness of blogs, chat rooms, and other social-networking media and to develop

new strategies both to capitalise on marketing opportunities revealed by consumers

and to defend themselves from attacks. (Court 2007).


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One such very famous attack is that on Dell from a Blogger, Jeff Jarvis of the

BuzzMachine.com. This all unfolded in the Summer of 2005, after Dell refused to replace or fix

Jeffs computer, Jeff proceeded to post Dell Hell posts on his blog. After several days he still

had received no response from Dell, so he posted an open letter on his blog to Michael Dell, the

chairman and Michael George the then Chief Marketing Officer. This post summarised his

resistance and struggle with Dells customer service. At the time Jeffs blog would have 5,000

visits per day, but when this open letter was posted, the post became the third most linked in the

blogosphere, and received 10,000 visited per day as people commented on their bad Customer

experiences with Dell. (mediapost.com 2005)

A review of the literature conversely suggests that the biggest shift in todays marketing world

isnt the much-discussed declining effectiveness of television advertising but the changes in how

consumers research and buy products. The Internet is a major contributor to this shift. (Court

2007) (Porter 2001), many new media that seem to be promising ways of gaining access to

consumers as they conduct their research are not yet at scale. The result is fragmented media

spending and, sometimes, rising costs to generate the desired consumer impact.

Webster 2004 highlights the marketing crisis in relation to advertising and direct mail where they

still play a part in a significant foundation of firms marketing plansat whereby they typically

account for about one third of all marketing firm expenditures. She says that this is not because

firm management is convinced that advertising is effective, but because they are uncertain about

what to do instead. Webster 2004, also draws attention to the fact that Marketing activities are


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rarely linked to tangible metrics or even tied to strategic business goals. Furthermore, Webster

highlights that a survey by Forrester on marketing success, reports that less than half of

marketers measure the effectiveness of individual marketing program elements and less than a

third measure the impact of integrated marketing activities. This suggests that not only is

marketing in crisis, but businesses that practise this type of waste may be also in crisis. An

important and core element of any business is to measure return on investment.


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2. BrandAccording to the American Marketing Association, a brand is a:

name, term, sign, symbol, or design, or a combination of them intended to identify

the goods and services of one seller or group of sellers and to differentiate them from

those of competition.

The word brand is derived from the old Norse word brandr, which mean to burn as brands

were originally and still are used as a method that owners could mark their animals in order to

identify ownership (Keller, 2003 strategic brand management book). Similarly today, companies

add their brand is order to identify ownership and differentiate from competitors. Patterson and

OMalley (2006) highlight that the majority of brand building activities taking place in mass

media environments rather than through direct consumer communications.

A well-recognised brand could help a company withstand the impact of increased competition. It

also adds value to both the firm and to the customer. It increases loyalty, as discussed in the

brand equity literature and creates a strong identity (Doyle, 1990; Keller 1993; Simon and

Sullivan 1993; Aaker 1996). It it is more expensive (6 times) to win new customers than to keep

existing ones (Peters, 1986) and brand loyalty plays a vital role in retaining existing valuable

customers. Strong and establish brands can be used as a platform for growth via brand extensions

as well as been able to command a premium price over weaker competitors 20% more than

discount brands. Another function of a brand is used to make the decision processes simpler and


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more efficient. In a typical situation a consumer is faced with been bombarded with many forms

of information, purchasing brands that have proved satisfactory in the past are usually selected,

this is more probable for low involvement products (Doyle, 1990). A strong brand also acts as a

source of differentiation thorough its name, symbol or personality which are very difficult to

emulate (Doyle, 1990; Aaker, 1996; Aaker, 1997).

David Penn (2006) has recently written a good summary of the current state of advertising

research, in which he shows how the earlier conscious rational models of advertising have been

challenged, in the last two decades, by neuroscience. He summarises the neuroscience learning

as follows: the most important brand response is emotional, Most of our decisions are

unconscious and ultimately, brand response is moreimportant than ad response. Also, David

Smith (2006) says, in astraight choice between emotion and reason, emotion wins. This shows

the importance of associating your brand with strong positive emotions.

Thus, the symbolic value of brands may be used by consumers to establish membership of social

groups, to signal aspirations of group membership, or to point toward differentiation from other

consumers. Many contemporary brands have achieved iconic status (Holt, 2004), such as

Redbull, Guiness, Ferrari, Lego. A study by WPP, found that brands considered iconic enjoyed

far higher top-of-mind awareness: 58 percent versus 36 percent. Critically, however, recent

findings in neuroscience suggest that the strongest mental representations of brands are those that

are well balanced across physical cues, functional benefits and emotions evoked.


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In his bookHow Brands Become Icons, Oxford University Professor Douglas Holt proposes

these three principles.

Iconic brands address acute contradictions in society. By tapping into a collective desireor anxiety, iconic brands develop a status that transcends functional benefits. They

challenge people, either directly or subtly, to reconsider accepted thinking and behaviour.

The famous Coca-Cola ad from 1971, "I'd Like to Teach the World to Sing," voiced a

desire to overcome the deep divisions in American society created by the Vietnam War.

Iconic brands develop identity myths that address these desires and anxieties. By creatingimaginary worlds, they offer escape from everyday reality. The Marlboro man represents

the values of the Western frontier: strong, independent and capable.

Over time, the brand comes to embody the myth. It becomes a shorthand symbol thatrepresents far more than just a brand of soft drink, cigarette, or car. While there are now

many expensive watches to choose from, Rolex still symbolizes success and status

around the world.

As brands, such as those just mentioned come to possess such meaning for consumers it is quite

obvious to see how we might depict the connection between consumers and brands as

relationships. And relationships is quite an accurate description however is, are they the same as

interpersonal relationships?


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Patterson (1999, p. 419) defines brand personality as 'the consumer's emotional response to a

brand through which brand attributes are personified and used to differentiate between

competing offerings'. Given the fact that consumers infuse brands with personalities, it is largely

held that as a result consumer personalities; and brand personalities should reflect one another.

This is not necessarily the case, but there may be some degree of fit between the two if, as

Lannon (1992, p. 12) states 'brand choice is the direct manifestation of a set of personal values'.

Brand personalities, therefore, are emotional projections used to simplify brand choice decisions

across a range of product categories. (Patterson and OMalley 2006)


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3. Technology and Marketing Customer Relationship Marketing (CRM)

With the advent of the internet, marketing saw an opportunity with Customer Relationship

Marketing (CRM). This powerful new medium was viewed as the mechanism for building

brands, reaching new markets, and finding new customers.

Figure 1 - Marketing and Technology

Gummesson (1994:12) defines relationship marketing as marketing seen as relationship,

networks and interactions. The internet was powered by huge databases and marketing also

created an opportunity use database technologies to store knowledge gained about customers.

The goal of relationship marketing is to build customer loyalty for the firm. Therefore, any CRM


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strategy (including technology investments) must build a strategic competitive advantage that

distinguishes a product/brand/company in a competitive environment. This helps create

immunity from competition as well as stronger customer loyalty. Information on customers is

critical to developing and maintaining customer relationships.

For small organizations with very few customers, where the ratio of customers to employees was

low, it relatively easy to collect and use relevant information in building customer relationships,

however for larger organizations with a larger customer to employee ratio this becomes

practically impossible to do as it does not scale very well. Thus, information technology, initially

in the form of the database, was regarded as an agent of surrogac y to be enlisted to help

marketers to re-create the operating styles of yesterdays merchants (Sisodia and Wolfe, 2000,

p. 526).

OMalley and Mitussis (2002) highlight that relationships are core, but, for large organisations

that these relationships now rely on a technology foundation to support and maintain these

relationships.

Whilst there is a suggestion that relationships between consumers and organisations

(see Sheth and Parvatiyar 1995) and consumers and their brands (see Fournier 1998)

have always been important, it is also recognised that, today, such relationships must

be facilitated or at least supported by technology (Dwyer et al., 1987; Blattberg and

Deighton 1991).

A downside of CRM is rather than treating each customer with the consistency and respect one

might expect in a relationship (Sheaves and Barnes, 1996), in reality customers often get

competing relational offers from different parts of the organization. This can lead to an

exacerbation of privacy issues with customers becoming increasingly concerned with


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organizational intrusion (Patterson et al., 1997), a perception that might actually translate into a

reduction in consumer trust (OMalley et al., 1997; Fournier et al., 1998).

Unfortunately, academic research has shown that it is often hard to demonstrate the link between

the implementation of information technology and returns that show on the bottom line

(Brynjolfsson, 1993; Willcocks and Lester, 1997). The move from transaction to relationship

marketing (Dwyer et al., 1987) in consumer markets was driven by changes in the business

environment and enabled by technology (Sisodia and Wolfe, 2000).

Salesforce.com specialises in selling CRM solutions through software as a service model. The

fact that this company has become so large shows he demand and success of CRM solutions.

There are also many others providing CRM solutions, a simple search on google for CRM

software yields 2.75 million results. OMalley and Mitussis (2002) sum up CRM as based

upon sound marketing principles through identifying customer needs, segmentation, offering

superior customer value, and customer retention all of which processes are enabled by the

application of sophisticated technology.


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4. Social networks and Brand communities

Before we delve into the depths of Brand communities it is important to understand social

networks. The first step in determining the usefulness of online social networks to marketers is to

have a basic understanding of a social network. Social networks are everywhere in a Marketers

world, consumers share information about products and services. And in some cases consumers

go as far as gravitating towards each other to form brand communities.

Social network analysis, which is related to Network Theory has emerged as a tool to understand

how social networks work. Social networks have been studied for quite a while, in fields

ranging from modern sociology, anthropology, social psychology, communication studies,

information science, organizational studies as well as Biology. (Van Den Bulte and Wuyts 2007)

A social network is a social structure made of nodes (which are generally individuals or

organizations) that are tied by one or more specific types of interdependency, such as values,

visions, ideas, financial exchange, friendship, kinship, dislike, conflict or trade. The resulting

structures are often very complex, after all human nature is inherently complex.

The question of how the pattern of interconnection among social entities consumers,

colleagues, business units, competitors and complementors - affect behaviours and the

outcomes of those entities in now receiving more attention than ever. (Van Den Bulte and Wuyts

2007).


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Social network analysis views social relationships in terms of nodes and ties, as basic building

blocks. Nodes are the individual actors within the networks, and ties are the relationships

between the actors. There can be many kinds of ties between the nodes. Research in a number of

academic fields has shown that social networks operate on many levels, from families up to the

level of nations, and play a critical role in determining the way problems are solved,

organizations are run, and the degree to which individuals succeed in achieving their goals.

Social networking has created powerful new ways to communicate and share information. Social

networking websites are being used regularly by millions of people, and it now seems that social

networking will be an enduring part of everyday life. Wikipedia is an incredible example of how

information is shared, where there are more than 75,000 active contributors working on more

than 10,000,000 articles in more than 250 languages, and these are all voluntary contributions. IT

has grown rapidly into one of the largest reference Web sites, attracting at least 684 million

visitors yearly by 2008. (Wikepdia.org 2008)

In its simplest form, a social network is a map of all of the relevant ties between the nodes being

studied. The network can also be used to determine the social capital of individual actors. These

concepts are often displayed in a social network diagram, where nodes are the points and ties are

the lines.


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Figure 2- Basic Social Network Diagram

Tie Strength is an important property of social network, and of particular importance to

marketers. Tie strength simply refers to the intensity and tightness of a tie between nodes, such

examples are the depth of a friendship, or frequency of interaction. It should be noted that tie

strength, therefore, is not a binary on or off state, but, is a variable measurement. Van Den Bulte

and Wuyts (page 10, 2007) conceptualise a tie strength as having two dimensions, (1) tie

intensity or activity (the frequency of contact) and (2) tie valence (the affective, supportive, or

cooperative character of the tie) and they state that this conceptualisation of tie strength agrees

with best empirical evidence to date. Mark Granovetter (1973) first introduced the Strength of

weak ties where acquaintances are weak ties and our friends are strong ties. He concludes that

Strong ties share the same limited information while weak ties are a source of new information

and thus are more valuable.


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In Malcom galdwells book The tipping point he suggests the law of the few, this law describes

the basic structure of social networks and how messages are passed through word of mouth. It

attempts to classify three important types of people who affect the rapid spread of messages

through the network. These three types of people are connectors, mavens, and salesmen.

The first type are Connectors, these are the socialites. They are people with many friends and

acquaintances who spend time maintaining these connections. If you were to draw connectors on

a network diagram, they would be the most central nodes with a higher number of connections

than most others. According to Gladwell connectors are rare in society, but they maintain many

more times the number of relationships than the average person does. Because of their ability to

spread a message to a huge number of people quickly, connectors are central to understanding

how tipping points are reached.

The second group are Mavens, who gather and harvest information from the social network.

They listen and evaluate the messages that come through the network and they pass their

evaluations on to others, along with the adding their own messages to these evaluations. Mavens

regulate network because they have the power to control what flows through the network.

Mavens are seen as trusted nodes.

Finally there are Salesmen, and they are what the name implies. They are persuaders who are

capable of propagating messages through the force of their character. Thus, regardless of the

message content or their expertise in the area, they have a certain ability to sell which helps them

move messages which may be of importance to them.


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It is only in recent times, due to emerging information technologies such as Web 2.0, which

facilitates and accelerate the velocity of communication among consumers, and within firms

through online social networks. Web 2.0 shall be dealt with in more detail in the next chapter.

4.1 Brand communities/Tribes

Next, we shall introduce the concept of a brand community. A brand community is defined as

a specialised, non geographically-bound based community, based on a structured set of social

set of social relations among admirers of a brand (Muniz and OGuinn, 2001, p 142) . In recent

years academic treatments of consumption activities have begun to move away from a focus on

the individual to considerations of the communal. There is a move from dyad to network

signalled a maturing of the emerging relationship literature (Ford, 1990). Enduring communities

have been variously labelled as 'consumption communities' (Boorstin, 1973), 'subcultures of

consumption' (Schouten and McAlexander, 1995), 'cultures of consumption' (Kozinets, 2001),


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'brand communities' (Muiiiz and O'Guinn, 2001; McAlexander et al., 2002), and 'brand cults'

(Belk and Tumbat, 2005). More temporary communities have been referred to as 'social

collectives' (Greenwood, 1994), 'neo-tribes' (Cova, 1997), and 'life-mode communities' (Firat and

Dholakia, 1998). What is particularly interesting from the perspective of branding is the linking

value that brands provide to individuals seeking to become part of these new communities.

Cova's (1997, p. 307) agrues that, in contemporary consumer society, brands should be

considered as objects used to facilitate social interaction: 'The system of consumption is not

always perceived as first and using the social link, but often as second, and in service of the

social link: the link is more important than the thing'. At the core of this argument is the

acceptance that 'relationships with objects are abut always two-way (person-thing) but always

three-way thing (person-thing-person)' (Bengtsson, 2003, p. 157,citing Belk, 1988). Muniz and

O'Guinn (2001, p. 427) point out: 'developing a brand community could be a critical step in truly

actualising the concept of RM'.

These communities neatly capture the notion that people have relationships with other people

and that brands may become a fulcrum around which such relationships are constructed

(Patterson and OMalley 2006). The brands meanings are seen as less significant than the social

links that people form as a result of using the brand. 'Sustained interpersonal interactions can

lead to relationships that transcend mere common interest in a brand and its applications'

(McAlexander et al., 2002, p. 43). These meanings are likely to be derived from the key elements

of communal interaction (Muniz and O'Guinn, 2001, p. 413):; consciousness of kind, 'the

intrinsic connection that members feel toward one another, and the collective sense of difference


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from others not in the community'; shared rituals, which 'contain the drift of meanings ... set up

visible public definitions ... and social solidarity'; and moral responsibility, 'a felt sense of duty or

obligation to the community as a whole'. This concept is backed up by of the fact that we are

social animals is that we live in a state of tension between the values associated with the

individuality and values associated with conformity. (Aronson 1972 Page 13) Conformity can

be defined as a change in a persons behaviour or opinions as a result of real or imagined

pressure from a person or group of people. (Aronson 1972, Page 13). From a trust perspective

"Social networks are trusted because of shared experiences and the perception of shared values

or shared needs" (Clemons et al. 2007)

There are an increasing number of descriptive studies detailing the nature of such communities:

Adobe Communities (Martin, 2007, page 51) Sun's Java Center community (Williams and

Gothrel, 2000); in-line skating (Cova and Cova, 2001); Macintosh user groups (Belk and

Tumbat, 2005); Star Wan fans (Brown et al., 2003); and Nutella (Cova and Pace, 2005); These

communities are expected to provide a bundle of benefits for the organisation: they positively

affect brand equity; they create a solid base of loyal, enthusiastic and forgiving consumers; and

they provide many opportunities for up-selling and cross-selling (Muniz and O'Guinn, 2001;

McAlexander et al., 2002).


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In the past, it was seen as marketings role to define the brand meaning however it should be

noted by (Patterson and OMalley 2006) that consumers are the ultimate arbiters of brand

meaning. Patterson and OMalley (2006) also recommend that:

managers need to pay close attention to how customers themselves define their

various connections with the brand. Managers must adequately analyse the nature,

characteristics and boundaries of those relationships and act accordingly. If, on the

other hand, consumers view these connections in terms of communal interaction with

other consumers, then managers need to identify how best to facilitate that

interaction without overtly intruding upon it.

The key here is around facilitating the interaction and not attempting to control it. In an interview

with Knowledge at Wharton, Forrester's Jeremiah Owyang , a senior analyst for Social

Computing backs up Patterson and OMalley (2006) by saying "Brands are not in control any

longer, and those that let go and put the power in the hands of the user will do well" .

(knowledge.wharton.upenn.edu 2007)

To further enforce this, Charlene Li and Josh Bernoff in their book Groundswell (page 78) state

Your brand is whatever your customers say it is. The real control of the brand has moved into


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the customer's hands, and technology has enabled that," says Lane Becker, president of Get

Satisfaction, a Web site that draws together customers and companies to answer each other's

questions and give feedback on products and services (crm-daily.com 2008)

Figure 3 Marketing and Social Networks

4.2 Online social networks the link between you and your customers

through Web 2.0

Cooke and Butler (2008) identify six trends that have contributed to a change in environment for

Marketers, in particular marketing researchers.

1. Open source movement.2. Emergence of Web 2.0.
http://www.crm-daily.com/http://www.crm-daily.com/


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3. Emerging social landscape.4. Rapid growth of online social networks.

5. Social computing tools.6. Tools to examine new forms of user-generated content.

The first trend is the continued growth of the open source movement; this is caused by the

focused online collaboration of many on a scale that had not been previously possible. The

second is the emergence of Web 2.0, which offers us an array of collaborative tools with which

to develop new research approaches, most of these tools were created by the open source

movement. The social software tools that define Web 2.0 will continue to grow rapidly and shall

provide us with new and innovative ways to explore the rapidly changing social and media

environment. This emerging social media landscape is the third trend, and is most easily

recognisable by the phenomenon of user-generated content, again some of the software used to

create user generated content is open source. Fourth, we observe the rapid growth of online

social networks. These are radically changing our media landscape and these have rich research

literature on the importance of studying humankind in these tribes, groups or social

networks. The opportunity to observe these social interactions will greatly benefit us in our

understanding of the role of advertising and marketing in the dissemination of ideas. Fifth, the

combination of social computing tools with an understanding of social networks will allow us to

build new types of community in which respondents interact not only with the firm but, with

each other. Sixth, it will become increasingly easier to handle multiple sources of data, and be as

comfortable with these new forms of user-generated content.


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opportunities, and the world of Web 2.0 provides us with the tools to exploit these

opportunities.

4.3 What is Web 2.0? and what is its relevance to marketing?

The key characteristic of Web 2.0 is that it lets people collaborate and share information online.

It has been described as an architecture of participation by OReilly (OReilly n.d.). The term

Web 2.0 became notable after the first O'Reilly Media Web 2.0 conference in 2004. Tim

OReilly states that Web 2.0 is ultimately about harnessing network effects and the collective


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intelligence of users to build applications that literally get better the more people use them.

(oreillynet.com 2005).

You might recognise elements of this architecture in the form of blogs, wikis, podcasts, P2P file

sharing, video sharing, photo sharing, virtual worlds and social networks.

Basically, Web 2.0 is about making computing and media social. It is built around social

software that enables people to connect or collaborate through computer-mediated

communication and, enabling consumers to easily form, join and participate in online

communities. It is not one single type of software, but rather to the use of multiple modes of

computer-mediated communication that can result in community formation. Within online

communities real-life meetings are a valued, and these online and offline meetings complement

each other. This is highlighted out by Cooke and Butler (2008) real-life meetings are a valued

part of the communication repertoire, and this is one of the reasons that they have helped to

transform the distribution of music through social network sites such as MySpace.Going to the

actual gig can become an integral part of the Web 2.0 experience as it might be recorded, shared

and then relived via various Web 2.0 services. This is also evident with Tweetups, where

people connected through the micro-blogging social network Twitter, will arrange a physical

meet up of likeminded individuals in order to exchange knowledge and build social capital.
http://www.oreillynet.com/http://www.oreillynet.com/


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Figure 4 - Tweetup

The key to understanding the importance of Web 2.0 is this ease of sharing, cooperating and co-

creating, including mash-ups. There is a broad spectrum of Web 2.0 software applications

which blur into one another. An initial glance at the social media landscape is overwhelming


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however, the Conversation Prism by Brian Solis is an excellent reference tool for Social Media

professionals to start listening to the voices that define and steer your markets. It features the

networks where conversations occur.

Figure 5 Conversation Prism by Brian Solis

The Conversation Prism is a living, breathing representation of Social Media and will

evolve as services and conversation channels emerge, fuse, and dissipate. As a

communications or service professional, you'll find yourself at the centre of the

Prism - whether you're observing, listening, trafficking, or participating. Get your ear

to the ground and start listening and learning. (Brian Solis, Brian Solis.com 2008)


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4.4 Viral marketing

Viral marketing refers a marketing techniques that exploits already existing social networks, by

encouraging customers to share product information with their friends to generate an increase in

brand awareness, or to achieve other marketing objectives, this is achieved through voluntarily

self-replicating viral processes, analogous to the spread of pathological and computer viruses.

Viral promotions may take the form of video clips, interactive Flash games, eBooks, images, or

even mobile phone text messages. Previously, a few in-depth studies have shown that social

networks affect the adoption of individual innovations and products (Rogers, 1995) (Strang and

Soule, 1998). Microsoft hotmail is quite a famous example of viral marketing. (Shuen, 2008 page

161) The Hotmail user base grew faster than any media company in historyfaster than CNN,

faster than AOL, even faster than Seinfelds audience. (Leskovec, J., Adamic, L. A., and

Huberman, B. A., 2007). By mid-2000, Hotmail had over 66 million users with 270,000 new

accounts established each day (Bronson 1998).

Most products cannot be advertised in such a direct way. Through The Long Tail as described

by Chris Anderson in the same named book and blog, the choice of products available to

consumers has increased manyfold thanks to online retailers such as Amazon.com who can

supply sell a large number of unique items, each in relatively small quantities than traditional

brick-and-mortar stores. Effectively advertising these niche products using traditional advertising

approaches is impractical. (Leskovec, et al 2007)


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A Lucid Marketing survey found that 68% of individuals consulted friends and relatives before

purchasing home electronics, more than the half who used search engines to find product

information (Burke 2003).

In order to have some insight into how to manage and understand participants in social media

Social Technographics is a very useful tool. This tool is introduced in the book Groundswell,

authored by Charlene Li and Josh Bernoff, both of whom at the time of publishing were vice

presidents and principle analyst for Social computing Social with Forrester. The Social

Technographics classifies a population of consumers into six overlapping levels of

participation within Social media. The six levels are:

1. Creators2. Critics3. Collectors

4. Joiners5. Spectators6. Inactives


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Figure 6 Social Technographics ladder source Forrester

The group at the top of the ladder are the Creators, these are consumers who have, within the

previous month, posted to a blog, updated or maintain a web page, uploaded a videos or audio

that they themselves may have created. The second group are Critics, they participate and react

by commenting on blogs or posting ratings and reviews, or updating wikis. They are on average

several years older than Creators. Since it is easier to react than create there are more critics than


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creators, four out of ten are Creators. The third group are Collectors they save URLs on a social-

bookmarking services such as deli.cio.us, Ma.gnolia, StumbleUpon , Windows Live Favorites,

vote for sites like Digg or Mixx , they also use RSS (Really simple syndication) feeds, or create

metadata that they share with a community. The fourth group is Joiners they maintain their

profiles on social-networking sites, such as Bebo, Facebook, MySpace and are the youngest of

the Social Technographics groups. The second last group are Spectators, they consume what the

first 3 groups produce. They are made up of mostly of blog readers and also video viewers and

podcast listeners, essentially constituting the audience for user-generated social content.

Spectators are the largest group of all, Spectators represent 48 percent of online adults

Americans. The final group are Inactives are the remaining online adults and do not participate at

all in social computing activities.


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Together Social networks, Marketing and Technology (mainly in the form of Web 2.0) have

converged into 3 circles, the focus is on the centre, where online social network strategy resides.

Figure 7 Online Social Networking Marketing Strategy


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Some of the questions raised by the literature review are:

Are there companies using marketing within online social networks? Are there any numbers on

the use of online social networks and what profile of people uses them? Of the people using

social networks, what do they use them for? Can marketing use online social networks for

Branding and relationships? Is there evidence of the fragmentation of social media, and has

marketing lost power because of this? Do people trust others and/or brands on online social

networks? Do bloggers or those who participate in online social network more power and

influence than marketers. Are Social Marketing efforts measure or monitored your?


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Chapter 5 - Methodology

There are three parts to the methodology, existing cases studies, observations in the form of

perspective of an anthropologist doing ethnographic field research and observation, and from the

perspective of a strategist marketing resources and finally semi-structured interviews. All three

methods shall be integrated in such a way to complement each other giving a bigger picture than

is possible it they was to be presented individually.

The first part is that existing case studies shall be used, this case studies with be based around the

Online Social Marketing, and the information extracted shale be whether the campaigns were

successful or not, lessons learned and if possible some sort of figures around return on

investment.

The second part, is from the view of an anthropologist doing ethnographic field research and

observation. Kozinetz (1998) created netnography which is base on the traditions and techniques

of cultural anthropology, netnography investigates the specific instance in which community is

formed through computer-mediated communications (CNC). Kozinets (1998) points out that

netnography is useful for three types of studies and in three general ways. Firstly, as a

methodology to study pure cybercultures and virtual communities that do not exist off-line in

real life, but are manifest exclusively through CMC. Secondly, as a methodological tool to study


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derived cybercultures and virtual communities, and thirdly, as an exploratory tool to study

general topics. As such it is a written account that results from fieldwork studying on-line,

computer-mediated or Internet-based communications. (CMC).

As Kozinets points out, the Internet offers increased opportunities for social group participation,

where consumers form virtual communities of consumption in order to assert social power, to

unite, and to claim symbols and ways of life that are meaningful to them and the communities

they build. Hence, netnographic studies seem to be able to offer those thick descriptions of the

life worlds of consumers, researchers look for. Moreover, netnography makes particularly sense

for attempts to analyse communities where access based on conventional methods is difficult

(e.g., Langer, 2003; Pires et al., 2003).

Referring to common ethnographic procedures, Kozinets (2002, p. 63) recommends the

following methodological stages and procedures for netnographic studies:

1. Entre: formulation of research questions and identification of appropriate online fora

for study

2. Data collection: direct copy from the computer-mediated communications of online

community members and observations of the community and its members, interactions

and meanings

3. Analysis and interpretation: classification, coding analysis and contextualization of

communicative acts


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4. Research ethics: (1) The researcher should fully disclose his or her presence,

affiliations, and intentions to online community members during any research; (2) the

researchers should ensure confidentiality and anonymity of informants; and (3) the

researchers should seek and incorporate feedback from members of the online

community being researched (4) The researcher should take a cautious position on the

private-versus-public medium issue. This procedure requires the researcher to contact

community members and to obtain their permission (inform consent) to use any specific

postings that are to be directly quoted in the research (Kozinets, 2002, p. 65; cf.

Kozinets & Handelman, 1998).

5. Member checks: presentations of some or all final research reports findings to the

people who have been studied in order to solicit their comments.

Kozinets (1999, p. 254) recommends distinguishing between tourists, minglers, devotees and

insiders when analysing messages from online community members: Tourists as those who lack

strong social ties to the group, and maintain a superficial or passing interest in the consumption

activity. Minglers maintain strong social ties, but are only perfunctorily interested in the central

consumption activity. Devotees maintain a strong interest in the consumption activity, but have

few social attachments to the group. Finally, insiders have strong social ties to the group and

maintain a strong interest in the central consumption activity. Kozinets (2002, p. 64) highlights

devotees and insiders i.e. the most enthusiastic, actively involved and sophisticated users - as

the most important data sources.


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Finally, the semi-structured interviews of businesss using social networks for marketing as well

as interviews of customers who connect to other customer using social networks. The basic

questions are in Appendix A, they shall be used as a guide, however should relevant a

conversation present itself it shall be perused. As part of the interview some of the questions

asked will use the Social Technographics to understand the interviewees level of maturity in

with social media.

Chapter 6 - Results

We shall initially go through data and statistics on some of the major online social networks.

Blogs shall be also included in this as Blogs themselves are a type of social network.

The second part of this chapter will look at Dell, P&G, and Adobe as case studies, on what they

have done in the marketing space with online social networks. Data from interview and

ethnography shall be integrated into this section to complement and give more depth to the case

studies.

As there is a large range and number of online social networks, some of the statistics are here for

just Twitter, Facebook and MySpace as these are considered among the largest and most

influential.


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6.1 Twitter

Twitter is a free social networking and micro-blogging service that allows its users to send and

read other users' updates (otherwise known as tweets), which are text-based posts of up to 140

characters in length. As of March 2008, the total users as estimated to be over 1 million, with

200,000 active users per week the total 3 million Twitter Messages per day (TechCrunch.com

2008)

More than 110 million active users Facebook is the 4th most-trafficked website in the world

(comScore). Facebook is the most-trafficked social media site in the world (comScore)

As far as user Demographics are concerned there are over 55,000 regional, work-related,

collegiate, and high school networks where more than 50% of Facebook users are outside of

college. The fastest growing demographic is those 25 years old and older. It is the No. 1 photo

sharing application on the Web (comScore) where more than 30 million photos uploaded daily

In a little over five months, Facebook have released the site in more than 20 languages, including

Spanish, French, German, Russian and Korean. (facebook.com 2008)

6.2 MySpace

MySpace the largest Social Network in North America and maintains a dominant position as

media site. It was once the biggest in the worldwide but in April 2008 it was surpassed by

Facebook (TechCrunch.com 2008).


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MySpace has more than 110 million monthly active users around the globe. 85% of MySpace

users are of voting age (18 or older). 1 in 4 Americans is on MySpace, in the UK its as commo n

to have a MySpace as it is to own a dog. On average 300,000 new people sign up to MySpace

every day. Myspace is localized and translated in more than 20 international territories: U.S.,

UK, Japan, Australia, France, Germany, Ireland, Italy, Spain, Mexico, Canada, Netherlands,

New Zealand, MySpace en Espanol, Latin America, Austria, Sweden, Norway, Denmark and

Finland. There are 60,000 new videos being upload to MySpaceTV each day. There are More

than 8 million artists and bands on MySpace. (web-strategist.com/blog/ 2008;

techradar1.wordpress.com 2008)

6.3 Blogs

Brands make up a major part of bloggers' online conversations. More than four in five bloggers

post product or brand reviews, and blog about brands they love or hate. Companies are already

reaching out to bloggers: one-third of bloggers have been approached to be brand advocates.

(technorati.com 2008)

One in five bloggers don't think that newspapers will survive the next ten years. Two of

interviewees said they would only buy a newspaper if they had written an article in it. And one

of them DM thinks that in the near future, buying a physical news paper will become a novelty.


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It should be noted that both of these were creators on the Social technographics ladder and their

main source of reading material is on Blogs.

Bloggers are early adopters, they spend twice as much time online as U.S. adults 18-49, and

spend only one-third as much time watching television. While they are online, bloggers are

participating in an average of five Web 2.0 activities such as RSS and Twitter. Bloggers are

important to watch, as they are generally the first ones to use new web applications, and are

highly influential in speeding adoption. (technorati.com 2008)

Table 1

Source (Technorati : State of the Blogosphere 2008)

Bloggers are active Web 2.0 participants, while they are online, bloggers are participating in a

variety of Web 2.0 activities.


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Figure 8 Blogger participation in Web 2.0 activities Source Technorati

Bloggers are generally the first to learn about new web technologies and applications, such as

RSS and Twitter. Bloggers could be seen as Mavens as defined in Gladwell Tipping point, they

are information specialist and like to share this information. On average, bloggers participate in

five of the ten Web 2.0 activities listed, with one-third regularly conducting more than seven

Web 2.0 activities.

On page 112 and 113 of Groundswell (Li and Bernoff 2008), there is a return on investment

(ROI) exercise of a large companies executives blog, GMs [General Motors] fastlane blog is

used to get real number estimations. It is also noted that many of the costs would be lower for

smaller companies. Including setup costs, and ongoing costs, year 1 costs $283,000 and the

benefits add up to $393,000. From these figures the financial benefits are clear.


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Here is a non-exhaustive list of large companies that use Online Social networks as part of their

connection to their customers.

Facebook Twitter MySpace 2nd Life Blog Flickr

You

Tube Created their own

Adobe

Apple

Dell General

Motors Google

Jetblue

Kodak Lego

SalesForce

Southwest


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Airlines

Starbucks

Toyota

Zappos

Table 2

A selection of Companies that user Online Social Networks for Marketing

6.4 Dell Case

As can be noted from this table Dell has a very large presence across a range of online social

networks. They also have their set up their own communities to encourage customer

engagement and conversations. Among their initiatives, are Ideastorm, Direct2Dell blogs, Studio

and Studio Dell Videos. Ideastorm, which leverages the wisdom of crowds, is an online

suggestion box for Dells customers, where a customer you can add, read and vote on what you

and others have in mind. Popular ideas bubble to the top and thus create an automatic priority

list to act upon. Dell have implemented some of the popular suggestions, one such example of a


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suggested implementation is Dont eliminate XP just yet which received 27,230 votes.

(ideastorm.com 2008; salesforce.com 2008)

Direct2Dell is Dells blog it encourages customers to read what's driving thoughts around

technology and Dell. Customers can also comment on the blogs and if they post a comment or

questions they will receive an answer. Studio Dell is a Dell created community with hosts

Videos, podcasts from Dell and members of the community about technology. It contains

divided into sections for Home, Small Business and IT professionals.

Of the existing online social networks, Dell is present on Facebook, where it has several groups,

including Social Media for Small Business group, a DELL PartnerDirect group and groups

for Dell Employee & Locations. They also used Facebook to run their Dell Re-generation

Graffiti Facebook Campaign

On Flickr Dell has photos shared within groups such as Dell Photos Group, Digital Nomads The

official Flickr group of DigitalNomads.com, The ReGeneration group of people who

committed to sustaining the world's natural environment and Dell Student Union group for

students and readers of the Dell Student Union blog. Dell is also very present on Twitter, a

mirco-blogging service that is known for conversations. Dell have over 50 official

representatives on Twitter. Dell is using Second Life 3D virtual world to allow people to build

their own computer, and even to buy the finished product if they wish.


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Figure 9 Dell Second Island Life

Another Dell created community is the Dell regeneration community, Dell launched a Re-

generation Graffiti Campaign through Facebook. The Goal of the campaign was to help improve

Dell products to be more eco-friendly, and of course, spur affinity towards the brand from green

leaning consumers, the Re-Generation site has more details. In this contest, Dell encouraged

existing Graffiti artists task is to interpret 'what green means to them with graffiti. One of the

goals was to foster meaningful dialogue on the environment.dialogue that will lead to action

and results. This was launched with Federated Media (A social media marketing agency), and

Graffiti Wall (A popular self-expression Facebook application). This interactive marketing

campaign spurred members of the group to create campaign resulting in affinity towards Dell.


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Jeremiah Owyang senior Social Computing analyst of Forrester Research: was briefed by James

Gross, a Director at Federated Media, as well as CEO John Battelle, about the contest as follows:

1) Existing application with thriving community

Graffiti is a self-expression application in Facebook. It has popular (rated 4 out of 5 stars)

Based on 242 reviews, and has 177,506 daily active users. Rather than creating a new

application, this campaign took advantage of an application and communitythat already

existed.

2) An art contest: What does Green mean to you?

Facebook members who used Graffiti were encouraged to join in a contest to win a 22

environmentally friendly Dell monitor (appropriate for artists) to create art around the theme

of What does Green mean to you? The contest lasted for one week

3) Engaged contributors spur theme

Over 7000 pieces of artwork were created and submitted to the contest. If you watch the

replay of the art being created, youll see hidden messages (like easter eggs) from the artists

as they discuss what green means to them. Many of the drawings had the Dell logo or the

regeneration logo embedded in it.

4) Self Regulation

There were few negative pictures that would detract from the campaign, as the community of

existing artists will self-regulate and vote off pictures that were not appropriate.

5) Community Voting and Winners Announced


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Voting began on the second week by the members and over one million votes were cast. The

winners were from United States, Canada, Sweden and Maldives. You can see the actual

winners here, or click image.

From a cost perspective it was quite low in comparison to running a similar campaign using

tradition media, most of the Dell dollars would have been spent on the mirco-site, and the rest in

the prizes, 22 Dell monitors, which were $399 each for six winners, which is little over two

thousand dollars. In turn Dell got over 7300 Graffitis created from Jan. 16th-Jan 23rd around the

theme of What Does Green Mean to You

There were 1,515 fans of the contest, more than 1,000,000 votes were logged from Jan. 26th-

Jan.31st for the artwork. In excess of 1,000 ideas have now been submitted over at

ReGeneration.org.

Jeremiah Owyang (web-strategist.com/blog 2008) deemed this a successful campaign with the

following points:

As they turned the action over to the community, decide on the winners, all under the

context of the regeneration campaign. The campaign moved the active community

from Facebook closer to the branded Microsite, closer to the corporate website,

migrating users in an opt-in manner that lead to hundreds of comments.


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We are present on most online social networks, we go where our customers are. from Martin

(Dell) interview. 2 million conversations per day with our customers from Martin (Dell)

interview . there have been improvements in positive conversations since we started monitoring

and acting. from Martin (Dell)

6.5 P&G beinggirl.com Case

In July 200 Procter & Gamble's launched BeingGirl.com in order to create a new way to talk to

consumers, the consumers in question were those of feminine care products. Bob Arnold,

Interactive Marketing Manager - Beinggirl.com Global Leader at Procter and Gamble, and his

team set out on this big challenge to create the right environment to make this a success. The site

is about everything that young girls deal with as part of their everyday life. Using the

technographics tool, Li and Bernoff (2008, Page 119) gives the breakdown of girls ages twelve


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to fifteen are community joiners and three out of ten are Critics. Critics are those who not only

read but, react to discussion forums. Because of the type of consumer, trust is a huge part and

also a measure of success. The approach that Bob took was to create a site that had categories

that would be most interesting to the community: your body, your mind, beauty, sex &

relationships, Ask Anna, games, Music, Advise for life (source: beinggirl.com, 2008). This was

the perfered option over a site that would just sell products. Advice and articles are delivered

with information trust and some subtle branding. It is a real social space, and the audience is

immersed, and not bombarded by branding.

Beinggirl.com attracts more than 2 million visitor per month worldwide, and traffic has increased

by 150 percent up on 2006 (Li and Bernoff, 2008 page 121). An important part of the success

was the creation of a dialogue, created though a social network, this also facilitated sharing of

knowledge. According to P&G, say that beinggirl.com is four times as effective as advertising in

reaching its target customer (Li and Bernoff, 2008, page 121). More hard numbers that back up

the initiave are the cost of running the site is put at $3 million a year, the site has to persuade

only 6,250 girls to use its products in order to break even, a number that it easily exceed. (Li and

Bernoff, 2008, page 122).

6.6 Adobe Communities Case

The adobe communities are segregated into four distinct areas Developers, Educators, Designers

and Partners. The developers area contains knowledge with articles, tutorials, code samples,

downloads, and sample applications relevant to developers. Stay on top of trends and new

techniques with blogs, forums, Exchanges, and events (adobe.com/communities 2008). It also
http://www.adobe.com/communities/http://www.adobe.com/communities/


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has the option to connect with other developers though blogs (ADC- adobe developer

connection) and message boards/forums, this has the effect of creating a community connection.

The educators area contains case studies, explore resources, find pricing, and learn how Adobe

software can help faculty, teachers, and staff deliver engaging instructional experiences. The

designers area facilitates Exploration, learning, and connection with the latest in digital design

and motion graphics. It also allows the browsing of work by leading artists, so that designers can

discover new design trends, and hone your skills with tutorials, key workflows, and advanced

techniques. Within the adobe communities because the main reason for connection is to create

and share knowledge and not primarily to make friends, there are many weak ties. Martin (2007)

points out that these types of ties, and the fact that you are immersed in the adobe brand through

and messages discussion, this may be more powerful than traditional advertising. This same

effect is evident in the beinggirl.com case also. Marketing is about discovering the needs and

want of a customer and Adobe, to great success also uses blogs to communicate with customers

for the development of new products.

6.7 Twitter and brands

On Twitter the following companies are using Twitter to support and strengthen their brands are

10 downing street , Apple, Amazon, Dell, Comcast, General motors, Jetblue, Kodak, Starbucks,

Stephen Fry Toyota and Zappos (twitter.com 2008). The total numbers of Twitter users are

estimated to be over 1 million, with 200,000 active users per week and a total 3 million Twitter


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Messages per day (techcrunch.com 2008). The main reason for the presence it isnt solely the

audience size that draws brands to it, it is that some of the users have considerable influence and

are likely to sway their followers. A single Twitter messageknown informally as a tweetsent

in frustration over a product or a service's performance can be read by hundreds or thousands of

people. Similarly, positive interaction with a representative of the manufacturer or service

provider can help change an influencer's perspective for the better.

Through Twitters search functionality (http://search.twitter.com/), it is possible to seek out what

is been said about a companys name by users on twitter, you can also create an RSS feed of the

search to monitor on an ongoing basis. This search can reveal comments, either negative or

positive about a brand, it is very wise for a company to monitor and respond to these comments

in a timely manner.

One such example,

GM took notice the day a prospective buyer was at a Saturn dealership, ready to

make a purchase, but couldn't find anyone to help him. "He was starting to get upset

about it," says Adam Denison, who helps coordinate social media communications at

GM. "When we saw it, we immediately let our Saturn colleagues know about itand

they could get the ball rolling a little bit better." The person bought a Saturn in the

endthough at a different dealership, Denison says. (Businessweek.com 2008).


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Below is an extract from RichardatDell on Twitter, note the human element of the conversations

especially highlighted by the green box. In the orange highlighted boxes we have Dell related

activities, including listening to a highlighted issue with a customer and passing it on to the

relevant part of the organisation. Finally, in the purple box there is a link about tips to save

energy and computer use. As can be seen from this page, there is an element of listening,

conversation and action with a real person, in these few tweets.


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Figure 10 RichardatDell connecting with customers using Twitter

6.7 Interviews

In the interviews carried out, when asked do People use online social networks to research

Brands, products, services? Yes, in some cases they will ask? And in others, they will hear buzz

around a new product. One such example as given by Billy: At the Cork Open Coffee Club

meeting one of participants brought in a Nokia Tablet PC and showed it to everyone as he was


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very impressed with it. When the meeting was over one of the other participants of the meeting

went out and bought one also, he then tweeted to his Twitter community the fact that he had

bought it and really thought that it was a great product. From this single tweet, a conversation

was started around the product, this had the knock on effect of 17 of these Nokia Tablet PCs

been bought in the space of two weeks. This shows great trust in from peer within social

networks, as some of the followers that purchased the product had not physically met those who

were praising the product.

When asked do they trust others on these online social networks, one of the replies was Joe:

Yes, when they establish a relationship. Once trust is established then you will buy based on

recommendations from your online social network. This was the general consensus, Brands are

been followed and been interacted with on these Social networks, some example of Brands been

followed are: Whole Foods, the Dell people, JetBlue, Comcast, Tyson Foods, Molson's

employees, Apple, Starbucks, and Zappos.

Among the top uses for online social networks, are Business leads, socialising, communication,

knowledge and information. Twitter, Linkedin, Facebook and blogging are the main social

networks used by those interviewed. Twitter is used for conversations, for trends and

information, Facebook seems to be used more for Friending, keeping in touch and general

communication.

From trust perspective, brands on social networks are trusted but, Johhny: Only when the

brands act like humans and interact like humans, Social networks give Brands the opportunity

to act and interact like humans, try doing that with a newspaper ad. Billy No one every trusts a

company, they trust personality this again emphasises the human element, this is why blogs


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work so well, you would trust Kieran Murphy of Murphys ice cream, you dont trust Murphys

ice cream.

All those interviewed agreed that traditional media/advertising is not trusted, Billy there is a

huge degree of cynicism for tradition advertising. It appears as well that when traditional or

mass media is not getting the response they want the just push more, and shout louder.

There is a definite fragmentation of tradition media and it is losing control.

Johnny: Conversation is enabled by social media tool (web 2.0). Media has become fragmented

for example in Ireland in the 1960s there was only one TV station and one radio station, now

there is a large choice of TV stations and more than 40 radio stations. These now serve niche

marketing, long tail effect.

Johhny: listener becomes the programmer using feeds [RSS] and podcasts from push to pull.

Most of what I read [all online] comes recommended by other people on online social networks,

they think how I think

Those who watched TV, which was a minority of their time usually, used Sky+ used to pull TV

programs and watch them in their own time, similar to subscribing to a podcasting. There

appears to be a frustration with working to someone elses schedule and not their own.

Blogging is around business or personal interests, Brian uses blogs to share insights, this

positions him as a thought leader, through this leads are generated both internationally as well as

nationally.


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When asked have they ever Blogged or commented (negative or positive) about a brand, or on an

online social network? One of the responses was Joe: Yes, all the time. This had the effect of

most people agreed with this perspective as they had similar experiences. On several occasions,

the business reached out this blogger, either directly or on the blog. This shows the influence this

blogger has that he is listened to, and action was taken by the companies in question.

Those interviewed feel more empowered than before online social networks existed.

Joe: Yes, because we now have a voice that is equal (in opportunity) via this web as a medium.

I can blurt my feelings without any gatekeepers. There are also quite a number of companies

present on social networks that are actually listening and acting. The fact that there are

companies out there listening and acting based on conversations from customers shows the

power shift towards the consumer.

Most of those interviewed all promoted themselves on using online social networks, and of those

who this was their primary method of promotion. Johnny: I have most of my business contacts

and sales leads through social networks, I spend no money on advertising, negligible amount

on marketing, my marketing budget is cost to attend an event that I sponsor, my main

marketing activity is to be visible and active on social networks. The way they promote

themselves is in a helpful transparent way, they share their knowledge and experience in order to

build up a credible reputation. According to those interviewed they have found these methods,

very profitable as the cost is low and the return is high. Through this social medium, they feel

closer to their customer, Joe: My customers know exactly what I think long before they choose


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to become my customers. Joe: I believe the web plus the social networks give my customers

lots of visibility into what I do.

Brian: Slow adoption in Ireland, but there are businesses showing interest in using social

media/online social networks. This is especially prominent in smaller businesses where

marketing budgets are smaller and there is less bureaucracy. Big companies (Ireland) appear to

be waiting for other big companies to make the move and they may follow depending on their

result. There seems to be little understanding and experimentation, engagement and listening are

required. A big mistake is that some companies see social networks as the end all solution.

Some of those interviewed, had developed metrics for their marketing efforts, but it was the

smaller operations that did not use direct measurements, the reason for this appears to be that the

return was so obvious there was no need to measure. From a monitoring perspective, there was a

good use made of free web 2.0 tools, while some of the very large organisations would outsource

to companies such as Factiva, Umbria , Buzzlogic, Nielsen BuzzMetrics , MotiveQuest, Radian6

who specialise in measurement and monitoring within Social media.

Alan : Salesforce.com are using yahoo pipes, which is a free composition tool to aggregate,

manipulate, and mash-up content from around the web, to monitor customers and their own

reputation. Awareness is the first step, this is reactive and is based on monitoring customers

through a tool called the Social media firehose, created by Kingsley Joseph of Salesforce.com.

This enables each product manager to monitor by brand name, the product manager in turn can

take action based on the result. Yahoo pipes are also used by Salesforce.com in a highly


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innovative way as a proactive prospecting. Approximately 50 to 60 conversations per day occur

whereby customers are discussing Which CRM solution to buy? on Twitter, boards, and other

part of the Social Web, this tool finds these conversations and enables salesforce to pursue the

lead. These customers are those with a high intent to buy. The alternative to this free method is to

pay appoximatley $10 per click on Google adwords. Finally, this tool can be used to seek out a

customer that may be asking a support type question and send the right support person to the

customer. This is a powerful use to Web 2.0 to connect with customers.

Zappos started out as is an online shoe company, and now supplies and handbags, clothing,

eyewear, watches, and accessories with gross sales of $840 million. Zappos have over 400

employees that are using Twitter, including the CEO. They also use a software tool that they

built themselves:http://twitter.zappos.comthis tool enables zappos to track their brand name and

manage their reputation.

Social Technographics results

Creators, They tend to be younger and evenly split between men and women. Based on a 2007

Forrester survey, creator represent 18 percent of the online adult population and are quite a small

group. The second group are Critics, they participate and react by commenting on blogs or

posting ratings and reviews, or updating wikis. They are on average several years older than

Creators. Since it is easier to react than create there are more critics than creators, four out of ten

are Creators.

The third group are Collectors they save URLs on a social-bookmarking services. They are the

mainly male-dominated among the Social Technographics groups.
http://twitter.zappos.com/http://twitter.zappos.com/http://twitter.zappos.com/http://twitter.zappos.com/


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The fourth group is Joiners they maintain their profiles on social-networking sites, More than

half also read blogs and nearly a third themselves publish blogs. Joiners make up a quarter of the

online population.

Spectators, they consume what the first 3 groups produce. They are made up of mostly of blog

readers and also video viewers and podcast listeners, essentially constituting the audience for

user-generated social content. Spectators are the largest group of all, Spectators represent 48

percent of online adults Americans, 37 percent of online Europeans and two thirds of online

adults of Japan. They are slightly more likely to be women and have the lowest household

income among Social Technographics groups. The final group are Inactives are the remaining

online adults and do not participate at all in social computing activities. Their average age is 50,

and they are more likely to be women. (Li and Bernoff , 2008, page 43-45).

Overall the interviewees were all on the creator step of the Social Technographics, the most

likely reason for this is that they all work with social media.


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Chapter 6 - Conclusion and Discussion

Online Social networks are still in an early experimental stage, the majority of the users on social

networks are early adopters or generation Y. This experimental stage, as with all experiments, is

a necessary step which shall produce patterns, results, and behaviour that will serve as genuine

benchmarks for measuring metrics and Return on investment. There is already evidence of many

big companies involved online social marketing, engaging with their customer and participating

in conversations.

Online social marketing and social media marketing should not be seen as a silver bullet for

marketing, and must be integrated with traditional marketing. The basic rules of Branding and

relationship marketing still apply, but the approach to marketing within online social networks is

different. This is summed up by

In order to survive many skills, such as expertise in the business use of social

networking, in digital marketing, or in emerging markets, require a degree of

specialization that complements the generalist capabilities of traditional marketing

managers. (David Court, 2007)

There are some subtle changes to be made such as one-way communications typically employed

by marketers with their customers such as mass advertising, promotional offers, manuals,

price lists, and product literature, must be replaced with two-way communications to involve the

customer. Monologue needs to become dialogue between Marketing and Consumer. Online

social networks are a great way to connect and communicate with your customer and although


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there are many Web 2.0 software tools, focus should be kept firmly on the people and human

elements. To ensure focus on your online networking marketing strategy, there must be a balance

between Marketing, Technology (Web 2.0) and social networks.

Figure 11 Online Social Networking Marketing Strategy

As online social network marketing mature there may be an emergence towards CRM-style

dashboards and hubs to streamline internal and outbound communications. For now, there are

many aggregation and tracking companies such as BuzzLogic, Radian6, BuzzGain, BrandsEye,


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Brandwatch who will also monitor conversations across the networks and communities that you

know and don't know to effectively map, engage, and manage participation efforts. A first step is

for a marketer to experiment with free tools such as google alerts, yahoo pipes, and so one.

The social technographics ladder from Forrester can be used a guide to social media maturity,

Marketing should move from Inactives to Spectator by reading blogs and consuming to

podcasts/video that their customers would read. The next step is to become a joine

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Mark Cahill MBA Thesis