Social Media Marketing

Social media marketing has become an important strategic issue. Marketing has evolved to be more about building a two-way relationship with consumers than just informing consumers about a product or service. Marketers increasingly must get customers involved in the company website and solicit suggestions in terms of product development, customer service, and ideas. The company website should enable customers to interact with the firm on the following social media networks (listed along with the estimated number of current users in millions): Facebook (1,200), Google Plus (500), Twitter (400), LinkedIn (300), Instagram (200), Pinterest (100), and Foursquare (50). To manage this process, larger companies have hired a social media manager(s) to be the voice of the company on social and digital media sites. The manager(s) responds to comments and problems, track negative or misleading statements, manage the online discussion about a firm, and gather valuable information about opinions and desires—all of which can be vital for monitoring strategy implementation progress and making appropriate changes.

The online community of customers increasingly mirrors the offline community but is much quicker, cheaper, and effective to reach than traditional focus groups and surveys. Successful strategy implementation requires a firm to know what people are saying about it and its prod­ucts. Customers are talking about and creating valuable content around every brand through blog posts, tweets, e-mails, and conversations with family and friends. Instead of ignoring or trying to quash “amateur content,” or trying to drown it out with “professional advertisements,” the best firms today embrace amateurs’ opinions, desires, and feelings—because they are the firms’ customers. They learn from and leverage amateur content to improve the authenticity of their marketing communication. Four example companies that do an excellent job of social media marketing are as follows:

  1. SpaceX (; (
  • Includes live broadcasts of rocket launches and pictures from space.
  1. Zappos (
  • Does a great job of engaging its audience on social media.
  1. Starbucks (
  • Launched “Tweet a Coffee” to engage customers and build awareness of brand.
  1. JetBlue (
  • Questions and concerns are answered promptly, and the account is used to keep custom­ers up-to-date, especially when travel conditions get complicated.

Companies and organizations should encourage their employees to create wikis—websites that allow users to add, delete, and edit content regarding frequently asked questions and infor­mation across the firm’s whole value chain of activities. The most common wiki is Wikipedia, but wikis are user-generated content. Anyone can change the content in a wiki but the group and other editors can change the content submitted.

Firms benefit immensely by providing incentives to customers to share their thoughts, opin­ions, and experiences on the company website. Encourage customers to network among them­selves on topics of their choosing on the company website. The company website must not be just about the company—it must be all about the customer too. Perhaps offer points, discounts, or coupons on the website for customers who provide ideas, suggestions, or feedback. Drive traffic to the company website, and then keep customers at the website for as long as possible with daily new material, updates, excitement, and offers. Encourage and promote customer par­ticipation and interaction. Customers trust other customers’ opinions more than a company’s marketing pitch, and the more they talk freely, the more the firm can learn how to improve its product, service, and marketing. Marketers should monitor blogs daily to determine, evaluate, and influence opinions being formed by customers. Customers must not feel like they are a cap­tive audience for advertising at a firm’s website. Table 8-1 provides new principles of marketing according to Parise, Guinan, and Weinberg.1

Wells Fargo and Bank of America tweet ( customers to describe features of bank products. Some banks are placing marketing videos on YouTube. UMB Financial of Kansas City, Missouri, tweets about everything from the bank’s financial stability to the industry’s pros­pects. Steve Furman, Discover’s director of e-commerce, says the appeal of social networking is that it provides “pure, instant” communication with customers.2

Although the exponential increase in social networking has created huge opportunities for marketers, it also has produced some severe threats. Perhaps the greatest threat is that any kind of negative publicity travels fast online. Seemingly minor ethical and questionable actions can cata­pult these days into huge public relations problems for companies as a result of the monumental online social and business communications.

Increasingly, people living in underdeveloped and poor nations around the world have smartphones, but oftentimes no computers. This is opening up even larger markets to online mar­keting. People in remote parts of Indonesia, Egypt, and Africa represent the fastest-growing cus­tomer base for many companies, including Opera Software ASA, a Norwegian maker of Internet browsers for mobile devices.

People ages 18 to 27 spend more time weekly on the Internet than watching television, listen­ing to the radio, and watching DVDs combined. Most companies have come to the realization that social networking and video sites are better means of reaching customers than spending so many marketing dollars on traditional yellow pages, television, magazine, radio, or newspaper ads.

New companies such as Autonet Mobile based in San Francisco are selling new technology equipment for cars so that everyone in the vehicle can be online except, of course, the driver. This technology is accelerating the movement from hard media to web-based media. With this technology, when the vehicle drives into a new location, information on shows, museums, hotels, and other attractions in the location can be instantly downloaded.

Digital advertising spending on social media and mobile devices increased nearly 17 percent to $50 billion in the United States in 2014, comprising 28 percent of total ad spending in the nation; however, about 36 percent of all traffic on the Internet is fake, being the result of bogus computers programmed to visit websites to take advantage of marketers who typically pay for ads whenever they are loaded when a user visits a webpage, regardless if the user is an actual person.3 Criminals can erect websites and deliver phony traffic and collect payments from adver­tisers through middlemen, oftentimes in third-world countries. This fraud problem is becoming so severe that Bob Liodice, CEO of the Association of National Advertisers, observes, “The total digital-media ad budget is being questioned and totally challenged; marketers want to spend more money in digital, but until there is more transparency on how their money is being spent, many hold back.”4

The ad-fraud detection firm White Ops reports that more than $6 billion of online ads in the USA annually are paid to “fraudsters.” Digital advertising is here to stay, no doubt, but there is a need to be increasingly careful of automated (fake) systems/websites/individuals securing your ad monies.

Source: David Fred, David Forest (2016), Strategic Management: A Competitive Advantage Approach, Concepts and Cases, Pearson (16th Edition).

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