Social Media Marketing
Business Case #3
Social Media Marketing
Between 2004 and 2014, more than 2 billion people around the world became Internet users.
During that period, mobile applications (apps) became increasingly important as phone and tablet
usage grew. The Google Play store for Android devices and Apple’s iTunes store each offer more
than 1 million apps. In June of 2015, cumulative app downloads from the Apple store totaled 100
billion, compared to just 5 billion app downloads five years earlier. By 2017, more than one -third
of world’s population will own a smartphone. At the same time, companies are facing a more
difficult globally competitive environment and seek opportunities to increase sales or decrease
costs. As a result, companies are exploring how to connect with customers online and through apps
at an increasing rate. Companies using these platforms to connect with customers, potential
customers, and fans has led to the rise of social media marketing.
Social Media Marketing
Social media is “forms of electronic communication (as web sites for social networking and
microblogging) through which users create online communities to share information, ideas,
personal messages, and other content (as videos).” When companies engage in social media to
connect with users and communicate ab out their brand, they are engaging in social media
marketing.
Social media marketing differs from traditional marketing in many ways, three specifically. First,
social media marketing exists completely online, whether via website or app. This technical no te
will provide further details on numerous popular social media marketing platforms. Second, social
media is available in real time and 24/7. Companies can initiate or respond to live events as soon
as they happen. Third, social media marketing is constan tly evolving with technology.
These key differences in the nature of social media marketing provide multiple benefits for
companies and explain why the marketing method has grown so rapidly. Social media marketing
provides companies the opportunity to pre sent more marketing content to more consumers at a
lower cost. Social media’s CPM (advertising dollars needed to reach 1,000 people) is only $2.50
compared to $57 for direct mail, $28 for broadcast TV, $16 for magazine and newspaper, $10 f or
radio, and $5 for billboards Most of the apps and websites companies are using are free to start an
account. This places more emphasis on the quality of the content and levels the playing field for
companies. Start -ups with small marketing budgets have the opportunity t o gain users and potential
customers for free if they can gain traction with social media marketing. Large companies can also
save money on the free platforms, but face increased pressure to develop content that contends
with the many other brands that hav e opportunities to market via social media.
Social media marketing also provides opportunities to increase brand recognition and long -term
loyalty. Brands can communicate with users through these new channels, which makes brands
more accessible for new cu stomers and more familiar for existing customers. Social media
provides opportunities for brands to make lifestyle connections. Unlike traditional marketing
where advertisements have limited time, brands can use social media to post more frequently. Each
post is an investment in developing a relationship with a company’s followers (and hopefully
future customers) instead of an immediate sales conversion. This authenticity creates more Business Case #3
intimate relationships with customers, attracting long -term relationships and building brand
loyalty. Social is primarily a push -marketing medium, so it does not hit customers when they are
looking to buy, but increases brand awareness and interaction and builds the business over the long
term.
Last, social media allows compani es to respond to users during crisis or react quickly for more
valuable customer service. There are many examples of companies gaining credibility with
customers even after a mistake because of their quick and smooth reaction on social media
platforms. BP’ s crisis communications during the Deepwater Horizon spill changed its social
media strategy. Moving from posting a couple of times a month to daily updates across channels
allowed BP to report its progress and monitor the conversation with its customers a nd the public.
Entire companies have formed to react to customers’ interactions online, protecting the company
brand image and providing customer service.
Although there are hundreds of social media apps on the market, there are a handful that have
shaped social media by allowing companies to interact effectively with customers. Seven worth
noting are Facebook, Instagram, Twitter, YouTube, Pinterest, Snapchat, and WhatsApp.
Mark Zuckerberg and some of his Harvard University roommates founded Face book in 2004 with
the goal to connect people around the university and create a centralized website with many
benefits. The website was one of the first to “go viral,” as college students across the United States
registered, reaching 1 million members by t he end of 2004. By 2015, more than 1 billion people
used Facebook and viewed more than 8 billion videos daily.
Facebook offers many ways for its users to interact, including connecting with friends, posting
pictures and videos, joining group discussions, building webpages, sharing articles, direct
messaging, and viewing news and trends. Companies tap into this expansive network by creating
their own pages that allow them to seamlessly connect with customers. Facebook allows
companies to be discoverable, co nnect with customers with one -on -one conversations, reach
groups of people quickly, and discover analytics on how customers interact with the site and
marketing activities. If a page isn’t enough for business, Facebook also offers ads companies can
pay for to target users based on characteristics such as location, age, gender, and interests, with
detailed analytics on ad performance.
Businesses have limited reach using their non -ad Facebook pages, but can attract potential
customers as followers “like” the ir page. When a user likes a business’s Facebook page, it is
displayed to that user’s Facebook network, resulting in some publicity for the business. Businesses
can post company announcements, brand imagery, sales, and product releases on their pages to
inform their followers and make their pages more attractive to follow. The best way for companies
to leverage Facebook’s enormous, data -packed network and gain exposure is through paid,
targeted ads. Banana Republic used Facebook’s Lookalike Audiences ads to advertise to audiences
modeled after its most loyal customers and saw a four -times -higher -than -expected return on ad
spend (ROAS).In April of 2015, 40 million small businesses had pages on Facebook, but only 2
million of them were active advertisers. Business Case #3
Inst agram
In an interview with Forbes about Instagram’s start, cofounder Kevin Systrom said, “We decided
that if we were going to build a company, we wanted to focus on being really good at one thing.
We saw mobile photos as an awesome opportu nity to try out some new ideas.” Instagram’s core
differentiator is its quick and simple feed of photos with like and comment capabilities. Facebook
recognized its simple brilliance and acquired the company in April of 2012 for $1 billion. By
September 2015, Instagram ann ounced it hit 400 million monthly active users from around the
world, beating out Twitter’s user base.
Instagram’s simple app platform allows users five basic ways to interact. First, the home screen
shows a live reel of photos and videos with comments and like counts of a user’s follows. Second,
the search function allows users to explore trending posts, hashtags, and photos, and to
recommended photos and videos. Third, the camera feature allows users to post their own photos
and videos with free filtering tools that produce nearly professional -quality images. Fourth, the
activity feature shows users their recent interaction with other users. Last, the profile shows users
their personal profiles with a collage of photos and videos, a brief description, and a link. When
registering, the app allows users to connect via Facebook to quickly gain a network.
Companies and brands found they can use Instagram just like users. Successful Instagram
marketers use the platform to connect with fans and potential custome rs using lifestyle pictures
and videos. Brands can feature products in their posts and pass along campaigns with information
in the comments, including hashtags. Followers can comment on the posts and can even create
their own posts to get further involved in a company’s campaign. Companies can direct users to
links in their profile to bring the users to their e -commerce platform, where sales can be made.
Similar to Facebook, Instagram offers paid advertising space for companies to gain traction on the
app. McDonald’s, for example, saw a 46 -point lift in ad recall from its Instagram advertising in
Taiwan.
Instagram inspires different types of marketing content as well. Users love “sunsets, the Milky
Way, and the stuff of inspirational posters.” These epic s hots dominate the feeds of many
influencers on Instagram and generate high numbers of likes and followers. It is especially
changing the way some athletes and adventurers make their living. Instead of attaching to a brand
for shoots, the influencers create their own brand and are paid to promote others. This rise in
Instagram’s user base and impact led 72% of marketers to say they would spend money on
Instagram in 2016.
Twitter started in 2006 as a website and app that allowed users to share brief text comments over
the Internet. In 2007, Twitter incepted the now popular “hashtag,” which allowed any text
following the “#” sign to become a searchable link. The hashtag unveiled top trends and helped
Twitter spread throughout the world. By early 2016, Twitter gained 320 million monthly active
users in its mission of “giving everyone the power to create and share ideas and information
instantly, without barriers.” Business Case #3
The T witter app and website allows users to publicly share information via comments, pictur es,
videos, or links with a limit of 140 characters in real time. The posts are commonly referred to as
“tweets.” Users can follow other users to monitor their tweets and share tweets (“retweet”) they
like. The app also shows users what tweets are most pop ular or trending by category (news, sports,
music, entertainment, and lifestyle).
Companies can register their own T witter accounts and initiate tweets or reply to tweets from
customers. Twitter has proven to be an excellent platform for companies to resp ond to crises or
make announcements. Companies also use Twitter to build brand association with customers,
including sharing articles, humanizing the company through personal tweets, promoting deals,
recommending charities, validating market trends to prov e market intelligence, and even sharing
humor. Personal styling service Bombfell reported a 25% increase in customer acquisitions by
using T witter promotional campaigns. Using the correct message can bring customers into the
sales pipeline.
YouTube
YouTu be was founded in 2005 as a video -sharing website. According to its site, “YouTube allows
billions of people to discover, watch and share originally -created videos. YouTube provides a
forum for people to connect, inform, and inspire others across the globe and acts as a distribution
platform for original content creators and advertisers large and small.” Google recognized its
potential as a media -sharing powerhouse and acquired the company in 2006 for $1.65 billion. By
February of 2016, YouTube claimed more than 1 billion users that watch or upload videos to its
site and app.
Once users register on YouTube, they have access to the most popular videos on the Internet. They
can see a feed of recommended and popular videos. Users can create a channel to upload videos
and connect with followers and also subscribe to other channels to stay in tune with what their
favorite users are posting. After watching a video, users are recommended similar videos that play
automatically after a video ends. Users can also react to videos by liking them or commenting on
a thread beneath the video.
Companies can leverage YouTube to create their own channels containing marketing content.
Their goal is to generate positive content that “goes viral.” If a video is a success, users c an share
the link with friends via e -mail, text, or other platforms of social media. Companies can direct
customers to their YouTube videos by sharing links on their websites or via other social media
platforms. Some companies leverage YouTube to test adve rtisements for feedback from customers
before airing them on major networks. For example, YouTube set up AdBlitz, a platform for
companies to put their Super Bowl commercials online before airing during the game. Those
advertisements garnered two centuries worth of collective views (1.8 million hours) and gave
companies an opportunity to receive feedback before spending $5 million for a 30 -second spot.
YouTube also offers prime advertising space for companies if they would like to pay. Before many
popular Y ouTube videos begin, advertisement videos play. Users can skip the ads after several
seconds, but if the user watches the advertisement through to the end, the advertising company
pays YouTube for the ad and interaction. Business Case #3
Founded in 2010, Pinterest does not identify itself as a social network, but rather as “a catalog of
ideas,” according to its CEO, Ben Silbermann. People connect and interact on Pinterest, but the
purpose is more for people to be inspired by the images and posts they see. It is closer to traditional
consumptive marketing than many of the other platforms discussed in this technical note. That
means that businesses interacting on Pinterest have to serve the needs of their customers not just
for content creati on and consumption, but for inspiration of activities. On Pinterest, users post the
whole recipe, not just a picture of the food.
Pinterest announced it had reached 100 million users in September of 2015 and continued to grow.
Women represent 85% of its u ser base. Businesses are allowed to advertise on the site and Pinterest
has confirmed it is developing a tool to allow purchases instantly through the site. Companies find
best practices are to post not just their own products, but the lifestyles and actio ns surrounding
those products to fit with the company’s hope that users “go out and do that thing [in a pin].”
Pinterest can be used as a top -of -the -sales -funnel marketing platform. Conversion rates for
Pinterest are 50% higher than for other social media platforms, with 47% of online consumers
saying they made a purchase based on information from Pinterest. Lowe’s, for example, does not
feature specific products, but typically posts do -it-yourself projects and the tools used to make
them. The successful st rategy has resulted in 3.4 million followers across 65 boards.
Snapchat
CEO Evan Spiegel cofounded Snapchat in 2011 while still a student at Stanford. The service
became popular for its disappearing messages, which could only be seen for 10 seconds befor e
automatically deleting. Snapchat has expanded to other messaging types, most notably introducing
the “Story” feature and the “Discover” feature for brands. Stories allow users to post compilations
of images for up to 24 hours for their followers to view. Discover is specifically a brand -focused
tool that also allows for stories to be posted for 24 hours.
In May 2015, Snapchat announced that its user base was 100 million. In January 2016, Bloomberg
reported that Snapchat users watched 7 billion video clip s each day, fast approaching Facebook’s
8 billion daily views with only a tenth of the user base. Brands create stories to highlight the use
of their products and are growing to produce television -style commercials because of the audience
size and reach.
Snapchat is one of the newest platforms, and brands are still trying to figure how to measure and
monetize it. Brands are primarily focusing on building their audiences, using clever campaigns
such as Audi’s comedy -oriented snaps during the Super Bowl in 2 014. During that time, Audi’s
account gained 5,500 followers, and Snapchat reported that Audi was the fastest -growing account
it had recorded. Like early influencers on Instagram, individuals have found ways to monetize
Snapchat faster than brands. DJ Khal ed focuses his career around his Snapchat account, creating
a fashion empire through more authentic product placement than traditional media.
Business Case #3
Former Yahoo! employees Brian Acton and Jan Koum founded WhatsApp in 2009. The app serves
as a cross -platform mobile messaging app. WhatsApp gained popularity, especially
internationally, by allowing users to message from different phones and service providers and in
more than 50 different languages without paying for SMS. WhatsApp usage is highest in Latin
America (66% of overall usage) and lowest in North America (7% of overall usage). Free group
texts with unlimited photo and video messages also helped WhatsApp gain 450 million users by
2014 before it was acquired by Facebook. By February 2016, WhatsApp h ad 1 billion monthly
active users. WhatsApp has also introduced voice messaging.
Although Facebook vows to keep WhatsApp free of ads, this messaging platform can be critical
for brands in ways outside of paid advertisements. WhatsApp is looking to create tools that allow
users to leverage WhatsApp to communicate with desired businesses, creating a more direct
customer service option and conversational commerce. Dan Chapman, MediaCom joint head of
digital, argues that big data has been commoditized and has yet to be humanized until now, by
messaging apps such as WhatsApp. He states, “If you want to get to the point where there is a
closer alignment to the moment that consumer is in, then fundamentally you have to align with
these [messaging] platforms,” and continues to say, “For me this is the next evolution of
understanding consumers better.” Some brands, like Dutch airline KLM, are already
communicating with customers via instant message on WhatsApp for customer service trials.
Although WhatsApp has histor ically been a messaging platform for users to interact with other
users, it is only a matter of time before brands will need to be on WhatsApp to maximize customer
service.
Measuring Success on Social Media
Social media follows steps similar to other adv ertising platforms to move from an impression to a
conversion, but uses a different timeline. Traditionally, the marketing cycle starts with
impressions, followed by calls to action, which in turn generate leads that produce sales
conversions. Social media marketing follows the same cycle but is normally less focused on
immediate sales conversions. Rather, social media provides opportunities for brands to engage
followers and create long -term loyal customers because of the consistency of interactions with t he
brand. Some social media marketing campaigns may take months or more before the target
consumer actually purchases the product or service.
Measuring impressions on social media varies across platforms, but it is still an important piece of
base knowledg e on how many people are aware of the brand through the channel. This process
begins by begins by measuring brand awareness (e.g., the number of followers a page has or how
many views a video receives).
The next step is to produce an interaction from the viewer. Social media has an advantage in
generating interaction over other forms of marketing because the consumer has many simple and
easy ways to interact with the brand. Viewers can like a post, comment on the post, rate a post,
and even share the post. All of these different methods show engagement with the brand and an
affinity for the post. Many social media companies measure engagement on certain posts with Business Case #3
algorithms to promote popular posts and further encourage interaction. For example, Facebook
ranks certain posts on users’ news feeds based on each post’s affinity (how connected the user
viewing the post is to the user who posted), rank (how many likes and shares the post has), and
age (how old the post is). These algorithms reflect the hypothesis that an interactive and passionate
smaller following is more valuable than a passive larger social media following.
Social media campaigns often continue without generating immediate leads and conversions.
Followers may become “fans” of the company and s tay tuned via social media. The hope is this
long -term brand connection will eventually return sales and goodwill to the company. Companies
can translate social media interaction into sales more quickly by creating leads from their posts to
continue to int eract with consumers until they are ready to purchase. Brands can continue this
interaction by funneling consumers to their websites or encouraging them to sign -up for e -mails.
The goal of most marketing campaigns is sales, the conversion of a prospective customer into an
actual customer. A purchasing experience currently requires customers to leave all major social
media sites, which prolongs the conversion process. Nevertheless, the future shows potential for
customers to make purchases in social platfor ms directly. WeChat in China and the $22 billion
purchase of WhatsApp by Facebook show the potential for this type of customer interaction.
WeChat functions as a peer -to-peer banking platform, a place to order food, even a place to play
games. There is no current equivalent platform in the United States. YouTube is also racing to
introduce buy buttons to allow users to purchase products or services shown in videos. While social
media currently has a longer conversion cycle than traditional marketing, these innovative moves
by major social media companies attempt to narrow that gap.
Rise of Influencers
Knowing the ability of social media to drive sales, the next step is to determine how to create social
media content that connects with people. Companies have long recognized the value of celebrity
endorsements of products. Social media has given rise to i ts own breed of celebrities, and people
who draw followings as experts in specific areas on social platforms. These influencers have
shown the ability to drive sales by driving engagement and excitement among their fans. Burst
Media found a return on inves tment of $6.85 per $1.00 spent when its clients use social media
influencers to promote the brand.
Influencers can be defined as individuals who relate to target customers on social media.
Measuring influence on social media can be quantified as:
Influen ce = Audience Reach (number of followers) × Brand Affinity (expertise and credibility) ×
Strength of Relationship with Followers
Brands pay influencers to promote their products. Social influencers are paid significantly less
than traditional celebrities to endorse a product through a posting. Many influencers command in
the range of $700 per 100,000 followers and 2,000 likes per photo. These influencers serve dual
purposes of giving a brand marketing impressions of its product and allowing the brand to in crease
its own followers through the collaboration. Business Case #3
Conclusion
Social media offers brands the opportunity to connect intimately with their followers on a monthly,
weekly, daily, or even hourly basis, at a time when the consumer is interested in seeing a specific
type of content. The content varies across different social media channels, but the importance of
being relatable, engaging, and personalized does not change. Because of the interconnectivity of
social media, brands are rewarded by interacting wit h each of their followers and with social media
influencers. Targeting relevant social media channels allows collaborators both to increase their
reach and to impact their followers.
Business Case #3
Questionnaire
Q1.
The usage of Social Media advertising is becoming a necessity in recent times, with the
development of apps and websites why are not platforms such as Facebook and T witter more
widely used? Even more so as the establishing of an account if free of charge.
Q2.
Social media marketing has a great advantage over traditional methods due to the reaction times
being considerably less. Campaigns can be created at a much reduced cost and with a smaller
workforce. Is this not the way forward?
Q3. (True/False)
An advantage of advertising is that word of mo uth is possibly the greatest tool and by extension
Social Media is a digital form of the word of mouth, because of this Social Media is rapidly
becoming the effective way to advertise and yet still has to be fully embraced by many.
Q4.
In recent years Social Media has eclipsed many former purposeful advertising mediums, T V, radio
and newspapers, so much so that much of the advertising revenue that these channels enjoyed for
so long has dried up. In what ways will these media streams have to change to co mpete?
Q5.
Facebook has to be the greatest Social Media channel and therefore the favored avenue for
advertising digitally, but does the consumer get a true experience of a products genuine features?
Q6.
Recently Social Media sites such as Facebook and You Tube have attracted advertisers of their
own after initially being advert free. This has maintained the access to these sites to remains free,
however how long can this be sustained?
Q7.
With billions of people around the world regularly using Social Media sites it has become a
necessity to use these apps as a vessel for introducing or reaffirming customers with products.
However, are customers becoming more and more driven by video promotion as opposed to the
tactile feel of a product?
Business Case #3
Q8.
Social Media si tes could prove invaluable to retail outlets and manufacturers should they reach out
and improve the ability to sell directly through the apps, at the moment they are used as a brand
promoter, why don't more companies lobby for greater freedom?
Q9. (True/False)
With So cial Media sites having the facility of people "liking" and "commenting" advertisers and
companies alike get instant access to people's interactions with their campaign or product and in
so doing can make instant alterations should they be required.
Q10. (True/False)
The rise of Social Media has also given rise to the use of influencers. The use of these Social Media
unknowns, in many cases, has provided a more cost effective channel in which to promote goods
and services, by simply having a following, even in an arena quite unconnected with the product,
businesses can reach out to many thousands of possible consumers quite easily.
