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ROLE OF SOCIAL MEDIA IN CONTEMPORARY MARKETING

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ROLE OF SOCIAL MEDIA IN CONTEMPORARY MARKETING Powered By Docstoc
					                                                   Role of Social Media in Contemporary Marketing
                                                                                  By Isman Tanuri
                                      Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
      Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie




                                 A Literature Review:
         Role of Social Media in Contemporary Marketing
                                  By Isman Tanuri
                              isman.tanuri@gmail.com
                            groovygenie.wordpress.com

Section 1
1.1 Introduction                                                 2
1.2 Background                                                   3

Section 2:
2.1 Marketing with Social Media                                  5
2.2 Influencing with Social Media                                7
2.3 Social Media and CRM                                         11
2.4 Communicating with Social Media                              12
2.5 Other Approaches to Social Media Marketing                   16

Section 3
Summary and Conclusion                                           18

References                                                       19
Appendix A-C                                                     22-24


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                 Otherwise, feel free to use, print or quote this document.




                                             1
                                                         Role of Social Media in Contemporary Marketing
                                                                                        By Isman Tanuri
                                            Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
            Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



A Literature Review:
Role of Social Media in Contemporary Marketing


Section 1
  1.1    Introduction
  The sudden emergence of social media in the public realm and the realisation of a
  powerful and coordinated online consumer-force have raised alarms in corporate offices
  all over. As consumers increasingly influence each other and share opinionated views
  on brands and products on the internet, businesses are compelled to rethink and
  reorganise marketing and communication strategies in order to address this ‘threat’ to
  traditional ways of doing business.


  Changed Landscape
  However, as with any shift in philosophy and trend adoption, understanding the true
  benefits of leveraging social media in marketing initiatives continues to be a challenge
  for business organisations. Many question the value of investment in social media and
  its direct influence on revenue generation. Others question the wisdom of ‘easing
  control’ over the brand to customers and risking further exposure to public scrutiny.
  Hence, many early commercial approaches to social media are misguided and flawed as
  traditional corporate objectives are in disparity with social media’s concept of open and
  transparent engagement with the marketplace. Nonetheless, this sentiment is beginning
  to change and marketers are increasingly embarking on social media campaigns in
  support of traditional marketing efforts.


  Review Objectives
  This literature review will attempt to discover whether current social media theories and
  concepts are relevant and applicable to long-held marketing principles and business
  philosophies. This review will highlight and critically examine articles and key expert
  views on the use of social media as a tool in a consumer marketing environment.
  Through a detailed discussion, the general consensus and established practices of
  enterprise social media activities will be ascertained and that social media will indeed
  represent a new frontier that will be beneficial and relevant to the marketing discipline.



                                                   2
                                                       Role of Social Media in Contemporary Marketing
                                                                                      By Isman Tanuri
                                          Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
          Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



1.2   Background
Social media is currently an evolving ‘phenomena’ in business marketing. Enlightened
marketers are beginning to drive the use of social media as a component in their
marketing strategy and campaigns to reach out to customers and fans. Among the sub-
disciplines of marketing that may utilise social media include promotions, marketing
intelligence, sentiments research, public relations, marketing communications and
product and customer management. Appendix A provides statistical information of social
media adoption across networks and around the world.


New Media Channels
Social media is described as the “shift in how people discover, read and share news,
information and content” (Solis, 2007a). People are doing so through the internet in the
form of blogs, social networks (eg. Facebook, Myspace, Orkut), news aggregators (eg.
Digg, Stumbleupon), video and music portals (eg. YouTube, Last.FM), social
bookmarking (eg. Delicious, Reddit), micro-blogging (eg. Twitter, Plurk), online forums
and reviews (eg. Amazon, Yahoo Answers!) and other social communication channels
(see Appendix B for overview of social media tools). This has been made possible
through converging technological evolutions on the internet, dubbed ‘Web 2.0’, the
internet as a 2-way communication platform (O’Reilly, 2005). O’Reilly further explains
this revolution as the era of participation and of harnessing the collective intelligence,
also referred to as the ‘wisdom of crowds’


This surge in consumer online activity and user-generated content is termed the
‘groundswell’ by Forrester researchers, Charlene Li and Josh Bernoff (2008) in their
book of the same title. As the groundswell began exhibiting collective influence through
sharing on the internet, businesses began to take notice and seek ways to participate in
the ‘conversations’. Enterprises, such as IBM and Lego, began building their own
community forums, and corporate blogs, including Dell’s and Ford’s, began appearing to
reach out to customers (Li and Bernoff, 2008).


In time, the marketing function also began integrating social media in campaigns. The
use of Facebook and Twitter to market products and services are beginning to receive
attention from businesses in recent years. Primary to these widespread adoption are its



                                                 3
                                                       Role of Social Media in Contemporary Marketing
                                                                                      By Isman Tanuri
                                          Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
          Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



relatively low cost-to-implement and the ability to bypass traditional media outlets for
advertising and promotional needs.


#FAIL
However, not all attempts at social media marketing have been successful in
implementation. A case in point is Sony’s Playstation Portable (PSP) fake blog fiasco.
The seemingly-innocent blog, presumed to belong to a teenager, was uncovered to
belong to an advertising firm hired by Sony to promote the PSP (Kingsley-Hughes,
2006). The uproar generated from this proved to be an embarrassing public relation
disaster for Sony.


Turning Tide
Particularly because of its open and connected infrastructure, the internet facilitates the
spread of information across geographies and boundaries. This has been a critical factor
in the success of viral marketing campaigns launched by businesses. However, social
media has also proven to be a handful for companies. When United Airline passenger,
Dave Caroll, found his guitar broken by the airline and subsequently endured a less-
than-pleasant customer service experience in his compensation bid, Dave decided to
write a song about his experience, videoed and posted it on YouTube (Guardian.co.uk,
2009). The video became a viral sensation and has received 5.4 million views to date
since July 2009. The Times UK estimated that the bad publicity generated by the video
cost a 10% drop in stock prices (amounting to US$180 million) within days of the video’s
debut (Ayres, 2009). This powerful effect of the groundswell on businesses is one of
many examples of social media’s persuasive influence.


Experts and Thought Leaders
Due to this being a new field of study, there is a lack of peer-reviewed resources on this
subject. Interestingly too, because of its fairly recent introduction into mainstream
commercial landscape, many of the recognised experts and key authors in social media
today are current practitioners in the social media/marketing space. Therefore, this
research is focussed on theories and ideas by these widely-accepted thought leaders in
the field. Unlike academia, these experts have emerged and influenced others through
the medium they know best: social media. Many of these leading social media experts,
including Seth Godin, David Meerman Scott, Mitch Joel and Chris Brogan, are bloggers

                                                 4
                                                         Role of Social Media in Contemporary Marketing
                                                                                        By Isman Tanuri
                                            Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
            Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



  who have build their personal brands and share their body of work or innovations at
  companies they worked for through online channels and digital word-of-mouth. Their
  brief profiles are shown in Appendix C.



Section 2
 2.1 Marketing with Social Media
 The Engagement Concept
 In the ‘Groundswell’ (2008), Charlene Li and Josh Bernoff outlined the following as core
 activities that define the engagement with the groundswell: listening, talking, energising,
 supporting and embracing. This is the framework that has been developed and proposed
 by Li and Bernoff to facilitate the transition for companies to understand and engage their
 customers within the social media space. They argued that social media is predominantly
 about the people and those relationships and communities must the cornerstone of any
 social media marketing strategy.


 Although the framework, as outlined, provides a clear community engagement model, it
 does not satisfactorily provide an understanding of the long-term value of investment in
 these activities. Engaging closely with customers and prospects on a broad scale
 represents a significant cost to most companies. However, Mitch Joel, in his book ‘Six
 Pixels of Separation’ (2009) makes a clear argument for close engagement. People are
 increasingly becoming digitally connected to each other via social networks and online
 activities. With current rate of adoption, the online population will represent a significant,
 easily-targeted market for businesses. By investing in getting connected with their online
 market and customers now, companies will have the edge and advantage on competitors
 in the future. Customers’ trust and rapport built over time are durable business assets that
 are hard to encroach on by competitors (Godin, 1999).


 ‘No’ to Social Media Marketing
 Nonetheless, the consensus on marketing via social media is not universal. Tom Martin
 (2009), in Advertising Age, is adamant that social media is not a channel for marketing
 and that any corporate involvement behind a social identity devalues the conversations.
 Glen Dury (2008) points out the argument that marketing has no place in ‘social’ media
 and that it ‘destroys social media’s foundations’ by undermining its human elements. This,

                                                   5
                                                         Role of Social Media in Contemporary Marketing
                                                                                        By Isman Tanuri
                                            Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
            Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



he contends, is because of the very nature of marketing, which is a commercial corporate
function.


This study however is not in agreement with these views. Even in traditional marketing,
engagements with prospects through advertising and promotional channels are activities
that involve multiple levels of human interaction, seen or unseen (for an example, an
advertising creative devising a copy for an audience). The marked difference at present is
that social media allows for reciprocal, two-way communication between advertiser and
customer. Essentially, the core marketing principle of satisfying human wants and needs
does not change. Marketing in social media is an evolution of commercial practices in
tandem with the times.


Independent Disciplines
Further in this, the prominent blogger and social media expert, Chris Brogan, in his blog
post ‘Marketing is NOT social media-Social Media is NOT marketing’ (2007), argues that
social media and marketing are distinctive disciplines and independent from each other.
His primary argument is that social media is a set of tools that ‘permits regular people
access to potential audiences of shared interest’ and that marketing should not ‘own’
these tools. Instead, he suggests that marketers should observe and take advantage of
the effect of having the media in the hands of regular people. The same sentiment is
similarly echoed by Lee Odden, voted number 15 by peers in 2008’s top 100 list of digital
marketers. Odden (2009) believes that social media is ‘no place for direct marketing’ and
that people join social networks, and the Web 2.0 space in general, to be social with a
like-minded community, instead of being marketed to.


Discomforting Truth
Herein lies the disconnect. On one end, consumers are empowered by the internet to
have their say and opinions on brands, and some, including experts such as Brogan and
Odden, believe that consumers should be given total freedom to decide when to engage
with brands. On the other end, marketers are desperately trying to leverage on social
media to drive their marketing campaigns and to manage perceptions of their brands
online.




                                                   6
                                                            Role of Social Media in Contemporary Marketing
                                                                                           By Isman Tanuri
                                               Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
               Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



The Advocates
Supporters of social media marketing for enterprise believe that the right approach can be
beneficial for both businesses and customers. Eikelmann, Hajj and Peterson (2007)
support the notion that companies should re-strategise and profit from this ‘threat’. They
believe that companies should actively seek to engage in conversations with their
customers. However, companies must observe a condition of moving away from
‘controlling the message’ and let consumers decide on the flavour of the conversations.
Additionally, in their research, they observed that Web 2.0 has caused the fragmentation
of marketing channels, in that, communities and websites tend to cater to niches and
particular demographics. These should be used to the advantage of companies as they
can be efficient through the use of highly-targeted effective marketing messages despite
the clutter.


This study agrees that the sheer volume of advertising clutter is causing consumers to
question the authenticity behind the claims of these messages. It is also agreed that
brand recall is suffering from increased consumerism as companies capitalise by
developing countless new products and brands. Tellingly, a CBS news report (2006)
states that an average person is exposed to about five thousand advertising messages in
a day. As such, David Meadows-Klue (2007) argues that, with the explosion of cheap,
one-way advertising channels and growing customer literacy in the art of marketing, the
impact of traditional marketing communications has been undermined. Therefore,
Meadows-Klue is of the opinion that social media is the right channel for marketers to
regain attention from customers.


2.2 Influencing with Social Media
The Bridging Factor: Influencers
Despite the opposing arguments for social media’s involvement in marketing, it is
ultimately social media’s creation of a new layer of influencers that will prove to be
beneficial for both marketers and consumers (Solis, 2007b). In ‘The Tipping Point’ (2000),
author, Malcolm Gladwell, emphasises on the importance of influencers in the
transference and spread of any new idea or knowledge. Without these idea facilitators,
many commercial successes, such as the Apple, Hush Puppies and Google brands, will




                                                      7
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



remain on the peripheral. For consumers, recommendations through peer influence tend
to be perceived as highly authentic and objective.


For marketers, whose predominant purpose is the influence of customers to their
products, the easy creation of consumer-influencers is a vital benefit that can be reaped
from the integration of social media in their campaigns. Moreover, many marketing
experts agree that word-of-mouth (WOM) is an effective element of promotion. In the Web
2.0 era, the WOM activity can be easily facilitated through the sharing of viral videos,
email or peer reviews on Facebook. Trusov et al (2009), in a research on the effect of
WOM on social networks’ sign-up, found that the elasticity of WOM referrals is 20 and 30
times higher than that of marketing events and media publicity, respectively. Thus, this
study is of the opinion that a major role of social media in marketing practices (if adopted)
must be objectively related to the creation of influencers within communities.


Return on Influence
Another applicable theory in the matter of WOM through social media is the Return on
Influence (Brogan and Smith, 2008). The prevailing idea is that marketing must be
strategically carried out through identifying and influencing those with the most influence
over others. At present, social media is the only medium that allows for such detailed
effort. Despite the intricacy of this tactic, the objective of focussing messages to the right
audience is in accord with marketing fundamentals of segmenting and targeting
audiences for maximum conversion. This tactic is also in agreement to Gladwell’s Law of
the Few theory (2000). The influence of a Connector personality (‘Connectors know lots of
people’) over an ideology or trend will quickly mobilise its spread and reach until it
reaches the ‘tipping point’. This is when an idea achieves critical mass and universal
recognition through a sudden exponential growth.


Brand Advocates
However, traditional marketing philosophies do not explicitly cater for external contribution
to a brand by anyone, other than an employee of a company. Commercial marketing
objectives are typically aligned to achieve incremental revenue through quality lead
generation and brand building. Because of this, no added emphasis is usually given to
building external non-sale relations with customers.



                                                  8
                                                         Role of Social Media in Contemporary Marketing
                                                                                        By Isman Tanuri
                                            Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
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Nevertheless, with social media, the unpaid brand advocates are a reality. In the
‘Groundswell’ (Li and Bernoff, 2008), it is proposed that brand advocates are ‘grown’
through purpose-built community forums for ardent fans of brands such as Lego, Dell and
the iPhone. In retrospect, this act of ‘energising the groundswell’ is in effect a controlled
and strategised word-of-mouth effort.


Stickiness Wins
Another triumphant brand advocate campaign was the successful bid to have Barack
Obama elected as President of the United States (Lardinois, 2005). The synchronised
use of social media channels gave extended awareness and publicity to the Obama
digital campaign and a measurable edge over John McCain, the Republican Senator.
This was achieved through endorsements made online by Obama advocates which has a
lasting and visible impact as the internet retains a level of permanency and transparency.
Again, this observation concurs with another of Gladwell’s theory in ‘The Tipping Point’,
the Stickiness Factor (2008). This is the study of the strength of a message in a person’s
mind that will allow it to be relayed from one person to another effortlessly until it reaches
tipping point. From a marketing perspective, the Stickiness Factor is an important criterion
in the crafting and testing of marketing messages: the viral effect of ‘United Breaks
Guitars’ and Susan Boyle’s 100 million YouTube views (Ostrow, 2009) are evidence that
the carefully-crafted message is a powerful tool for the marketer.


Conclusively, the use of external resources, who will evangelise a brand to friends,
relatives and colleagues for “the most honest form of marketing” (WOMMA, 2009), is
similar in effect to an over-achieving direct marketing campaign, at minimal or no cost.
The Obama campaign is compelling evidence that social media can assist in achieving
marketing objectives if efforts are focussed on marketing through influence and brand
advocacy.


Permission and Trust Marketing
Irrefutably, traditional marketers are grappling with the decline of mainstream advertising
and the rise of social media which has deeply affected the media and newspaper
industry. Forrester Research, in its 5-year forecast, reports that global advertising budget
will decline significantly and this will be supplanted by a 34% growth in social media



                                                   9
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



budget (VanBorskirk, 2009). This is a strong indication that advertising is fast losing its
effect as a promotions tool.
Without a doubt, the works of Seth Godin in the area of permission marketing have
influenced a new generation of digital marketers. In ‘Permission Marketing’ (1999), Godin
explores the use of interactive technology, such as email and online games, in order to
receive explicit customer permission for a brand to initiate direct interact. Godin argues
that only marketing messages and approaches that are relevant, personal and anticipated
will be readily accepted by customers.


Godin’s theory has been proven just as relevant today as customers continue to eschew
traditional advertising in favour of word-of-mouth recommendation and peer reviews. With
social media, practitioners of digital marketing are able to gain inroads to potential
customers through the proven method of permission marketing. Instead of brands
pushing and ‘shouting’ their messages across, social media channels allow for consumers
to voluntarily ‘befriend’ (via Facebook Fan Pages) or accept communication (via Twitter or
email newsletters) from brands. The building of trust through such relationships typically
benefits both companies and consumers.


As organisations become exceedingly visible through social media, it is therefore notable
that marketing of trust is important. Mitch Joel (2007) expounds the theory that if an
organisation does not provide value, be open and transparent and create opportunities for
two-way communications, the brand will not survive in a time when social media is
becoming an accepted platform for brand-building. Joel further states that these ideals
are can only be possible through the ‘building of community based on trust’. Based on
these arguments, this study therefore has the opinion that modern organisational
marketing must involve efforts in social media in order to maintain and increase trust and
authenticity from customers’ perspective.


The Reality
The above arguments indicate that social media can be mutually beneficial for both
parties if the boundaries of engagement are specified. In areas where corporate-
sponsored social media activities are managed (such as product support forums),
branding and direct marketing should be reasonably accepted. In public and closed social
networks, such as Twitter and Facebook respectively, permission must be sought for

                                                 10
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



marketing messages to be broadcasted or relayed to specific users. Breaching these
boundaries is akin to interruption marketing, similar in purpose and effect to untargeted
advertising and email spam.


2.3 Social Media and CRM
Bernoff (2009) recommends that every organisation must know every single one of their
best customers by name. To achieve this, social media can be used to provide visibility
and almost real-time direct channels to engage and interact. The argument also extends
to the idea that your best customers will always know where to find your company if they
have a problem. Meadows-Klue (2007) concurs with this view. He further states that, as
customers have been empowered by easily-available social media tools, the expectation
is growing that their favourite retailers will engage them in the online domain.


Limitation to Resources
However, such idealistic views may be contrary to business ethos of efficiency and that
close attention on every single customer, even the best ones, may be a resource drain,
especially in the fast moving consumer goods industry. The call for companies to be
exceptionally frugal in this economic climate resonates clearly among business leaders.
Expert advice dictates that the focus must be on spending that generates real returns on
investment (ROI), not just in marketing activities but also in operations (Maddox, 2009).


New Rules of CRM
This is where the argument for social media and customer relationship management
(CRM) converges. CRM drives the radical customer-oriented marketing concept (4Cs of
customer, cost, convenience and communication) that is slowly replacing the traditional
4Ps of marketing thinking (product, place, price and promotion). As outlined by Dr. Ned
Roberto (World Village, 2008), the 4Cs’ emphasis is to approach marketing from
consumers’ perspective. In this regard, we can find that both CRM and social media offer
the same benefits and end-results for companies and their customers, which is visibility
and long term patronage.


A recent Forrester survey found that social media is extensively helping companies to
deepen their relationships with customers through complementary uses of social tools



                                                 11
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
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and CRM systems (Karpinksi, 2008). Supporting this view, David Myron (2009), in his
editorial in CRM Magazine, also theorises that using social media, in conjunction with
CRM tools, provides a new level of customer intelligence. Listening in to customers’
sentiments and gathering attitudinal data via social media will provide business strategists
with higher level of confidence in decision making.


Real-Time Customer Management
Close customer management through social media also translates into an enhanced
customer service experience. A good example of this is Comcast’s Twitter service.
Customers’ ‘tweets’ sent to its @comcastcares Twitter account are typically responded in
full public view. Todd Defren, in his article ‘A Social Media Guide from the Edge’ (2008),
enthuses that, in an online world, a company must be seen as responsive by customers
and non-customers. This, he believe, will provide for the manifestation of ‘good karma
through good service’. This study agrees in that this approach not only provides a level of
transparency and genuine authenticity to the company’s profile but will ultimately enhance
the efforts in customer retention.


The above arguments certainly demonstrate that social media can fulfil the traditional
metrics of marketing, which are to limit churn and increase customer retention. More
importantly, the CRM practice, coupled with freely available social tools, can be a cost
effective activity to any organisation intent on a long-term and sustainable business
model, albeit with budget limitations.


2.4    Communicating through Social Media
The advent of social media has changed the way companies organise their outwardly
communication activities. Companies are also beginning to realise that customers will talk
about them, with or without them (Solis, 2007b). As most of the internet is open and
unsecured, these comments or sentiments can be easily seen or read by potential
customers or clients. David Roth (2009) contends that this is a double-edged sword.
Where companies can now observe their customers or competition by listening in to
conversations, they are also susceptible to the same reciprocal tactics. This is the
challenge that companies and brands are facing in the Web 2.0 and social media era.




                                                 12
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



Loss of Control
Today’s popular consensus is that companies can no longer control the perceptions to
their brands (Eikelmann, 2007). These include control of the company’s corporate
message as well as parties responsible for disseminating information from the
organisation (Young, 2009). Conversely, any person with an internet connection and a
computer is able to review or comment on a brand, either on their Facebook page, Twitter
or anywhere else on the internet. This effect of the ‘democratisation of media’ is a vital
inducement to re-evaluate how brands and companies communicate (Dury, 2008).


Public Relations
David Meerman Scott, in his book ‘The New Rules of Marketing & PR’ (2007), fervently
suggests that traditional public relations (PR) practices ‘do not work anymore’. Scott cites
that, instead of pushing press releases or information to traditional media outlets (for eg.
journalists, newspapers and TV stations), companies can now take ownership and
independently publish information or news via Web 2.0 mediums. These include official
company blogs, YouTube, online news sites and even through direct relations with market
analysts and influential bloggers.


This study believes that this strategy of bypassing conventional media provides PR
practitioners an almost instant access to communication channels, unlike traditional
methods. An almost real-time reaction is indeed a timely benefit for companies in dealing
with developing crisis' communications. In fact, Li and Bernoff (2008) propose a proactive
approach to crisis management. Through dedicated and around-the-clock close
monitoring of online social spaces for public sentiments, companies can address minor
complaints quickly before they become a public relations disaster.


Similarly, Forrester’s social media analyst, Jeremiah Owyang (2009), advocates the hiring
of a brand monitoring company to provide regular reports to analyse public reactions to a
company’s manoeuvres in the market as a form of intelligence gathering. Based on these
arguments, this study believes that the PR practice must evolve beyond press releases
and reactive damage control.




                                                 13
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



Changing Perceptions
In real-life practice, social media has also provided public relations with a formidable tool
in altering public perceptions. In a current takeover battle between Kraft and Cadbury
(Mullman and York, 2009), Kraft engaged a renown PR firm, Brunswick Group, to connect
with Cadbury’s stakeholders via social media. The campaign uses video messages from
Kraft’s executives and informative microsites to win over support from Cadbury’s
stakeholders to the proposal of being acquired. By developing niche messages and
directly targeting and communicating to the audience, Brunswick’s personal approach is
likely to appeal the stakeholders (Scott, 2007). From a marketing perspective, this in fact
a form of permission marketing as advocated by Seth Godin (1999), communication that
is relevant, personal and anticipated.


Public vs. Media
From the earlier arguments, this study deduces that the public relations role in a
company’s brand and perception management has indeed transformed with social
media’s arrival. What used to be a function that tries to influence and alter public
perceptions predominantly through close media relations, is in fact much more associated
now with direct public management and engagement in the Web 2.0 environment.
However, such close association with the public is a positive development in the age of
increased corporate social responsibility (CSR).


Online Thought Leadership
David Meerman Scott (2007) also outlines a holistic strategy in marketing a company
online. By communicating online thought leadership through content development and
knowledge sharing (for example, white papers, e-books and articles), the company will
receive recognition for its expertise and an enhanced brand perception from potential
clients or customers. The online thought leadership is in fact a long term investment that
will ensure a company maintain an extended influence over a community audience
(Matthews, 2007). With a loyal community audience, the company may find that it is
easier it to push through innovative and revolutionary ideas to its clients and customers.




                                                 14
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
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Blogging with Authority
In purporting thought leadership, Li and Bernoff (2008) suggest that blogging is an
effective method of communicating an organisation’s message. Other than being direct
and immediate, a blog allows for a two-way dialogue to be established for a customer to
provide his views and comments. This activity, as stressed by Li and Bernoff, is a cost
effective method to receive feedback and inputs from customers regarding a company’s
products or services.


However, Seth Godin (2005) provides a different concept to blogging. Godin contends
that a blog, as a marketing tool, should be a launch pad for spreading of ideas. Termed
‘viral blogs’, Godin is of the view that a blogging corporate leader or employee must have
an authoritative opinion but with a flexible allowance for discussion.


This study contextually agrees with such an ideal. However, a focus on content must be
exercised. In this case, David Meerman Scott (2007) provides a framework for relevant
blogging: companies should not write in an advertorial manner but instead focus on topics
that may concern their industry as a general. This lends authenticity and an opportunity to
augment a thought leadership persona.


CSR through Social Media
In this time of increased corporate social responsibility awareness and green marketing,
an organisation’s degree of openness and transparency are a sure measure of its serious
intention. Sandy Carter, IBM’s Vice President for Websphere Marketing and author of
‘The New Language of Marketing 2.0’ (2009), theorises that CSR and green marketing
objectives are best achieved through the adoption of Web 2.0 technology.


Apart from efficiency in use of resources (which directly contributes to green credentials),
Carter maintains that using social media to promote a company’s CSR and green
initiatives can trigger solid word-of-mouth references and drive influencers’ willingness to
tell a company’s story. Such viral outcomes are welcomed as most typically, the primary
objective of CSR and green campaigns are in the creation of strong advocates that will
passionately support a motion or alternative solution to an environment issue (Howell,
2009).



                                                 15
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



2.5 Other Approaches to Social Media Marketing
Product Development
Other authors and practitioners are equally bullish about enterprises deploying social
media as an idea development tool. The academic team of Constantinides, Romero and
Boria (2008) are of the opinion that companies should involve the customer in making
business decision through the collaborative use of social media. These can be made
possible in areas such as product development and service improvement. An example of
this is Domino’s Pizza’s customised pizza program, where customers can create their
own pizza, name them and make it available to others (Costantinides et al, 2008).


Li and Bernoff also touched on this approach in ‘Groundswell’ (2008). In the presented
Bearingpoint case study, the company uses a wiki for its effort in cataloguing its
information management solutions for its clients and system support information. The
significant difference in this knowledge management activity is that the wiki is open and
accessible for viewing and editing by its clients, systems users and even competitors, who
provides content related to specific information management issues. With a substantial
body of knowledge contained in the wiki, Bearingpoint is even able to sell the content of
this ‘crowdsourced’ knowledge along with its projects for clients.


Li and Bernoff believe that by developing communities where customers are allowed to
feedback and contribute ideas, a company can market more efficiently with products that
have been evaluated and verified by its own customers. By tapping on the collective
knowledge of the consumer and directly soliciting the wants of the customer, such
approach deserves merit as it fulfils the prime marketing fundamental of serving the
needs of the customer.


An Organisational Approach
Another remarkable concept that is a result of the social media revolution is the brand
organisation. In this approach, the organisation must adopt the philosophy that internal
branding is just as important as external communication. Employees must understand
and deliver the brand’s promise at all times. This is because customers can easily gain
access to online information on the company and its employees and make unaided
decisions based on these gathered information (Interakt, 2009).



                                                 16
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie




Despite its revolutionary concept, the brand organisation approach is a highly visible
endeavour in an increasingly customer-oriented landscape. Interestingly and in accord,
the author, Tamar Weinberg (2009), proposes that customer service should be a core
component of any social media strategy. She argues that ‘customer service is social too’
and favourable impressions in this area will translate and propagate into online and offline
reputation for companies.


As described, this study believes the organisational approach to social media may
encounter considerable resistance in organisations with legacy operational practices. The
technological and communication aspect of social media may prove a challenge for
widespread adoption within a company, especially one with a mature population.
However, Amber Naslund (2009), an advocate of the social media-savvy organisation,
outlines the following for senior management buy-in: transparency provides business
intelligence in managing internal employee relations, improved customer experience
through consistent organisational message and better decision making through real-time
operational insights.


Catalyst for Change
Additionally, this study also believes that social media is the right catalyst for the next era
of business, from IT-driven to CSR-driven. In a recent research, it is found that there is an
increased adoption in Web 2.0 business efficiency practices in organisations, for example
the use of tools such as wikis, blogs, RSS (Bughin, 2007). Therefore, it is only a matter of
time before social media is an accepted norm within corporate activities. However, only
with early internal and external adoption of social media initiatives can businesses
maximise current and future opportunities, ahead of competitors.




                                                 17
                                                         Role of Social Media in Contemporary Marketing
                                                                                        By Isman Tanuri
                                            Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
            Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



Section 3
Summary
 The above study has shown that social media do indeed have a significant role to play in
 contemporary marketing. Although there are dissenting voices in regards to the use of
 social media as a marketing tool, generally, social media has been proven to have
 important applications for marketing campaigns, public relations activities and customer
 relationship management programs.


 Marketing through Influence
 A balanced and complementary approach is required to integrate social media into
 marketing practices. The expert consensus calls for marketers to engage in a subtle and
 restrained manner when engaging customers in social media. Making inroads through
 influence and permission, rather than direct selling, will more likely provide the benefits of
 long-term engagement. Therefore, the objective for social media marketers is indeed to
 turn customers into brand advocates.


 Communication 2.0
 The significance of social media as a possible corporate ideology cannot be ignored.
 With open and transparent communication through social media, companies can benefit
 from the increased level of trust by customers and stakeholders. This is important in an
 era where corporate social responsibility is emphasised in the wake of corporate
 scandals, such as Bernie Maddox’s and Satyam’s. Social media has also been proven to
 be an effective tool for public relations and in the creation of thought leadership for a
 company.


Conclusion
 Although social media is a recent arsenal to the field of business marketing, its potential
 as a marketing tool cannot be overlooked. However, further development in its practice
 and usage is required in order to increase corporate adoption. Also, a study into the
 measurement of social media’s effectiveness and its return on investment must also be
 undertaken. Only then can the real value of social media to an enterprise be ascertained.
 Nonetheless, social media is a powerful tool for any organisation moving in the Web 2.0
 space and beyond.


                                                  18
                                                       Role of Social Media in Contemporary Marketing
                                                                                      By Isman Tanuri
                                          Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
          Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



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                                                19
                                                        Role of Social Media in Contemporary Marketing
                                                                                       By Isman Tanuri
                                           Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
           Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



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                                                       Role of Social Media in Contemporary Marketing
                                                                                      By Isman Tanuri
                                          Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
          Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



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                                                21
                                                      Role of Social Media in Contemporary Marketing
                                                                                     By Isman Tanuri
                                         Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
         Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



Appendix A
Social Media Adoption Statistics




                                               22
                                                      Role of Social Media in Contemporary Marketing
                                                                                     By Isman Tanuri
                                         Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
         Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



Appendix B
Social Media Applications Tools




                                               23
                                                           Role of Social Media in Contemporary Marketing
                                                                                          By Isman Tanuri
                                              Email: isman.tanuri@gmail.com + Blog: groovygenie.wordpress.com
              Twitter: @groovygenie LinkedIn: linkedin.com/in/ismantanuri Del.icio.us: delicious.com/groovygenie



Appendix C
Social Media Thought Leaders
The following profiles the leading experts in social media and digital marketing:

Seth Godin
Godin is author of ten books that have been bestsellers around the world. His most recent titles
include The Dip and Meatball Sundae. Free Prize Inside was published in early May, 2004 and All
Marketers Are Liars was published in 2005. His books that have been bestsellers around the world
and changed the way people think about marketing, change and work. Permission Marketing was an
Amazon.com Top 100 bestseller for a year, a Fortune Best Business Book and it spent four months
on the Business Week bestseller list. It also appeared on the New York Times business book
bestseller list.


Charlene Li
Charlene Li is the Founder of Altimeter Group and co-author of the business bestseller,
“Groundswell: Winning In A World Transformed By Social Technologies“, published by Harvard
Business Press in May 2008. She frequently consults and speaks on social and emerging
technologies and publishes a blog, The Altimeter.

Josh Bernoff
Josh is senior vice president, idea development at Forrester Research and is responsible for
identifying, developing, and promoting some of the company's most influential and forward-looking
ideas.Josh is the coauthor of the BusinessWeek best-selling book Groundswell: Winning in a World
Transformed by Social Technologies, a comprehensive analysis of corporate strategy for dealing
with social technologies. Abbey Klaasen of Advertising Age picked it as "the best book ever written
on marketing and media," and Amazon's editors put it in the top ten business books of the year


David Meerman Scott
David Meerman Scott is a marketing strategist, keynote speaker, seminar leader, and the author of
the hit new book World Wide Rave. His previous book, The New Rules of Marketing & PR is an
award-winning BusinessWeek bestseller and is being published in 24 languages. He is a recovering
VP of marketing for two publicly traded technology companies and was also Asia marketing director
for Knight-Ridder, at the time one of the world’s largest newspaper and electronic information
companies.


Mitch Joel
Mitch Joel is President of Twist Image - an award-winning Digital Marketing and Communications
agency. He has been called a marketing and communications visionary, interactive expert and
community leader. He is also a Blogger, Podcaster, passionate entrepreneur and speaker who
connects with people worldwide by sharing his marketing insights on digital marketing and personal
branding. Mitch is also the author of ‘Six Pixels of Separation’.


Chris Brogan
Chris Brogan is President of New Marketing Labs, a new media marketing agency, and home of
the Inbound Marketing Summit conferences and Inbound Marketing Bootcamp educational events.
He works with large and mid-sized companies to improve online business communications like
marketing and PR through the use of social software, community platforms, and other emerging web
and mobile technologies.



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