Literature Review Chapter: Social Media on the Advertising Competitiveness

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¶ … Social Media on the Advertising Competitiveness of Small Businesses

Marketing is a complex issue (Joshi, 2005; Christensen, 1997). Because of the complexities surrounding it, it is very important that every researcher into the issue carefully consider what area of marketing he or she wants to study, and focuses on that area. By doing so, marketing (both domestic and international) can be better addressed (Christensen, 1997). Long before social media ever appeared on the scene, companies were finding creative and innovative ways to market their goods and services to consumers (Joshi, 2005). The trust that is associated with traditional media has been increasingly successful in transferring over to viral marketing strategies online. Trust in traditional media (newspaper ads and articles, and TV), the authors report (using Menon's research), transfers to the Internet. In particular, trust in traditional advertising for health issues and mediations leads to trust in Internet drug searches (Soh, et al., 2007). As this trust is continuing to be transferred into a viral environment, use of social media in marketing campaigns becomes more crucial than ever.

Yet, this growing trend is still relatively unrecognized within the contemporary scholarly discourse. Contemporary researchers are struggling to keep up with the emerging trend. Thus, "researchers are scrambling to understand the phenomenon almost as quickly as the technology advances" (Williams & Merten, 2008, p. 254). In this environment, it is important for studies like this one to continue to flush out the benefits of social media marketing and how they can be utilized by contemporary organizations.

Benefits of Social Media Marketing

The research clearly shows a number of positive benefits that are associated with utilizing social media within marketing strategies. First and foremost, these strategies are incredibly cost effective. Presence on social media platforms is often free of charge, allowing organizations to set up fan pages on sites like Facebook, Twitter, and YouTube for just the cost of the labor to keep the site updated. Small businesses can utilize these free resources as a way to get started with little or no capital investments, and still be able to reach a very broad audience. Moreover, many social networking sites offer advertising space, where banners and ads are seen on homepages. Facebook ads are one example that is still extremely cost effective, averaging out to pennies per click.

Additionally, there is much m more engagement with the consumer, and all of his or her network. This means that the consumers are much more personally involved in the marketing messages that are being spread through their networks. Here, the research states that "social media allows social marketers to directly engage their consumers in the creative process. In this paradigm, customers become creators or co-creators with the agency or organization" (Thackeray et al. 2008 p 341). Overall, this keeps consumer investment high which will benefit SMEs by retaining a greater customer loyalty and increasing the facilitation of word of mouth marketing strategies through consumer generated content that does the marketing work for the organization.

Moreover, marketing through social media platforms presents much less invasive marketing techniques. The marketing message is often spread through consumer networks, thus from friends or friends of friends, rather than a consumer constantly being bombarded by annoying ads that are distracting and unappealing. When a company puts a "fan" page or a "follower" page up on Facebook, the advantage for a company is two-fold, Taylor et al. explains. One, although Facebook users cannot enroll unlimited numbers of friends on that site, the number of "fans" is "unlimited, allowing companies or brands to enlist thousands of fans" (Taylor et al., 2011, p 259). The second advantage is really a benefit for consumers because a user who becomes a "fan" of a company or of a brand may wish to follow it but he or she doesn't have to give their profile or email address to that company in the process. This keeps consumer anonymity, thus increasing the overall likelihood they may further investigate products and services without the worry of being constantly bombarded by sales calls and emails for the next year.

Another clear benefit of using social media as a platform for marketing is the greater scope of demographics that become reachable through such technologies. Essentially, social networking platforms do tend to break down some of the traditional socio-economic barriers that separated demographics in more traditional marketing strategies. The sheer popularity of social marketing is astounding. Over ten million people use social networking on a daily basis (Williams & Merten, 2008). This increases the overall ability for an organization to reach a much wider scope of demographics than traditional marketing practices. As more and more users go online, they are being stripped of the previous divides that separated them into groups in terms of other traditional forms of marketing. Modernization theory illustrates how social networking is helping remove previous boundaries between socioeconomic divides. This theory suggests that "In the context of social reproduction, modernization theory holds that as societies develop they become more open, socioeconomic achievements become less tied to social background and other ascribe characteristics," (Marks, 2009, p 918). People of all different backgrounds easily come into contact with each other online, where they would have never met in person. Thus, because "social background becomes less important and social attainment becomes more universalistic" marketing efforts can go much further online than in traditional forms (Marks 2009 p 918). Use of social media can expose an organization to a much wider selection of the marketplace, for a fraction of the cost.

It is clear that the trend of social networking and media is only going to continue into the future. This is demonstrated by the mass exodus of young readers away from traditional print media (newspapers, magazines). Yes, the young reader doesn't go out on the front lawn and pick up the daily newspaper anymore; perhaps his or her father or grandfather still does, but the young reader goes online to pick and choose what information to review. And in choosing what information to tap into online, the typical online magazine has many of the same features as the print version of magazines, hence, the young Internet-savvy person finds the blogs more entertaining and useful because on social media sites there is all that addition entertainment and diversity to explore. This provides a key situation, where SMEs can tap into an emerging market trend before it becomes too cliche to work effectively at such low costs.

Social Media as a Viable Marketing Strategy for SMEs

One of the groups that have the most to benefit from cost effective social media marketing are SMEs. These organizations have much more restricted cash flow than their larger enterprise counterparts, and thus any cost effective measures can help them reinvest funding into other areas of the business. Yet, this cost effectiveness does not signify poor performance. According to the research, "there is an increased potential for social marketers to use the Internet for promotion" (Thackeray et al., 2008, p 339). Grainger (2010) points to the fact that the companies that are timid about dipping their toes into the social media stew are missing out, but those engaging in social media -- even though they may not know "why they are entering them" -- are learning how to market with this tool. There are many cases of SME firms successfully implementing these cost effective measures and seeing amazing returns. For example, it and it staffing companies have been using social networking as a way to reach out to potential businesses and potential employees looking to be placed in prestigious companies all over the United States. The research shows that in the case of these it companies, use of social networking within their marketing and networking strategies increases their ability to reach a wider section of the marketplace (Westlake, 2008)

Social Media and Large Enterprise Businesses

Still, SMEs are not the only organizations tapping into the social media trend. Many enterprise businesses are also rapidly jumping on the bandwagon. The research shows that advertisers shelled out about $1.2 billion in 2009 for ads on social media sites (and one can bet a lot more than that was spent in 2010), but researchers are saying it is going to be important for advertisers to understand the consumer / social media follower's "motivations for going online" (Taylor et al. 259). However, such excessive funding into advertising via social networking platforms can prove to actually hinder the success of the fundamental strategy. Too aggressive strategies on social networking platforms can bombard to consumer on a platform they expect to be for building relationships, not for selling products.

Reviews of the culture of the Internet have shown that advertising can be "intrusive and annoying" -- and especially for those Internet users who see pop-up ads on every page they visit are very negative towards advertising cluttering up MySpace, Facebook, and Twitter (Taylor et al., 259). If consumers and social media aficionados sense that their Facebook and YouTube, etc. are being… [END OF PREVIEW]

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