We have witnessed lots of changes in the communication field over the past few years. Different types of communication media have been emerging and making their way into the market and have made the communication needs of the customers cheaper owing to competition. Internet is one of those things that contributed to the revolutionary changes in the recent times. There have been many changes and different stages of evolution in the said field even with the use of internet. Different methods and technologies have been evolving to use the internet in a better way. Social networking is one of those that have and have been making the internet exciting by the day. The latest buzz “Social Networking” added to make users more interactive with their friends (Ivanauskas, 2009). Social Networking sites like Facebook, Orkut, MySpace, and Twitter are already in to the market and making their presence felt by having lot of members join their networks and communicate with their friends and buddy list through their websites. The above mentioned social networking websites have bridged a lot of gap between friends who are priory difficult to stay in touch. They also have many users friendly and value added features such as sharing media and playing online games etc.
The increasing demand for these websites meant the marketing companies have started focussing on these websites to attract the unique customer groups these websites represent. The latest buzz in marketing that reaches customer directly has been social networking.
Aim:
Main aim of this dissertation is to know how the social networking influences the current generation through the extensive utilisation of social networking for marketing purposes and evaluating the social networking sites as a medium of advertisement.
Objectives:
To study the effect of social networking websites on the current generation.
Researching latest marketing strategies of business by using Internet Technologies including social networking sites
Conducting a consumer survey about the usefulness and effectiveness of advertisements in social media networks.
Context:
First online community created was SixDegrees.com in the year 1997. And it used allow users to create their own profile and make them available to their friend by adding to their friends list (Adrian, 2008). The first ever social networking website however did not stand the tide of time and was closed due to reasons which are out of scope of this dissertation.
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The time spent by the netizens on the social networking sites is increasing by the day and the recent studies only go on to show the same. The community websites hold major part of Internet traffic and it increased 230% since from 2007 (Diana, 2010). The time spent on the internet increased by around 65% by the users in UK from 2007 to 2010 (Burrows, 2010). The statistics also show that the average age of the users of the social networking sites is predominantly low like in the 20 to 30 and 30 to 40 groups due to various reasons. (Michael, 2008)
The projections also indicate a billion users for the social networking sites by the end of 2012. The increasing strength of these websites makes the marketing departments rethink their marketing strategies.
After going through lots of articles and statistics related to online communities, it has been observed that the latest market trend was revolving around these networking sites and making most of this to their business advantage. “Acknowledging the fact that teenagers do spend a lot of time online, it would be interesting to take advantage of this new trend and utilize it for the classroom more specific to the teaching and learning process.” (Pingdom, 2010)
“Experts predict that between 2007 and 2011, U.S. ad spending on social networks will grow 180% from $900 million to $2.5 billion, as illustrated below in Figure II, which is attributable to increased revenue projections of the popular social networking site Facebook and increased spending on niche social networks” (Zarina, 2009). It is indeed surprising to observe the share of internet marketing in the youth related companies. Modern marketing companies started making tools to make use of this trend and the same can be observed by studying these websites. In fact many companies adopted marketing in social networking websites as their major outlet of advertising and publicity. (RedBridge, 2008; MLC, 2008)
The companies are also undergoing a major change technologically like adopting technologies such as web 2.0 to use the marketing space and opportunity in the modern websites such as Facebook, twitter etc which are mentioned above. According to Bakardjieva (2004), technologies of communication media were instrumental factors in building up successful communities that exists today.
The increasing demand for the online communities and social networking websites is making new companies enter the arena. The investments of major IT companies in the already existing social networking websites (Google invested $900 million in MySpace and Microsoft $240 millions in Facebook) goes on to show the obvious which is the potential of these sites for the future (Ivanauskas, 2009). The investment is looked upon not as a business opportunity but rather as a marketing venue for these big companies to promote their already existing products.
Companies on the other hand besides grabbing big opportunities such as above also are not missing out on being on the user side of these websites and being part of the plan when it comes to their target population. Almost everyone these days seem to have their presence in almost all the social networking sites which are most common in those respective regions. An account in Facebook, MySpace and Twitter seem to be the most common thing to most companies to reach out to customers on a direct basis. The customers are rising their doubts and the interaction is what is making the use of these websites so unique compared to other marketing strategies (Grunert, 2009).
The above unique facts about the social networking and the new trends of marketing that are starting to spread making use of the same made the choice easier. It was decided that the area has lot of scope for research.
Literature Review:
According to Linda Peters (1998), the “Web” presents a fundamentally different environment – both as a medium and as a market – from traditional communication channels perspective. Itcreates the Marketspace – a virtual realm where products and services exist as digital information and can be delivered through information-based channels (Rayport and Svikola, 1994). The companies and consumers quickly adopted the new concept of the new interactive world for their own benefits. These interactive channels allowed companies to reach new markets or have a grater influence in the existing one‟s (i.e. example media companies transferred their news papers in order reach new audiences) and the consumers had an opportunity to save time and money by communicating, looking for information or buying product and services online. The concept of interactivity has been extensively researched in advertising and marketing literature and was summarized by Johnson (Johnson et al, 2006)
According to Liu & Shrum (2002) emergence of new media (Internet), brought new models of interactivity: user-to-user and user-to-message. Contemplating about user-to-user interactivity Ha and James (1998) suggested that “the more communication in a computer-mediated environment resembles interpersonal communication, the more interactive the communication isâ€-. Steuer (1992) defined users-to-message interaction as follows: ―the extent to which users can participate in modifying the form and content of a mediated environment in real timeâ€-. Lee (2005) summarized the main components of online interactivity
Commercial online services and the introduction of the Web have created the potential for a mass interactive dialogue between exchange parties (Peters, 1998). The world have witnessed the evolution of a universal interconnected network of audio, video, and electronic text communications that blurred the distinction between interpersonal and mass communication and between public and private communication (Neuman, 2003). The new market space changed the behavior of the people and the communication models. The shift is then from a “one (firm)-to-many (consumers)” model of communication to the “many-to-many” model where contribution to the medium and the message may come from both directions (Hoffman and Novak, 1996). Chaffey (Dave Chaffey et al., 2007) argues that such kind of communications allows mass customization and personalization and the messages send trough Internet can be targeted more effectively. Moreover, the Web is changing the traditional marketing communications concepts as the consumers can go all the way from awareness to interest to desire to action (AIDA Framework), all within the same medium and within the same session (Economist, 2008a).
Andrew L. Shapiro (1999) argues that the emergence of new, digital technologies signals ia a potentially radical shift of who is in control of information, experience and resources. One of the key features of the new electronic communication media is the ability of consumers to control both contact and content (Peters, 1998). Sohn and Lackenby (2002) suggest that individual’s participation in social communication processes is the crucial factor for increasing the perceived interactivity of the Internet (citied in Stafford and Ronald, 2005). Moreover, according to Normann and Ramirez (1994) the consumers become co-producers, because the value is constantly created in interaction with many different players, including consumers, suppliers, employees and managers. As a result, marketers are losing control over the communication messages their trying to deliver to their consumers. According to Gatarski and Lundkvist (1998) when communication, in the meaning of sharing information, meets interactivity, it creates not simple massages but forms two-way conversations. These conversations can be applied in production as implementation of mutual ideas (consumer’s and producers‟) in order to create new enjoyable products or services.
2.1 Introduction to changing media and communications landscape
The last century was a gold age for the media development. The new technologies as Telephone, Radio and Television have changed people‟s lives forever. The new ways of communications have been successfully adopted and become a norm. The last decade of the century brought the new innovative technology – Internet. As predicted by Newman (1991) Internet: Altered the meaning of geographic distance. Allowed the huge increase in the volume of communication. Provided the possibility of increasing the speed of communication. Provided opportunities for interactive communication. Allowed forms of communication that was previously separate to overlap and interconnect.
Grieco and Holmes (1999) (citied in Combe et al, 2003) identifies three powerful features of Internet:
1. Disintermediation or the removal of brokers by allowing direct communication across spatial and sociometric distance;
2. Asynchronicyty of the removal of temporality as a barrier to communications;
3. Oculacy or the ability to communicate messages through images.
According to Hermeking (2006) The global spread of modern technology, including information and communication technology (ICT), is commonly regarded both as an indicator of the postmodern era of globalization and as the very precondition for that era of intensive worldwide interactions of people and exchanges of goods, services, information, and capital. Hoffman (Hoffman et al., 1995) argues that the popularity of the WWW as a commercial medium (in contrast to other networks on the Internet) is due to its ability to facilitate global sharing of information and resources, and its potential to provide an efficient channel for advertising, marketing, and even direct distribution of certain goods and information services.
In the recent years Internet witnessed amazing growth, according to Internet Consumption Report (Soumukil, 2008) the 21% (1,407,724,920) of the world population (6,676,120,288) are internet consumers. Most of them live in well developed regions as North America where internet penetration is as high as (73.1%), Australia (57.0%) and Europe (47.7%). Peters (1998) suggest that no other technological innovation has captured the imagination of users with the speed and impact of the Internet (Graph 1).
According to Linda Peters (1998), the “Web” presents a fundamentally different environment – both as a medium and as a market – from traditional communication channels perspective. It creates the Marketspace – a virtual realm where products and services exist as digital information and can be delivered through information-based channels (Rayport and Svikola, 1994). The companies and consumers quickly adopted the new concept of the new interactive world for their own benefits. These interactive channels allowed companies to reach new markets or have a grater influence in the existing one‟s (i.e. example media companies transferred their news papers in order reach new audiences) and the consumers had an opportunity to save time and money by communicating, looking for information or buying product and services online. The concept of interactivity has been extensively researched in advertising and marketing literature and was summarized by Johnson (Johnson et al, 2006) (Appendix 1.1). According to Liu & Shrum (2002) emergence of new media (Internet), brought new models of interactivity: user-to-user and user-to-message. Contemplating about user-to-user interactivity Ha and James (1998) suggested that “the more communication in a computer-mediated environment resembles interpersonal communication, the more interactive the communication isâ€-. Steuer (1992) defined users-to-message interaction as follows: ―the extent to which users can participate in modifying the form and content of a mediated environment in real timeâ€-. Lee (2005) summarized the main components of online interactivity (Table 1).
Commercial online services and the introduction of the Web have created the potential for a mass interactive dialogue between exchange parties (Peters, 1998). The world have witnessed the evolution of a universal interconnected network of audio, video, and electronic text communications that blurred the distinction between interpersonal and mass communication and between public and private communication (Neuman, 2003). The new market space changed the behavior of the people and the communication models. The shift is then from a “one (firm)-to-many (consumers)” model of communication to the “many-to-many” model where contribution to the medium and the message may come from both directions (Hoffman and Novak, 1996). Chaffey (Dave Chaffey et al., 2007) argues that such kind of communications allows mass customization and personalization and the messages send trough Internet can be targeted more effectively. Moreover, the Web is changing the traditional marketing communications concepts as the consumers can go all the way from awareness to interest to desire to action (AIDA Framework), all within the same medium and within the same session (Economist, 2008a). Peters (1998) suggests four main changes in communication model compare the new and old media:
1. Communication style – tend to have little or no time lag between the giving, receiving and responding aspects of communication between the parties.
2. Social presence – or perceived personalness, the feeling that communication exchanges are sociable, warm, personal, sensitive and active.
3. Control of contact – Early research into the willingness of consumers to utilize technology in shopping behavior concludes that the ability to control the pace and presentation of product information has the strongest influence on willingness to engage in computer-mediated marketing activity (Carson et al., 1996).
4. Content – The content can be customised either by users or by senders. Where users are able to control the content, or presentation, of the message it is said to be interactive.
Andrew L. Shapiro (1999) argues that the emergence of new, digital technologies signals ia a potentially radical shift of who is in control of information, experience and resources. One of the key features of the new electronic communication media is the ability of consumers to control both contact and content (Peters, 1998). Sohn and Lackenby (2002) suggest that individual‟s participation in social communication processes is the crucial factor for increasing the perceived interactivity of the Internet (citied in Stafford and Ronald, 2005). Moreover, according to constantly created in interaction with many different players, including consumers, suppliers, employees and managers. As a result, marketers are losing control over the communication messages their trying to deliver to their consumers. According to Gatarski and Lundkvist (1998) when communication, in the meaning of sharing information, meets interactivity, it creates not simple massages but forms two-way conversations. These conversations can be applied in production as implementation of mutual ideas (consumer‟s and producers‟) in order to create new enjoyable products or services.
2.2 Social media and Web 2.0
2.2.1 Social media
The real power of people can be noticed in the new revolutionized media channel – social media. According to Mayfield (2008) social media is best understood as a group of new kinds of online media, which share most or all of the following characteristics: Participation & Engagement: social media encourages contributions and feedback from everyone who is interested. It blurs the line between media and audience. Openness: most social media services are open to feedback and participation. They encourage voting, comments and the sharing of information. There are rarely any barriers to accessing and making use of content – password-protected content is frowned on. Conversation: whereas traditional media is about „broadcast‟ (content transmitted or distributed to an audience) social media is better seen as a two-way conversation. Community: social media allows communities to form quickly and communicate effectively. Communities share common interests, such as a love of photography, a political issue or a favourite TV show. Connectedness: Most kinds of social media thrive on their connectedness, making use of links to other sites, resources and people Drury (2008) suggests that when analyzing social media marketers too often concentrates on the “media” factor, when “social” element is the key, because marketing within social media is about building a relationship and conversation with the audience, where the simple message delivery is changed by ongoing exchange of perceptions and ideas between company and the consumer. Haven (2008) suggests that social media key elements are not entirely new as features of sharing, connecting, opining, broadcasting and creating has been long in our lives, but there are several characteristics of new technologies and behaviors that set them apart from the past: Reach – Historically, audiences for the common person have been limited: a tribe, family, friends, neighbors, or the local community. Today’s technologies provide scale and enable anyone to reach a global audience.
Accessibility – The means of production for most media used to lie in the hands of enterprises with unlimited resources (financial or human). Today’s technologies for media creation are available to anyone at little or no cost.
Usability – The means of production typically required specialized skills and training, both technically and creatively. Today’s technologies simplify those processes, or in some cases reinvent them, so anyone can create and operate the means of production.
Transparency – People, especially Americans, historically kept personal information to themselves and had a general distrust of authority (enterprises, government, etc.). Today, people are willing to share anything about themselves (interests, location, family situations, health condition, etc.) in a public venue, and today’s technologies make that both possible and purposeful.
Recency – When people did have the means of production and distribution in the past (albeit limited), the time lag between communications was typically long (days, weeks, or even months). It was a limitation of the technology or system in which it operated. Today’s technologies enable instantaneous responses and dialog where only the participant determines the delay in response.
The interactivity gains a new meaning when it is applied through Web 2.0 platforms and Social media channels as dialogue between consumer and company becomes much more active and interactive. As summarized in the media landscape analysis the past decade was all about two-way communication‟s and interaction‟s models. Most of the marketing academics (Kotler, 2003; Pettit and Brassington, 2005) recognized the importance of creating two-way marketing channels between consumer and company for brand building, CRM, sales (and etc). Social media, itself, does not change this idea, but redefines interactivity and takes it to another level. Armano (2008a) argues that social media goes beyond the interactive marketing which is facilitated by computer-human interaction, and introduces human-to-human interaction enabled by technology (Appendix 2.1). The main difference is that the companies instead of pushing the content (i.e. automated e-mail‟s) through online channels empower people to engage and interact with other people and produce new content about the company (blogging, commenting, social networking and etc.). Free production of content and voluntary distribution is the key elements of the social media. Meadows-Klue (2008) suggests that in social media marketing engagement replaces interruption; diversity and self-expression replace conformism and unity; the media of the masses replace mass media; granular insights and rich data replaces generalization and conversations in marketing replace control. Another major change from the marketing perspective is the shift from persuasion to influence. Past decades marketing practitioners were using the communication mix in order to “attack” consumers with pervasive messages to make them buy goods and services offered, but in the age where 25 percent of search results on Google for the world‟s 20 largest brands links to consumer-generated content (Nielsen Buzz Metrics, 2007), to do this is too late, not practical or impossible, as the messages are already floating out there. According to Mitchell (2008) this process is facilitated by the change of information flows from “top down” (B2C) to “bottom up” (C2B) what redefines marketing environment as marketers do not own the message anymore (Figure 2.2, Apendix 2.2). Armano (2008) suggests that people can be divided in different grouping according their “strength” as the massagers (Apedix 2.3)
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The User Generated Content (UGC) can become influential message of the consumer to the consumer (C2C) about the company and therefore should be carefully monitored. In fact, the content is the new message in social media channels. According to Eikelmann (Eikelmann et al, 2008) the best marketers can do in this environment is to try to engage with the consumers through social media in order influence these messages. Drury (2008) suggests that instead of sending simple messages, marketers should provide the content which would be relevant for consumers and would generate conversations among them. Therefore, influence will become a standard measurement in Marketing 2.0 (Dowdell, 2008). As blogger and social media strategist Douma (2008) put it: “The age of persuasion is over. Welcome to the age of influence.”
Marketers are forced to look for alternative communication strategies to market in the social media environment, because advertising clutter, growing advertising literacy and changing consumer behaviour drives down the return on investment (Biegel, 2008; Constantinides and Fountain, 2008). These strategies have to consider the increasing fragmentation in the markets.
2.2.2 “Web 2.0”
Social media and Web 2.0 are two terms which are often used interchangeably in the marketing literature, even though they are not entirely the same. From the marketing perspective, the Web 2.0 should be perceived as the new tools for the marketing communication mix and facilitator and enabler of social media. The Web 2.0 term was introduced by Tim O‟Reilly in 2004, it has originated from talks about social software and the communities surrounding these applications. According Tim O‟Reilly (Tim O‟Reilly, 2007) “the companies that survived the dotcom boom had something in common;” these companies realized that the “Web” is much more useful for delivering service than being used just as a platform for “packaged” products (i.e. software). Constantinides and Fountain (2008) defined Web 2.0 as follows: ―Web 2.0 is a collection of open-source, interactive and user-controlled online applications expanding the experiences, knowledge and market power of the users as participants in business and social processes. Web 2.0 applications support the creation of informal users ‘ networks facilitating the flow of ideas and knowledge by allowing the efficient generation, dissemination, sharing and editing / refining of informational content .” Hoegg (Hoegg et al, 2005) suggests that Web 2.0 is “the philosophy of mutually maximizing collective intelligence and added value for each participant by formalized and dynamic information sharing and creationâ€-.
Both definitions share similar concepts of maximizing the collective intelligence, self-regulating community, network effect, transparency of the information creation and sharing process, but the key element in these terms is the user. From technological perspective, there are not many changes in the Web 2.0 compared to Web 1.0 applications; the real value is created by people not only using this social software but participating in the creation process of it (by creating and editing the new content or even in some cases modifying the application itself). According to Constantinides and Fountain (2008), the key innovative elements typifying this new family of web applications can be summarized as three main principles:
1. Focus on simple, service-based open-source solutions in the form of online applications.
2. Continuous and incremental application development requiring the participation and interaction of users in new ways: not only â€-consuming’but also contributing, reviewing and editing content.
3. New service-based business models and new opportunities for reaching small individual customers with low-volume products.
As Web 2.0 applications are still in the development stage, the grouping of them varies according to the purpose and field of the research. Hoegg (Hoegg et al, 2005) groups web 2.0 applications according the services they provide (Figure 2.4).
Tim O‟Reilly (2005) argues that “Web 2.0 doesn’t have a hard boundary, but rather, a gravitational core which could be visualized as a set of principles and practices that tie together a veritable solar system of sites that demonstrate some or all of those principles, at a varying distance from that core” (Appendix 2.4). Therefore it is difficult to classify the Web 2.0 into the precise groupings, because the applications are interrelated and most of the time a few Web 2.0 features works on one platform. The mixture of Web 2.0 applications working under one site are known as “Mash-ups”. According to Mayfield (2008) ―this combination of two or more pieces of content (or software, or websites) is one of the phenomena in social media that make it at once so exciting, fast-moving and sometimes bewilderingâ€-. But even more important feature of Web 2.0 applications is the adaptability in the different platforms. Social applications are becoming more and more popular on mobile devices (Phones, iPods (via podcasts)). In fact, according to BBC News (2008) one of the reasons the Internet usage on the mobile devices is increasing – Web 2.0 applications. According to Drury (2008) social media applications has an ability to bring “Head” (Professional) and “Tail” (UGC) content together in all the formats (audio, video , text). As more and more professionally edited websites incorporates social media content some companies (i.e. Joost) are trying to apply Web 2.0 principals (live participation) for even bigger media platforms as TV. These applications are being tested in the Internet TV and in the near future have a good chance to redefine TV experience completely. All theses changes open new opportunities for integrated marketing campaigns, where marketers are enabled to reach larger audiences of consumers at all their touch points with mediated world at one-stop shop.
Blogs and blogging
Web Logs (commonly knows as Blogs), according to Tredinnick (2006), are arguably the “oldest” Web 2.0 applications and have been in the web space since mid 1990‟s. Constantinides and Fountain (2008) states that it is the most know and fastest-growing category of Web 2.0 applications. According to McCann report (2008), 184 million people World Wide have started a blog and 346 million read blogs, which means that 77% of active Internet users read blogs. Furthermore, 17.8 m have read a blog and around 4.3 m have created their own blog in the UK (McCann, 2008). The most recent Technorati research (2008) confirms this phenomenon as they tracked blogs in 81 languages from 66 countries around the world, it suggest that blogging have made a major influence on media ecosystem as bloggers are collectively creating almost one million posts every day and have representation in all top-10 web site lists across all key categories. In general a “Blog” is a Web site, usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video where entries are commonly displayed in reverse-chronological order and has permalinks (Daily Blog Tips, 2008), but Pomerantz and Stutzman (2006) argues that for every blog author and consumer, the precise understanding of a blog‟s use is different, therefore it is difficult to define its true meaning. Dearstyne (2005) summarized the definitions and blogging opportunities provided by major companies: ―Microsoft defines blogs as frequently updated personal web journals that can dramatically help both small and large companies communicate their product messages. They increase people’s ability to share ideas and information exponentiallv, and on a worldwide scale. Accenture says blogs are an interactive website that allows the owner to publish ideas and information. Users can read and evaluate material and add new content, creating a conversation that spans lime zones and continents.
Research Design and methodology:
We are left with mainly two options for the way and approach for gathering the research data- primary and secondary in the broadest sense. The primary research methodology involves direct interaction with the subjects where as the secondary research involves collection of data from sources such as literature, magazines etc. While the primary research methodology is more current, it includes interviews, questionnaires, targeted groups, personal interviews etc which is a time taking and tedious process. There needs to be a trade off regarding the extent of primary research data to be included in the research. The main empirical study will be carried out based on the primary data which was collected as per the study requirements. Based on the requirement and research find
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