October 2, 2014

Written by Masters Student at Lund University

Social Media Revolution

Nowadays, it is difficult to imagine the world without the internet as over 2 billion people use it and 70% of them use it daily. The number of internet users has grown by an astonishing 566% since 2000. Most of the time online spent on social media, around 3.2 hours each day; it has become an integral part of people everyday life (www.thecultureist.com).

These numbers and the importance of social media platforms simply cannot be ignored by the companies if to develop their brand. Whether to participate in this communication or not is up to a brand but both decisions will have a remarkable impact on brand equity (Kietzmann et al., 2011). People are there and they are discussing and spreading the word without permission of the firms in question or as Akar and Topcu (2011, p. 36) put it, “Social media converts consumers into marketers and advertisers, and consumers can create positive or negative pressure for the company.”

The social media revolution is here and the question is how to make a good use of it rather than fail. There seems to be a lot of noise on the Internet as well as literature on how damaging it is if to fail at social media and how much it can affect your financial performance and brand. But is it always the case, especially when talking about big brands? Are there any possibilities to avoid a significant damage and even to capitalize on your fails, benefit from it?

The following section will provide a review of the current theories and thoughts regarding social media marketing, addressing such questions as: What is social media and why should companies consider establishing their presence on it? Two very different real-life cases will be discussed to answer my research question and support an idea that social media fails is actually something a company can benefit from and should not be afraid to confront. Finally, this paper will be concluded with a few suggestions regarding social media fails effect on the performance of the business and what it could possibly depend on as well as some possible suggestion for the future research.

Why Implement Social Media?

The beginning of 21st century has experienced an explosion in new media being utilized by companies to reach their potential customers, so called, social media. What is social media and why companies should be considering being present in it?

Nair (2011) refers to social media as to all available online tools, where content, insights, perspective and information can be shared while Papasolomou and Melanthiou (2012, p. 319) describe it as “…synonymous with social networks like Facebook and MySpace.”

Why is it important for a brand to be present in social media? The major drive is the shift in consumer’s lives. The social media has completely changed how individuals communicate with each other and how users exchange and process information with others (Aula, 2010). Moreover, social media has transformed where and how people spend their time, so if to imagine that most of their day people spend in front of desktops and mobile devices as well as if to consider that 48% of 18-34 year olds check Facebook right away when waking up, it should be obvious that marketers need to shift their budget into new media categories if to continue developing their brand and reach the potential customers (www.digitalbuzzblog.com). The evolution of social media has significantly changed the approach towards online marketing; however, it has not caused the old marketing methods, such as television and magazine advertising to become completely insignificant (Winer, 2009). In fact, marketing strategy should consist of both to form an ecosystem where all the elements work together towards a common objective (Hanna et. al., 2011).

It should also be mentioned that the swift growth of Internet and social media has taken the power from companies to the consumer (Kietzmann et al, 2011; Deighton and Kornfeld, 2009).This has caused the consumers’ expectations to change as they are not willing to be talked at but rather with (Varadarajan and Yadav, 2009; Wind, 2008) or as Christodoulides (2006, p. 801) contends, “Command and control branding simply cannot be tolerated online”, therefore today companies are almost expected to be present in social media and facilitate the conversation with their customers. Social media marketing is user generated; therefore the aim of it is to make users talk (Akar and Topcu, 2011). Adding to an idea, Fournier and Avery (2011, p 193) in their article summarize this phenomena really well by stating that, “The technology that was supposed to empower marketers has empowered consumers instead.”

In such manner, due to its interactive nature, more opportunities are available for companies to collect consumer insights that could be helpful for the advertising campaigns, product development and market research (McAfee et al., 2011).Undoubtedly all of the reasons listed above should be a good push for a company to adjust its marketing strategy and consider implementing social media.

However, let`s imagine for a second that a company has implemented social media advertising and trying to be active, follows the rules, innovates and engages but suddenly fails to meet customer expectation by being rude, not answering a message or maybe just an angry customer has posted a complaint on their Facebook page and that has been shared hundreds of times. What should a company do? Unfortunately academic articles suggest all sorts of ways how to go social but a few of them say how to get out of social media fails and how much it actually affects your business performance if it does at all. Therefore the purpose of this research is to prove by representing two case studies that social media fails do not necessarily mean losing loyal customers or experiencing a loss in sales but could be something a company, if dealt with in certain ways, can benefit from.

Examples of Social Media Fails

Nestlé

Nestle has been established over 140 years ago and now is a world`s leading and most recognized company with an extensive portfolio that covers almost every possible food and beverage category (www.nestle.com). It is most certain that you will find at least one of their products in your own kitchen and it is very likely that you have heard about Nestlé social media failure back in 2010 that will be briefly discussed below. A three-month campaign has been started by Greenpeace against Nestlé due to their excessive use of Palm Oil that has been known for deforestation and loss of endangered species. Greenpeace took it to YouTube by posting a video that Nestlé urged to be removed. Shortly after adjusted logos started appearing on Nestlé Facebook page but Nestlé representatives went defensive by stating that whoever is commenting with a “provocative” logo will have their comments removed (Hickman, 2010). Social media failure is evident as this sort of behaviour is unacceptable for a brand and social media users are aware of it but how much damage did it actually cause to a business? According to Mulier (2011) the revenue went up by 6.2% regardless of the Greenpeace campaign and all the mistakes made. Of course, it is difficult to predict whether it could have been even higher without it but the numbers are there and they are positive. In such manner, it could be argued that social media fails certainly put a pressure on brands and only those companies that got the basics of marketing right, and gained a significant number of loyal customers outside of social network can manage to survive the social media fails and keep the sales up (Barwise and Meehan, 2010).

Maker`s Mark

The following case is more recent than Nestlé but takes a different perspective on social media fails where the quality of the product, in this case whiskey, is questioned. Back in February 2013 Maker`s Mark announced its` plans to reduce the amount of alcohol from 45 to 42 percent due to high demand and low bourbon supply (Stampler, 2013). Angry but at the same time loyal customers took over all the possible social media websites to complain about watering down their favourite whiskey. However, this case is a brilliant example of how a brand can turn social media fails into a success and record an amazing 44% sales increase, which has been a topical issue discussed by Dooley (2013) in Forbes magazine. What did they do right? First of all, Maker`s Mark was quick to realize they have made a mistake and that a swift action needs to be taken. As a consequence, the company has reversed its decision to lower down the alcohol level in their beverage and apologised to their customers by posting just a short, well thought message on a Twitter “You spoke. We listened”, which has become a popular hashtag. This is a great example of how a company can reduce or even avoid the damage by social media fails if to monitor, be quick and stay true to a product, respect your customer opinion.

Major Lessons on Social Media Fails

The number of internet users is going up and given this tremendous growth a company should try and figure out the way to employ social media to reach the millions of potential customers that use it on a daily basis (Parsons, 2013). A company should not be afraid to fail but rather test and correct mistakes as it goes.

On the whole, the damage social media fails make to a brand depends on a wide spectrum of factors. The main ones identified through the analysis of the above case-studies, that might be of a help for other companies to consider, are discussed below. First of all, it depends whether the brand has already been well established outside of the social media, like in the case of Nestlé, where we can see that there is a loyal base of customers that did not turn their back on the brand. Secondly, whether the quality of the product is questioned like it was discussed in Makers Mark case. Similarly it is essential to be able to respond quickly, thus be efficient in social media communication even though it is tremendously time-consuming it gives a business a greater chance of getting away from a significant loss (Kietzmann et al., 2011).

Are there any ways to benefit from social media fails? Certainly, if dealt with correctly by providing a prompt response and listening to your customers a brand is still able to capitalize on social media fails. It raises publicity and statistics presented earlier suggests that it might actually trigger a purchase intention rather than putting consumers off. However, a different view is presented by Phan (2011), who has conducted a research regarding the use of social media for fashion brands to establish whether a presence in social media has any influence on consumer brand perceptions and product purchase. The outcome of it is negative – no, it does not. In such manner, whether positive or negative information, for example regarding a failure, is posted on social media does not necessarily affect the purchase behaviour thus sales should not be affected by the negative publicity. Most importantly social media fails should be seen as a lesson for a company, opportunity to learn and adjust the strategy. Certainly, even if social media fails might not necessarily cause a significant financial damage to brands that is of course still not a reason to leave it unnoticed.

Trying to develop a tool to measure a failure, define terms for social media fails as such, could be a suggestion for the future research as there is no real clear guidance on it. It is very unclear whether it should simply be assessed based on sales figures, share prices or shall we measure social media fails based on the volume of negative publicity and word of mouth. Hanna (2011) suggests that companies are confused by the indicators of the performance, where to look and how to measure as there is clearly a lack of research conducted in this area.

Reference List

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