September 25 2014

Written by Daphne Khoo

Introduction

Needless to say, over the past 10 years, the Internet has changed drastically. In the recent years, traditional media has waned since the growing use of social media such as blogs, Twitter, Facebook, and other Web 2.0 platforms. On these social media platforms, consumers are now able to contribute, share and access information extensively on the World Wide Web. Given these characteristics, the new Internet not only shapes consumers’ perceptions but also empowers consumers in Internet marketing, heralding a perceptible change in consumer behavior over the years. With this power at hand, many marketers are beginning to understand the importance of readjusting their marketing strategies to reap commercial gains, specifically through incorporating the online social network to influence consumers’ perceptions and behavior (Akar and Topçu, 2011). Since corporations actively search for means to capitalize and leverage on the various online marketing channels evolving technologies facilitate, what is the best marketing mix most commercially beneficial to marketers?

Evolution in Information Technology

The Web was first introduced by Tim Bruners-Lee in 1989 and is by far the largest transformable-information construct. Since 1989, there have been remarkable improvements in the Web and related technologies (Getting, 2007; Boulos and Wheeler, 2007). More specifically, the advent of Web 2.0 has redefined marketing roles to those that were more customer-centric. According to Berners-Lee, Web 1.0 was a read-only web and a system of cognition (Getting, 2007). At that point, the main goal of websites was to make information readily accessibly for anyone and establish an online presence (Aghaei, Nematbakhsh and Farsani, 2012). Unlike Web 1.0, Web 2.0 is far more interactive and participative as users are now allowed to create, upload and share content. Web 2.0 hosts platforms where users can express themselves freely with no restraints. Some examples would include blogs (online journal entries), web mashup (combined information and services from multiple sources), and Wikis (Free access to edit information on a webpage). In this Web 2.0 reality, in particular with the advent of social media sites such as Facebook, users form communities, create, and share content across multiple platforms at an alarming rate (McIntyre, 2013). With access to such rapid and multidirectional flows of information, consumers can now make more informed decisions, which ultimately influence their behavior.

Essentially, the differences in Web 1.0 and Web 2.0 are pertinent to the changes in consumer behavior, as enhanced user participation would empower consumers in internet marketing (Labrecque, Esche, Mathwick, Novak and Hofacker, 2013).

User Generated Content

In the Web 2.0 realm, online brand communities including social-networking sites have mushroomed and sustained the development of user-generated content (Gangadharbatla, 2008). User-generated content (UGC) has also been a key driver for not only brand conversations but consumer insights as well. With the continued growth of online participation in content creation and sharing, consumer empowerment in internet marketing comes into play as consumers are now able to exert greater influence over products and brands (Jevons and Gabbott, 2000; Riegner, 2007). As a result, a shift from a conventional publisher-centric media model to a more user-centric model can be observed. However, it does not stop here. When consumers generate content about a brand regardless of intent, this brand-related UGC amplifies the impact that UGC has on brands and consumer-based brand equity, which will be further discussed later in the paper.

Changing Consumer Perceptions and Behaviors

Web 2.0 has profound implications for consumers. In contrast with consumers 10 years ago, consumers today are able to access word-of-mouth recommendations and reviews, and easily become digital producers. With this ease in accessibility, consumers are more empowered to provide constructive advice on the credibility of a product or service (Veer, 2011). Furthermore, in today’s context, consumers would rather trust advice from their communities as compared to a marketer’s pitch. Consequently, as consumers distrust marketers, brand supremacy and brand loyalty degenerates (McIntyre, 2013).

Consumer empowerment is activated and enhanced by marketing efforts that serve to satisfy consumer needs and wants especially within the Web 2.0 era (Wright, Newman, and Dennis, 2006). Undeniably, consumer empowerment is not objective but subjective. A study has shown that there are three main influences on a consumer’s subjective empowerment experience: 1) the ability to dictate the features of the choice set; 2) progress cues in the consumer purchasing process; and 3) information on other consumers (Wathieu et al., 2002). Essentially, UGC enables consumers to connect in new digital realms (Harrison, Hunter and Waite, 2006), making them feel empowered and allowing them to define brand values based on their own perceptions (Christodoulides, 2009).

Capitalizing on Changing Consumer Behavior

The proliferation of the Internet has been the single most critical catalyst in the power shift from marketers to consumers (McIntyre, 2013). Consumers are now actively seeking value in low cost purchases and brands are being commoditized, which ultimately pose as a greater challenge to the modern marketer. Furthermore, Marshall McLuhan suggested that the power of words no longer lies in the medium, but in ways the medium is used. In fact, most marketers have started rebranding their businesses, channeling their resources into building interactive relationships with consumers in online communities rather than pushing media campaigns.

· Establishing an Online Presence

In the past, the company initiates interaction between the company and consumers through market research and advertising. However, at present, the internet has empowered consumers by making it convenient to contact the company to gather more information on their products or even purchase them within the comforts of their home at any time of the day. This ultimately led to the advent of internet search engines and directories, which facilitate consumers' desires to gather important information on products of services before purchasing them. As such, in today’s context, it is important for marketers to ensure that they establish an online presence on the web through search engine optimization tactics and an easily navigable and accessible website.

· Managing Customer Relationship

Establishing good customer relationships never stops at clinching a deal on an excellent product; it has to be coupled with excellent after-sale service as well. The internet has made such a practice even more essential today. Chat rooms, reviews box and other internet media have accelerated the feedback loop on products and its complementary after-sale service. This has made it easier for consumers to access information on the quality of the product or service posted by communities and to make more informed decisions. As a result, an effective feedback system has to be put in place to manage negative social response or feedback before word spreads and undermines the credibility of the brand. It is especially crucial in today’s context to provide prompt service recovery because negative feedback travels farther than positive ones in the cyber world (Sridhar and Srinivasan, 2012).

· Increased Customization in the Product Offering

Having realised the importance that consumers ascribe to personalized or customized offerings, marketers should abandon mass marketing, which was popular within traditional media practices. However, in the Web 2.0 era where consumers value quality customer relationships, marketers prefer diversified advertising, as greater returns can be translated from these relationships (Anderson, n.d.). Marketers are now able to use technologies such as Ad Exchange and Demand Side Platform to ensure that their targeted market segment receives their customized messages.

· Brand-related UGC

Recent studies have shown that brands that encourage UGC can create relationship-building opportunities with consumers (Christodoulides, Jevons and Bonhomme, 2012). Yet brand-related UGC is a Janus-faced strategy. On the flipside, negative UGC can have adverse implications on enhancing and sustaining a brand’s equity, especially since consumers place greater credibility on UGC than professional content (Cheong and Morrison, 2008). A recent study suggests that involvement with UGC can have a positive impact on consumer-based brand equity, since there are more than twice as many brand-related searches on social-networking sites that relate to UGC as compared to marketer-created content (Christodoulides, Jevons and Bonhomme, 2012). For successful brand marketers, these findings strongly support a change towards a more participative and interactive approach and provide an undisputable basis for a brand manager to engage in UGC (de Chernatony and Christodoulides, 2004). Ultimately, successful brand managers have to review the ways in which they can better manage brand-related UGC so as to simultaneously grow their brand equity as well.

· Multi-Channel Strategy/ Cross Channel Advertising

As consumers continuously search for new information, marketers face the challenge of continuously catering to that need by using the right format, scope and tone (Anderson, n.d.). Therefore, it is crucial for marketers to develop an open-source content in order to ensure that messages are syndicated and integrated with online channels through links. Today, marketers aim to foster close relationships with their consumers and to build brand loyalty by offering insights on consumers’ pressing concerns on blogs. In fact, according to the HubSpot State of Inbound Marketing Report, B2C companies that maintained a blog generated 88% more leads per month than those who did not.

Furthermore, with information easily accessible and shared among consumers, marketers should be more conscious of their different channel offerings. Especially with internet comparison sites and consumer chat rooms, the required information that consumers demand can be easily accessed. As such, marketers must be aware that it would not be easy to execute differential pricing in different channels without an influx of purchases, consumer confusion or dissatisfaction (Laroche, Kiani, Economakis and Richard, 2013). Since the consumers expect consistency, a successful marketer has to establish an effective multi-channel strategy rather than leaving it to chance.

· Inbound Marketing

Ultimately, it would be essential for marketers to engage in in-bound marketing by supplying value laden-content, such as White Papers and infographics, so as to enter consumers’ inner circles (McIntyre, 2013). By this strategy, marketers would be able to tap on privileged and personal information about their consumers and thereby redefine their targeted market segments, determine valuable leads and better tailor their messages and products.

With technological evolution, business intelligence, and predictive analytics, Customer Relationship Management systems and other software applications and programs can facilitate this new marketing approach. This technological support allows marketers to quickly sort, analyze and translate the variety of data that consumers have accessed into more accurate results on consumer preferences. Therefore, marketers should consider employing these technologies when formulating an effective marketing mix.

Conclusion

In a nutshell, the evolution of the internet has fundamentally changed how consumers perceive brands as well as purchase goods. There is a clear power shift from the marketer to the consumer, as the consumer is empowered to make informed decisions based on information the internet provides easy access to. With consumers becoming co-creators, marketers should adopt a more participative, personalized and user-centric approach in order to succeed. Marketers should pay attention to developing positive brand-related UGC in order to establish their brand and grow their brand equity. Building conversations around their brand is also essential in establishing credibility in our tech-savvy age. Nonetheless, despite the growing obsolescence of the traditional marketing approach, online and offline marketing should not be isolated but considered as a mixture of both inbound and outbound marketing when one is formulating a multi-channel strategy. Traditional marketing approaches possess the potential in garnering reach and influencing consumer perceptions and thusshould not be ignored or neglected. Furthermore, there will always be differentiated consumers and the possibility of repurposing old systems. Even though the means of marketing has evolved along with technology, the role of marketing still remains the same. Its aim in fostering quality customer relationships will definitely drive its function to positively correlate with the changing behaviors of its consumers (McIntyre, 2013).

Projecting into the next five years, establishing marketing-tech teams may be necessary to tackle the challenge information technology poses to marketing’s form and function.

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