The Rise of Social Media - A Double Sided Coin for Marketers

Written by a Master's Student of the Lund University School of Economics and Management

Abstract

The development of Web. 2.0 technologies and rise of social media have taken most of us by surprise, marketers included, with the unexpected power shift and empowerment of consumers. The rise of social media and resulting power shift has turned the world upside down for marketers, requiring immediate adjustment to their mindsets, alteration of their strategies, and rethinking of their business approach to marketing.With the new interconnected era comes a new set of opportunities and challenges for marketers, which are to be examined shortly along with the areas in which marketers have experienced empowerment or disempowerment. 

Introduction

The emergence of social media has not only revolutionised the way in which business is conducted, but also how consumers and marketers communicate and interact with each other. According to O’Brien (2011), social media can be considered a: “ fundamental shift in the way we communicate” (p.32). It has led to radical changes in the landscape of marketing and branding, thereby forcing firms to adopt new approaches and adjust their strategies to successfully compete in this new consumer driven environment (Gensler, Vlöckner, Thompkins and Wiertz, 2013). As witnessed over the years, the rules of the game have changed and so have the positions of the players. Much of the existing research literature focuses on the powershift and the ways in which social media has empowered the consumer. A naturally arising question is: in what areas have marketers lost control and where have they gained it? This post aims to examine a few selected challenges and opportunities that marketing practitioners are presented with today by social media, and highlight specific areas in which control has been gained or lost. Lastly, this post seeks to offer some strategic recommendations as to how marketers should tread to succeed in this new interactive social media landscape.

Challenges Marketers are facing in the Age of Social Media   

Adjustment to New Roles

Social media and the rise of online communities have brought about a lot of changes for marketers, a fundamental one being the shift in communication with consumers (Rolland and Parmentier, 2013). The changes that have taken place in the marketing environment, due to the revolution of social media, can best be explained by the pinball metaphor conjured by Thurau, Hofacker and Bolching (2013): “moving from bowling to pinball” (2013: 240). The communication has changed from a one-way monologue to a two-way dialogue, which in turn implies a shift in power and new roles for marketers (Wiederhold, 2012). Social media provides consumers with a platform to express their opinions, and has thereby given them a voice that companies no longer can ignore without endangering the reputation of their own brands (Kamlow, 2014). An example to illustrate this is that of “Dell Hell”. On one occasion the company chose to ignore a customer’s complaint on its website, which backfired and resulted in collective criticism of the brand online. This incident had a negative impact on both Dell’s reputation and sales, which in turn emphasizes the powerfulness of consumers’ voice (Savitz, 2011).

It has been, and still is, a challenge for marketers to adjust to the fact that they are operating in an environment where consumers are talking back at them and where the terms no longer are being dictated by companies, but by consumers (Wiederhold, 2012). With these changes taking place an inside-out approach, under which marketers have previously operated, is no longer effective according to O’Brien (2011). Instead they have to adopt an outside- in approach, adjust to their new roles as moderators and listeners, and learn to collaborate with consumers (Rolland and Parmentier, 2013). Similarly Lewis (2014) contends that a shift in focus is necessary from: convincing consumers to trying to understand them. According to Lewis (2014), it is essential that marketers become effective listeners and embrace the feedback consumers provide on social network sites to better understand their expectations and how to meet them. O’Brien (2011), argues that the way to achieve this is through active consumers engagement. The word “engagement” has become a critical success factor in this new era and as acknowledged by Hesse (2012), it is the “leading businesses who are working closely with stakeholders to understand their views” (p.1). 

Adjustment to Loss of Control

With the rise of social media, the power has shifted to consumers and consequently disempowered marketers in some areas. Marketers no longer exercise the same level of control over the branding process as they once used to and have no power over what consumers and critics say about their brands online (Kaplan & Haenlein, 2010). By establishing an online presence on social media networks companies are forced to relinquish control, as they are positioning their brands in an environment which is largely uncontrollable to them. Both Fournier and Avery (2010) and Barwise and Meehan (2010) argue that it is the aspect of ceding control that is the biggest challenge and hardest adjustment for firms and their marketers in the age of social media. 

Lost Control over Privacy

With the social media revolution, everything becomes transparent and “there are no secrets” (Christodoulides,2009:142). The transparency of social media has made it increasingly difficult for marketers to hide their mistakes from the public eye, and easy for brands to become a target of criticism (Fournier and Avery, 2010).   Rosenblum (2011), further argues that with consumers in control “corporations are naked” (p. 1). With an empowered position, consumers have taken on the role as detectives and expose every bit of information they find about companies and their brands, regardless whether it is good or brand (Fournier and Avery, 2010). This transparency increases the vulnerability of brands and magnifies their weaknesses, which in turn puts marketers under increased pressure to deliver on their brand promises (Gensler et al., 2013). Unmet expectations and dissatisfaction, as we often have witnessed, can lead to the development of bad reviews, parodies on brands, and criticism online, which may have a damaging effect on the brand’s image and reputation (Fournier and Avery, 2010). An example of such, is the exposure of Sony’s faked blogs, which went viral and caused a storm of criticism (Weaver, 2010). In order to be perceived as an authentic brand and establish trust with customers, it is absolutely crucial that firms are transparent and honest in their communication with consumers and stay true to their promises. As Barwise and Meehan (2010), argue marketers can only: “build trust by delivering on it” (p.83). Horsager similarly contends that companies should: “embrace transparency” and not try to “shut down critics”, a mistake many are still making today (2013:1).

Lost Control over Content

The from social media resulting empowerment of consumers, presents itself both as a challenge and opportunity to marketers. Consumers have transformed from being passive recipients of messages to active producers of content (O’Brien, 2011). In addition to that, social media has made it possible for consumers to share content with millions of other users, and discuss a brand’s meaning and values online (O’Brien, 2011).  Online users’ ability to discuss brands in online communities and assign them new meanings that at times “contest the brand’s aspired identity” is a problem marketers did not have on their plate before the rise of social media and the empowered consumer (Gensler et al., 2013: 244). The fact that marketers no longer are the sole creators of content and can’t control a brand’s meaning or message underline their loss of control in the area of branding (Christodoulides, 2009).  Berthon, Pitt, Plangger and Shaprio (2012), advocate this view in their claim that: “value creation shifts from the firm to the consumer” (p.269). Mangold & Faulds (2009), similarly point out that marketers in the age of social media have lost control over: “the content, timing, and frequency of the social media-based conversations occurring between consumers”  (p.357). To remain successful in this era companies and marketers must adopt a mindset that is open towards collaboration with consumers and embraces sharing and delegation of control (Rolland and Parmentier, 2013). However, with the traditional brand manager being: “an inveterate control freak” who “instinctively, wants to control everything about his brand” this becomes a difficult target to achieve (Christodoulides, 2009:142).

Lost Influential Power

Social media has provided consumers with different sources of power that jointly have lead to consumers’ empowered position (Labrecque, Esche, Mathwick, Novak and Hofacker, 2013). One of these sources is information-based power, and the ability for consumers to “produce user-generated-content” (Labrecque et al., 2013: 259). By granting consumers this ability and the access to information online, social media has bridged the information gap that previously existed between firms and consumers (Labrecque et al., 2013). As a result, consumers’ reliance upon firms for information has decreased, causing firms to lose their upper-hand (Labrecque et al., 2013). With this it becomes evident that the emergence of social media not only has instigated a shift in control between marketers and consumers, but has also altered who consumers trust and marketers’ power to influence. A good example to illustrate this shift is the claim by Gensler et al., (2013): “a brand is no longer what we tell the consumer it is - it is what consumers tell each other it is” (p.242). Consumers are no longer listening to firms, instead, as pointed out by Fournier and Avery (2010), “people are talking to other people” (p.595). According to O’Brien (2011), the consumer has gone from being  “passive and accepting” to “cynical and untrusting” (p.37). An example from a personal experience, to illustrate the point of increasing trust in other people, is when I a few weeks back decided to try out a new restaurant with a friend. It wasn’t the content on the restaurant’s website that I relied on to make my decision, but instead the online recommendations and reviews provided by complete strangers. A conclusion that can be drawn from this is that marketers’ ability to influence consumers has become disempowered in the age of social media. In accordance with this view Hanna, Rohm and Crittenden (2011), claim that: “social media has fundamentally altered marketing’s ecosystem of influence” (p.266).

Opportunities Marketers are facing in the Age of Social Media  

While it is true that social media has contributed to the power shift and consequently introduced a new set of challenges for marketers to tackle, social media also brings a set of opportunities. The purpose of the second part of this post is to explore the other side of the coin, highlighting the key opportunities, as well as to illustrate the areas in which marketers have been empowered and gained control.

The Empowered Consumer - A New Brand Promoter?

The first part of the blog post, portrayed the way in which empowered consumers can pose a challenge to marketers. This post, on contrary, will briefly examine how consumers’ empowerment can be considered an opportunity by marketers and assist them in raising brand awareness. With an increase in power, consumers have an ability to slip into different roles, one of them being the promotional role of marketers. As pointed out by Berthon, Pitt, Plangger and Shaprio (2012), consumers are undertaking marketing like activities such as advertising and product review writing, and is, as recognized by O’Brien (2011), using social media networks to promote their own content or that of companies. This may in turn help to increase brand awareness, strengthen brand equity and attract new potential customers. An example of a campaign that went viral and got millions of users engaged worldwide was the: “Make Love. Not War” video by Axe (digitalstrategyconsulting, 2014). According to O’Brien (2011), it is the “the development of brand relationships through social experiences and delivering persuasive messages to content creators and online users” that signifies future of marketing (p. 3).

 Facilitated Data Collection

Living in a digital and highly transparent age has its advantages and disadvantages for both consumers and firms. The transparency does on one hand increase the exposure of firms and their brands, but on the other hand, they are able to generate greater consumer insights, reach people across borders in a more cost effective way than prior to the existence of social media (Rolland and Parmentier, 2013). Labrecque et al., (2013), highlight marketers’ empowered position in the following statement: “Marketers regain power through their ability to identity, reach, and influence more socially connected consumers” (p.264).  Metaphorically speaking it can therefore be said that social media has removed the curtain from the window, providing marketers with a clearer and far reaching view. Furthermore, social media has also given marketers the opportunity to identify brand lovers and target important information providers such as lead users with whom they might want to engage in co-creation activities with (Rolland and Parmentier, 2013). Finally, with the access to social media networks, online communities, blogs and forums, marketers can nowadays monitor the conversations that users are having about their brands and products, which may turn into a source of innovation for a product improvement or generation of new product ideas (Thurau et al., 2013).

An example of a company that has embraced the opportunity of transparency and is using its online presence to generate valuable insights about its consumers is Proctor and Gamble with its website beinagirl (Barwise and Meehan, 2010). Their aim being to gain a deeper understanding of how the brand and products can better fit into the lives of  consumers, as well as to discover new business opportunities (Barwise and Meehan, 2010). This example of Procter & Gamble  underlines a change in marketing approach and adoption of an  outside-in perspective. It can be concluded, that it is becoming less about pushing products out to consumers hoping they will be accepted and instead more about developing products that fit into the lives of consumers and add meaningful value to them (O’Brien, 2011). Deighton and Kornfeld (2009), similarly state that, marketing in the social media age has become: “less a matter of domination and control, and more a matter of fitting in”  (p. 4).

Opportunity to Co-create Excellence with Consumers

As mentioned in the previous post, technological advancements and rise of social media have shifted the power in the customer-marketer relationship, causing marketers to lose control in certain areas (Thurau et al, 2013). The transformed value creation process is one example of the ongoing shift, which went from being an activity entirely controlled by marketers, to a participative process with consumers as co-creators (Berthon, Pitt, Plangger and Shapiro, 2012).  With co-creation, firms have the opportunity to use consumers as a new source of innovation and as a partner to pinball ideas with. Involving them in the brand building process and creating value joint value with them may strengthen the relationship and increase consumers’ brand engagement (O’Brien, 2011). O’Brien (2011) further emphasizes that: “the more they participate the more loyal they become” (p:34).  Social media offers an excellent platform for firms to engage in co-creational activities online and Beiersdorf AG is a brilliant example to illustrate this.

Beiersdorf AG, the multinational skin care company, is a forward-thinking company that has adjusted its mindset to the transformed marketing landscape, embraced change, and the idea of undertaking co-creational activities with consumers. Evidence of this, is its collaboration with consumers in the development stages of NIVEA Invisible for black & white deodorant (Bilgram,Bartl, Biel, 2011). Using social media networks and online communities as a platform to collect consumer insights and monitor consumer discussions about deodorant related problems, Beiersdorf converted these insights into a concept for a new product development (Bilgram,Bartl, Biel, 2011). Throughout the process, Beiersdorf AG reached out to consumers on multiple occasions seeking their feedback, opinions and test their concepts on them (Bilgram,Bartl, Biel, 2011). NIVEA Invisible for black & white turned out to be a huge success and therefore sets an excellent example of what marketers and consumers can achieve when working together.

Conclusion

With the countless challenges and opportunities that social media presents marketers with today, only a few were invited up for discussion. As exemplified in the post, social media is a double-sided sword for marketers. As acknowledged by Barwise and Meehan (2010), “through social media they can gain rich, unmediated consumer insights, faster than ever before” (p. 82).On the downside, brands are more exposed than ever and marketers have lost influence over the reach of their messages and what people are saying about their brands (Kaplan & Haenlein, 2010). Companies and their marketers are still adjusting to the changed environment and continue to modify their strategies, trying to come to terms with their loss of control, consumers’ empowered position and cooperation, an aspect that is, “new territory” for them (Thurau et al., 2013:238) .

Although improvements are visible and adaptations are made, such as the example with Beiersdorf illustrate, many firms and marketers still remain cautious about embracing the empowered consumer as partner and relinquishing control over their brand (Vernuccio, 2014). With their previous high level of control, taking the role as a “brand host” is a difficult adjustment (Christodoulides, 2009:141).  According to Vernuccio (2014): “to thrive with brands on the internet a looser form of brand control is needed, welcoming the active participation of consumers” (p. 212). Darwin too made a valid point that: “it is the one that is best able to adapt and adjust to the changing environment that” survives ( Vaze and Tindale, 2011:175).

The ongoing power struggles between marketers and consumers online have however raised the question whether: “we still can claim we are practicing brand management” (Fournier and Avery, 2010:19). I would like to rephrase the question into: who owns a brand in the age of social media?

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