Introduction: Context, Definitions and Direction

The United Kingdom’s Advertising Standards Authority is likely to begin regulating marketing and branding efforts on social networking sites to ensure that content related to such sites does not mislead or offend, and that it abides to relevant laws related to health, alcohol, gambling, financial products and auto (Marshall, 2010).  Clearly, marketing on social networking sites is serious enough to have stimulated regulation in the United Kingdom.

Why are more and more organisations turning to social network marketing?  It all begins with the recent sudden evolution of online social communities, such as YouTube, Facebook, Second Life, Digg.com and Myspace, often attributed to Web 2.0 technologies such as RSS which make mass user communications multi-faceted and simple at the same time (Duan, 2008).  According to Daun (2008, 167), “online social communities have emerged as a thriving force in e-commerce”, to the extent that “many companies, such as Google and Microsoft, are taking initiative to leverage the phenomenal growth of individual participation and interactions in online communities”.

This essay argues that social network marketing done right is a valuable tool for organisations seeking to promote a product or service in this day and age.  Indeed, it explores several persuasive reasons this seems to be the case, before it reaches this conclusion.

Before we consider social network marketing, it is important to understand the definition of a social network, which could be applied in its most traditional sense.   A social network refers to continuing relations between individuals within a group, which exists for general expressions of mutual solidarity or for more specific reasons (Clemons, 2009).  They are validated by such things as agreement on objectives, shared perceptions of worth, social values, or even choice of entertainment.  Hence, people within a social network trust one another (Clemons, 2009).  Social networks within the context of online communities extend this basic principle.  According to Boyd and Ellison (2007), online social networks enable users to create public or partially public profiles within the service, display other service users with whom they are connected and navigate their users and the users of others within the service.   Online social networks differ from traditional social networks in the huge quantities of data the former offers, via blogs, newsgroups, and email systems, and so on (Ma et al., 2008).

Marketing on social networks has become so rampant, that a term has been created for it: “social network marketing”, which employs “pre-existing social networks to increase brands or products awareness through word-of-mouth promotion” (Ma, Yang, Lyu and King, 2008, 1).  Clearly, marketing through traditional social networks, such as through word of mouth, was always limited in terms of information that it could provide the potential consumer.  The information boom in social networking sites has caused a surge in social network marketing.  Indeed, it is estimated that advertisement expenditure on global social networking sites will reach $2.8 billion in 2010 (eMarketer in Ma et al., 2008).    Note that our definition of social network marketing is limited to marketing on social networking sites.

Viral marketing is an integral part of social network marketing.  It is “the tactic of creating a process where interested people can market to each other” (Subramani and Rajagopalan, 2003, 300).  For instance, The Facebook home page currently states: “Create a Page for a celebrity, band or business” (Facebook, 2010).  Since viral marketing is unique in that it comes at zero cost to companies, the discussion in this paper will be limited to this form of social network marketing, and why it is a potentially invaluable tool to businesses in this day and age.

Reason 1: Popularity

Social network marketing just makes sense, considering the popularity of social networking sites today.  This is highlighted by the fact that in the United States every second Internet user has visited at least one of the high ranking social networking sites (comScore Media Metrix, 2006).  Further, approximately 50 such sites each lay claim to at least one million registered users (Trusov, Bucklin and Pauwels, 2009).  Moreover, in March 2010, Facebook surpassed Google as the most visited US website, indicating that people now prefer getting information from friends they trust, versus a robotic search engine (Pepitone, 2010).  So it is no small wonder that Subramani and Rajagopalan (2003, 300) argue that social networking sites “are increasingly being recognized as an important source of information influencing the adoption and use of products and services”.  This is supported by reports conducted in 2005 that show that consumer attitudes towards traditional advertising greatly decreased between 2002 and 2004, to the extent that 59% fewer consumers reported that they purchased products because of traditional advertisements (Nail, 2005 in Trusov et al., 2009).  It appears that social network marketing is overtaking traditional marketing.  Consider that consumers reported to have been acquired through social network marketing provide more long term value to an organisation than consumers acquired through traditional marketing methods (Villanueva, Yoo and Hanssens, 2008).

Perhaps the popularity of marketing on social networking sites, and social networking sites in general, can be partially attributed to their ability to segregate target markets.  Many sites target individuals from specific linguistic groups or geographical regions, or segregate according to these regions or groups; similarly, some sites are created for specific political, religious, or ethnic groups (Boyd and Ellison, 2007).  Hence social network marketing is an incredible means for reaching a specific target market efficiently and effectively.  Indeed, organisations can use social networking sites to create a customer base, attract prospective customers, and contact them directly (Sommers, 2010).  For example, MyChurch is a social networking site which currently hosts 37,000 churches; it offers a platform to connect and engage members through videos, pictures, documents, posts, event planning tools and Facebook integration (MyChurch, 2010).   A company that is in the business of selling hymn books may greatly benefit from social network marketing on MyChurch.

Reason 2: The Ripple Effect

Social network marketing is an effective tool for profit and non-profit organisations because of the way in which social networking sites are structured.   Since social network sites rely on user-generated content to maintain users, users directly benefit from bringing in more contacts, or friends (Trusov et al., 2009).  A benefit may be social recognition from other contacts, or a formal referral program.  Indeed, public displays of connection are important elements of social networking sites, and sites generally make it easy to invite non-members to join the network (Boyd and Ellison, 2007; Trusov et al., 2009).  Here we see a ripple effect: a single event such as the joining of one new member can cause a spreading series of effects, such as the joining of 100 new members as result. This principle can be applied to social network marketing as well.  For example, an organisation’s fan page may attract one user, who has 200 friends, to join the page.  That page then appears in the user’s new feed, and draws in another 50 fans.

At the heart of the ripple effect then are visible profiles.  Profiles allow users to type themselves into being (Sunden, 2003).  Further, they are constructed such that the individual user is at the very heart of his or her own community (Boyd and Ellison, 2007).  So in effect, a profile can allow an organisation to create a human face, and really speak to its target audience, in everyday language, which is of particular importance in this egocentric day and age.  For example, a Swiss luxury watch retailer, WatchesOnNet.com, which sells Swiss watches online at reduced prices, has its own Twitter page, http://twitter.com/watchesonnet.  Simple messages are delivered to its followers on a constant basis, speaking in everyday twitter language, or tweets.  Its visible profile page talks to the consumer in simple, understandable language; indeed, its Twitter “bio” reads: “We are the premier luxury watch store online and offer the lowest prices, best selection, and best customer service on the face of the Earth! Free shipping too!” (WatchesOnNet.com, 2010)

Reason 3: No price tag

Our definition of social network marketing highlights marketing on social media sites at zero cost.  So this kind of marketing is a highly viable strategy in the current global economic climate, when businesses and organisations are focussed on cutting costs.  While social network marketing may require time to learn how to create effective profiles and posts, and more time to actually implement these techniques on a regular basis, they do not have a price tag, in contrast to traditional advertising (Sommers, 2010).  As Whitman 2006 (p.B3A) argues, “instead of tossing away millions of dollars on Superbowl advertisements, fledgling dot-com companies are trying to catch attention through much cheaper marketing strategies such as blogging and [word of mouth] campaigns”.  Consider this example: a local restaurant created a Facebook page to promote itself; within three weeks, the page had more than 1,000 followers, and the restaurant was able to announce contests, special offers and menu specials at no time and no cost to its followers (Sommers, 2010).

The economic benefits of social network marketing are linked with its ability to help advance search engine optimization (SEO).  SEO “is the practice of optimizing web pages in a way that improves their ranking in the web search results, which are also known as natural or organic results because they are supposed to reflect relevancy in searchers’ standard” (Xing and Lin, 2004, 519).  SEO has become increasingly popular because, in contrast to sponsored results, organic results are seen by users as being unbiased and objective (Xing and Lin, 2004).  In recent years SEO strategy has been concentrating on generating quality SEO content that speaks to the needs of consumers, moving away from manipulating search engines with keywords, and in doing so has been encouraging the use of social network sites (Raece, 2007).  The concept is to build popularity within social network sites, incorporate back links to the organisation’s official website, and allow for bloggers and social networkers to tag content being generated from the social network page, all of which increase traffic to the organisation’s site, and therefore increase organic search engine rankings (Raece, 2007).   It is therefore important for the organisation to constantly engage visitors to its social network pages, by updating and promoting its products and services (Raece, 2007).  Consider Honda’s MySpace page http://www.myspace.com/honda.  It runs contests, such as the “ultimate profile contest” in which user profiles and music profiles were judged for excellence (Honda, 2010).  The page increases traffic to the official Honda website by providing a prominent logo link to http://automobiles.honda.com/, and by offering site visitors with the following options in regards to the Honda MySpace page “add to friends”, “forward to friend”, “add to favourites” and “add to group” (Honda, 2010).

Reason 4: Customer Engagement

Perhaps the most obvious reason for social network marketing is its ability to engage customers.  According to SocialMediaTrader (2010), to be successful, a social network marketing strategy must clearly define the target audience, their needs, and how content the company generates can help fulfil these needs over the long term.  Once the strategy is implemented, and the organisation begins to communicate with consumers, it must listen and respond to consumers, creating non automated, honest, two-way public conversations (SocialMediaTrader, 2010). Consider Starbucks, which employs social media sites, including YouTube, Facebook, Twitter and MyStarbucksIdea.com, for customer engagement (Belicove, 2010).  The Starbucks social network strategy is about building relationships through fun and engagement such as its April Fool’s day USB plug-and-pour device for coffee joke (Belicove, 2010).  It is also about connecting with customers in ways in which they would seek the connection, so URLs are precise, such as Twitter.com/starbucks, or Facebook.com/starbucksjobs (Belicove, 2010).  In social networking, Starbucks responds in one of four ways: it amplifies a trend or something consumers seem to like; it seeks constructive criticism through MyStarbucksIdea.com so as to improve projects, products and services; and sometimes strategically chooses to ignore brand detractors, such as anti-Starbucks social network groups (Belicove 2010).

Conclusion: Looking into the Future & Deductions

Social network strategy has been stated to be the world’s most effective marketing strategy (Misner 1999).   The four compelling reasons outlined above construct a strong case for using social networking sites in marketing an organisation’s product or service.  In the future, it would be interesting to explore the possible negative impacts of social networking strategy, specifically one or more of the following questions could be explored:  How could the popularity of social networking sites harm an organisation’s brand?  How could the ripple effect of information spreading on social networking sites damage an organisation’s image?  How can visible profiles turn into a disadvantage?  How could segregated target markets turn out to be a limitation?  How could the seemingly no cost venture turn into a costly venture through time wasting?  How could the social networking sites of a competitor cause an organisation’s site traffic to decrease?  And how could a social networking page actually disengage consumers?

We began this paper discussing the UK’s proposed regulation regarding social network marketing.  Now consider that the United Kingdom is a country with 46.7 million Internet users, and that many other countries demonstrate similar figures (Miniwatts Marketing Group, 2010). For example, the United States boasts 220.1 million users, and Oceania/Australia 21.0 million users (Miniwatts Marketing Group, 2010).  Hence we can assume that social network marketing is a tool employed throughout the world, and for good reason, including the popularity of social networking sites, the ripple effect of marketing on these sites, their ability to bring an organisation to life and to segregate target markets, their economic value in increasing site traffic, and their ability to engage consumers.

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